Amicus Curiae Brief — Nixon v. Shrink Missouri Government PAC

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Supreme Court, U.S.

: FIk KE D

jun 4 1999

No. 98-963

In the

Supreme Court of the United States

October Term, 1998

JEREMIAH W. (JAY) NIXON,

Attorney General of Missouri, et al.,

Petitioners,

Vv.

SHRINK MISSOURI GOVERNMENT PAC,

ZEV DAVID FREDMAN, and JOAN BRAY.

Respondents.

On Writ of Certiorari to the United States Court

of Appeals for the Eighth Circuit

BRIEF OF AMICI CURIAE PACIFIC LEGAL

FOUNDATION AND LINCOLN CLUB OF ORANGE

COUNTY IN SUPPORT OF RESPONDENTS

—_

JOHN A. RAMIREZ SHARON L. BROWNE

Of Counsel Counsel of Record

Pacific Legal Foundation Pacific Legal Foundation

10360 Old Placerville Road. 10360 Old Placerville Road.

Suite 100 Suite 100

Sacramento, California 95827 Sacramento, California 95827

Telephone: (916) 362-2833 Telephone: (916) 362-2833

Facsimile: (916) 362-2932 Facsimile: (916) 362-2932

Counsel for Amici Curiae Pacific Legal Foundation

and Lincoln Club of Orange County

EDITOR'S NOTE

THE FOLLOWING PAGES WERE POOR HARD COPY

AT THE TIME OF FILMING. IF AND WHEN A

BETTER COPY CAN BE OBTAINED, A NEW FICHE

WILL BE ISSUED.

QUESTION PRESENTED

Whether the court of appeals erred in declaring that

Missouri’s campaign contribution limits for statewide office,

which exceed the limits expressly approved by this Court for

national elections in Buckley v. Valeo, 424 U.S. | (1976), violate

the First Amendment?

QUESTION PRESENTED

TABLE OF AUTHORITIES

TABLE OF CONTENTS

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SUMMARY OF ARGUMENT .................0005: 3

ARGUMENT

1. THE COURT BELOW APPLIED THE

PROPER STANDARD OF REVIEW

A. This Court Has Made Clear That the “Now-

Settled Approach” with Respect to State

Regulations Imposing Severe Burdens on

Speech Is That Such Regulations Must Be

Narrowly Tailored to Serve a Compelling

I eee a OG eS Be

1. Political Contributions and

Expenditures Are Indistinguishable ... .

Subjecting Contribution Limits to

Anything Other Than Strict Scrutiny

Would Directly Contravene This

Court’s Established First Amendment

POD wvcconscasesecccasss

The Purpose of Applying Strict Scrutiny Is

Not to Truncate Legislative Prerogatives but

Rather to “Jealously Guard” Against

Usurpations of Fundamental Rights .......

Il. MORE NARROWLY TAILORED MEANS

EXIST TO PREVENT ACTUAL AND

APPARENT CORRUPTION

TABLE OF CONTENTS—C ontinued

Page

A. Bribery Statutes Exist and Are Utilized to

Prevent Actual Corruption ................ 23

B. Campaign Contribution Disclosure

Provisions Exist to Prevent the Appearance

SPEED cc cccccescccccecccecccceses 26

SE coc endceedseseceveccccecceseccces 30

TABLE OF AUTHORITIES

Page

Cases

Arkansas Educational Television Commission

v. Forbes, 118 S. Ct. 1633 (1998) .. 2.2 1, 16

Brown \. Hartlage,

Se oe eeu bekee aces sueeeaanaee 12

Buckley v. American Constitutional Law

Foundation, 119 S. Ct. 636 (1999)... 00... 4,11, 13,21

Buckley v. Valeo,

424 U.S. 1 (1976) ............ i, 3-10, 12-13, 22, 26, 29

Burson \. Freeman,

Pn 66 cendudncéessnanteeves 11-12

California Medical Association v. Federal

Election Commission, 453 U.S. 182 (1981) ..... 7-8, 12

Citizens Against Rent Control v. Berkeley,

Ge as SO EUED ce ccccccvescesusseces: 7, 13-15

Colorado Republican Federal Campaign

Committee \. Federal Election Commission.

Sean Gah SPE be eeeérncenececdcscour passim

Columbia Broadcasting System v. Democratic

National Committee, 412 U.S. 94 (1973) .. 0.0000... 16

Fair Political Practices Commission v. Superior

CE, Be Se STE 8 ec eccecescccconceee: 20

Federal Election Commission v.

