By Lisa Ryan
Copyright © 2000 by University of the McGeorge School of Law
JD, McGeorge School of Law, University of the Pacific
to be conferred 2001
B.A., International Relations, University of California at Davis, 1992
Table of Contents
Proposition 25, the California Voters Bill of Rights Act, seeks "to minimize the potentially corrupting influence and appearance of corruption caused by excessive contributions and expenditures in campaigns." (Election Campaigns, Contributions and Spending Limits, Public Financing, and Disclosures Initiative Statute, California Voter Pamphlet, p. 135 (2000).) Proposition 25 is the latest in a series of attempts to bring serious campaign finance reform to California. This measure mandates limits on campaign contributions, requires immediate Internet disclosure of political contributions, bans corporate contributions to candidates, and provides public financing for candidates adopting voluntary campaign spending limits.
While most people agree that campaigns today rely too heavily on money from special interest groups, there is little consensus on how to reduce these potentially corrupting influences. The voters of California have consistently called for reform of the election system and have previously passed initiative measures toward that end, but many of the most sweeping reforms have been invalidated by the courts as a violation of a candidate’s First Amendment right to free speech.
Proposition 25 is a broad based measure designed to drastically reform the campaign system in California but avoid some of the problems previous campaign reform measures have faced. Unlike previous measures, Proposition 25 calls for "voluntary" spending limits but provides public financing of both candidate and initiative campaigns to serve as an incentive for adopting such limits. Those who abide by the voluntary spending limits, ranging from $700,000 for Assembly races to $12,000,000 for the Governor’s race and state ballot initiatives, are eligible to receive campaign advertising media credits and four free mailings of voter information packets. The Legislative Analyst’s Office estimates that the publicly funded campaign assistance in this measure would result in an annual state cost of about $17 million. Additionally, the Secretary of State estimates the voter information packets mandated in this initiative would cost about $35 million.
Proposition 25 proposes to reform campaign and election financing in California by limiting the amount of money individuals can donate to candidates and ballot initiatives to $5,000 per election for statewide candidates, $3,000 for other candidates and $5,000 to Political Action Committees ("PACs"). Further, Proposition 25 would limit the amount a person can contribute to political parties to $25,000 per year.
A. CURRENT STATE OF THE LAW
According to one of the initiative’s co-sponsors, Ron Unz, "The problem with California elections today is not that political campaigns regularly violate or even skirt the law but that the laws themselves have become so weak and ineffective that obviously corrupt practices are absolutely lawful." (Ron K. Unz, Politics is up for Sale in California, Los Angeles Times, August 25, 1999.) Whether Proposition 25 is the answer to the problem remains to be seen. Nonetheless, in order to understand the potential impact Proposition 25 may have on the future of campaigns in California, one must look to the recent history of campaign and election reform.
1. The Political Reform Act of 1974
Californians have seen a number of ballot proposals regarding campaign and election reform in the past few decades, but very little has actually changed in the last 25 years. California election reform through initiative (or, the initiative process) started with Proposition 9 in 1974. Proposition 9 covered basic disclosure laws and established the Fair Political Practices Commission ("FPPC"). Proposition 9 also included limits on spending by campaigns, but the famous 1976 U.S. Supreme Court decision, Buckley v. Valeo, ruled such spending limits unconstitutional as a violation of an individual’s First Amendment freedom of speech rights. (Buckley v. Valeo, (1976) 424 U.S. 1.)
Today, the Political Reform Act is still the law in California governing disclosure of political campaign contributions and spending by candidates and ballot measure committees, requiring lobbyist's financial disclosure, as well as setting ethics rules for state and local government officials. Since the adoption of the Political Reform Act of 1974, Californians have passed additional reform measures that have systematically been invalidated by the courts, creating a confusing picture of what the law is today.
