Cuts at FPPC May Halt Probes
The 30-year-old state ethics watchdog agency, which is looking into the governor's use of campaign funds, is targeted for reductions.
SACRAMENTO â€" The state agency that polices
the flow of money into California political campaigns has
been targeted for deep cuts by Gov. Arnold Schwarzenegger,
even as the agency is looking into the governors' own use
of campaign funds.
The cuts could force the Fair Political Practices
Commission, formed in the aftermath of Watergate, to halt
investigations. And watchdog groups that have criticized
the agency as toothless in the past are now rushing to its
"The public should take pause when elected officials are
significantly cutting an agency that watches over their
behavior," said Andy Draheim, spokesman for California
The controversy is erupting at a time when more money is
flowing into state politics than ever. Ballot initiative
campaigns with tabs of $10 million are routine.
Once-obscure groups such as the state prison guards union
have won significant contract gains. And Indian tribes
flush with cash from casinos have been using it to curry
favor in the Capitol as they seek to expand their gambling
Campaign finance reform advocates have long been critical
of the commission, a bipartisan group of five members, two
of whom are appointed by the governor and one each by the
secretary of state, attorney general and state controller.
They say it often acts too late â€" or not at
all. And when it does act, they say, it doesn't do enough.
But they also acknowledge that at least it exists and is
independent. That's more than most states have, they
say."There are times when one might disagree with its
penalties, but it's one of the more effective groups of its
kind in the country," said Tracy Westen, chief executive
and founder of the Center for Governmental Studies, a Los
Angeles think tank.
"I am concerned about the proposed budget cuts," he said.
"The FPPC itself has said they might cripple its ability to
continue to enforce campaign finance and ethics laws. If
true, it would be a disaster. We need an honest cop on the
Next week, the commission will mark the 30th anniversary of
Californians voting it into existence through the Political
Officials at the commission, which has a $6-million annual
budget, warn that the $980,000 in cuts the governor has
proposed would cost it several investigators, attorneys and
analysts. As a result, investigations into some conflicts
of interest may have to be put aside, and the same goes for
work rooting out complicated money-laundering schemes that
donors use to evade contribution limits, officials say.
The commission receives more than 47,000 phone calls a year
from local and state candidates seeking advice on the
state's complicated campaign finance laws. But now many
could go unanswered. And the commission might have to stop
enforcing bans on certain gifts and payments to
"We have a number of programs that are in jeopardy right
now," said Steven Russo, the commission's chief of
enforcement. "We would be able to investigate fewer cases.
There are already cases we would have to close because
there is not sufficient staff."
The governor's plan would continue a trend that has seen
the staff size steadily whittled down over the last several
years, raising concerns about its ability to carry out the
mission intended when voters approved the Political Reform
Act in 1974.
If the governor's plan were approved, there would be 57
staff members left at the agency â€" down more
than a third from its peak in the early 1990s.
Administration officials say they are simply asking the
commission to tighten its belt.
"We're not saying there won't be impacts in terms of their
workload, but just as other state agencies have been forced
to absorb and adopt these reductions, we are asking them to
as well," said H.D. Palmer, spokesman for the Department of
Finance. "Different agencies have to do it in different
Palmer said many of the reductions were proposed by the
FPPC itself before Schwarzenegger took office in
But agency officials say they didn't propose the cuts at
all; they merely complied with an order to show what would
happen if the commission had to sustain such a cut.
Among the cuts are positions that would be lost because the
administration is refusing to lift a state hiring freeze to
replace investigators and attorneys who are retiring. That
freeze, however, has been lifted for thousands of other
state positions â€" including the governor's
own political and press aides.
Although Palmer said the cuts are justified, he is leaving
open the possibility that the administration could change
"If there is a compelling case that the core functions of
the agency would be compromised by these reductions, we
wouldn't necessarily be opposed to lowering them," he
Commission officials said that was news to them.
The commission is investigating the governor's campaign
that led to passage in March of Propositions 57 and 58,
which authorized the sale of $15 billion in bonds to
balance the budget.
The Foundation for Taxpayer and Consumer Rights, a Santa
Monica advocacy group, alleges that Schwarzenegger violated
the law by not disclosing the top corporate donors in
campaign commercials. Instead, the complaint says, the
governor "laundered" his campaign cash by funneling it into
Voters never learned the commercials were paid for by
corporations with business before the state. Instead, they
were told that "Gov. Schwarzenegger's California Recovery
Team" paid for them, according to the complaint.
"This is indicative of a larger pattern," said Carmen
Balber, a consumer advocate with the foundation. "Gov.
Schwarzenegger came to Sacramento promising to sweep the
special interests out. Instead, he is throwing away the
Balber accused the administration of financially starving
the commission so it can do less enforcement work.
It's a charge Palmer calls silly. "These guys are giving
conspiracy theorists a bad name," he said.
The furor over the funding has, however, prompted lots of
reflection over the appropriate role of the commission.
It comes after the commission fined Lt. Gov. Cruz
Bustamante and three of his campaign committees $263,000
for illegally funneling $4 million into his failed
gubernatorial campaign last year.
The fine was the biggest ever imposed on an individual by
the commission, but critics said it was too little, too
late. It came almost as a slap on the wrist after
Bustamante had already broken the rules and spent the $4
million, they said.
Critics said the FPPC should have pushed for the $9 million
in penalties it initially sought in a lawsuit against
Commission members say the law limits how far they can go
in many cases.
"For people who thought there would be instantaneous
enforcement and an immediate clamping down on illegal
contributions, I am not sure that was ever a realistic
goal," said Pamela Karlan, a commission member and
professor at Stanford.
"Money in politics is like water," she said. "It's very
hard to dam it up. What tends to happen is the money flows
around whatever obstacles are put in front of it. The real
success of the law is making the process more
Supporters of the commission argue that the Bustamante case
is a fine example of how that works. The publicity around
his illegal actions, they say, probably helped doom his
"Bustamante may be a poster child for what happens under
the current system when you go too far," said Westen, the
government studies expert. "The attention paid to his
sucking up money from improper sources played a significant
role in bringing him down."
"For most people, this commission is pretty obscure," he
said. "But it plays a vital role in keeping the government
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