Massachusetts Citizens for Life,

Ses Se eccccnectaaccecevece 12, 21, 24

Federal Election Commission v. National

Conservative Political Action Committee,

470 U.S. 480 (1985)... 2... 66. eke, 5, 7-8, 10-12, 21

TABLE OF AUTHORITIES— ontinued

Page

First National Bank of Boston v. Bellotti,

GP ah HEED eb cdococcectsecetesudeeets 12

Florida Bar v. Went for It, Inc.,

Se EE so oncdecenceonnceseeocdouens 19

Glickman v. Wileman Brothers & Elliott, Inc.,

et Oe Cs oon oc oedeeadetienterecaeses |

Grosjean v. American Press,

Ge SEEN. noc b0debeesbesecencenseses 29

Hague v. Commitiee for Industrial Organization,

a, GES acocedeesceseeteesncesuwes 17

Keller v. State Bar, 496 U.S. 1 (1990)... 2. 0 ee eee |

McCormick v. United States,

Se Be CED on ccscccccccccecesscce aaa

Mcintyre v. Ohio Elections Commission,

BO hs SEED ce wecdcecescesuceses 12-13, 17, 21

Meyer v. Grant, 486 U.S. 414 (1988) ..............5. 12

Miami Herald Publishing Co. v. Tornillo,

Ss SR ccs cctocecncesetusvosecoes 1S

NAACP v. Alabama,

Be es SED é ccoecccessescceseosenunenes 8

Nixon v. Administrator of General Services,

BP Ge oc cc ccccececoveccescnsess 14, 21

Red Lion Broadcasting Co. v. Federal

Communications Commission,

. Lt e | APPT TTIvrrreerriee ee 17

Reno v. American Civil Liberties Union,

SSPE, Ge FeO ec ccccccccccccecovesee: 17, 27

TABLE OF AUTHORITIES—C ontinued

Roberts v. United States Javcces,

SRE SOT ee TOE

Rosenberger v. Rector and Visuors of University

a Vivaiata, SIS US. GED CTTIOD oc cccccccccccccecs

Schaumberg v. Citizens for a Better Environment,

i PTT TET TCT eT CTT Te

Shrink Missouri Government PAC v. Adams,

161 F.3d 519 (8th Cir. 1998) .................. 3,

Turner Broadcasting System, Inc. v. Federal

Communication Commission,

rr er ee

U.S. Term Limits v. Thornton,

$14 U.S. 779 (1995)... cece eee e cee ce eee

United States v. Bereano,

Be Cee SOG COMED ch vccccscecccdcceceess

United States v. Carpenter,

i Pee

United States v. Griffin,

154 F.3d 762 (8th Cir. 1998) ... 2.2.00... eee eee.

United States v. Jackson,

72 F.3d 1370 (9th Cir. 1995) .. 20.22. eee eee.

United States v. Montoya,

945 F.2d 1068 (9th Cir. 1991) ..............00--.

United States v. Sawyer,

Penne CUP OGED GUEED sccccosévccoeccccosss

United States v. Simmons,

154 F.3d 765 (8th Cir. 1998) ...............0005.

vil

TABLE OF AUTHORITIES—C ontinued

Page

United States v. Woodard,

149 F.3d 46 (Ist Cir. 1998) 2.0... 2666 c eee eee eee 25

Vannatia v. Keisling,

151 F.3d 1215 (9th Cir. 1998) ... 2... eee eee ee eee 7

Constitutions

United States Constitution Amendment | ............. 17

Missouri Constitution Article Ill, section IS ........... 24

Federal and State Statutes

SBC. cuette GOES oc ccccccccccvccvcccccescess 25

SO TED 0 coc bcdccterdcesceccnescécecssecs 25

Se TE oc cccnccvcccccsecesccocsceccossee 25

SD UBC. coatiat BOGE 2. ccccccccccccceccescccsecs 25

GRUB. cretie TEED occ ccccccccccccccccccccccces 3

California Penal Code section 86... . 2... 6.6. eee eens 25

Missouri Annotated Code Statute section 130.032(1)(6) ... 2

Be ETRE cc cccccccdcccccscccesvcoecceess 2

Missouri Code section 576.010 ... 2... 2.6.66 cee eee eee 23

ee a

Miscellaneous

A Behind-the-Scenes Look at Orange County's

Political Life: Foes Frankly Furious at Allen's

Late Mailers at Taxpayers’ Expense, L.A.

Wee, TE BGR ccceccvcvcdccccsscescccoces 19

vill

TABLE OF AUTHORITIES—C ontinued

Lillian Be Vier, Money and Politics: A Perspective

on the First Amendment and Campaign

Finance Reform, 73 Cal. L. Rev. 1045 (1985) ..... 9,18

Big Names Surface in Operation Rezone Case,

+ rrr 25

Corporate Political Activities 1998: Complying

with Campaign Finance, Lobbying and Ethics

Laws, Practising Law Institute Course

Handbook Series, Chapters 17 and 20 ............. 26

Virginia Ellis, Labor, Trial Lawyers Pour Millions

Into Davis’ Coffers Funds: A Third of

Gubernatorial Candidate's Money Comes from

Two Groups That Usually Back Democrats,

es § § § Pree 28-29

FPPC Advice Letter to Randall Zakreski

(08/11/93) No. 1-93-296 ..... 0.0. ccc ceceeeeeeeee 26

In Legislative Races, Tobacco Is a Hotter Issue

Than Ever: Several Candidates Get Burned by

Foes for Taking the Industry's Donations.

Some Who Accepted Gifts in the Past Are Now

Shunning Them, L.A. Times, Oct. 29, 1996.......... 28

It Wasn't Easy to Sting Capitol, Sacramento Bee,

TP Ph Ce pcb oC SGN ON GeebeneebeSEC -seneees 24

Paul Jacobs and Virginia Ellis, Legislators Bypass

Mass Mailing Ban: Loopholes Used to Send 35

Million Pieces at Taxpayer Expense, L.A.

PENOD, RED, BF, FOOD cccccccccccccveccescess 18-19

TABLE OF AUTHORITIES—Continued

Page

Ted Johnson, Kuykendall Blends Pragmatism,

Ideology: Legislator Says Accepting Tobacco

Firm's $125,000 Contribution Helped Him

Beat Incumbent, and Vows It Won't Ease His

Opposition to Smoking, L.A. Times,

STOTT TTT UTI TT TL TTT TT TTT eT 28

Justices May Revive Cap on Contributions,

FS §¥ 33. PPT 10

Michael Malbin and Thomas Gais, The Day After

Reform: Sobering Campaign Finance Lessons

from the American States (The Rockefeller

SO CD + « censdaseesesenrseecs 19-20, 26

Dan Morain and Dave Lesher, Casino Campaign

Donations Questioned: Legislature's Legal

Advisor Says That Lawmakers Could Face

Criminal Sanctions if They Accept

Contributions from Indian Gambling

Operations Deemed To Be Illegal, L-A. Times,

Pe PPPPrrrivirirririrrir rere 28

INTEREST OF AMICTI'

For 25 years Pacific Legal Foundation attorneys have been

litigating in support of individual rights. To this end, Pacific

Legal Foundation attorneys have been before this Court for the

purpose of representing individuals whose First Amendment

rights had been violated. See Keller v. State Bar, 496 U.S. 1

(1990). Pacific Legal Foundation has also participated as a

friend of the court in many other First Amendment cases this

Court has heard in the past decade. See Arkansas Educational

Television Commission v. Forbes, 118 S. Ct. 1633 (1998);

Glickman v. Wileman Brothers & Elliott, Inc., 521 U.S. 457

(1996); Rosenberger v. Rector and Visitors of University of

Virginia, 515 U.S. 819 (1995); and U.S. Term Limits v.

Thornton, 514 U.S. 779 (1995). )

The Lincoln Club of Orange County is a community-based

membership organization with a political action committee

(Club), formed for the purpose of making contributions to

California state and local candidates. Currently, the Club has

over 300 individual members. Because many California

municipalities and, at various times, California law, have

imposed contribution limits which thereby infringe upon the

associational rights of the Club and its members, the Club has a

direct interest in the law governing contribution limits.

Pursuant to Supreme Court Rule 37, written permission from

all parties for Pacific Legal Foundation to file this brief has been

lodged with the Clerk of this Court.

' Pursuant to Supreme Court Rule 27.6, amici curiae Pacific Legal

Foundation and the Lincoln Club of Orange County affirm that no

counsel for any party in this case authored this brief in whole or in

part; and furthermore, that no person or entity has made a monetary

contribution specifically for the preparation or submission of this

brief.

STATEMENT OF THE CASE

Zev David Fredman was a candidate for the office of

Missouri state auditor in the 1998 Republican primary. To this

end, he formed a candidate committee (“Fredman for Auditor”),

filed the requisite candidate papers, and paid a filing fee.

As part of his initial campaign strategy, Fredman desired to

raise large sums of funds from various donors and possibly from

Republican Party leaders. The purpose of Fredman’s strategy

was to obtain seed money in order to allow him to compete

effectively in the Republican primary. His ability to attract other

contributions--and thereby become a competitive candidate --was

a function of his ability to raise early seed money. This was

particularly important for Fredman because he was not a

professional politician. As a first-time candidate for statewide

political office, he did not have either a vast network of political

contacts or a well-established base of contributors. As a private

businessman who had to continue to manage his business while

mounting a statewide campaign, Fredman did not have the time

Or resources to raise the seed money necessary for his campaign

by asking a large number of contributors for small contributions.

