HERE’S ONE REASON why you won’t see much of John McCain in California over the next month: If your name was synonymous with campaign finance reform, the recall is the last place you’d want to be. Why? Because the October 7 special election exposes California’s new-and-improved donor law for what it is: a shabbily-written statute that doesn’t hold all of recall’s players to an equal standard. Not that the good citizens of California haven’t done their best to try to curb the influence that money on politics. Over the last 15 years Californians have voted for ballot measures changing the state’s campaign finance laws–and time and again those measures were struck down by the courts as unconstitutional. In November 2000, voters signed off on the latest attempt at campaign finance reform, Proposition 34, which placed a dollar-limit on local and statewide races (federal contests don’t apply).
But, as the recall contest has shown, such “reform” is useless when lawmakers junk it up with loopholes. And that’s what California has–campaign money rules with more dodges than Al Bundy’s garage.
In California’s recall, individuals can give a maximum of $21,200 to a candidate. Unless the donor and candidate are one and the same, in which case there’s no limit. Arnold Schwarzenegger has written a $2 million check to his own campaign; Peter Ueberroth staked his long-shot effort with $1 million from his personal fortune. Nor is there a limit on donations to independent committees (or “ballot measure committees”) that are pro- or anti-recall. Those committees are free to raise-and-spend as they please, as long as they don’t work in tandem with a candidate.
In California, smart recall candidates are working both sides of the street. They establish one campaign account that abides by the $21,200 limit, while setting up other committees for bigger donors. It’s a tactic both Democrats and Republicans employ. Schwarzenegger, for example, has both a “Join Arnold” effort that’s tailored to his candidacy and a “Total Recall” committee that nominally supports recall but, in reality, is another vehicle for promoting Arnold For Governor. Gray Davis, meanwhile, has collected more than $6.6 million over the course of recall courtesy of three “independent” committees. His aides expect another $5 million in the weeks ahead. Among those coming to the governor’s rescue: Steve Bing (Elizabeth Hurley’s ex), who chipped in $100,000, and the Zenith Insurance Company, a $200,000 donor (and, not coincidentally, a major player in California’s worker compensation debate, which may be the next big fight in Sacramento).
Here’s a third loophole: Davis, who’s the target of recall, doesn’t have to play by the same rules as those who seek to replace him.
The governor is exempted from the $21,2000 donor limit because state election officials don’t consider Davis to be a recall candidate. Thus he’s free to solicit special interests for very large checks, which is troublesome as the legislative session hasn’t ended yet and there are hundreds of bills awaiting the governor’s signature. It’s familiar territory for Davis, whose re-election effort last year didn’t have to abide by Prop 34 limits because the law, which technically went into effect in January 2001, didn’t apply to his candidacy in 2002 cycle. (That’s how the authors of Prop 34 got Davis’s support–and how he bulled his way to reelection, raising about $1.5 million a month during his first four-year term.)
Finally, there’s a fourth loophole:
Lieutenant Governor Cruz Bustamante is using one of his older lieutenant governor committees, which existed before the Prop 34 limits became law, to dump money into his recall effort (conservative state senator Tom McClintock is doing the same). This enables special interests to give to Bustamante’s candidacy without being restricted to the $21,200 ceiling. Otherwise, their large donations would have to go to a “no on recall” committee which can’t serve as an advocate for the lieutenant governor. It’d be the same as giving money to Davis, and no Bustamante supporter really wants that to happen.
LEGALLY, Bustamante may not be breaking the law, but he’s certainly found a creative way to interpret it. Under Prop 34, candidates can tap into leftover campaign committees to help fund new candidacies. However, such shifts were intended as one-time transfers of funds–a political inheritance. Bustamante applies the law differently–as if he were shifting money between ATM accounts. Since becoming a recall candidate, the lieutenant governor has funneled more than $1.1 million into his recall account via this practice. That puts Bustamante on the air and on a more level playing field with his recall opponents. If California’s finance laws aren’t clear, what is clear is that the money itself is in play–as an issue–as the campaign proceeds.
SCHWARZENEGGER’S CAMPAIGN has attacked Davis for encouraging gaming tribes to recommend potential candidates for two openings on the California Gambling Control Commission, which oversees tribal casinos. It’s a familiar accusation: Davis as a “pay for play” governor. Davis, who’s received $1.4 million from tribes, bristles at the suggestion that he’s giving away seats to the tribes (who, by the way, want to renegotiate their state compacts so as to expand gaming across California).
Davis, in turn, labels Arnold a “sellout” for engaging in fundraising despite telling Jay Leno that he had “plenty of money myself” and didn’t need to hit up donors. To date, Schwarzenegger’s candidate committee has received about $1.5 million from non-family sources, in addition to the $2 million from his own fortune (yes, his mother-in-law, Eunice Shriver wrote a check for $15,000). According to Arnold’s campaign, about half of those donations are $100 or less.
Bustamante, meanwhile, faces media scrutiny over his relationship with the gaming tribes and what their large donations might garner in the way of access and policy decisions in his administration.
Campaign finance reform hasn’t bought California a better brand of politics. Maybe it’s time to recall Proposition 34.
Bill Whalen is a research fellow at the Hoover Institution, where he follows California and national politics.