2. Propositions 68 and 73
In 1988, voters approved two separate campaign finance reform initiatives, Proposition 68, and Proposition 73. Proposition 73 prohibited the use of public money for campaign purposes and limited the amount of contributions candidates, committees, and political parties could accept from all persons on a fiscal year basis ($1,000, $2,500, or $5,000, depending on the source). Proposition 73 also prohibited the transfer of campaign funds between candidates. These same provisions also applied to special elections but were based on election cycles rather than fiscal years.
Proposition 68 only limited the campaign contributions and spending for state Assembly and Senate candidates. More importantly, Proposition 68 expressly provided for public funding of elections. The proposed public funding would come from taxpayers who voluntarily decide to direct part of their income tax payments (up to $3 for single tax returns, and up to $6 for joint returns) to finance state campaign matching payments.
The California Supreme Court eventually ruled in Taxpayers to Limit Campaign Spending v. FPPC that because the two measures contained conflicting comprehensive regulatory schemes, they could not be merged and only one could be implemented. Since Proposition 73 received more affirmative votes than Proposition 68, the Court ordered the implementation of Proposition 73 and proclaimed all the provisions of Proposition 68 invalid. (Taxpayers to Limit Campaign Spending v. FPPC, (1990) 51 Cal. 3d 744.) In 1990, all state and local elections were conducted under the Proposition 73 limits.
The federal courts, however, ultimately found many of the provisions of Proposition 73 unconstitutional. In Service Employees International Union, the fiscal year based contribution limits were deemed to discriminate against challengers. (Service Employees Int’l Union AFL-CIO, CLC v. FPPC, (E.D. Cal. 1990) 747 F. Supp 580.) The Service Employees case ended in 1993 when the United States Supreme Court denied certiorari. (California FPPC v. Service Employees Int’l Union, AFL-CIO, CLC, (1992) 505 U.S. 1230.)
The proponents of Proposition 73 then petitioned the California Supreme Court to rewrite the unconstitutional portions of the measure so that it may again become enforceable, but the court narrowly rejected that request. (Kopp v. FPPC (1995) 11 Cal.4th 607.) The only provisions of Proposition 73 that survived legal challenge were those concerning the contribution limits for special elections, some restrictions on the type of mass mailings officeholders may send out at public expense, and the prohibition on the use of public money for campaign purposes.
3. Proposition 208 and Where We Are Today
California voters passed yet another campaign reform proposition in 1996. Proposition 208 amended the Political Reform Act of 1974 by imposing contribution limits and restrictions on candidates for state and local elected offices. However, it did not take long before opponents challenged this initiative as well. A federal district court invalidated Proposition 208 on the premise that the contributions were so low that they precluded candidates from raising sufficient funds to conduct a meaningful campaign, thus violating a candidate’s First Amendment rights. (California Prolife Council Political Action Comm. v. Scully, (E.D. Cal. 1998) 989 F. Supp. 1282.)
On January 5, 1999, the Ninth Circuit Court of Appeals affirmed the preliminary injunction staying enforcement of Proposition 208 and returned the matter to the district court to consider the constitutionality of all aspects of the campaign finance system in a new trial. (California Prolife Council Political Action Comm. v. Scully, (9th Cir. 1999) 164 F.3d 1189.) The fate of Proposition 208 likely will be decided in light of the United States Supreme Court’s January 24, 2000, decision in Nixon v. Shrink (2000) 120 S.Ct. 897, which upheld Missouri’s strict limits on contributions to candidates (see discussion below in Chapter 4.)
Where does that leave campaign finance and disclosure law in California today? The only contribution limits currently in effect solely apply to contributions to candidates in a special election to fill a vacancy in a state or local elective office. Those limits per election are: $1,000 from "persons", $2,500 from political committees, and $5,000 from broad based political committees.
