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The Los Angeles Times
Aug 04, 2006 - 01:00 AM

by Robert Salladay, Times Staff Writer

Angelides Backs Public Financing of Campaigns;

The Democrat, who is running for governor, defies key supporters and endorses Prop. 89.
SACRAMENTO, CA -- Defying some of his strongest supporters in the race for governor, state Treasurer Phil Angelides on Thursday threw his support behind a November initiative that would use taxpayer money to fund campaigns and would markedly restrict political donations to candidates.

The decision to endorse Proposition 89 puts Angelides at odds with Gov. Arnold Schwarzenegger, his Republican opponent. Schwarzenegger had made sweeping away the influence of special interests a central platform of the 2003 recall as he blistered then-Gov. Gray Davis for his fundraising. Since then, Schwarzenegger has broken fundraising records himself and has shown little interest in changing campaign finance laws.

Big corporate donors and major unions -- such as the California Teachers Assn., one of Angelides' biggest backers -- oppose the campaign finance overhaul. But the initiative is being sponsored by another important union, the California Nurses Assn., which has been one of Schwarzenegger's strongest critics.

Campaign finance has a tortured history in California, where voters have either turned down efforts to limit the influence of donors or seen them tossed out by the courts. Despite donation limits approved by voters in 2000, unprecedented amounts have been spent; this year alone, an estimated $300 million could go to a host of races and initiatives.

Angelides has been a prolific fundraiser himself, both in his races for treasurer and as Democratic Party chairman more than a decade ago. He raised an estimated $4 million at a Beverly Hills event with former President Clinton this week, and his race for governor has benefited from about $9 million in spending by a housing developer and his daughter, who are his longtime friends. 

But he characterized Proposition 89 as nothing less than protecting democracy and creating a system "where it's not how much money you can raise, but the power of your ideas."

"It has become a dialing-for-dollars democracy, with the unjust influence of the special interests silencing the voices of Californians," Angelides said at a rally at the nurses union headquarters in Oakland. 

Under Proposition 89, the maximum donation to a statewide candidate would be lowered to $1,000 from the current maximum of $22,300. Perhaps the most significant restriction would be to ban an individual, corporation or union from contributing more than $15,000 combined to all candidates and political committees in a given year.

The initiative would increase the tax on corporate profits by 0.2% to create a public war chest of about $200 million that would be distributed to candidates. Candidates would receive the taxpayer money if they agreed to reject private donations and gather "seed money" in the form of $5 donations from as many as 25,000 donors, in the case of a race for governor.

An Assembly candidate, for example, would receive $250,000 in a primary and $400,000 for the general election. A candidate for governor would get $10 million for the primary and $15 million for the general election. Those amounts could increase if the candidate faced a wealthy, selffinanced opponent.

The plan is modeled after laws in effect in Arizona and Maine. 

Schwarzenegger has rejected Proposition 89 because it would increase taxes. He also said recently that he disliked public financing of campaigns, citing his experience in Europe.

Schwarzenegger refuses to accept donations from certain groups with which the state directly negotiates. For one, he won't take contributions from the California Correctional Peace Officers Assn., the prison guards union, because his office negotiates their wage and benefit contracts. But he has taken vast sums from others doing or seeking business with the state, contending that those contributions have no influence on him.

"You can have all the money in the world in politics, but if you sell out -- if you take money and you do favors in return -- that's where the evil is," he told Times columnist Steve Lopez this week. "The evil's not in the money."

Disparate forces -- the Chamber of Commerce, the California Business Roundtable, the State Council of Laborers, the teachers union and the United Food and Commercial Workers Union -- all oppose the initiative. They argue that it would raise taxes to fund fringe candidates and negative campaigns, and would restrict their own right to free speech.

California Chamber of Commerce President Allan Zaremberg said the initiative was "a misuse of tax money."

Robin Swanson, a spokeswoman for the campaign to defeat Proposition 89, said the initiative would do nothing to stop millionaires from sponsoring initiatives or campaigns, while putting a cap on what other interest groups could give to the same types of endeavors.

"We certainly don't want to give the wealthiest an advantage to give unlimited funds to their pet causes and not be able to fight back," Swanson said.

But Rose Ann DeMoro, executive director of the nurses union, told Angelides that he "dared to stick [his] head above the crowd" by endorsing the measure.

"The entrenched special interests who are against this like the status quo, and they fear change," she said.




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