Gov. Wins Initiative Fundraising Case
A preliminary ruling lets Schwarzenegger raise unlimited money to push ballot measures.
SACRAMENTO â€" California politicians can raise
unlimited amounts of money to promote ballot initiatives, a
judge said Wednesday, handing Gov. Arnold Schwarzenegger a
significant victory as he promotes his political agenda
In a preliminary ruling, Sacramento Superior Court Judge
Shelleyanne Chang said forcing Schwarzenegger to abide by
fundraising limits for initiatives would unfairly trample
on his right to free speech and would not subdue "the
demons" of political corruption.
If Chang sticks with her initial ruling after a hearing
scheduled for today, she will significantly alter
Proposition 34, the initiative voters passed resoundingly
in 2000 to reduce the influence of money in politics.
Last month Schwarzenegger, Citizens to Save California and
other groups promoting initiatives sued the Fair Political
Practices Commission, the agency that enforces state
campaign laws. They asked Chang to overturn a regulation
prohibiting politicians from "controlling" initiative
groups that raise unlimited amounts of money from
Campaign finance watchdogs said the ruling would allow
politicians to bypass contribution limits by setting up and
promoting themselves through initiative committees.
"This decision thwarts the understanding and intent of
voters who assumed by voting in favor of Proposition 34
that the limiting of contributions to candidates and
officeholders applied to ballot committees," said Paul S.
Ryan, an attorney with the Campaign Legal Center in
Washington, D.C., which joined in defending the
Chang's ruling is especially important to the Republican
governor, because he has partly staked his political future
on overhauling government at the ballot box rather than
through the Democratic-controlled Legislature. The governor
is expected to support at least four propositions in a
possible special election this November, a campaign
Schwarzenegger estimated would cost at least $50
The preliminary ruling means Schwarzenegger can actively
control Citizens to Save California and other groups
promoting ballot initiatives, without having to abide by
the contribution limits that apply to his reelection fund.
He can accept no more than $22,300 per donor in that
"We certainly felt that all along there was a violation of
the 1st Amendment," said Joel Fox, co-chairman of Citizens
to Save California. "The right-to-associate and the
freedom-of-speech issues were very important."
Chang's ruling would open the way for Schwarzenegger and
other politicians to collect five- and six-figure donations
and control how the money is spent.
If it stands, the decision "would remove any doubts about
the governor's ability to raise unlimited sums for his
favorite ballot measures and to raise unlimited sums to
oppose his least favorite," said Rick Hasen, an elections
law scholar at Loyola Law School.
FPPC spokesman Theis Finlev said the agency was
disappointed by Chang's tentative ruling and that it hoped
to persuade the judge to change her mind.
Assembly Speaker Fabian NuÃ±ez (D-Los
Angeles) said he would attempt to overturn the ruling by
introducing a bill that would bar candidates from
controlling initiative groups that don't abide by
fundraising limits. His move would set up another political
battle this year between Democrats in the Legislature and
the Republican governor.
NuÃ±ez said the ruling shows "the governor,
in lock step with the corporate backers of his initiatives,
have gone to incredible lengths to eliminate the will of
the people to limit campaign spending."
Chuck Bell, a Sacramento-based attorney for the governor
and other plaintiffs in the case, said it would be
difficult for the Legislature to step in. The
constitutionality of such an effort would be dubious, he
said: "I don't think that leaves them much ground
Schwarzenegger has cast himself as an agent of reform who
wants to stop a practice in Sacramento in which he says
"money goes in" while "favors go out." Bell said the
governor needed initiative campaign money to compete on a
"level playing field" with well-funded political opponents
and to "communicate on television to voters directly."
The FPPC ruled last June that committees such as Citizens
to Save California can raise unlimited sums as long as
their expenditures are not controlled by a candidate. The
Sacramento court was asked to decide: If a candidate
controls a ballot committee, should fundraising limits
In her preliminary ruling, Chang said she agreed that
preventing the corrupting influence of money in politics
was important. But Chang, an appointee of former Democratic
Gov. Gray Davis, said "it is difficult to comprehend" how
limiting campaign contributions to ballot groups would
eliminate the "three resilient demons of campaign finance":
corruption, the appearance of corruption and circumvention
of campaign finance laws.
The judge said the FPPC wrongly assumed that contributions
to initiative groups such as Citizens to Save California
were "in reality contributions to the candidate who
controls the committee." The regulation "unreasonably
impairs or chills" the right of a politician to exchange
ideas with other people, she said.
Citizens to Save California was created to help the
governor implement his political vision. Its leadership
includes Schwarzenegger allies such as Allan Zaremberg,
president of the California Chamber of Commerce, and Rex
Hime of the California Business Property Assn..
The four issues Schwarzenegger may ask voters to decide in
a special election are whether: teachers should be paid
based on merit rather than seniority; the pension system
for state employees should be overhauled; the way voting
districts are drawn should be changed; automatic restraints
on government spending should be imposed.
Citizens to Save California has until May 1 to collect
about 1.2 million signatures on each initiative it supports
to qualify for the November ballot. The group has been busy
raising money to pay people to gather the signatures and
others to produce advertisements. Reports that the group
has filed with the state show it has raised $4 million so
far, with many contributions exceeding $22,300.
Schwarzenegger has attended all of the group's major
fundraising events, including an "Evening with Gov. Arnold
Schwarzenegger" on Tuesday night at the Hyatt Regency
Irvine. A "dinner chair" for the event was asked to donate
$100,000, which bought two 10-seat tables, tickets to a
reception and three photos with the governor.
Fox said the ruling frees Citizens to Save California to
"enlarge our effort" in assisting Schwarzenegger.
Ned Wigglesworth, an analyst with TheRestofUs.org, which
has filed a lawsuit against Schwarzenegger, the governor's
various political committees and Citizens to Save
California, cast the ruling as a defeat for ordinary
"Today's ruling is out of step with the people and out of
step with the law of the land," he said.
Times staff writer Peter Nicholas contributed to this
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