Instead, Fredman needed to depend on a small number of large

contributions.

Msc» ~ law prohibited Fredman from raising more than

$1,075 per donor for the primary election. Mo. Ann. Stat.

section 130.032(1)6). Missouri law further provided that

contributors and candidates who violated Missouri's contribution

limits would be subject to criminal sanctions. Mo. Ann. Stat.

section 130.081.

Shrink Missouri Government (SMG) PAC is a political

action committee, duly organized under the laws of Missouri.

During the 1994, 1996, and 1998 election cycles, it made

contributions to candidates for Missouri elective office, and

continues in operation for the purpose of making similar

contributions in the future. Because SMG believed that

Fredman’s candidacy for state auditor promoted the political

viewpoints and goals of the PAC and its contributors, SMG

contributed $1,025 to the “Fredman for Auditor” committee on

June 23, 1997, and an additional $50 on February 25, 1998. By

this latter date, SMG had therefore provided the maximum

contribution to the “Fredman for Auditor” campaign for the

primary election. SMG would have contributed more than

$1,075 to the “Fredman for Auditor” committee for the primary

election, but was prohibited from doing so by Missouri law.

Because Missouri's contribution limits severely burdened

SMG's ability to promote its political viewpoints and to express

support for candidates through campaign contributions, and

because Missouri's contribution limits precluded the ability of

Fredman to raise early seed money and thereby prevented him

from mounting a competitive campaign, SMG and Fredman

filed an action under 42 U.S.C. section 1983 in the United States

District Court for the Eastern District of Missouri. SMG and

Fredman sought declaratory and injunctive relief against the pro-

visions of Missouri's campaign laws that limited contributions

to candidates for office. On May 12, 1998, the Honorable

Catherine D. Perry, United States District Judge, entered a final

judgment holding that the contribution limits did not violate the

First Amendment. SMG and Fredman appealed this judgment

to the Eighth Circuit Court of Appeals. On November 30, 1998,

the United States Court of Appeals for the Eighth Circuit found

that Missouri's contribution limits violated the First Amendment

of the United States Constitution. Shrink Missouri Government

PAC v. Adams, 161 F.3d 519 (8th Cir. 1998).

SUMMARY OF ARGUMENT

In the seminal case of Buckley v. Valeo, 424 U.S. | (1976),

this Court explained that “contribution and expenditure

limitations operate in an area of the most fundamental First

Amendment activities.” /d. at 14 (emphasis added). Stating that

both expenditure and contribution resirictions implicate political

speech and association, this Court in Buckley further noted that

“contribution and expenditure limitations impose direct quantity

restrictions on political communication and association by

persons, groups, candidates, and political parties.” /d. at 18.

This Court's established First Amendment jurisprudence

makes clear that state election laws which “directly regulate[]

core political speech” or which “impose[] ‘severe burdens’” on

speech or association are always subject to strict scrutiny.

Buckley v. American Constitutional Law Foundation, 119 S. Ct.

636, 642 n.12, 648 (1999) (Thomas, J., concurring in the

judgment). As this Court has held that contribution limits

restrict “fundamental” First Amendment activities (Buckley, 424

U.S. at 14), the court below properly applied strict scrutiny with

respect to Missouri’s campaign contribution limits.

The states contention that substantial “deference” should be

given to legislatively imposed contribution limits is, in reality, a

subterfuge utilized to mask the flawed premise underlying

campaign contribution limits. The flawed premise is that rather

than serving as /initation on legislative power, the First Amend-

ment--according to campaign contribution limit proponents--

embodies a normative policy end towards which society should

Strive. This normative policy end is a “level playing field”

where all citizens have a government compelled “equal

opportunity” for self-expression.

Not only has this Court categorically rejected the notion that

the exercise of free speech by some may be limited for the

purpose of amplifying the speech of others, but also, the state’s

argument fails to recognize the potential--in the context of

campaign finance reform--for “legislators to set the rules of the

electoral game so as to keep themselves in power and keep

potential challengers out of it.” Colorado Republican Federal

Campaign Committee v. Federal Election Commission, 116 S.

Ct. 2309, 2329 n.9 (1996) (Thomas, J., concurring in part and

dissenting in part).

Moreover, in order to survive strict scrutiny, a statute

regulating fundamental rights must be narrowly tailored to serve

a compelling governmental interest. In the context of campaign

finance, the only governmental interest that this Court has

accepted as “compelling” is the prevention of actual and

apparent corruption. Federal Election Commission v. National

Conservative Political Action Committee, 470 U.S. 480, 496-97

(1985). This Court has defined corruption narrowly, to include

only a financial quid pro quo. Id. at 497.

To this end, nearly a quarter century has passed since this

Court decided Buckley and much has changed since that time

with respect to the regulation of election-related activities. More

specifically, the rigorous enforcement of bribery statutes and the

adoption and enforcement of comprehensive disclosure schemes

by all 50 states--coupled with the intense scrutiny by the press

with respect to the financing of elections--illustrates that the

“blunderbuss approach” of contribution limits “cannot be held

a means narrowly and precisely directed to the governmental

interest in the small minority of contributions that are not

innocent.” Colorado Republican, 116 S. Ct. at 2329 (Thomas,

J., concurring in part and dissenting in part). Experiences from

Missouri, California, and other jurisdictions indicate that less

restrictive means are available to prevent actual and apparent

corruption.

ARGUMENT

THE COURT BELOW APPLIED THE PROPER

STANDARD OF REVIEW

A. This Court Has Made Clear That the “Now-

Settled Approach” with Respect to State

Regulations Imposing Severe Burdens on Speech

Is That Such Regulations Must Be Narrowly

Tailored to Serve a Compelling State Interest

In the seminal case of Buckley v. Valeo, 424 U.S. 1, this

Court explained:

Contribution and expenditure limitations operate in an

area of the most fundamental First Amendment

activities. Discussion of public issues and debate on the

qualifications of candidates are integral to the operation

of the system of government established by our

Constitution. The First Amendment affords the broadest

protection to such political expression in order “to

assure [the] unfettered interchange of ideas for the

bringing about of political and social changes desired by

the people.”

Id. at 14 (citation omitted, emphasis added). The Buckley Court

made clear that both expenditure and contribution restrictions

implicate political speech and association, stating that

contribution and expenditure limitations impose direct

quantity restrictions on political communication and

association by persons, groups, candidates, and political

parties.

Id. at 18.

Notwithstanding this Court’s recognition that both

expenditure and contribution limits implicate “fundamental First

Amendment activities” (id. at 14), it has not gone “unnoticed

that this Court has seemed more “forgiving” in the level of

scrutiny applied in its review of contribution limits. Colorado

Republican, 116 S. Ct. at 2329 n.7; See also California Medical

Association v. Federal Election Commission, 453 U.S. 182, 196

(1981) (contributions are “not the sort of political advocacy that

this Court in Buckley found entitled to full First Amendment

protection”); National Conservative Political Action Committee.