B. PROPOSED CHANGES
Proposition 25 contains many of the same provisions included in Proposition 208 as well as some components never before seen by California voters. The key provisions of Proposition 25 are broken down into Disclosure of Contributions, Spending and Advertisement (sections 6 & 7), Limitations on Contributions (Section 8), and Campaign Spending Limits and Public Support (Section 9). Some of the major specifics include:
New Disclosure & Reporting Requirements
Ballot Pamphlet Disclosure
Requires disclosure of the top five contributors, if any, of $25,000 or more to committees primarily formed to support or oppose a state ballot measure to be listed in the ballot pamphlet, together with the aggregate amount of contributions made by those contributors. (Voter Pamphlet, at 137.)
Disclosure of Top Contributors in Advertising
Requires any advertisement for or against any state or local ballot measure to include a disclosure statement identifying any entity, other than an individual, whose cumulative contributions to the committee placing the advertisement are $50,000 or more, or any individual whose cumulative contributions are $250,000 or more. (Voter Pamphlet, at 137.)
Requires a disclosure statement in advertisements for or against a candidate or ballot measure if the spokesperson is paid $5,000 or more. (Voter Pamphlet, at 137-38.)
24 Hour Disclosure
Candidates, committees and possibly major donors receiving contributions or making expenditures of $25,000 or more in a calendar year must report each contribution of $1,000 or more to the Secretary of State within 24 hours of receipt of the contribution. (Voter Pamphlet, at 136.)
Web Sites for Candidates and Committees
The Secretary of State must establish and maintain a "Campaign Web Site" on the largest nonproprietary, nonprofit, cooperative of computer networks which includes information for each state candidate and each state ballot measure. (Voter Pamphlet, at 138.) All contribution and expenditure data required to be filed by this Act must be made available on the Secretary of State’s "Campaign Web site" within 24 hours and in a form that is sortable by donor, city, state, zip code, amount, date, employer, occupation, and other information determined by the Secretary of State.
Filing of Advertisements
Requires copies of all television, radio, and print advertisements to be filed with the Secretary of State within 24 hours after its release and to be posted on the Secretary of State’s Campaign Web Site. (Voter Pamphlet, at 138.)
Mandatory Campaign Contribution Limits
Limits on Contributions
Mandates contribution limits be set at $5,000 per election for statewide candidates, $3,000 for local candidates, and $5,000 to PACs. (Voter Pamphlet, at 138.)
Limits the amount a person can contribute to political party committees to $25,000 per year (Voter Pamphlet, at 139) and limits candidate acceptance of election contributions from all political party committees to no more than 25% of the voluntary spending limits specified by this Act. (Voter Pamphlet, at 139.)
Bans for-profit corporations and joint stock companies from directly contributing from their own "general treasury fund" to candidates. (Voter Pamphlet, at 140.)
Bans transfers from other candidates’ committees
Bans candidate and ballot measure committees from transferring funds to other candidate or ballot measure committees. (Voter Pamphlet, at 139.)
Aggregate Contribution Limits
Limits the amount any contributor (other than a political party) can contribute in the aggregate to all states candidates and committees per election to $50,000. (Voter Pamphlet, at 140.)
When Contributions Can be Received
Restricts statewide candidates from fundraising prior to 12 months before the primary election. Other candidates cannot begin fundraising until 6 months before the primary election and may not accept contributions beyond 90 days after withdrawal, defeat, or election to office. (Voter Pamphlet, at 139.)
3. Voluntary Limits On Campaign Spending
Section 9 of Proposition 25 requires each candidate for state office and each ballot initiative committee to file a statement either accepting or rejecting the voluntary spending limits prescribed in this initiative. A violation of the pledge to abide by the voluntary spending limits subjects the candidate or ballot measure to a fine of $5,000 or three times the amount of expenditures in excess of the spending limits, whichever is greater. (Voter Pamphlet, at 140.)
