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Sacramento Bee
Jun 26, 2004 - 01:00 AM

by Margaret Talev, Bee Capitol Bureau

Election funding limits added;

Some say new rules on ballot initiatives could fetter governor.
California's political watchdog agency adopted sweeping regulations Friday aimed at stopping politicians from using the ballot initiative process as a way around campaign finance limits.

Campaign finance reform groups praised the new regulations, saying they will make California the first state in the nation to address the problem.

But experts debated how significantly they will rein in Gov. Arnold Schwarzenegger, the leader who has proven most adept in the state at using ballot measure campaigns to raise huge sums from individual donors to promote his agendas.

Under one of two regulations adopted by the Fair Political Practices Commission, donation limits that already apply to a candidate's campaign because of Proposition 34 would extend to any ballot committees that politician controls. Limits range from $3,200 per donor for legislative candidates to $21,200 for those running for governor.

The regulation, likely to be challenged in court, is set to take effect after the Nov. 2 election and will have no bearing on Schwarzenegger's pledge to raise millions to defeat initiatives that would undermine deals he has made with Indian gaming tribes.

The second regulation, which will take effect this summer, aims to place a $25,000 limit on contributions to other ballot measure committees that feature politicians in their ads.

Its complex wording, however, appears to apply only to ads running within 45 days of an election in which the politician appears on a ballot.

Because Schwarzenegger is not up for re-election until 2006 and most state lawmakers are up for re-election in November, critics say it gives the governor an unfair advantage.

"While we can understand why the commission was anxious to impose some sort of ballot measure limits, the way they did it is totally unfair to members of the Assembly who are now going to be hamstrung in promoting or opposing ballot measures," said Karen Getman, a former chairwoman of the commission who now represents Assembly Speaker Fabian Nunez, D-Los Angeles.

"There's a legitimate and important reason why members of the state Assembly should be able to speak just as loudly as the governor on ballot initiatives," Getman said.

Schwarzenegger's lawyers also opposed the commission's actions, arguing that they were not supported by existing campaign finance law.

One of the governor's attorneys, Charles Bell, told commissioners it was cynical to suggest Schwarzenegger uses ballot campaigns to promote his own political future.

"We're really dealing with issues here," Bell said. In terms of opposing casino initiatives, for example, Schwarzenegger "is not doing this to enhance his image but because he believes the initiatives pose a threat to his constitutional powers."

And Bell suggested later to reporters that the governor's team would look for ways around the ruling. "When you look at a piece of Swiss cheese, it does have holes in it," he said.

Schwarzenegger, asked to comment on the ruling during a press conference on another subject, didn't have much to add. "We are going to have our, you know, decision on that very soon, on all of that, because there will be much more coming out."

While contributors to Schwar-zenegger's re-election committee face the $21,200 limit, they have been able to give unlimited sums through other committees he controls, including his California Recovery Team, which promoted a bond measure on the March ballot.

Schwarzenegger used the same method to raise millions to promote last year's recall election, which swept him into office.

But it was Lt. Gov. Cruz Bustamante, who also ran for governor in the recall, who prompted the commission to close ballot measure loopholes.

Bustamante had raised millions to air ads on a racial privacy initiative, which gave him exposure for his recall candidacy, and said he did so based on FPPC guidelines. He later admitted that he had violated state campaign finance laws and agreed to pay a record $263,000 in penalties.

Although Schwarzenegger took office promising to diminish the influence of special interest donors, he has raised more than $12 million since then - a record - and accepted lump sums of as much as $250,000 per donor.

Doug Heller of the Foundation for Taxpayer and Consumer Rights said how well the regulations work will come down to how well the commission enforces them.

"If the FPPC enforces the law with a strict definition of control, then this is a real benefit and will protect the public from politicians getting around campaign finance laws," he said.

Bob Stern of the Center for Responsive Politics in Los Angeles said the regulations adopted by the commission should seriously curb such donations.

"It's a big deal," Stern said.

Even if the California Recovery Team continues under different leadership, and even if Schwar- zenegger continues to raise money for it, Stern said, "He can't control the committee and how (money is) being spent. ... It's a very big first step."
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The Bee's Margaret Talev can be reached at (916) 326-5540 or mtalev@sacbee.com




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