Self-Financed Candidacies Draw Watchdogs’ Scrutiny : Politics: Wealthy say their cash provides independence from special interests. But does the trend put leadership posts up for auction?

Longtime North Hollywood resident Jim Keysor, who represented the northeast Valley in the 1970s as a state assemblyman, wants to make a political comeback and is ready to spend $150,000 of his own money on that quest. Already, the part-owner of a plastics company has put $63,100 into his campaign.

Another state Assembly candidate, Ross Hopkins, a public affairs consultant from Canoga Park, is a political novice who has dipped into his life savings to loan his campaign committee $49,000, or two-thirds of its total receipts.

“Absolutely, it’s a lot of money for me,” Hopkins said of his investment in his political future.

Assembly candidate Valerie Salkin, who lived in the East Valley only a year before deciding that she wanted to represent her newly adopted home, has become her own biggest financial angel by loaning her campaign committee $60,000.

Then there’s Doug Kahn, an heir to the Annenberg publishing fortune, who has already put $400,000 into his upcoming, and third, bid for the congressional seat now held by U.S. Rep. Carlos J. Moorhead (R-Glendale). Kahn, who spent $140,000 running against Moorhead in 1994, says that sinking his family money into politics is a good investment. “I’m taking money from my children to do this,” he said. “But it’s important for them that I do this, to turn this country around and bring reasonable leadership to the House.”

As San Fernando Valley voters approach a watershed 1996 election year, when half a dozen veteran incumbents leave office, they will find themselves courted by a new crop of eager candidates, many of them putting out big money of their own to improve their chances. Some say self-financing is sinister, that it permits the well-to-do to become viable and competitive candidates thanks solely to the power of the checkbook.

But others say such candidates should be applauded because they are not beholden to special interests and are proving that they are serious about serving their communities--so serious that they are willing to put their own bucks at risk.

“In the last 10 years, we’ve seen a lot more candidates loaning money to themselves,” said Bob Stern, co-director of the California Commission on Campaign Financing.

“In the past, candidates would simply give $10,000 or so to their campaigns, and they could afford that. But now, with the price of campaigns going up, we’re talking about candidates putting in $50,000, $70,000, $100,000 or more into their campaigns. And instead of giving it to their campaigns, they’re loaning it in the hopes they can get it back someday.”

But if public-interest groups, like the League of Women Voters, California Common Cause and the Ralph Nader-affiliated CalPIRG, have any say, the trend would be sharply curtailed.

Animated by such events as the 1994 U.S. Senate race in which Michael Huffington spent $28 million of his oil fortune on his losing campaign, these groups are shooting to place measures on the November, 1996, ballot to curb current campaign-finance practices in state and local elections. (Federal races and candidates would not be affected.)

The proposals would limit how much contributors can give candidates as well as how much candidates can loan to their own campaigns.

Under the ballot initiative backed by the League of Women Voters and Common Cause, candidates for all state offices except governor would be limited to loaning themselves $20,000 per election. For gubernatorial candidates, the cap would be $50,000.

A separate ballot measure that CalPIRG is backing would go further. It would limit self-lending to $10,000 for all candidates except those running for governor, who could loan themselves no more than $25,000.

The U.S. Supreme Court, citing First Amendment protection of self-expression, has refused to limit what candidates may contribute outright to their campaigns. But the federal courts have recognized a legitimate public interest in limiting how much candidates lend themselves. Kentucky passed a landmark lending-curb law in the 1980s after its governor outraged voters by holding fund-raisers--attended by state contractors--to pay off the loans he had made to his campaign.

The League of Women Voters and its allies are currently trying to get enough signatures to put their plan, called the Political Reform Act of 1996, on the ballot. CalPIRG and its supporters expect to begin gathering signatures in December for their measure, called the Anti-Corruption Act of 1996.

Some might say that if candidates’ self-lending practices are sharply curtailed, the biggest winners, at least financially, may be the candidates themselves, especially the losers who have little chance of recouping their money.

“Your ability to raise money to pay off debt is a lot greater when you’re in office than when you’re out of office,” acknowledged Democrat Adam Schiff recently. Schiff borrowed $50,000 from his parents to finance his unsuccessful 1994 campaign for the seat now held by Assemblyman James E. Rogan (R-Glendale). His parents are still looking for the first repayment installment, Schiff said. Next year, Schiff--sans additional loans from his parents--will be running for the seat now held by state Sen. Newton R. Russell (R-Glendale).

In effect, what starts out as a loan by the candidate often ends up as a de facto contribution.

That’s clear now to banking consultant Bob Hammer, who ran in the 1994 GOP primary for the 24th Congressional District seat, held then, as now, by U.S. Rep. Anthony C. Beilenson (D-Woodland Hills). Hammer has had to kiss the $70,000 loan he made to his campaign goodby. Reminded recently of that investment, Hammer, a businessman, chuckled. “I just took it as a loss.”