a. Voluntary Spending Limits per election: (Voter Pamphlet, at 140)
Assembly $300,000 $400,000
Senate or Board of Equalization $500,000 $800,000
Statewide other than governor $1,500,000 $2,000,000
Governor $6,000,000 $10,000,000
State ballot initiative $6,000,000 $6,000,000
b. Limits on Contributions
Candidates and committees who accept the voluntary spending limits also agree to accept no more than $100,000 or 10% of the voluntary spending limit amounts, whichever is greater, from any single donor other than committees of a political party. (Voter Pamphlet, at 140.)
c. Spending Limits Lifted
The spending limits increase two and one-half times if candidates or committees who agree to the voluntary limits are faced with an opponent not agreeing to the voluntary limits reaching certain expenditure thresholds. (Voter Pamphlet, at 141.)
4. Public Assistance For Eligible Campaigns
One of the most controversial provisions of Proposition 25 provides public financing of campaign media advertisements and voter information packets for qualifying candidates and committees adopting voluntary spending limits.
a. Campaign Advertising Media Credit Program
Qualifying candidates can receive media credits— up to $300,000 for statewide office and up to $1 million for Governor and statewide ballot measure committees. (Voter Pamphlet, at 141.) Public funds to be allocated to the media credit program are limited to $1 per taxpayer per year or approximately $16 million and are distributed on a first come, first served basis. Eligibility for these media credits is based on filing a requisite number of voter signatures and is tied to contributions received. (Voter Pamphlet, at 141.)
b. Voter Information Packet
Before each election the Secretary of State will send four "voter information packets" to voter households. (Voter Pamphlet, at 142.) All state candidates and ballot measure campaigns can include a sheet of campaign information in the packet. (Voter Pamphlet, at 142.) The costs of mailing this packet for those candidates voluntarily complying with the spending limits will be paid out of California’s General Fund. Those candidates not complying with the spending limits will be charged the pro-rata cost of mailing the packets. (Voter Pamphlet, at 142.)
Under the provision of Article IV, section 1 of the California Constitution, "the legislative power of the State is vested in the California Legislature…but the people reserve to themselves the power of initiative and referendum." The people may either propose laws to be voted upon by them (the power of initiative) or they may reject by their vote laws which the Legislature has enacted (the power of referendum). This power of initiative by the people is one that is exercised regularly in California. An initiative is normally not a measure that has been debated in the legislature or reviewed by numerous policy analysts. As such, many initiatives have statutory drafting problems.
One pervasive drafting problem with Proposition 25 concerns its specific provisions that defer to Proposition 208, a measure still pending before the federal district court. For example, Section 21 of the Proposition states: "If Proposition 208 approved by the voters in the 1996 general election is reinstated by the courts, sections 85301 through 85312 and Section 6 ‘Legislative Amendments’ as set forth in Proposition 208 shall prevail over conflicting provisions of this Act." Proposition 25 limits contributions to political parties to $25,000 per year. (Voter Pamphlet, at 139.) Proposition 208, on the other hand, limits contributions to political parties to only $5,000 per calendar year. Therefore, the drafters of Proposition 25 are stating in Section 21 that they want those particular provisions of Proposition 208 to prevail if reinstated by the courts. Although this particular drafting method may be beneficial to the drafters, it sets up a confusing situation for voters. If Proposition 208 is upheld by the courts the limits it created will supersede any set forth in Proposition 25. On the other hand, should all similar provisions of 208 be invalidated, Proposition 25’s provisions will remain intact until and unless they, too, are challenged successfully in the courts.
While the initiative process is the power vested in the people to enact law, initiative measures must still pass constitutional muster. "The voters may no more violate the Constitution by enacting a ballot measure than a legislative body may do so by enacting legislation." (Citizens Against Rent Control / Coalition for Fair Hous. v. City of Berkeley, (1981) 454 U.S. 290, 295.) "A state’s broad power to regulate elections ‘does not extinguish the state’s responsibility to observe the limits established by the First Amendment rights of the state’s citizens.’" (Eu v. San Francisco County Democratic Cent. Comm., (1989) 489 U.S. 214, 222 [citing Tashijian v. Republican Party of Connecticut, 479 U.S. 208, 217.].)
