03/10/2013 08:00 am ET Updated Dec 06, 2017

California Campaign Contribution Limits: Lawmakers Find Loophole With 'Ballot Measure' Committees

Thirteen years after California instituted campaign finance limits, lawmakers at the state Capitol are making broad use of a maneuver to avoid them.

In addition to their campaign accounts, legislators create "ballot measure" committees of their own that set no limits on the amount donors can contribute. The committees allow legislators to ask special interests for far more than the $4,100 per election they can solicit for their own campaigns.

State regulations require the accounts to be used to support or oppose any ballot measure, including proposals still under development that might not pan out.

A Bee review found that some of the more than $2.7 million lawmakers collected through these committees in the last two years paid for items with tenuous connection to such measures, including thank-you gifts to donors, a lawmaker's tuition and contributions to nonprofits. In some cases, they also spent heavily on extravagant, out-of-state fundraisers.

Any company or other large donor interested in spending on a ballot measure can do so directly.

But after California voters approved campaign contribution limits in 2000, committees controlled by lawmakers became another vehicle for raising the large amounts of campaign cash needed for ballot measure campaigns.

Routing contributions through the candidate-controlled committees can "kill two birds with one stone" for donors, said Jessica Levinson, a campaign finance and ethics expert at the Loyola Law School in Los Angeles.

"If you support the ballot measure and you want to just support the candidate because of just emotional support, or you want to support the candidate because you want to get something in return, it's kind of a win-win," Levinson said.

At least two dozen legislators maintained ballot measure committees in the two years leading up to the 2012 election. Sometimes they gave money to existing campaigns; more often they didn't.

They directed a quarter of the $2.5 million they spent in 2011 and 2012 to campaigns supporting or opposing state and local propositions, transferring money or covering the cost of the campaigns' expenses, The Bee analysis found.

They used another quarter of the committee cash for their own initiative qualification drives, polling and political advertisements. Those types of costs are typically associated with a ballot measure campaign, but not all of the campaign finance statements specify a particular proposal.

Much of the rest fell into what critics call a "gray area" -- spending that could be justifiable under the current rules but also results in personal or political benefits for lawmakers.

Legislators say the committees allow them to help state and local efforts to shape policy and to communicate with voters on issues outside the Capitol.

"Even when I'm not on the ballot, a lot of my constituents seek out my advice on how to vote ..., so I've realized the value of having a ballot measure committee has been to continue to inform and educate my constituents on primarily what's been local measures," said Sen. Alex Padilla, D-Los Angeles.

$2,000 'thank you gloves'

Padilla spent about $200,000 on local and state proposals through his ballot measure account in the last two years.

He spent to promote Gov. Jerry Brown's successful tax hike measure, Proposition 30, and a cigarette tax measure that failed, Proposition 29. He also aided library and transit tax proposals on the ballot in Los Angeles and spent against Proposition 32, a statewide measure aimed at restricting political fundraising by unions.

His committee also reported expenses less clearly related to initiative campaigns.

Padilla spent a total of $887 on at least nine "gifts of appreciation" sent to various individuals through a well-known fundraising firm he uses.

Sen. Kevin de Leon, D-Los Angeles, also spent more than $2,000 on "thank you gloves" sent to 21 lobbyists and other power brokers who attended a fundraiser for his ballot measure committee at a 2012 Las Vegas prizefight.

De Leon was a principal of a November ballot measure that changed the state's corporate tax formula to fund conservation and renewable energy projects. He said he "wanted to make sure to thank those that were in my corner for these fights, including presenting the boxing gloves as symbols of the KO of the out-of-state corporations seeking to sucker-punch CA taxpayers."

"In light of the battle, I thought it was a more appropriate way to thank folks than sending a fruit basket," he said in a statement.

Assemblyman Isadore Hall's "Inspiration and Hope for California" committee didn't spend any money directly on proposals up for a vote in the last two years. But it did pay a $6,800 bill for a seminar at Harvard University's John F. Kennedy School of Government and spent $1,700 at the University of Southern California.

Hall, a Compton Democrat, said attending what he described as emerging leadership seminars at Harvard and USC would "absolutely" help him play a greater role in formulating and supporting future measures on the ballot. He defended the committee, saying it creates "opportunity for exposure in terms of different ideas that would affect the state of California."

In some cases, legislators also used their ballot measure committees to support various causes in their districts.

Then-Assemblyman Felipe Fuentes, D-Sylmar, spent heavily on an effort to qualify an immigration-related measure he drafted. He also transferred $10,000 to a nonprofit aimed at empowering Latino voters, and $3,000 to a committee supporting the recall of several San Fernando City Council members.