470 U.S. at 501; Vannatia v. Keisling, 151 F.3d 1215, 1221

(9th Cir. 1998) (applying a “rigorous” level of scrutiny with

respect to contribution limitations).

In contrast, this Court has clearly and unequivocally applied

strict scrutiny to expenditure limits, finding that such limits are

Subject to nearly a per se rule of unconstitutionality as there

exists no compelling governmental reason to impose direct

limitations on such political speech. See Buckley, 424 U.S.

at 44-59; Colorado Republican, 116 S. Ct. at 2312 (opinion of

Breyer, J.);. National Conservative Political Action Committee.

470 U.S. at 496-97; Citizens Against Rent Control v. Berkeley.

454 U.S. 290, 297-98 (1981).

This perceived distinction between the level of deference

provided to campaign contributions as opposed to campaign

expenditures has its roots in this Court's statement in Buckley

that contribution limits “entail{] only a marginal restriction upon

the contributor’s ability to engage in free communication”

because “the transformation of contributions into political debate

involves speech by someone other than the contributor.”

Buckley, 424 U.S. at 20-21. In contrast, expenditure limits, the

Buckley Court stated, “represent substantial rather than merely

theoretical restraints on the quantity and diversity of political

speech.” /d. at 19.

It was this distinction this Court utilized in California

Medical Association to uphold the Federal Election Campaign

Act (FECA) contribution limits on the amount a trade

association was permitted to give to a multicandidate political

action committee. In so holding, the California Medical Asso-

ciation Court noted that contributions to a political committee

constituted “speech by proxy” and therefore limits on such

activity were subject to less intense judicial scrutiny. C alifornia

Medical Association, 453 U.S. at 196.

Although Amici do not mead to simply dismiss this

apparent distinction as set forth above, Amici respectfully

submit that subjecting campaign contribution limits to anything

other than “strict scrutiny” defies logic and directly contravenes

this Court’s First Amendment jurisprudence.

1. Political Contributions and Expenditures

Are Indistinguishable

The distinction between expenditure and contribution limits

has “no constitutional significance.” National Conservative

Political Action Committee, 470 U.S. at 518 (Marshall, J.,

dissenting). “[{PJeople--candidates and contributors--spend

money on political activity because they wish to communicate

ideas, and their constitutional interest in doing so is precisely the

same whether they or someone else utter the words.” Buckley.

424 U.S. at 244 (Burger, C.J., concurring in part and dissenting

in part). Moreover, contributions to a political campaign Is

exactly the type of “group association” this Court has long-

recognized as being accorded the most “exacting” protection by

the First Amendment. NAACP v. Alabama, 357 U.S. 449, 460

(1958): Citizens Against Rent Control, 454 U.S. at 294. The

ability to freely communicate ideas and participate in group

association by making campaign contributions ts central to our

form of representative democracy. See, e.g., Roberts v. United

States Jaycees, 468 U.S. 609, 622 (1984) (“[W]e have long

understood as implicit in the right to engage in activities

protected by the First Amendment a corresponding right to

associate with others in pursuit of a wide variety of political,

social, economic, educational, religious, and cultural ends.”).

The exercise of such free speech rights allows citizens to

communicate a message of support directly to their candidate

and at the same time allows the candidate and his or her backers

to further garnish electoral support. Sze Lillian Be Vier, Money

and Politics: A Perspective on the First Amendment and

Campaign Finance Reform, 73 Cal. L. Rev. 1045

+ fs . . ’ l

Indeed, as this Court has noted: ——

[T}he practice of persons sharing common views

banding together to achieve a common end is deeply

embedded in the American political process. The 18th-

century Committees of Correspondence and the

pamphleteers were early examples of this phenomena

and the Federalist Papers were perhaps the most

Significamt and lasting example. The tradition of

volunteer committees for collective action has

manifested itself in myriad community and public

activities; in the political process it can focus on a

candidate or on a ballot measure. Its value is that by

collective effort individuals can make their views known

when, individually, their voices would be faint or lost. )

Citizens Against Rent Control, 454 U.S. at 294 (em i

added). see also United States Jaycees, 468 U.S. salen

individual’s freedom to . . . petition the government for the

redress of grievances could not be vigorously protected from

interference from the State unless a correlative freedom to

engage in group effort toward those ends

pon e were not also

It is perhaps with these thoughts in mind that th

ree membe

of the Buckley Court found the distinction between contributions

and expenditures untenable at the time (see Buckley, 424 U.S.

at 241, 244 (Burger, C_J., Concurring in part and dissenting in

part) (“The Court’s attempt to distinguish the communication

inherent in political contributions from the speech aspects of

political expenditures simply ‘will not wash.””); id. at 261

(White, J., concurring in part and dissenting in part) (“[I]t is

difficult to see the difference between the two Situations.”); id.

a 290 (Blackmun, J., concurring in part and dissenting in part)

(“I am not persuaded that the Court makes . . . a principled

distinction between contribution limitations, on the one hand,

and the expenditure limitations on the other . . . .”)), and two

other members have subsequently disavowed it. See National

Conservative Political Action Committee, 470 U.S. at 518-19

(Marshall, J., dissenting) (“I now believe the distinction has no

constitutional significance.”); Colorado Republican, 116 S. Ct.

at 2325 and n.4 (Thomas, J., concurring in part and dissenting

in part) (“In my view, the distinction [between contributions and

expenditures] lacks constitutional significance, and | would not

adhere to it.”).

Amici therefore find it compelling that in the course of the

23 years since this Court decided Buckley substantial precedent

has evolved supporting the conclusion that “contributions and

expenditures are two sides of the same First Amendment coin.”

424 U.S. at 241 (Burger, C.J., concurring in part and dissenting

in party. Amici therefore submit that contribution limits of the

> As a practical matter, the reason contribution and expenditure limits

involve “two sides of the same First Amendment coin” (id.) is

because both campaign contributions and expenditures are utilized

for the exact same purpose, namely, conveying a political message

in the “marketplace” of “ideas.” Citizens Against Rent Control,

454 US. at 295. This is illustrated by reference to a recent example

from a statewide campaign in California--which currently does not

impose contribution limits on state candidates. The 1998 Democratic

gubernatorial primary pitted AJ Checchi, a multimillionaire

businessman whose personal campaign expenditures could not have

been constitutionally limited, against Gray Davis, a candidate without

such resources. See Justices May Revive Cap on Contributions, L.A.

Times, Dec. 9, 1998. As the attached California campaign disclosure

forms illustrate (see Appendix B), funds raised by both the Checchi

and Davis committees (whether in the form of personal expenditures

by Checchi or contributions from supporters received by Davis) are

used for the exact same purpose, paying political professionals and

other vendors to disseminate the political committees’ message.

