The Public Eye

A legal use of power: Parties funnel millions to California candidates

Sacramento

Eureka, on California’s North Coast, is at least a seven-hour drive from Fresno, the northern tip of the Central Valley’s sprawling 14th Senate District. It’s even farther from Santa Ana, the Orange County city at the heart of Southern California’s 34th Senate District.

In political terms, though, the Eureka-based Humboldt County Democratic Central Committee was right in the thick of both campaign battlegrounds last fall.

The Humboldt committee, along with party committees in San Mateo, San Diego and elsewhere, poured millions of dollars into Senate and Assembly contests during the final weeks of the fall campaign – sometimes within days of receiving large contributions from public-employee unions, corporations and other special interests. The Republican candidates in those races received similar help, as GOP committees from San Luis Obispo, San Bernardino and beyond accepted large donations and pumped money into the campaigns.

Fourteen years after voters approved a measure that imposed candidate contribution limits for the first time, the pipeline of money between donors, political party committees and far-flung candidates in competitive races continues to grow. Political parties’ role as money middlemen effectively skirts the limits while making it difficult for voters to figure out which special interests support a candidate.

California political parties dominated fundraising in more than two dozen Assembly and state Senate races last fall. With Democrats’ two-thirds legislative supermajorities at stake, the parties relayed at least $22 million into candidates’ campaign coffers from Aug. 1 through mid-November, state records show. That is more than a third of the total amount raised by all legislative candidates during that time.

The transactions are complex, sometimes involving multiple committees, yet entirely legal if there is no coordination between donors, committees and candidates. Such cases are difficult to prove and only a relative handful of politicians, consultants or political committees have gotten in trouble for money laundering.

“I guarantee you there’s someone with a huge Excel spreadsheet on one screen and the rules and regulations on the other, and they’re tracking it. It takes time and understanding, but it’s possible,” said Loyola Law School professor Jessica Levinson, who teaches election law. “People are forever becoming smarter about different ways to get money into elections. It can provide a very broad vehicle for people to exert their influence.”

The money-shuffling is a legacy of Proposition 34, the November 2000 measure placed on the ballot by lawmakers of both parties and billed as campaign-finance reform.

Proposition 34, for the first time, restricted the size of campaign contributions to state races in California. But the measure’s text acknowledged another primary purpose – “to strengthen the role of political parties in financing political campaigns” and to allow them to make unlimited contributions to their candidates.

County central committees and other party entities, which had been the domain of activists who busied themselves with local endorsements or volunteering on local campaigns, overnight became potential conduits for big money into races anywhere in the state.

“It was a huge loophole written by party attorneys to allow parties to raise unlimited money,” said Bob Stern, a former general counsel of the California Fair Political Practices Commission.

Individual donors last year were not allowed to give more than $8,200 to a candidate. But donors could give a larger amount – $34,000 last year – to each party organization that, in turn, could be contributed to candidates’ campaigns.

That means a wealthy donor could write a series of $34,000 checks to multiple party committees, which then could each send the money to one candidate in a contested race. As long as there was no coordination, the transaction would be legal.

Certain county committees have emerged as go-to recipients of the money each election cycle.

“We’ve developed a reputation around the state that we’re good at fundraising,” said Jess Durfee, a former chairman of the San Diego County Democratic Party, who oversees the party’s fundraising and contributions to other candidates. In the final weeks before the Nov. 4 election, the party gave more than $415,000 to Senate candidates and received $1.1 million in contributions – more than two-thirds of that in five-figure increments.

“Legislation passed in Sacramento affects San Diego Democrats as much as anyone else,” Durfee said.

He never talks to candidates about money – nor does he need to, he said. “Usually at our state conventions, there are a number of county committees who are briefed about what’s going on around the state,” he said. “Anyone who follows statewide politics knows that there are going to be a couple of targeted races.”

Voters who want to find the actual sources of the party money pouring into a candidate’s campaign have to dig into the parties’ campaign filings.

On the Republican side, party activist Charles T. Munger Jr. gave $3.3 million to the state GOP and seven other party committees from August through the election.

On the Democratic side, affiliates of the SEIU union gave $2.3 million to state Democrats, 17 Democratic county parties, as well as to the California Republican Party.

Party officials and donors say they carefully follow Proposition 34’s rules against coordination. “That’s up to the individual county committees to decide what they want to do,” Shawnda Westly, executive director of the California Democratic Party, said last month at a UC Berkeley forum on the November election.

Last summer, however, after a years-long legal fight, the state Fair Political Practices Commission gave final approval to a $40,000 fine against Republican state Sen. Tom Berryhill, his brother, and party committees in Modesto and Stockton for illegal coordination. Authorities alleged that Tom Berryhill funneled $40,000 to Bill Berryhill’s 2008 Assembly campaign through the party committees.

Commission investigators produced fall 2008 emails and text messages between Tom Berryhill and Bill Berryhill’s consultant and local Republican leaders as proof of collusion. The Berryhills denied any wrongdoing, and Tom Berryhill wracked up more than $273,000 in legal bills fighting the case last year, according to his latest campaign statement.

Charles Bell, the Berryhills’ attorney, said candidates, consultants and political parties have become more aware of “appearance problems,” in which contributions to a party committee are quickly followed by its donation to a candidate.

“I think it’s caused party committees, and certainly county party committees, to be more careful about avoiding situations where it might be inferred by the timing of contribution to party and contribution to candidate” that there was coordination, Bell said.

Call Jim Miller, Bee Capitol Bureau, (916) 326-5521. Follow him on Twitter @jimmiller2. David Siders of The Bee Capitol Bureau contributed to this report.

Top donors to party committees

Charles T. Munger Jr. $3.3 million

SEIU affiliates statewide: $2.3 million

No on 45: $1.95 million

No on 46: $1.2 million

California Teachers Association: $1.2 million

AFSCME: $676,000

Operating Engineers affiliates: $672,000

Philip Morris USA and its affiliates: $650,000

PG&E Corp.: $526,500

California Republican Party: $463,000

Party committees that gave the most money to candidates’ campaigns, Aug. 1 through Nov. 15

Democratic State Central Committee of California: $10.4 million

California Republican Party: $6.27 million

Republican Central Committee of San Luis Obispo County: $1.87 million

Tulare County Republican Central Committee: $620,658

Sacramento County Democratic Central Committee: $566,500

Top recipients of party money during that time (vs. total fundraising)

Luis Chavez (Democrat) for Senate 2014: $2.35 million ($2.7 million)

Janet Nguyen (Republican) for Senate 2014: $2.2 million ($2.6 million)

Sharon Quirk-Silva (Democrat) for Assembly 2014: $2 million ($2.7 million)

Tim Sbranti (Democrat) for Assembly 2014: $1.7 million ($2.2 million)

Andy Vidak (Republican) for Senate 2014: $1.6 million ($2.1 million)

Note: Totals may reflect multiple committees

Source: California secretary of state

Related stories from Sacramento Bee

  Comments