03/13/2012 11:41 am ET Updated Mar 13, 2013

Campaign Finance Reform Initiative 'Stop Special Interest Money Now' Backed By GOP Funders Of 'Citizens United' Cause

Story comes courtesy of California Watch.

By Lance Williams

The Lincoln Club of Orange County had a big hand in the landmark Supreme Court decision in Citizens United v. Federal Election Commission, which opened the floodgate of special-interest money in presidential politics.

In 2008, the Republican group helped finance “Hillary: The Movie,” a negative election-year film about Hillary Clinton that became the flash point in the litigation.

Oddly, even though the club boasts it was “instrumental” in pushing the Citizens United case, it now is backing a state ballot measure purportedly aimed at banning special-interest money in California elections – adopting some of the reformist language that critics of Citizens United use.

Records show that the club, long a GOP fundraising powerhouse, is a driving force behind the Stop Special Interest Money Now initiative. The measure, on the November ballot, would ban corporate and labor union contributions to California candidates.

At a series of fundraising events, the club has raised more than $150,000 for the measure. The latest fundraiser, featuring supply-side economist Arthur Laffer, is scheduled for March 28 in Newport Beach.

The invitation says the initiative will “stop the flow of special-interest money from corporations and unions to Sacramento.”

That’s not the Lincoln Club’s usual take on campaign finance issues, people familiar with the club say.

While Citizens United was litigated, club leaders argued that Congress’ efforts to limit corporate donations in federal elections violated free speech rights guaranteed by the First Amendment. A divided U.S. Supreme Court endorsed that view in its 2010 decision.

“The Lincoln Club has a long history of spending big money in California politics and seeking to weaken the rules that prevent big money in politics,” said Derek Cressman, Western regional director of state operations for the good-government group Common Cause.

Common Cause hasn’t yet taken a position on the ballot measure, but he said the notion of the Lincoln Club advocating campaign finance reform was “laughable.”

Steve Smith, spokesman for the California Labor Federation, contended that the measure’s real intent is to stop unions from deducting money from their members’ paychecks to finance political donations. That would effectively prevent unions from making donations in California, he argued.

Meanwhile, he said corporations and wealthy individuals still would be free to make unlimited campaign donations via the super political action committees that have sprung up in the wake of the Citizens United decision.

“It is clear, given the history with the Lincoln Club, that this measure is in no way about campaign finance reform,” Smith said.

The club’s director didn’t respond to phone calls and an e-mail requesting comment. But in an op-ed piece published last month in the San Jose Mercury News, Michael Capaldi, who is the club’s chairman emeritus, touted the initiative as a needed measure to “deal a blow to corporate and union power together.”

He discounted unions’ complaints, saying they still would be free to collect voluntary donations from members.

According to the official history on its website, the Lincoln Club of Orange County was founded in 1962, after future President Richard Nixon lost the California governor’s race to Democrat Pat Brown, father of current Gov. Jerry Brown.

Since then, “the club has played a pivotal role in the candidacies of Richard Nixon, Ronald Reagan, Pete Wilson, George Deukmejian, the recall of Gray Davis and the subsequent election of Arnold Schwarzenegger,” the website says.

The club also has raised millions for GOP candidates and causes.

In 2008, David Bossie, head of the conservative nonprofit Citizens United, contacted the club. As an investigator for a Congressional committee, Bossie had worked on GOP probes into President Bill Clinton’s involvement in the so-called Whitewater affair. In 1998, Bossie was fired for releasing taped phone calls that had been edited to suggest that Hillary Clinton had been involved in billing irregularities at an Arkansas law firm, The Washington Post reported.

With Hillary Clinton emerging as a leading candidate for the Democratic presidential nomination, Bossie wanted to make a film exploring whether she was “ruthless, cunning, dishonest (and) willing to do anything for power,” as he put it in an interview with C-SPAN.

The Lincoln Club donated “approximately $100,000,” Bossie said, and was listed on the credits as an executive producer.

The Post characterized the resulting film as “a nonstop montage of Clinton’s changing hairdos, interspersed with reports about various scandals … (and) withering testimony about her alleged lack of character and honesty.”

Citizens United planned to pay cable TV stations to broadcast the film during the presidential campaign.

But the FEC intervened, ruling that “Hillary: The Movie” was not a documentary, but essentially an anti-Clinton campaign ad.

As such, it violated campaign finance laws that restricted corporate and union donations, the FEC ruled. Citizens United sued – and in a 5-4 decision, the high court overturned most federal restrictions on campaign donations. As a result, donors today may make multimillion-dollar political donations to independent political committees, commonly known as super PACs.

The Citizens United decision has had a profound impact on American politics, said Common Cause’s Cressman.

“It’s allowed corporations for the first time to write unlimited checks to these so-called super PACS,” he said. As a result, a handful of wealthy people have “an inordinate influence over who runs for office and who’s going to win,” he said.

The language of the new California initiative expresses a similar concern. “Even contribution limits in some jurisdictions have not slowed the flow of corporate and union political money into the political process,” it says.

Smith, the union spokesman, said the Lincoln Club has backed similar measures before – one in 1998, the other in 2005. Those measures targeted unions without mentioning corporations. Both were defeated.

Lance Williams is a senior investigative reporter focusing on money and politics for California Watch and the Center for Investigative Reporting. To read more California Watch stories, click here.