Moreover, had California law imposed campaign contribution limits

on statewide candidates such as Davis at that time, that would have

(continued...)

type at issue in this case should undoubtedly be subject to strict

scrutiny.

2. Subjecting Contribution Limits to Anything

Other Than Strict Scrutiny Would Directly

Contravene This Court’s Established First

Amendment Jurisprudence

| This Court has long recognized that state election laws

“directly regulat{ing] core political speech” or which “impose

‘severe burdens”” on speech or association are always subject to

Strict scrutiny. Buckley v. American Constitutional Law

Foundation, Inc., 119 S. Ct. at 649 (Thomas, J., concurring in

judgment).

For example, just recently in American Constitutional Law

Foundation this Court applied strict scrutiny in reviewing certain

Colorado statutes regulating the initiative and referendum

process. American Constitutional Law Foundation, 119 S. C1.

at 642 n.12. Other precedents from this Court where strict

scrutiny has been applied with respect to state laws which

regulate core political speech or impose severe burdens on such

speech are abundant. See Burson v. Freeman, 504 U.S. 191.

*(...continued)

undoubtedly vitiated the associational rights of Davis backers. Their

collective voice would have been subject to a limit (as Davis could

have only raised funds in small incremental amounts), whereas the

collective voice of Checchi’s supporters would have been compara-

tively amplified as he could spend unlimited amounts of his own

money in furtherance of his candidacy. See Citizens Against Rent

Control, 454 U.S. at 296 (“To place a... limit . . . on individuals

wishing to band together to advance their views . . . is clearly a

restraint on the right of association.”); See also National

Conservative Political Action Committee, 470 U.S. at 495 (“To say

that [collective action by] pooling . . . resources . . . is not entitled to

full First Amendment protection would subordinate the voices of

those of modest means as opposed to those sufficiently wealthy to be

able to buy expensive media ads with their own resources.”).

198 (1992) (applying strict scrutiny in determining whether to

uphold a state law prohibiting the solicitation of voters and the

distribution of campaign literature within 100 feet of the

entrance of a polling place); Brown v. Hartlage, 456 U.S. 45,

53-54 (1982) (strict scrutiny applied to state regulations of

candidate promises); First National Bank of Boston v. Bellotti,

435 U.S. 765, 786 (1978) (strict scrutiny applied to a state law

prohibiting corporate contributions to ballot measures ), Citizens

Against Rent Control. 454 U.S. at 294 (applying strict scrutiny

to a municipal ordinance limiting contributions to ballot measure

committees); Mcintyre v. Ohio Elections Commission, 514 U.S.

334, 345 (1995) (applying strict scrutiny to a state statute pre-

venting anonymous campaign literature). Indeed, even where a

state law does not directly regulate core political speech, this

Court has applied strict scrutiny. See Meyer v. Grant, 486 US.

414, 421 (1988) (applying strict scrutiny to a state statute

making it a felony to pay initiative petition circulators).

As this Court has previously noted, campaign contribution

limits operate in “an area of the most fundamental First

Amendment activities” (Buckley, 424 U.S. at 14) as they

“impose direct quantity restrictions on political communication

and association by persons, groups, candidates, and political

parties.” Jd. at 18. Consequently, regulations imposing

expenditure or contribution limits have always been subject to

strict scrutiny--notwithstanding the wordsmithing and machina-

tions present in certain passages in California Medical

Association. Indeed, as this Court recently noted:

In these cases [citing Buckley, Federal Election

Commission v. Massachusetts Citizens for Life, 479 U.S.

238 (1986), National Conservative Political Action

Committee, and California Medical Association], the

Count essentially weighed the First Amendment interest

in permitting candidates (and their supporters) to spend

money to advance their political views, against a

“compelling” governmental interest in assuring the

electoral system’s legitimacy, protecting it from the

appearance and reality of corruption.

Colorado Republican, 116 S. Ct. at 2313 (emphasis added).

Thus, since Buckley, this Court has always required that

coniribution limits be subject to “exacting judicial review”

(C itizens Against Rent Control, 454 U.S. at 294) and such

“exacting” review has always been equated with strict scrutiny.

McIntyre, 514 U.S. at 346 n.10. It therefore appears clear that

the “now-settled approach” with respect to “state regulations

imposing “severe burdens” on speech’” is that such regulations

must “be narrowly tailored to serve a compelling state interest.”

American Constitutional Law Foundation, 119 S. Ct. at 642

n.12; see also id. at 649 (Thomas, J., concurring in the

judgment) (“When a State’s rule imposes severe burdens on

speech or association, it must be narrowly tailored to serve a

compelling interest; lesser burdens trigger less exacting review

Pee

| Therefore, as this Court has previously held that contribution

limits restrict “fundamental” First Amendment activities

(Buckley, 424 U.S. at 14), and that state regulations imposing

such contribution limits are subject to “exacting judicial review”

(Citizens Against Rent Control, 454 U.S. at 294), the court

below properly applied strict scrutiny with respect to Missouri’s

Campaign contribution limits.

B. The Purpose of Applying Strict Scrutiny Is

Not to Truncate Legislative Prerogatives but

Rather to “Jealously Guard” Against

Usurpations of Fundamental Rights

| Contrary to the assertions of the state and its amici, the

opinion of the court below does not abrogate the ability of state

legislatures to regulate state electoral activity. To the contrary

the Purpose of applying strict scrutiny is not to truncate

legislative prerogatives, but, rather, to jealously guard against

usurpations of fundamental rights. Indeed, as this Court well

knows:

In the usual case . . . [t]o survive judicial scrutiny a

statutory enactment need only have a reasonable

relationship to the promotion of an objective which the

Constitution does not independently forbid, unless the

legislation trenches on fundamental constitutional

rights.

But where the challenged legislation implicates

fundamental constitutional guarantees, a fat more

demanding scrutiny is required. For example . . . the

presumption of constitutionality is lessened when the

Court reviews legislation endangering fundamental

constitutional rights, such as freedom of speech... .

Legislation touching substantially on these areas comes

[before a court) bearing a heavy burden which its

proponents must carry.

Nixon v. Administrator of General Services, 433 U.S. 425, 506

(1977) (Burger, C.J., dissenting) (emphasis added).

Accordingly, “because of the significant impact on First

Amendment rights” (id. at 532) and perhaps with the above

thoughts in mind, this Court has always required state election

laws regulating political speech to undergo “exacting” or “strict

scrutiny.” /d.; see also Citizens Against Rent Control, 454 U.S.

at 294.

Petitioners’ contention--that substantial “deference” should

be given to legislatively imposed contribution limis--is, in

reality, a subterfuge utilized to mask the flawed premise

underlying campaign contribution limits such as those at issue

here. The flawed premise is that rather than serving as a limita-

tion on legislative power, the First Amendment--according to

campaign contribution limit proponents-- embodies a normative

policy end towards which society should strive. This normative

policy end is a “level playing field” where all citizens have a

government compelled “equal” opportunity for self-expression.

