Photo by Debra DipaoloIn a year when the candidacies of John McCain and Bill Bradley got a big boost from their calls for campaign-finance reform, you might think a ballot measure aimed at keeping candidates from buying their way into office in California would be a sure thing.

Not so — Proposition 25, godfathered by multimillionaire and former candidate for governor Ron Unz, has failed to win the support of former allies in the campaign-reform camp. A Field Poll shows it too close to call.

Unz tried to craft a measure that would avoid the pitfalls of two previous attempts at reform that appeared on the ballot in 1996. One of those, Proposition 208, won voters’ support but was overturned by the courts.

“Nothing has survived in court in this state in 25 years,” Unz points out.

So “court-proofing” reform and avoiding yet another round of litigation were central factors in the way Unz and former acting Secretary of State Tony Miller drew up this year’s reform package. But their eagerness to skirt judicial challenge has left the measure a peculiar potpourri of boldness and timidity. On the core issues of contribution caps and soft-money regulation, the measure seems faint-hearted; on more peripheral matters like monitoring and disclosure, it is forward-looking and creative. Where it strikes out into important new territory — on the issue of public financing — critics say it takes half-measures that will prove ineffective.

It has never been easy to rally reformers around a common strategy. Four years ago they were split into two warring factions, putting forward competing proposals on the November 1996 ballot. Proposition 208, sponsored by Common Cause, the League of Women Voters and Ross Perot’s United We Stand, went up against Proposition 212, backed by CalPIRG (the Nader-affiliated student public-interest group), ex-Governor Jerry Brown and a number of labor unions. The latter measure took a more stringent approach to contribution limits, capping gifts by individuals at $100 in legislative races and $200 for statewide contests and banning corporate and labor giving outright; under Proposition 208, individuals, companies and unions were all permitted to give $250 locally and $500 to any state candidate. On spending limits, 208 again took the gentler approach, calling for spending caps two to three times as high as 212’s; these were voluntary limits, made attractive to politicos by raising the contribution limits for those adopting them. The CalPIRG-union camp took the harder (and perhaps unconstitutional) line, making the spending limits mandatory.

The two campaigns spent much of their funds and energy bashing each other’s measures. “Meaningless gestures, empty words” and “Consumer fraud, not campaign reform,” said the 208 forces about Proposition 212; the 212 team responded in kind, labeling 208 a “retreat from the big problems . . . cosmetic improvements” that are “soft on special interests.” Fans of good government feared the exchange of fire would doom both measures. But while 212 failed by a hairbreadth 49-51 margin, 208 sailed to a comfortable 61-39 victory.

A lawsuit challenging Proposition 208 by an army of political players — Demo cratic and Republican state parties, a large union, the pro-life PAC and others — resulted in a court order in January 1998 blocking its enforcement, leaving California as one of the handful of states without any contribution limits in force. Into this vacuum stepped the deep-pocketed Unz.

The cautious approach Proposition 25 takes on contribution limits was understandable in the light of anti-reform appellate-court decisions of the past few years. But last month the U.S. Supreme Court upheld Missouri legislation limiting individual contributions to candidates to $1,075. This decision will probably lead to the reinstatement of Proposition 208’s caps in California, so Proposition 25’s higher limits (if it passes) would become irrelevant.

On the positive side, Proposition 25 substantially tightens reporting rules, requiring earlier financial disclosure of major contributions and expenditures. Candidates and ballot-measure committees would have to disclose in their advertising the identity of their top two donors, and the amount spent by the campaign to date. Additional disclosure requirements would be set for “slate mailers” that recommend candidates and ballot measures. Spokespersons used in ads and mailings, if paid, would have to be identified as such, protecting the voters from such stunts as TV reporter David Horowitz’s renting out his “consumer advocate” persona for $150,000 or former Superintendent of Public Instruction Wilson Riles Jr.’s pitching “no” ads on school funds for a five-figure sum. Some of these provisions — mandating, in effect, certain political speech — might not pass the First Amendment test in the courts, suggests UCLA law professor Daniel Lowenstein, founding chair of the California Fair Political Practices Commission. Miller disagrees, while acknowledging that courts haven’t ruled on such cases.

For political buffs who want to know all the details, and want to know now, disclosure would be more complete and more timely after 25. Financial-disclosure reports would be made accessible to the public through an Internet Web site within 24 hours of receipt. Links would also be provided to Web sites established by campaign committees. Similar disclosure for some local election campaigns would begin in 2002.


The initiative limits contributions to $3,000 in legislative and local races and $5,000 for statewide candidates — but that’s per election, which means twice those amounts if donors give both in the primary and again in November. These ceilings are triple (and five times) the federal limit of $1,000 passed by Congress in 1974 and still in force. Craig Holman of the Center for Governmental Studies argues that the limits are too high to effectively curb special-interest influence, a view echoed by CalPIRG’s Wendy Wendlandt. “This anemic measure won’t fundamentally change the kinds of people who get their views heard in Sacramento — wealthy interests will continue to dominate,” Wendlandt charges. The California Labor Federation AFL-CIO, complaining that 25’s rules will allow corporations to continue outspending unions 11 to 1, labels the initiative “anti-worker.”

