California's Political Gold Rush

By William R. Doerner

They are known in Sacramento as "crunch weeks," when California's assembly and senate face deadlines for moving legislation toward passage. Last week, as a cutoff approached for voting bills out of committee and onto the floor, the most frantic spot in town was Room 4202 in the capitol building, the hearing room of the assembly's critical ways and means committee. Day after day, the chamber was aswarm with legislators, their aides and California's highly visible corps of lobbyists.

Crunch week also meant that Sacramento's calendar was studded with fundraising events. On Tuesday evening some 100 guests nibbled on shrimp and crayfish at Assemblyman Gerald Felando's $500-a-person "Annual Fresh Seafood Reception," held in the tony Sutter Club, two blocks from the statehouse. On Wednesday there was the $500-a-plate "Breakfast with Assemblyman Wally Herger," and this week there will be the comparably priced "Rise and Shine with Assemblywoman Lucy Killea."

The crowded calendars point up the extent to which California's legislative agenda has become a vehicle for ceaseless and extravagant campaign fund raising. Of course, using public office to attract political contributions is hardly unknown. But in California the practice has spiraled virtually out of control, leading to what an indignant private study commission called "a new political gold rush." In 1984, campaign spending for seats in the 80-member assembly and the 40-member state senate hit $45 million, by far the highest in the nation.

With no limits on contributions or expenditures, candidates regularly build up war chests that amount to ten times their annual $33,732 salaries. Santa Monica Assemblyman Tom Hayden holds the known record for expenditures, at more than $2 million in 1982. Most of the money comes from political-action committees, corporations and labor unions seeking influence. Says former Assembly Speaker Robert Monagan: "The only way to really participate now in state government is by writing a check."

Some legislators admit to spending half their time seeking out potential contributors. Lawmakers "think about campaign money when they get up in the morning, they think about it all day, and they think about it at night," says San Francisco Assemblyman Art Agnos. Last week a California congresswoman was accused of thinking about it too much. A Los Angeles County grand jury indicted three-term Representative Bobbi Fiedler for allegedly offering to help State Senator Ed Davis retire a $100,000 campaign debt if he dropped out of a nine-way primary race for the Republican nomination to the U.S. Senate. Fiedler called the charge "ridiculous."

Fund raising also forces state legislators into an undue preoccupation with relatively minor issues that are backed by contributors willing to spend heavily. These are known cynically as "juice bills" for the cash that can | be squeezed out of them. One prime example: repeal of unitary taxation, which would save foreign companies operating in California as much as $500 million in state corporate taxes. Strongly backed by Japanese and British interests, the bill has been debated in each of the past three sessions but has yet to come to a vote. Insiders complain that legislators are dawdling because they have become hooked on the thousands of dollars of lobbyist lucre it generates. Another example: between 1979 and 1982, California's oil industry spent $2.5 million to prevent the imposition of a severance tax, which is a levy on oil shipped out of the state.

Ironically, many of the present excesses stem from laudable reforms of the past. In 1974, California passed a measure requiring detailed disclosure of campaign contributions and spending. But the law's conflict-of-interest provisions, which forbid many practices that give the appearance of quid pro quo fund raising, apply only to local officials, not to state legislators. The disclosure rules, moreover, enable politicians to trace the source of their opponents' funding and seek parity.

California's obsession with campaign cash is compounded by the growth of so- called transfers, money controlled by legislative leaders and doled out to loyal supporters. Though both parties employ the system, by far the biggest transfers trove belongs to Assembly Speaker Willie Brown, a Democrat, who raised $4.2 million in contributions that he could use in his own or other 1984 campaigns. Brown pumped nearly $1.2 million of that bundle into 14 other races, making the powerful speaker California's largest single political contributor. "It's an absolute arms race," admits Brown, who only last December picked up a cool $700,000 at a fund raiser he gave in Los Angeles, featuring such celebrities as Actors Morgan Fairchild and George Hamilton. "I do marvelous events," Brown says coyly.

Transfers are outlawed under the recommendations of the 21-member commission that studied California's campaign financing for 18 months and issued a report last October. The commission's other proposals include a prohibition on fund raising during nonelection years, when many contributions are clearly intended to influence legislation rather than the ballot box, and caps on both spending and contributions. The panel also favors limited public financing of election campaigns, a system used by eleven other states.

Whether the reforms stand a chance of becoming law, however, remains highly problematical. Brown, who supports the recommendations, is uncertain that voters are yet sufficiently riled by the current system to demand a new one. "It's an insiders' issue," he says. "There's no momentum building at the moment." Indeed, California voters have indicated considerable resistance to public financing; Republican Governor George Deukmejian has vetoed such measures. The commission evidently had some doubt that its report would lead to immediate change. It projected $50 million in campaign spending for state legislative races in next fall's election and as much as $87 million by 1990.

With reporting by Richard Woodbury/Sacramento