This normative policy end underlying contribution limits of the

type at issue here is fatally flawed for two reasons.

First, this Court has categorically rejected the notion that the

exercise of free speech by some may be limited for the purpose

of amplifying the speech of others:

[T]he concept that government may restrict the speech of

some elements of our society in order to enhance the

relative voice of others is wholly foreign to the First

Amendment, which was designed “to secure the ‘widest

possible dissemination of information from diverse and

antagonistic sources,”’ and “to assure unfettered

interchange of ideas for the bringing about of political

and social changes desired by the people.” The First

Amendment's protection against governmental

abridgment of free expression cannot properly be made

to depend on a person's financial ability to engage in

public discussion.

Citizens Against Rent Control, 454 U.S. at 295-96 (citations

omitted; emphasis added).

Second, and perhaps more fundamental, the normative

policy end that underlies contribution limits such as those at

issue here is, in reality, a repackaged version of an argument this

Court has rebuked in the past. More specifically, in Miami

Herald Publishing Co. v. Tornillo, 418 U.S. 241 (1974), this

Court declared unconstitutional a Florida statute that provided a

“right of reply” for political candidates with respect to

newspapers which had attacked cr otherwise editorialized in

opposition to them. Defending the statute with an argument

remarkably similar to the one advanced by the government and

its amici in this case--that political campaign giving and by

extension the election of representatives ‘is dominated and

controlled by well-endowed “special interests”--the state of

Florida argued that the reply statute was necessary as “[t}he First

\—

Amendment interest of the public being informed [was] in peril

because the ‘marketplace of ideas’ [was] a monopoly controlled

by the owners of the market.” /d. at 251. According to the State

of Florida, the First Amendment imposed a “fiduciary

obligation” on the government “to ensure that a wide variety of

views reach the public.” /d. at 251, 248.

Rejecting this contention, this Court stated:

[T]}here is practically universal agreement that a major

purpose of [the First Amendment] [is] to protect the free

discussion of governmental affairs.

.. . [S]ociety must take the risk that occasionally

debate on vital matters will not be comprehensive and

that all viewpoints may not be expressed.

Id. at 259-60 (White, J., concurring in judgment).

Columbia Broadcasting System v. Democratic National

Commitiee, 412 U.S. 94 (1973), offers further support to reject

the “level playing field argument” advanced by the government

and its amici. In that case, this Court held that there was no First

Amendment requirement for broadcasters to sell time for

editorial announcements. /d. at 130-32. Thus, this Court

rejected attempts by the plaintiffs in that case to turn the First

Amendment into a “sword” rather than a shield against

government overreaching. See also Arkansas Educational

Television Commission v. Forbes, 118 S.-Ct. 1633 (1998)

(rejecting third-party candidate’s argument that the First

Amendment gave him a right of access to participate in a

candidate debate hosted by a state-owned public television

broadcaster).

Far from imposing a duty on government to “level the

playing field,” the First Amendment serves as a limitation on

legislative power. Standing alone, the First Amendment

provides:

Congress shall make no law . . . abridging the freedom

of speech . . . or the right of the people peaceably to

assemble, and to petition the Government for a redress

of grievances.

U.S. Const., amend. 1 (emphasis added). This limitation on

legislative power is, of course, made applicable to the states

through the Fourteenth Amendment. See, e.g., Hague v.

Committee for Industrial Organization, 307 U.S. 496 (1939):

see also McIntyre, 514 U.S. at 336 n.1.

But even assuming arguendo, that, as the government and its

amici contend, the First Amendment can be used to “level the

playing field” (see, e.g., Red Lion Broadcasting Co. v. Federal

Communications Commission, 395 U.S. 367, 375 (1969)

(upholding the then-existing Federal Communication Com-

mission’s “fairness doctrine” on the ground the policy

“enhanced” rather than abridged First Amendment principles),

this argument “fails to acknowledge . . . the potential for

legislators to set the rules of the electoral game so as to keep

“It is to be noted, however, that Red Lion relied, in part, on the

finding that the ability of citizens to broadcast viewpoints was

curtailed to the extent that effectively doing so relied on their

obtaining access to scarce broadcast mediums such as television and

radio frequencies. Amici respectfully submit that the rationale of Red

Lion may no longer be viable to the extent that broadcast mediums

are no longer scarce in this “internet” or “world wide web” age. More

specifically, the development of the internet and the world wide web

provide most citizens with virtually unfettered low-cost access to a

means of broadcasting viewpoints. See Reno v. American Civil

Liberties Union, 117 S. Ct. 2329, 2335 and n.9 (1997) (“Any person

Or Organization with a computer connected to the Internet can

‘publish’ information. Publishers include . . . advocacy groups and

individuals. ... ‘Web publishing is simple enough that thousands of

individual users and small community organizations are using the

Web to publish their own personal “home pages,” the equivalent of

individualized newsletters about the person or organization, which

are available to everyone on the Web.””).

themselves in power and keep potential challengers out of it.”

Colorado Republican, 116 S. Ct. at 239 and n.9 (Thomas, J.,

concurring in part and dissenting in part). “Indeed, history

demonstrates that the most significant effect of election reform

has been not to purify public service, but to protect incumbents

and increase the influence of special interest groups.” /d.

Therefore, when state legislatures--such as the Missouri

Legislature--seek to “ration political expression in the electoral

process, [courts] ought not simply acquiesce in [legislatures’|

judgment.” /d. (emphasis added).

As Professor Be Vier points outs:

Courts must police inhibitions on political activity

because we cannot trust elected officials to do so: ins

have a way of wanting to make sure the outs stay out

Indeed, there are reasons to believe that legislators,

given free rein to inhibit political activity, might attempt

to restructure the political balance of power so as

principally to benefit themselves and their political allies.

In fact, many political process “reforms” seem to

promise tempting short-run political advantages to

incumbents and their allies.

BeVier, Money and Politics: A Perspective on the First

Amendment and Campaign Finance Reform, supra, at 1075-76.

Moreover, evidence bears this point out as the advantages of

holding office (such as franking privileges, media attention, etc. )

certainly provide incumbent candidates with a multitude of

vehicles by which to increase and maintain their name recog-

nition and, by extension, their hold on their seats. Indeed, as one

Los Angeles Times article pointed out for example, between

January 1, 1995, through Aug. 19, 1996, the top spending 20

California Assembly Members alone spent a combined total of

$1.3 million during this period on taxpayer funded frank mail.

See Paul Jacobs and Virginia Ellis, Legislators Bypass Mass

Mailing Ban: Loopholes Used to Send 35 Million Pieces at

Taxpayer Expense, L.A. Times, Aug. 27, 1996, at Al; see also

Florida Bar v. Went for It, Inc., 515 U.S. 618, 628 (1995)

(stating that references to other locales is relevant in First

Amendment challenges). As this article points out, this

Staggering amount of taxpayer funded mail sent to California

voters during this period:

tae [Djemonstrates the inventiveness of elected

Officials in finding ways to use tax funds to promote

themselves and maintain their grip on public office. . . .

ve [T]he mailings are used most by legislators facing

a stiff challenge in their district or trying to advance to

another office. .. .