Having to swallow an even bigger personal financial loss in the race for Beilenson’s seat was attorney Richard Sybert, the GOP nominee who lost his head-to-head battle against the incumbent, spending more than $500,000 of his own money in the process.

Attorney Edward Tabash, who ran in the Democratic primary for the 41st Assembly District seat and in the process spent $125,000 that he had loaned to his campaign, knew it was futile trying to recover his money after he lost to Sheila J. Kuehl. “If I couldn’t raise money as a candidate, I knew there was no way I could raise it to pay for debt retirement,” Tabash said.

The debate about the implications and merits of candidate self-financing is an old one. Often, it is only the voices that are new.

“I’d rather see a candidate who is 100% self-funded than one who is funded only by special interests and can’t be independent,” Salkin said recently, repeating a standard argument.

Salkin, a Democrat running for the seat now held by Assemblyman Richard Katz (D-Sylmar), has loaned herself $60,000. She has raised a total of $134,000. Her coffers also include $10,000 each from her father and grandfather and a $5,383 contribution from herself.

Hopkins, who is running in the adjoining Assembly district for the seat now held by Assemblywoman Paula L. Boland (R-Granada Hills), adds that self-funding his campaign is a big sacrifice for him but a necessary and honorable one.

“It shows a level of commitment on my part that says I’m a serious candidate,” Hopkins said. Candidates who are not viewed as serious cannot expect the party faithful to contribute to their campaigns or walk precincts for them. Nor can they expect the better political consultants to work for them or reporters to pay attention to them, Hopkins notes.

“Frankly, I’d have felt a little squirrelly asking others to contribute to my campaign if I hadn’t put money into it myself,” said Sybert, who is preparing to run against Beilenson again next year. “Obviously, my money helped,” Sybert added, noting that money attracts money. “It makes a statement to contributors that you have faith in yourself.”

Such a “statement” helped him raise another half-million dollars from contributors, Sybert said.

But Jim Dantona, a candidate in the race for Katz’s Assembly seat, said he would not--even if he were wealthy--use his own money to finance his candidacy. “No, I wouldn’t,” he said. “I’m a true believer on this.”

Dantona, a former aide to Lt. Gov. Gray Davis and ex-state Sen. David Roberti, has raised $64,440 for his campaign, and he’s proud to say that it did not come out of his own pocket.

“When you look at someone’s [financial disclosure] report, it tells a story,” Dantona said. The story told by Keysor and Salkin’s reports is that they were “born with a silver spoon” and can’t relate to voters in the modest, working-class communities of the northeast Valley, Dantona said.

The story his own statement tells, Dantona says, is that of a man who is able to raise money from law enforcement groups, labor unions and businesses, “a broad-based coalition of people and groups.”

In effect, it is a virtue to be able to raise money from other people, a sign of the candidate’s ability to inspire others, according to Dantona.

To Salkin, however, having her own money means not having to accept money from sources like Browning-Ferris Industries, a firm that needs support in high places for its plan to expand its Sunshine Canyon landfill. “I said no to them: Jim Dantona took a $2,500 contribution,” Salkin said.

Hopkins also says self-financing frees him from uncertain political liaisons. Here, he points to the fact that Scott Wilk, an aide to Boland, who is a major opponent of his in the GOP primary, has gotten a $50,000 political loan from Lorine Pichler, an Orange County investor.

“Absolutely, I should be applauded for putting in my own money,” Hopkins said, “especially when you look at [Wilk], who goes to an outsider for a $50,000 loan. The worst that can be said of me is that I’m only buying myself, not being bought by someone else.”

But Tony Strickland, Wilk’s campaign manager, says the public should be impressed with Wilk’s fund-raising ability. “Scott had to move [Pichler’s] heart to get her to contribute. If he hadn’t, she wouldn’t have given as much,” Strickland said. “At least, he touched someone with his message and exercised some charisma.” He said Pichler is not a sinister representative of special interests but a woman who wants to see conservative Republicans in office.

Finally, Keysor, who is also running in the Democratic primary for Katz’s seat, says the public is not troubled by wealthy candidates financing much of their campaign costs. “We ran a poll--and I’m not going to give out all the details--that showed that it doesn’t bother people at all,” Keysor said. “In a way, it was viewed positively [by voters]. It’s the damnedest thing.”

Keysor, who represented the northeast Valley from 1971 to 1978 in the state Assembly, is no stranger to putting his money where his political mouth is. In 1986, he ran for Los Angeles County assessor and loaned his campaign $400,000--he raised another $400,000 from other sources--and he never got the money back.

Did it affect his lifestyle to lose $400,000? “It did not,” Keysor said recently. “That’s because I do have a big income.” Keysor Century Corp., the Saugus-based plastics firm owned by Keysor’s family, generates $10 million to $25 million in gross revenue per year, according to the Southern California Business Directory and Buyers Guide.

“Ask the other people running: If they had a million dollars in the bank, would they put a lot of it into their campaigns if they could? If they say they wouldn’t, they’re lying to you,” Keysor said.