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March 11, 2013
Editorial: California lawmakers tap rich loophole in campaign law with ballot committees

(March 11 -- By the Editorial Board)

Surprise, surprise. California lawmakers are increasingly exploiting a legal loophole to skirt campaign finance limits. Does this have a familiar ring?

Somewhat restrained by a $4,100 per election restriction on what they can solicit from individual contributors for their campaign accounts, lawmakers are taking advantage of "campaign measure" committees. That allows them to raise unlimited funds from special interests, ostensibly to support or oppose a ballot measure, but also to organize lavish junkets and dole out favors to friends, campaign consultants and others in their political machines.

A Sunday story by The Bee's Torey Van Oot detailed how the top loophole exploiters are spending the money they raise. Las Vegas is a favored destination. Sen. Ed Hernandez, who has a "California College Opportunity" ballot committee, spent three-fourths of his committee funds on fundraising, including wining and dining 25 guests on an overnight stay at the Bellagio in Las Vegas, with dinner at Smith and Wolensky. Sen. Kevin de León, D-Los Angeles, held a fundraiser for his "Believing in a Better California" committee at a 2012 Las Vegas prizefight. Later he spent more than $2,000 on "thank you gloves" to 21 lobbyists and other power players who attended the fundraiser.

What happens in Vegas stays in Vegas, but what happens with these ballot measure committees in California stays there, too. Lawmakers, including Senate President Pro Tem Darrell Steinberg and Assembly Speaker John A. Pérez, spend hundreds of thousands of dollars from these committees on "consultants," but don't have to detail how that money is spent.

Is it expended on ballot measures? Or does some of the money go to consulting that benefits the lawmaker behind the committee, without that being reported?

At their best, these kinds of committees allow lawmakers to promote initiatives that benefit California, as de León did in pushing Proposition 39, which voters approved last November to change state tax formulas to fund renewable energy projects.

At their worst, they are slush funds for lawmakers to parcel out patronage, while allowing special interests to ingratiate themselves with lawmakers without any restrictions on the dollars contributed.

And who do we have to thank for this loophole? Former Gov. Arnold Schwarzenegger, that champion of political reform, deserves most of the credit.

In 2005, Schwarzenegger challenged a Fair Political Practices Commission rule it had handed down four years earlier. The FPPC rule attempted to ban candidates from raising unlimited amounts of money for ballot committees they controlled, a response to former Lt. Gov. Cruz Bustamante's abuse of the loophole during the recall campaign against Gov. Gray Davis.

Although Schwarzenegger had taken Davis' job promising not to take money from special interests, his political allies soon created Citizens to Save California and started accepting unlimited contributions, with Schwarzenegger featured at fundraising events. Good government groups pressed the FPPC to crack down. When it attempted to do so, Schwarzenegger sued and was able to maintain the loophole, thanks to a questionable ruling by Sacramento Superior Court Judge Shellyanne Chang.

Because of that ruling, California lawmakers can continue to exploit a loophole their counterparts in Congress cannot enjoy. The Federal Election Commission several years ago ruled that members of Congress could not raise money in excess of federal contribution limits.

Sadly, because of Chang's ruling, the only people who can close this loophole are lawmakers themselves. They should do so. If they fail to act, the loophole will need to be closed through the initiative process.

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