And direct mail to voters plays a crucial role in

winning elections .... “Nine times out of 10,

Campaigns are won by the candidate who did the most

mail.”

L. A. Times, Aug. 27, 1996.

In yet another California example, one Assembly incumbent

sent out $24,000 worth of taxpayer funded mail two weeks prior

to a recall election this Member faced. See A Behind-the-Scenes

Look at Orange County's Political Life: Foes Frankly Furious

at Allen’s Late Mailers at Taxpayers’ Expense, L.A. Times,

Nov. 5, 1995.

Yet more recent evidence also underscores the fact that the

ability of challengers to unseat incumbent officeholders is

directly related to the amount of money they are able to raise and

spend. One such study concluded as follows:

In fourteen lower-chamber legislative elections in states

between 1990 and 1994, as well as in six U.S.

Congressional elections between 1986 and 1996, the

amount of money raised by the challenger was

consistently the single most important variable

associated with electoral competition.

Michael Malbin and Thomas Gais, The Day After Reform:

Sobering Campaign Finance Lessons from the American States,

at 166 (The Rockefeller Institute Press 1998). Professor

Malbin’s study also concluded:

Our studies of twenty-two legislative elections

confirm a conclusion long known among political

scientists: The most important financial difference

between competitive and uncompetitive races lies in the

money raised by the challenger. There is also no

question, either among political scientists or among

politicians, that early money is the hardest to raise, as

well as being the most important for establishing a “take-

off’ threshold for potentially viable campaigns to

become serious.

_ . . [W]e know that the sources available to

incumbents, and to well-established, competitive nonin-

cumbents, will not be there to help most challengers get

started.

Rich candidates, of course, can always provide their

own seed money.

Id. at 174.

Indeed, Professor Malbin’s findings indicate that if the old

adage that “money [is] the mother’s milk of politics” is in fact

true, courts should be vigilant in ensuring that incumbent

officeholders do not “own{] the dairy.” Fair Political Practices

Commission v. Superior Court, 25 Cal. 3d 33, 54 (1979) (Bird,

C.J., dissenting) (striking down California Political Reform

Act’s ban on lobbyist contributions). This case, of course,

involves a nonincumbent first-time candidate for statewide

political office.

Accordingly, the court below properly rejected the “scintilla”

of evidence produced by Missouri in defense of that state’s

campaign contribution scheme: namely, the “conclusory and

self-serving” affidavit of an incumbent state Senator. Shrink

Missouri Government PAC v. Adams, 161 F.3d at 522. This

evidence alone simply does not satisfy the “heavy burden”

(Nixon v. Administrator of General Services, 433 U.S. at 506)

the government and its amici carry to demonstrate to a court that

the recited harms of corruption or the appearance of corruption

“are real . . . and that regulation [contribution limits] will in fact

alleviate these harms in a direct and material way.” Turner

Broadcasting System, Inc. v. Federal Communication

Commission, 512 U.S. 622, 664 (1994).

MORE NARROWLY TAILORED MEANS

EXIST TO PREVENT ACTUAL AND

APPARENT CORRUPTION

In order to survive strict scrutiny, a statute regulating

fundamental rights must be “narrowly tailored” to serve a

compelling governmental interest. American Constitutional Law

Foundation, 119 S. Ct. at 642 n.12; Mcintyre, 514 U.S. at 347.

To this end, “government must curtail speech only to the degree

necessary to meet the particular problem at hand, and must

avoid infringing on speech that does not pose the danger that

has prompted the regulation.” Massachusetts Citizens for Life,

479 U.S. at 265 (emphasis added).

In the context of campaign finance, the only governmental

interest that this Court has accepted as “compelling” is the

prevention of actual or apparent corruption. National

Conservative Political Action Committee, 470 U.S. at 496-97.

Moreover, this Court has defined corruption narrowly, to include

only a financial quid pro quo; in other words, dollars exchanged

for political favors. National Conservative Political Action

Committee, 470 U.S. at 497; see by analogy, McCormick v.

United States, 500 U.S. 257, 273 (1991) (finding campaign

contributions made in exchange for an “explicit promise” of

favorable future action as a violation of the Hobbs Act as

opposed to those contributions made with anticipation of

favorable future action) (emphasis added).*

Nearly a quarter century has passed since this Court decided

Buckley and much has changed since that time with respect to

the regulation of election-related activities. More specifically,

* In fact, the major foundation on which the government and its amici

base their argument is what they characterize as the “common sense

recognition” that large campaign contributions cause “harm” or

“corrupt” our system of government. This Court has rejected similar

attempts to make such bald, categorical assessments of corruption

based solely on the existence of campaign contributions in our

electoral system without evidence of actual quid pro quo corruption:

Serving constituents and supporting legislation that will

benefit the district and individuals and groups therein is the

everyday business of a legislator. It is also true that

campaigns must be run and financed. Money is constantly

being solicited on behalf of candidates, who run on platforms

and who claim support on the basis of their views and what

they intend to do or have done. Whatever ethical

considerations and appearances may indicate, to hold that

legislators commit . . . [crimes] when they act for the benefit

of constituents or support legislation furthering the interests

of some of their constituents, shortly before or after campaign

contributions are solicited and received from those

beneficiaries, is an unrealistic assessment of [the indicia of

criminal intent]... . To hold otherwise would open to

prosecution not only conduct that has long been thought to be

well within the law but also conduct that in a very real sense

is unavoidable so long as election campaigns are financed by

private contributions or expenditures, as they have been from

the beginning of the Nation.

McCormick, 500 U.S. at 272. Thus, the government’s assertion that

the mere existence of “large” campaign contributions in our electoral

system is indicative of corruption is simply unsupportable.

the rigorous enforcement of bribery statutes and the adoption

and enforcement of comprehensive disclosure schemes by all 50

States--coupled with the intense scrutiny by the press with

respect to the financing of elections--illustrates that the

“blunderbuss approach” of contribution limits “cannot be held

a means narrowly and precisely directed to the governmental

interest in the small minority of contributions that are not

innocent.” Colorado Republican, 116 S. Ct. at 2329 (Thomas,

J., concurring in part and dissenting in part).

Simply stated, and as discussed more fully below, more

narrowly tailored means exist to prevent actual and apparent

corruption.

A. Bribery Statutes Exist and Are Utilized

to Prevent Actual Corruption

Missouri has enacted a comprehensive scheme of criminal

bribery statutes intended to precisely address the situation of

“quid pro quo” corruption. More specifically, Missouri Code

section 576.010 provides in relevant part:

1. A person commits the crime of bribery of a

public servant if he knowingly offers, confers or agrees

to confer upon any public servant any benefit, direct or

indirect, in return for:

(1) The recipient’s official vote, opinion,

recommendation, judgment, decision, action or exercise

of discretion as a public servant: or

(2) The recipient's violation of a known legal

duty as a public servant.

