Campaign Reform Promised by Prop. 208 Remains Elusive

Six months after voters passed a campaign initiative that was supposed to revolutionize the way political money changes hands in California, the dust has settled enough to discern outlines of the new post-reformist world.

Pretty scary, according to many who now inhabit it.

Special interest groups, the very ones meant to be quashed by reform, are swelling with influence, some potentially stronger than before. Politicians, who, according to reformers, would be paying less attention to fund-raising because of the new rules, are gearing up to pay even more. Incumbents and the rich hold a strong advantage over the challengers who were meant to benefit from reform.

Lawyers and accountants trying to figure out the new standards are as ubiquitous as mosquitoes in the spring. The Fair Political Practices Commission, which is charged with interpreting the law, is under attack for what candidates and consultants contend are confusing rulings about what is allowed and what is not.

To be sure, the law has had an impact, prohibiting any fund-raising for state offices for the last five months. And some say the law will ultimately benefit voters. But as opening day arrived Monday for the legal fund-raising season for statewide candidates, few political figures believe there has been any long-lasting cultural change.

The chaotic transition to a new system is complicated by other staggering uncertainties over how next year’s state elections will be run. Three major components of the elections--campaign finance reform, term limits and the newly adopted open primary--are being challenged in court. Appeals are likely to persist well into next year.

“I don’t remember an election where we have known so few of the rules a year out,” said Steve Smith, who is on leave from his job as state Democratic Party political director while he works for Lt. Gov. Gray Davis. “We don’t know who can run in what election and how they can raise their money.”

Proposition 208 on November’s ballot drew strong support from voters tired of the dominant role that money has played in California’s political business. The measure placed strict limits on donations and encouraged politicians to agree to voluntary spending limits.

Donations from political action committees and other big donors were sharply curtailed--banned in the case of lobbyists. Statewide candidates were barred from raising money until a year before the primary--June 2, this year--and legislative candidates were banned from fund-raising until six months before the primary.

Proponents said the measure would encourage challengers, put government discourse on a higher, less money-grubbing plane, and send a new spirit wafting through the decadent Capitol. So far, there is little evidence that much of that has come about.

“Proposition 208 is what happens when people who don’t know how a clock is made try to repair it,” said Allan Hoffenblum, a Republican who publishes the Target Book, an analysis of state legislative races.

Hoffenblum and others across the political spectrum believe that the most striking effect of reform is the transfer of power from candidates to special interest groups.

In theory, the law was meant to weaken interest groups. Before, they could donate unlimited sums to specific candidates to secure loyalty. Now, they cannot.

But those same interest groups are free, with only mild restrictions, to mount “independent expenditure” campaigns on behalf of specific candidates.

A campaign is considered “independent” if it is run separately from the candidate’s own effort. Because it clearly benefits the candidate, however, it accrues good will for the interest group--particularly when candidates are operating under new rules that make it more difficult to raise money.

Moreover, interest groups can also use the power of an independent expenditure campaign to punish their opponents.

So, predictably, groups that formerly donated huge sums to candidates are now gearing up to run independent campaigns.

In each of the last two election cycles, the California Medical Assn.’s political action committee donated more than $1.1 million to candidates and causes in the state. Now, the CMA has formed an independent expenditure committee.

“I would venture to say that we will spend as much under 208 as we did before 208,” said Dean Chalios, the CMA committee’s executive director.

“I don’t think it will be all that different. In the past if we wanted to make a major contribution in a particular race we would sent a check to that campaign. Now we are going to be required to determine how that money should be spent. . . . We are just as comfortable doing it this way as that way.”

Much of the state’s political energy has swung toward the independent campaigns. One respected Democratic consultant, Gale Kaufman of Sacramento, for example, is considering signing on to one or more independent campaigns. In previous years, she would have half a dozen candidates as clients by now. This year, because of fund-raising uncertainties prompted by Prop. 208, she has none.

Assembly Speaker Cruz Bustamante (D-Fresno) noted that major political parties and assorted interest groups have been raising money all spring, a luxury not afforded the candidates.

“The Republicans are gearing up. The Democrats are gearing up,” he said. “The insurance companies are gearing up. The attorneys are gearing up. Everybody’s gearing up, except the candidates, who are all going to be limited in terms of how much they’re going to be able to raise.”

