Outsiders Bankroll Prop. 90 Campaign

Led by a New York businessman, a national network of property rights activists is bankrolling a proposed California constitutional amendment that would bar the government from seizing homes and businesses to use the land for private economic development.

Supporters say Proposition 90, on the Nov. 7 ballot, is a long-overdue reform to safeguard property owners whose rights are being trampled by local and state governments wielding their eminent domain powers.

“It is really a case of the little guy versus powerful interests,” said campaign spokesman Kevin Spillane. “Lots of people who have eminent domain threatened [against them] are small business owners and urban dwellers who do not have the money to fight.”

But opponents consider the measure dangerous because one section would require agencies to pay owners when future zoning, planning or environmental rules substantially harm property values.

Organizations representing cities and counties, police and fire chiefs, corporations and conservationists warn that this provision would hamstring government and unleash billions of dollars in damage claims.

“As government considers rezoning, development permits or timber harvest permits, property owners will say, ‘You cannot do this, and I will sue you if you go ahead,’ ” said Tom Adams, board president of the 25,000-member California League of Conservation Voters. “Government agencies ... will back away from protecting the environment and quality of life.”

There are similar measures on the ballot in Arizona, Idaho and Washington, but the stakes in California are particularly high. All sides agree that victory in the most populous state could lead to a nationwide groundswell of initiatives or legislation.

The measures follow last year’s U.S. Supreme Court decision allowing government agencies to seize private property for economic development, not just traditional government uses. And they are loosely modeled after a measure passed by Oregon voters two years ago that has prompted thousands of damage claims.

Fears About Reach

Against this backdrop, property rights groups have provided several million dollars for the initiatives without having to disclose the identities of their donors.

Although the California Republican Party and some taxpayer groups endorsed Proposition 90, records show that the lion’s share of $3.7 million raised has been donated by nonprofits associated with Manhattan real estate entrepreneur Howard S. Rich, an advocate of smaller government.

Opponents have collected more than $5.7 million, much from the League of California Cities and the California Public Securities Assn. They started airing television ads Wednesday; supporters also have ads prepared but have declined to say when they might begin advertising.

In e-mails, Rich declined to be interviewed but defended Proposition 90 fundraising. “Those opposed to Proposition 90 know they’re stepping on basic constitutional principles.... Like any group in power that wants to keep it, they have attempted to confuse the issue, attack the messenger and engage in character assassination,” he wrote.

The proposal would not prevent government from taking private property for roads, schools or parks, but it would block condemnations for construction of nonpublic facilities in redevelopment areas. And, according to the nonpartisan state legislative analyst’s office, it apparently would increase the amount owners are paid when the government seizes property.

A more sweeping provision of Proposition 90 -- one that many opponents have seized upon -- would allow owners to seek payment whenever new regulations substantially reduce property values. One example is down-zoning, in which an agency reduces the number of structures that can be built on a parcel.

The legislative analyst concluded that Proposition 90 could cause significant statewide costs because it could be applied not only to eminent domain and land use but to new rules governing employment conditions, apartment prices, endangered species, historical preservation and consumer protection.

The initiative exempts health and safety laws, but the California Police Chiefs Assn. is opposing it because of the potential fiscal effects. “If it impacts city finances, it will impact public safety because we usually are the largest part of the ... budget,” said Steve Krull, the association’s president and chief of the Livermore Police Department.

Consumer advocates voiced concern that the measure could undercut Proposition 103, the insurance initiative passed by voters in 1988.

Others fear that future environmental regulations would be vulnerable. Kim Delfino, California coordinator for Defenders of Wildlife, said that if the burrowing owl were placed on the state’s endangered species list, for example, developers might claim financial damage from new owl protection requirements.

But proponents said such fears were baseless because Proposition 90 does not override existing laws, such as those governing endangered species and insurance industry regulation.

Concerns About Donors

Apart from disputes over the particulars, much of the Proposition 90 debate has focused on funding by out-of-state groups connected to Rich.

“It is appalling that a New Yorker would take it upon himself to set the political agenda in California,” said John Echeverria, executive director of the Georgetown Environmental Law and Policy Institute in Washington, D.C.

Proposition 90 supporters say Rich and others simply tapped into public dissatisfaction with the Supreme Court’s ruling that New London, Conn., could displace homeowners to redevelop waterfront land.

Unable to move reforms in the Legislature, state Assemblywoman Mimi Walters (R-Laguna Niguel) said she launched Proposition 90 this year along with Rich, whom she had met in political circles. “This issue is important ... to all Americans,” she said. “And I do not think it matters as much about where the money comes from as getting out word to Californians.”

Fairness Issue

Although Proposition 90 officials said about 6,000 people have made small donations in recent months, they acknowledged that most of the campaign’s big ones were arranged by Rich, a onetime Libertarian Party activist who owns a plumbing company and numerous properties in New York.

The Fund for Democracy, which sponsored the measure and which Rich heads, donated $1.5 million. Chicago-based Americans for Limited Government, of which Rich is board chairman, gave $1 million. And Club for Growth State Action, a Chicago group on which Rich serves on the leadership council, gave $220,000. (Unlike candidate contests, there are no spending limits for California initiatives.)

An additional $600,000 came from Montanans in Action, which has largely financed three Nov. 7 initiatives in that state. All were tossed out recently by a judge who concluded that paid, out-of-state signature collectors engaged in fraud -- but backers are appealing.

Executive Director Trevis Butcher said he does not know Rich or recall whether Rich’s Fund for Democracy gave money to Montanans in Action. The Montana initiatives, however, reported almost $25,000 in loans from Americans for Limited Government.

The president of the Illinois nonprofit, John Tillman, did not respond to requests to discuss its political contributions.

Butcher contends that campaign law does not require disclosure of the sources of money that went through Montanans in Action to his initiatives.

But attorney Jonathan Motl recently filed a complaint with that state’s political watchdog, alleging laundering of contributions. “It is critical that the true donor be disclosed so the public can judge exactly who is [behind] this campaign,” he said in an interview.

Officials from California’s Fair Political Practices Commission declined to comment on whether Montanans in Action is required to report its donors in this state. But in general, out-of-state groups must name them only if the donors had reason to believe that their money was destined for California.

Out-of-state donations to initiatives are not uncommon and usually are not harmful to their chances, said Robert Stern, president of the Center for Governmental Studies in L.A.

“Why are they being so secretive?” he said. “I think it hurts their cause and distracts from it.”

The Fund for Democracy contributed more than $230,000 to an Idaho initiative that is similar to California’s.

“They are looking to help guys like me,” said Laird Maxwell, a longtime property rights activist who heads the campaign.

In some states, opponents face an uphill fight, partly because the well-funded initiatives have depicted common people as victims of government.

“The other side really has been successful in seizing the fairness issue,” said Jason Jordan, consultant for the 35,000-member American Planning Assn.

The Proposition 90 campaign has highlighted several cases, including the condemnation of a Hollywood luggage store for a luxury hotel and other projects.

“I oppose use of eminent domain for private development,” said the owner, Bob Blue, who successfully negotiated to stay at his present location. “It is going to hurt the person who can least afford it. It is going to be ‘sell or get condemned.’ ”

tim.reiterman@latimes.com

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