A. First Amendment
In Planning and Conservation League, Inc. v. Lungren, the Third District Court of Appeal stated: "The First Amendment to the United States Constitution prohibits any law ‘abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances.’ This prohibition is applicable to the states by virtue of the Fourteenth Amendment." (Planning and Conservation League, Inc. v. Lungren (3rd Dist. 1995) 38 Cal. App. 4th 497, 505 [quoting Meyer v. Grant, (1988) 486 U.S. 414, 420.].)
Buckley v. Valeo is still the landmark decision affecting campaign finance reform in respect to spending limits. There the court noted that political campaign contributions and expenditure limitations "operate in an area of the most fundamental First Amendment activities." (Buckley, 424 U.S. at 14.) The First Amendment protects not only the rights of speech and petition but also the right to contribute financial and other support to a political candidate or ballot measure.
Since Proposition 25 specifically deals with campaign contributions and expenditure limits, any court reviewing this initiative would also have to address the First Amendment issues it raises. "Although the plurality in Buckley asserted that contribution limits entail ‘only a marginal restriction upon the contributor’s ability to engage in free communication,’ [Buckley] the High Court has since come to recognize that contribution limits ‘automatically affect expenditures, and limits on expenditures operate as a direct restraint on freedom of expression." (Service Employees Int’l Union, AFL-CIO, CLC, 747 F. Supp. at 588 [citing Buckley, 424 U.S. at 21 and City of Berkeley, 454 U.S. at 299.].) This direct restraint on freedom of expression raises a pivotal question as to what level of review the court must use for campaign reform initiatives such as this.
Undoubtedly, freedom of expression is a fundamental right. But does an initiative, such as Proposition 25, trigger strict scrutiny, the highest standard of review? "Not every governmental regulation implicating First Amendment or other fundamental rights is subject to strict judicial scrutiny. On the contrary, ‘it is only where there exists a real and appreciable impact on, or a significant interference with the exercise of a fundamental right that the strict scrutiny doctrine will be applied.’" (Planning and Conservation League, Inc., 38 Cal. App. 4th at 506 [citing FPPC v. Superior Court (1979) 25 Cal. 3d 33, 47.].) However, should the courts determine that Proposition 25 does require such exacting scrutiny, the proponents would have to show that the law was narrowly tailored to carry out a compelling state interest. Because Proposition 25 does not mandate spending limitations, but provides an incentive for voluntary spending limits, First Amendment rights are probably not obstructed.
Buckley held that limits on campaign expenditures impose significantly more severe restrictions on protected freedoms of political expression and association than limitations on financial contributions. The court found unconstitutional the portion of the Federal Election Campaign Act of 1971 (2 U.S.C. § 431 et seq.) which imposed limits on expenditures. (Buckley, 424 U.S. at 23.) The court held that such limits on expenditures did not satisfy the "exacting scrutiny applicable to limitations on core First Amendment rights of political expression." (Buckley, 424 U.S. at 44.)
More recently, a federal court of appeals panel found: "We are hard-pressed to discern how the interests of good government could possibly be served by campaign expenditure laws that necessarily have the effect of limiting the quantity of political speech in which candidates for public office are allowed to engage." (Carver v. Nixon, (8th Cir. 1995), 72 F.3d 633.) However, Buckley held that limits on contributions were constitutional. Therefore, limits on campaign contributions could be constitutionally upheld, but limits on campaign spending would not survive. This constitutional doctrine remains alive today.
