CALIFORNIA ELECTIONS / GOVERNOR : Law Puts Big Demands on Candidates

Republican Pete Wilson has out-banked Democrat Dianne Feinstein about 6 to 1 going into their fall campaign for governor, but California’s 2-year-old campaign finance reform law still puts enormous fund-raising demands on both candidates during the remaining three months of the contest.

As of June 30, Wilson had $3.9 million cash on hand and Feinstein had $645,344, according to reports filed with the secretary of state’s office. Wilson out-raised Feinstein by 2 to 1 during the latest reporting period, May 20-June 30, and he had spent $5.4 million for the year even though he had no substantial opposition in the June primary. Feinstein, with a tough primary, spent $5.5 million in the first half of 1990.

Wilson aides declined to say how much they have budgeted for the fall campaign, but campaign director Otto Bos said, “We are about $50,000 over our budget projections. We think we are very close to where we want to be.”

Sources in the Feinstein campaign have said the former San Francisco mayor hoped to raise $10 million to $12 million for the fall stretch. To come near to that goal, her campaign would have to collect about $3 million a month from here on. She took in only about $1.5 million in the last six weeks, Feinstein told a press conference in Los Angeles on Tuesday.

The good news for Feinstein was that she raised that much without relying on further loans from her husband, Richard Blum, a wealthy investment banker who advanced the Feinstein campaign about $3 million to help her defeat state Atty. Gen. John K. Van de Kamp in the June 5 primary election.

This is the first statewide election being conducted under the restrictions of Proposition 73, an initiative approved narrowly by state voters over a rival campaign reform plan in 1988. A major provision of the law, sponsored by conservative Republican Assemblyman Ross Johnson from La Habra and independent Sen. Quentin Kopp of San Francisco, limits contributions and loans to campaigns from an individual to $1,000 for each fiscal year. There is no restriction on what a candidate can contribute or lend to his or her own campaign.

With her treasury depleted by the primary battle, Feinstein spent most of the following four weeks out of public view, primarily talking to potential contributors. Wilson spent some of his reserve during that time on television ads that went unmatched by the Feinstein campaign. This strategy led some experts to conclude that Feinstein missed an opportunity to capitalize on the public exposure and momentum she got out of the primary victory. But the fiscal year calendar of the campaign finance law made it imperative that Feinstein raise as much money as possible before June 30.

Until Proposition 73, there was no contribution limit on individuals or businesses. In the 1986 election for governor, incumbent Republican Gov. George Deukmejian raised more than $13 million. His unsuccessful opponent, Democratic Los Angeles Mayor Tom Bradley, collected a little more than $6 million. A single group, the Western Growers Political Action Committee, gave Deukmejian more than $100,000 in one two-month period in 1986, and Bradley had a number of contributions in the $10,000-$15,000 range.

Proposition 73 has curbed the check-writing abilities of the big givers. But the reforms have not necessarily reined in the soaring cost of elections in California, or reduced the influence of a candidate’s most trusted money men and women, veteran campaign officials say.

Duane Garrett, Feinstein’s campaign chairman, explained it this way: “The $1,000 contributor becomes the sine qua non of the effort. Before, you didn’t think of amounts. You did a lot of $500 events and you’d get $5,000 from a giver. . . . Now you have to make that kind of contributor into a fund-raiser. As a result, the take is down.”

Thus, instead of paying for a 10-place table and allowing the campaign to honor select friends or potential givers by seating them for free, the contributor now is asked to find nine friends or associates to write their own checks.

Proposition 73 does not limit the total spending for a single office, and it prohibits public financing of campaigns. It also banned large in-kind contributions, a feature that bothers even the Wilson camp although the senator supported Proposition 73.

In the past, it was common for law firms and accounting offices to lend talent to campaigns to handle the considerable legal and bookkeeping services required in running for election. Firms also lent planes and buses for candidate travel. During 1986, for example, the Bradley campaign received in-kind contributions valued at more than $62,000 from one law firm and $9,248 in copying machine services from two firms.

“Probably the biggest complaint is that it takes more bookkeepers and more attorneys,” Bos said. “It drives up the cost of the campaign.”

Bos also said Proposition 73 can discourage grass-roots campaigning. Businesses, labor unions and other organizations used to donate office space in California’s smaller cities and towns for use as local campaign headquarters. But Bos said, “This doesn’t happen much any more because you’ve got to pay up front. I’m not convinced that kind of reform is good reform.”

Most campaign veterans believe, however, that the greatest effect of Proposition 73 is to force candidates to spend much more time collecting money. One prominent Los Angeles fund-raiser who asked not to be quoted by name commented, “It’s a total perversion of the process. The (1,000) dollar figure doesn’t bear any relation to the cost of campaigning.”

The result is that the candidates have less time to spend in public discussing real campaign issues, added another political expert, Robert M. Stern, co-director of the California Commission on Campaign Financing.

CAMPAIGN REPORTS

The following chart shows the amount of money raised by the major candidates for statewide office this year through June 30 , as reported on their latest campaign reports. Also noted is the amount of cash that each candidate had on hand at the end of the reporting period, as they prepare for the fall general election. Several of the candidates, in the aftermath of bruising primary campaigns, reported substantial debts. The campaign reports were filed this week with the secretary of state’s office in Sacramento.

RAISED THIS YEAR OUTSTANDING CANDIDATE (through June 30) CASH ON HAND DEBTS GOVERNOR Dianne Feinstein (D) $5,822,898 $645,344 $3,197,861 Pete Wilson (R) $4,294,252 $3,944,908 $192,475 LT. GOVERNOR Marian Bergeson (R) $396,182 $3,937 $21,854 Leo T. McCarthy (D) $682,127 $485,215 $42,883 ATTORNEY GENERAL Daniel E. Lungren (R) $433,186 $216,965 $7,066 Arlo Smith (D) $804,236 $181,825 $355,356 INSURANCE COMMISSIONER Wes Bannister (R) $84,445 $17,889 $2,341 John Garamendi (D) $1,420,535 $20,396 $939,565 CONTROLLER Gray Davis (D) $708,140 $2,525,569 No debt Matt Fong (R) $350,913 $210,346 $14,624 TREASURER Kathleen Brown (D) $893,657 $1,172,869 No debt Thomas W. Hayes (R) $405,220 $24,792 $686 SECRETARY OF STATE March Fong Eu (D) $296,344 $272,409 No debt Joan Milke Flores (R) $262,339 $176,954 No debt