Fuentes said the spending was meant to better the communities he represented.

$745,000 for consultants

Political consultants were paid $745,000 from the lawmaker committees in 2011 and 2012. The law requires that such advice pertain to prospective or current ballot measures. In some case, the lawmakers pay the same consultants that work on their candidate campaigns for work through the committee.

Senate President Pro Tem Darrell Steinberg's Committee for a New Economy spent $142,000 on consulting fees, about 40 percent of the committee's total spending. Lisa Gasperoni, who also serves as a top political strategist to Steinberg on Democratic caucus matters, got $121,484 of that amount.

Steinberg said Gasperoni's initiative committee work, which included consulting on tax and water bond measures slated for the ballot, was separate from her candidate campaign work. She also received $220,000 in payments from the California Democratic Party for consulting services, according to campaign filings.

"In my role as leader, I am obviously involved not only in helping others craft possible initiatives, but I have some issues of my own, including initiative reform," Steinberg said. "That account allows me to do the appropriate research and polling and working with consultants to look at various initiatives."

Assembly Speaker John A. Perez's committee also spent heavily on consultants. It paid the same firm that advises the speaker on other political issues, The Strategy Group in Pasadena, more than $100,000. Perez's committee, like many others, did not report the subject of the consulting. Consultant Douglas Herman of The Strategy Group said the ballot measure work included "everything from analysis to message to participation" related to past initiative campaigns and potential proposals under development.

"There's a lot that goes into those kinds of recommendations," he said.

Some lawmakers' committees spent the bulk of their money on raising more money.

Sen. Ed Hernandez, D-West Covina, spent three-quarters of his committee funds on fundraising, including wining and dining 25 guests on an overnight stay in Las Vegas, with dinner at Smith and Wollensky and a stay at The Bellagio.

Hernandez said he eventually intends to use the committee to qualify and back a local measure to create a special health district in the San Gabriel Valley. He said the fundraisers will help him raise the $800,000 he needs to collect the signatures to put the issue in front of Los Angeles voters.

De Leon's Believing in a Better California committee bankrolled at least three trips to Las Vegas for the senator and contributors, including a getaway to watch a June 2012 championship fight between Manny Pacquiao and Timothy Bradley.

Attendees, including representatives for some of Sacramento's most powerful interest groups, enjoyed "pre- and post-fight receptions, VIP fight ticket" and "five-star accommodations on Saturday night" in exchange for their contributions, according to a fundraiser listing published online. In all, about 40 percent of de Leon's costs were tied to fundraising.

Reform efforts have failed

Phillip Ung, a policy advocate for California Common Cause, said ballot measure committees essentially are "political slush funds" that can be used to offset costs that would usually fall to the more strictly regulated re-election committees.

"In the long term, they can't continue the way they are because they're just being abused by some elected officials," he said.

Opponents of the ballot measure committees have already tried and failed to change the system.

The Fair Political Practices Commission set contribution limits for ballot measure committees in the early 2000s. It acted after former Lt. Gov. Cruz Bustamante was fined for using his account to run proposition-related TV spots featuring himself during the 2003 gubernatorial recall campaign, when he was running to replace then-Gov. Gray Davis.

Those limits were thrown out as a result of a 2005 legal battle involving a committee associated with former Gov. Arnold Schwarzenegger. Sacramento Superior Court Judge Shelleyanne Chang found that the rules surrounding the limits were vague enough to violate First Amendment rights and that the FPPC didn't have the power to set them.

Since then, the FPPC has tried to increase regulation of the committees.

In 2009, commissioners approved changes requiring that the committee name clearly identify it as a ballot measure account controlled by a candidate. The commission also mandated that campaign filings detail all expenses of $100 or more.

Candidates nevertheless continue to use the money they raise in ways that could also benefit themselves.

Sen. Jim Nielsen, R-Gerber, appeared in a radio ad he produced opposing a measure to repeal the death penalty during his own 2012 campaign. The 60-second spot, which cost $4,489, ran on a station in Northern California, where he was running for a vacant state Senate seat.

Nielsen political consultant David Reade said maintaining the committee ensures the senator "can have his voice heard on issues."

"Having a ballot measure committee enables someone like Jim Nielsen, who cares passionately about certain issues, to be able to advocate them when there is a measure in front of the voters," Reade said, "whether or not he's involved with the campaign."

Call Torey Van Oot, Bee Capitol Bureau, (916) 326-5544. Follow her on Twitter @capitolalert. ___