For the first time since 1976, the United States Supreme Court in October 1999 decided to review its holding in Buckley v. Valeo, by hearing argument on the constitutionality of campaign contribution limits. (Oral Argument, Nixon v. Shrink Missouri Gov’t PAC, 68 U.S.L.W. 3239 (U.S. October 5, 1999.) (No. 98-963).) On January 24, 2000, the Court issued its decision in Nixon v. Shrink Missouri Gov’t PAC, upholding strict dollar limits on political contributions. By a 6-3 vote, the justices endorsed Missouri’s contribution limit of $1,075 per person to statewide candidates as constitutional. (Nixon v. Shrink Missouri Gov’t PAC, 2000 WL 48424 (U.S.))The Eighth Circuit Court of Appeals had demanded to see something more than the vague specter of potential corruption as a justification for limiting contributions. In rejecting that notion the Supreme Court held, "…there is little reason to doubt that sometimes large contributions will work actual corruption of our political system, and no reason to question the existence of a corresponding suspicion among voters." (Id. At 11.) In essence, the Court stood by its original distinction in Buckley, finding limits on contributions outside the gamut of protected free speech.
Justice Kennedy, one of three dissenters, questioned the majority’s reliance on Buckley by simply stating, "Buckley has not worked." (Id. at 18.) Kennedy expressed concern that upholding limitations on political contributions only increases a candidate’s reliance on "soft money" from political parties, thereby undermining the political process. "The Court has forced a substantial amount of political speech underground, as contributors and candidates devise ever more elaborate methods of avoiding contribution limits, limits which take no account of rising campaign costs." (Id. At 17)
The Court’s decision in Shrink Missouri may have dramatic implications for campaign finance reform in California. The holding removes any speculation and conjecture as to how today’s Court views Buckley, and it provides additional ammunition for those advocating campaign contribution limits in states across the nation.
B. Voluntary Spending Limits
In an attempt to limit the excessive amount of money being spent on campaigns, many reform proposals have adopted the concept of "voluntary" spending limits. Due to Buckley, Proposition 25 does not mandate spending limits, but rather provides an incentive for those voluntarily limiting their spending with public financing. The question then becomes whether those who reject the limits are put at a considerable disadvantage. The courts could determine that the media credits and four mailings put out by the Secretary of State are so significant that the system, in effect, obligates candidates to adopt the limits. The courts may determine that such incentives to abide by the spending limits may eliminate the "voluntary" designation.
C. Public financing
Buckley v. Valeo established that: "Congress may engage in public financing of election campaigns and may condition acceptance of public funds on an agreement by the candidate to abide by specified expenditure limitations." (Republican Nat’l Comm. v. FEC, (S.D.N.Y. 1980) 487 F. Supp. 280, 284 [citing Buckley, 424 U.S. 1, 57 n.65.].) Far from being a threat to First Amendment values, such measures are an "effort not to abridge, restrict, or censor speech, but rather to use public money to facilitate and enlarge discussion and participation in the electoral process, goals vital to a self-governing people." (Buckley, 424 U.S. at 92-93.) Such legislation "furthers, not abridges, pertinent First Amendment values." (Id.) It is therefore undeniable that public funding of election speech is consistent with the First Amendment.
D. Ban on transfers
Transferring money from one candidate to another is a common practice in the legislature. The ability to raise money for their members in tight races or to fund new candidates in open seats is viewed by many as the most important role of the legislative leaders in both houses. In 1998 alone, Senate President pro Tempore John Burton spent $7,368,487 during the general election, primarily in the form of transfers to Senate candidates. And Assembly Speaker Antonio Villaraigosa spent $8,043,859, transferring most of the funds to other Assembly candidates. (California Secretary of State, 1998 General Election Report, p. 2 (visited Dec. 1999) .) page 2.) Although some may dislike this practice of legislative leaders raising large sums of money to transfer to other candidates, forbidding candidates from transferring funds to other candidates’ committees raises some constitutional uncertainty.