Holman fears approval of these high ceilings could undermine litigation defending lower limits — the much lower limits in the pending 208 appeal, for example — and would set a counterproductive precedent for efforts in other states. Trudy Schafer, legislative advocate for the state League of Women Voters, points out that no local government now sets limits that high, but governments might be tempted to raise their limits to conform to a standard the state prescribed — an ironic effect for a reform measure.

Critics have assailed 25 for doing nothing about multimillionaire candidates — the Perots, Checchis, Huffingtons (and, for that matter, Unz) — who try to buy elections out of their own pockets. But this “loophole” is no plutocrats’ plot — much as the public might like to stem such spending, the U.S. Supreme Court has held since 1976 that restricting candidates’ use of their own funds to “speak” to the public violates the First Amendment. Within that constitutional constraint, Unz and Miller manage to hobble tycoons a little: Candidates are forbidden to lend their campaigns more than $50,000 (would-be governors can lend $100,000), thus ruling out any recouping of big-buck investment after getting elected. Self-financed candidates (and anyone whose campaign gets more than one-tenth of its funds from the same source) are also barred from any publicly financed media credits or voter mailings, forgoing benefits Unz estimates at up to $10 million in value.

At least one widely abused loophole is closed by 25, making donations from minor children count against the parents’ donation limits. This is likely to reduce the number of politically precocious 6-year-olds who “max out” to candidates out of their candy money.

While 25 is loose on contribution limits, it is tough on their timing, making politicians take a break from the endless rounds of begging, establishing an off-season when donors would be protected from their outstretched palms. The hunting season for campaign cash would open six months before voting day for local candidates (one year before for statewide aspirants) and would close 90 days after the election. Funds raised post-election could be used only to pay off outstanding debt or bills, not held over for future use.

For the League of Women Voters, the fatal flaw in 25 is its permissive stance on “soft money” gifts to a political party. Parties can receive $25,000 per donor annually for use in support of candidates — but general-purpose gifts to parties are not regulated at all. Says the League’s Schafer, “While 208 had strict limits on this back door” (it capped everyone’s gifts to political parties at $5,000 annually), “25 leaves this massive loophole.” Unlimited corporate, union or individual giving to the parties, Craig Holman says, undermines the rest of the measure, since party organizations can be used in ways that are simply disguised candidate donations — phone banks to get out the vote, partisan polling and staffer support. Moreover, he argues, soft money can be used for direct-mail party fund-raising, with the party then funneling the proceeds to candidates’ treasuries. In short, says Holman, Proposition 25 makes soft money “a legitimate form of political influence peddling.”

Proposition 25 gives Californians their first opportunity in 12 years to say yea or nay on public financing of state campaigns. It would offer up to $1 million per election in the form of credits for broadcast-media advertising to candidates for governor and campaigns for or against a state ballot initiative — if the candidate or initiative campaign agreed to the voluntary spending limits. Candidates for other statewide offices could receive credits worth up to $300,000 per election, but aspirants to the Legislature are not helped. The state would set aside, out of the general fund, $1 per California taxpayer to underwrite these credits. Unz estimates this would net up to $34 million every election year, which would be allocated on a first-come, first-served basis until the pot was empty.


The League of Women Voters, which has long supported public financing of candidates in principle, argues that the specifics of 25’s plan are a formula for failure. The amounts offered are too small a part of what state campaigns now cost, the League maintains, to lure campaigns into accepting the spending limits. In the most recent attorney general’s race, for example, the winner spent $4.2 million, so $300,000 in free ads would not have been at all decisive.

Additional public financing comes in the form of voter information packets (four per election) in which candidates who accept the spending limits can insert a one-page message, with mailing costs waived. In essence, this lets them deliver four ads to every state voter for only the cost of printing — a more substantial enticement than the broadcast-ad credits.

The divisions within the reform camp, while not as acrimonious as four years ago, remain deep — and fissures this year run within organizations as well as between them. Though the League of Women Voters’ initial July vote to oppose it was unanimous, an October move to reopen the question almost passed; on the other hand, about one-eighth of Common Cause’s board opposed endorsing the initiative. At the Center for Governmental Studies, two staffers in adjoining offices speak publicly on opposite sides.

According to a recent Field Poll, Californians are evenly split, 38-38, on the measure, with one-fourth of voters undecided. But the bulk of “no” spots has yet to hit TV screens. Weighing in heavily against the measure are some of the state’s traditional big election spenders. The California Teachers Association and the Service Employees International Union (SEIU) each ponied up about $250,000; the state Chamber of Commerce and California Business Roundtable anted five-figure sums. With few organizations lining up in Proposition 25’s favor, the chances of its winning are in doubt. Unz says he’s considering throwing more of his own cash into the fray, but adds, “It’s unreasonable for one person to have to finance campaign-finance reform.”

Some reformers are willing to take a pass this year, looking ahead to a more thorough approach. “Our ultimate goal is complete public financing of all campaigns, coupled with free airtime for candidates and initiatives,” says Cliff Tasner of Americans for Democratic Action, which is neutral on the measure. “If we create an even playing field in which a wide range of viewpoints engage in a lively debate, we’ll inspire more people to participate. Proposition 25 is too meager, but we’re eager to campaign for public financing that works.”

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