Reform proponents say they could not legally ban independent campaigns, whose rights have been affirmed in court decisions.

A foretaste of the confusion that a flurry of independent campaigns could cause came last year in the high-profile contest between then-Rep. Andrea Seastrand (R-Santa Barbara) and her Democratic challenger, Walter Capps.

By the time the race ended, nine groups had run advertisements for or against one of the candidates--and in total, they outspent the candidates, according to Capps’ consultant, Bill Carrick.

Accountability went out the window. Capps, who won, was criticized for not policing ads run by organized labor--even though he was forbidden by law from having any discussions with the unions running the ads. Various appeals by each candidate’s boosters ended up offending other supporters.

What if that occurs statewide?

“I shudder to think,” said Carrick. “It changes not only the nature of how people like me make a living but also communication. Instead of broad messages, you end up with targeted messages to all these audiences. And at the end of it, you end up with no clear idea who was elected to do what.”

A legal opinion recently rendered by the FPPC staff further strengthened the hand of independents. The law was intended to limit donations: $250 per donor to any committee spending $1,000 or more in an election, according to one of its framers, Tony Miller. Essentially, that would have required all independents to collect money in $250 bites.

An FPPC attorney, however, ruled that there are no limits on the size of donations until an independent committee spends $1,000. That means independent committees can rake in huge donations and stockpile them until a few weeks or months before an election when they start spending money.

Both Miller, a Democrat who lost a 1994 bid for secretary of state, and Bill Jones, the Republican who beat him, asked the FPPC to repudiate the ruling. Jones called it “irresponsible.”

Some still support the reforms. State Sen. Richard L. Mountjoy, a Republican from Arcadia, said the new rules have helped his quest for the lieutenant governorship.

The reforms allow Mountjoy and other statewide candidates to accept only $500 per donor, or $1,000 if the candidate agrees to limit spending to specified levels. Legislative candidates are limited to $250 per donor, or double that if they accept spending limits.

Mountjoy said those reforms emphasize a candidate’s grass-roots organization, because it takes many more smaller donors to compensate for large donations lost to reform.

“It’s better for me because I raise the small chunks of money anyhow,” said Mountjoy. Of others, he added, “It’s going to cause them all to work harder at raising money when they’re used to calling high-powered lobbyists . . . Politicians may not like it but it’s a good thing for the people of California.”

Most political operatives say Mountjoy is correct that broad support is now more important. But getting it, they say, means spending more time raising money than under the old system. Those who will benefit most are veteran politicians with long donor lists, or rich candidates who can throw personal money into a race.

Feeding much of the concern about the impact of reform on next year’s elections is the chaotic nature of the transition. Political consultants and fund-raisers complain that the meaning of the law changes depending on which lawyer interprets it.

Gary Huckaby, an FPPC spokesman, said that staff attorneys there have been performing “political reform triage” to take care of the most pressing questions first, and that they will ultimately clarify all the questions about the law.

“We’re asking people to be patient,” he said.

(BEGIN TEXT OF INFOBOX / INFOGRAPHIC)

Rules Tied Up in Court

Key elements of the rules governing California’s political campaigns are tied up in litigation, leaving candidates, consultants and voters uncertain of how the process is supposed to work. The following cases are pending:

Open Primary: Until now, when voters have gone to the polls for primaries, they have seen candidates listed under each party’s name. Only members of each party could vote to determine the nominee. Under the open primary, approved in last year’s election, all candidates’ names will be included on the same ballot, accompanied by their party designation. Everybody in any party can vote for whomever they wish. The top representative of each party would go forward to the general election.

Both the Democratic and Republican parties have challenged the new law. The case is scheduled to go to trial in U.S. District Court in Sacramento on July 29.

Term Limits: U.S. District Judge Claudia Wilken recently declared parts of California’s term limits law, passed by voters in 1990, to be unconstitutional. The state has filed an appeal, and the U.S. 9th Circuit Court of Appeals said it will hear oral arguments on an expedited basis in August.

Campaign Finance: The U.S. District Court in Sacramento has set an Oct. 15 trial date for a challenge to Proposition 208, which was handily passed by the voters in November. The case was brought by the California Pro-Life Council PAC, one of several complaining that the measure passed by voters was an unconstitutional abridgment of the right to financially support candidates.