A United States district court previously struck down a similar ban on transfers in Proposition 73 in Service Employee International Union. There, the court held provisions prohibiting candidates or elected officials from making contributions to other candidates from their own campaign funds violated the First Amendment insofar as they were premised upon the need to prevent evasion of campaign contribution limits based on fiscal years, which is not in issue here. However, the court noted that because political contributions are a form of protected free speech, those wishing to uphold this ban on transfers bear the burden "to demonstrate that the transfers serve some legitimate governmental interest." (Service Employee Int’l Union, 747 F. Supp. at 593.) The proponents of the ban in Proposition 73 argued that "the transfer ban is simply a device to prevent those who desire to avoid the contribution limits from doing so by the simple expedient of using another candidate as a conduit for the contribution." (Id.) Although not part of its binding decision, the court suggested that if the campaign limitations had been upheld, such an argument would have significant weight. If the contribution limitations in Proposition 25 withstand constitutional challenge, it would appear that the ban on transfers fares a better chance of surviving judicial scrutiny.
A. Contribution Limits
Undeniably, the costs of running a campaign for public office in California have increased dramatically. In 1998, the average Assembly race cost $143,519 and the average Senate race cost $248,481. (California Secretary of State, 1998 General Election Report, figure 7 (visited Dec. 1999) .) The vast amount of money needed to run a competitive campaign has deterred qualified candidates and requires our public officials to spend a great deal of time fundraising for their next campaign. There is little doubt that money is necessary to communicate with voters; therefore, it is not surprising that those who spend more than their challenger in a campaign have an increased likelihood of victory. Nonetheless, it is startling to note that while Assembly winners outspent Assembly losers by a ratio of less than 3 to 1 in 1976, by the late 1990s, that ratio had become approximately 14 to 1. (Id. at 6.) Because money plays such a crucial role in campaign races, there will always be a call for greater campaign finance reform.
Additionally, there will always be a need for candidates to communicate with voters and this need to communicate has a direct relationship to the need for money. The reality in California is that "communication" is very expensive. Television buys are virtually impossible for most local, Assembly or Senate candidates in many of the larger media markets in California. Some argue that imposing contribution limits, with or without expenditure limits, will reduce the amount of money a candidate can raise, thereby limiting a candidate’s opportunity to communicate with voters.
Opponents of Proposition 25 argue that imposing campaign contribution limits benefits both the independently wealthy and the incumbents. Other candidates will have less money to spend on mail and advertising (both radio and television) working to the advantage of those candidates already known by the voters. Incumbents should already have the name identification and presumably the voters already know their positions. Furthermore, self-financed candidates would be free to spend as much of their own money as they desire. For a millionaire candidate who can afford to spend millions on a campaign, there is no incentive to voluntarily abide by the spending limits. This type of candidate could easily afford to buy his own media advertising time, and the pro-rata cost of four statewide mailings. Furthermore, such a self-financed candidate would not have to worry about the per person contribution limits when he plans to spend his own money on the race, whereas other candidates would have to spend a larger portion of their time raising money in smaller amounts. This dichotomy could effectively dissuade a potential candidate without the personal financial resources from even entering the race.
However, contribution limits could presumably cut down on the exorbitant amount of money contributed by special interest groups. California is currently only one of six states in the nation with no limits on contributions. (Voter Pamphlet, at 64.) According to California Common Cause, the average amount given by the Top Ten donors to current legislators was $12,328. (See Jim Knox, California Common Cause Reports on Top Ten Contributors to State Legislators and Legislative Campaigns During 1997-98 Election Cycle, September 7, 1999.) Under Proposition 25’s contribution limits of $5,000 per election for statewide candidates, $3,000 for other candidates, and $5,000 to PACs, the intended result is to reduce the candidates’ reliance on special interest money. Campaign finance reform advocates argue that their goal is "ending big money’s influence on politics." It is not certain that the proposed contribution limits would end big money influence, but they should lower the stakes.
B. Disclosure Requirements
It is undisputed that increased disclosure requirements provides voters with the information they need to make informed choices. The original spending and contribution disclosure requirements included in the Political Reform Act of 1974 have dramatically changed the political environment by revealing the campaign contribution practices of special interest groups and public officials. The Internet disclosure requirements of Proposition 25 make the current disclosure rules even more accessible to the general public. Currently, campaign donations and expenditures are available only by visiting the Secretary of State and requesting copies of the many reports filed by the candidates. However, Senate Bill 49 was recently enacted to require Internet disclosure of contributions by January 1, 2000. (Online Disclosure Act of 1997, SB 49, stats 1997 c. 866, codified at Cal. Govt. Code § 84600.) The Secretary of State’s office will still be responsible for collecting such disclosure statements but now additionally responsible for creating the online system whereby candidates can file their reports electronically. Nothing in this new law requires more frequent disclosure.
Governor Gray Davis as well as some legislators came under public scrutiny this past summer for attending fundraisers with special interest groups at the same time legislation affecting the same groups was being considered. However, the money raised from such fundraisers would not be disclosed until the next year, long after most would forget the legislation under consideration. (See Virginia Ellis, Faster Fund-Raising Disclosure Urged, Los Angeles Times, September 21, 1999.) The disclosure requirements in Proposition 25 would presumably solve this inconsistency by requiring any donation to be disclosed electronically within 24 hours. At first glance, such reporting requirements seem to be extremely burdensome; however, with the latest advances in electronic technology, they could be as easy as a click of the mouse.
C. Implementation Costs
Many of the provisions of Proposition 25 appear to place an extremely high fiscal burden on the state and local governments. Proposition 25 mandates an appropriation from the General Fund to the Secretary of State of $1,500,000 in the first fiscal year and $750,000 in each subsequent fiscal year for the costs of implementing the Internet campaign disclosure requirements of Section 7. (Voter Pamphlet, at 138.) But the Legislative Analyst and the Director of Finance estimate this measure is likely to cost more than $40 million to the state and potentially more than $1 million annually to local governments. As a result, the Secretary of State would bear a substantial burden in implementing many of Proposition 25’s provisions. The initiative mandates that the Secretary of State "shall establish and maintain a ‘Campaign Web Site’ on the largest, nonproprietary, nonprofit, cooperative public network of computer networks which includes a grid for each state candidate and each ballot measure…[t]he Campaign Web Site shall also contain dynamic, multimedia copies of all campaign advertisements…" (Voter Pamphlet, at 138.) This provision would entail a substantial amount of time, money and staff work. The Secretary of State’s office would become a clearinghouse for all campaign information including advertisements. Furthermore, the costs associated with compiling and disseminating four statewide campaign mailers pursuant to this initiative would be significant.
While Californians have regularly supported campaign reform by passing a number of initiatives over the past 25 years, it is unclear whether the climate is right for such a sweeping measure as Proposition 25. Even though voters tend to support campaign finance reform measures on the ballot, voters have been somewhat reluctant to approve of using taxpayer money to pay for the campaigns of their elected leaders. The public financing component may deter voters from approving this measure. The California Chamber of Commerce has already publicly opposed this initiative saying public money should not be used to finance campaigns. Additionally, a coalition called the "Taxpayers for Fair Elections," comprised in part of the League of Women Voters, Congress of California Seniors, California Taxpayers’ Association, California Teachers Association and the Chamber of Commerce, have organized in opposition to Proposition 25. (See Taxpayers for Fair Elections, News Release, Prop 25 Seen as a Cure Worse Than the Disease, December 8, 1999.)Nonetheless, it is apparent that in order to ensure judicial approval, public financing is an important component of this overall package.
In light of the Supreme Court’s recent decision in Nixon v. Shrink Missouri Government PAC,, the political contribution limits established under Proposition 208 have a terrific chance of being reinstated by the courts. In the meanwhile, Proposition 25 will provide California’s voters with one more opportunity to pass campaign finance reform. The presence of Proposition 25 on the March 2000 Primary Election Ballot sends yet another clear signal to our elected officials that there is still an intense desire to see more reform.