In addition, Missouri Code section 576.020 provides in

relevant part:

1. A public servant commits the crime of acceding

to corruption if he knowingly solicits, accepts, or agrees

to accept any benefit, direct or indirect, in return for:

(1) His official vote, opinion, recommendation,

judgment, decision, action or exercise of discretion as a

public servant; or

(2) His violation of a known legal duty as a

public servant.

Additionally, as part of the requisite oath of office for elected

members of the Legislature, the Missouri Constitution requires

such members to take an oath committing to honest services

during their tenure and the commitment not to take any money

or other gifts in exchange for the performance or nonperform-

ance of official duties. Missouri Constitution, Article IIl, sec-

tion 15. Far from being a relic of Missouri law, the annotations

to these statutory and constitutional provisions indicate their

vitality.

As these Missouri bribery laws are undoubtedly more

narrowly tailored means by which to address the precise problem

of corruption in public service, the contribution limits at issue in

this case are overbroad as they “infringe{] on [many instances of

innocent] speech that does not pose the danger that has

prompted regulation.” Massachusetts Citizens for Life, 479 U.S.

at 265.

In addition, recent experiences in California also illustrate

the ability of bribery laws “to punish and deter the corrupt

conduct the [g]overnment seeks to prevent” through limits on

campaign contributions. Colorado Republican, 116 S. Ct.

at 2329 (Thomas, J., concurring in part and dissenting in part).

In the early 1980’s, the United States Department of Justice

began what was to be an approximate eight-year investigation

into suspected corruption in the California Legislature. As

explained in the Sacramento Bee (It Wasn't Easy to Sting

Capitol, June 19, 1994), this investigation resulted in the

convictions of four state legislators, several appointed officials

and one lobbyist. Generally, these convictions were based on

various federal and state statutes and legal theories such as the

Hobbs Act (19 U.S.C. § 1951), “RICO” (18 U.S.C. § 1962),

“mail fraud” (18 U.S.C. § 1341), “money laundering”

(18 U.S.C. § 1956), and “bribery” (California Penal Code § 86).

See also United States v. Montoya, 945 F.2d 1068 (9th Cir.

1991); United States v. Carpenter, 961 F.2d 824 (9th Cir. 1992):

and United States v. Jackson, 72 F.3d 1370 (9th Cir. 1995).

Moreover, far from being isolated to the above instances,

there are many other examples of the government convicting

public officials and others from multiple jurisdictions— including

Missouri--under such bribery theories. See, e.g., United

States v. Simmons, 154 F.3d 765 (8th Cir. 1998) (Missouri

political consultant); United States v. Griffin, 154 F.3d 762

(8th Cir. 1998) (Missour speaker of the House); United States v.

Bereano, 161 F.3d 2 (4th Cir. 1998) (Maryland lobbyist); United

States v. Woodard, 149 F.3d 46 (1st Cir. 1998) (Massachusetts

House member); United States v. Sawyer, 85 F.3d 713 (1st Cir.

1996) (Massachusetts lobbyist); McCormick v. United States,

500 U.S. 257 (West Virginia legislator); see also The Fresno

Bee, Big Names Surface in Operation Rezone Case, Jan. 1,

1999, concerning the recent convictions of certain California

municipal officials regarding the same.*

These examples illustrate that bribery laws are more

narrowly tailored means to prevent actual corruption. Indeed,

“bribery laws are designed to punish and deter the corrupt

conduct the Government seeks to prevent under [contribution

limits}.” “In light of [this] alternative[], wholesale limitations

that cover contributions having nothing to do with bribery--but

with speech central to the First Amendment--are not narrowly

tailored.” Colorado Republican, 116 S. Ct. at 2329 (Thomas, J.,

concurring in part and dissenting in part).

* Although Amici are certainly not advocating the federalization of

State and local bribery and ethics crimes, Amici raise these examples

as evidence of the simple fact that more narrowly tailored means exist

to prevent actual corruption.

B. Campaign Contribution Disclosure Provisions

Exist to Prevent the Appearance of Corruption

In the 23 years since this Court decided Buckley, every state

in the Union has adopted a comprehensive statutory scheme

requiring candidates to disclose contributions and expenditures

before and after elections. Most of these states require the

itemization of individual donors who give over a certain

threshold amount (usually between $25 and $100) and also

prohibit anonymous and “laundered” contributions (i.e., contri-

butions made through straw men). Michael Malbin and Thomas

Gais, The Day After Reform: Sobering Campaign Finance

Lessons from the American States, supra, at 13-14.

Many states also impose disclosure obligations on

contributors who contribute a cumulative threshold amount. See

Corporate Political Activities 1998: Complying with Campaign

Finance, Lobbying and Ethics taws, Practising Law Institute

Course Handbook Series, Chapters 17 and 20. Thus, in these

States, contributions are “double” reported. In California for

example, individuals, corporations, and other entities that

contribute a cumulative total of $10,000 or more in a year to

candidates, political action committees and ballot measure

committees combined, must file semi-annual “Major Donor”

disclosure reports. See FPPC Advice Letter to Randall Zakreski

(08/11/93) No. 1-93-296. Thus, a person who qualifies as a

“Major Donor” in California discloses all of his or her

contributions on his or her Major Donor Report, and such

contributions are also disclosed on the recipient candidate’s

report. Other states having “double disclosure” laws include

Hawaii, Maryland, Nebraska, Pennsylvania, Utah, Washington,

and West Virginia. See Corporate Political Activities 1998:

Complying with Campaign Finance, Lobbying and Ethics Laws,

supra, Chapter 20 at 7-8.

In addition, many states and the Federal Election

Commission publish, or are beginning to publish, campaign

disclosure reports on the internet. This development will no

doubt provide for more efficient disclosure particularly to the

“thousands” or “millions” of people who use the internet as an

information source. See Reno v. American Civil Liberties

Union, 117 S. Ct. at 2335. Indeed, a search on the world wide

web indicates that there are hundreds of organizations on the

web whose sole purpose is to publish information on campaigns

and elections and many such web sites focus particularly on the

financing of elections. The web sites established by the

California Voter Foundation (www.calvoter.org) and the Center

for Responsive Politics (www.crp.org) are just two examples.

The significance of these laws--and, just as important, the

utilization of the information provided as a function of such

laws--is not so much their intricacies, but rather, the fact that

their existence is clear evidence that more narrowly tailored

means exist to prevent the appearance of corruption rather than

the “blunderbuss approach” of campaign contribution limits.

Colorado Republican, 116 S. Ct. at 2329 (Thomas, J., concur-

ring in part and dissenting in part). Indeed, as this Court has

noted in analogous circumstances, the “less intrusive” means of

preventing fraud in the charitable solicitation context are “penal

laws used to punish [illicit] conduct directly” and “disclosure”

laws. Schaumberg v. Citizens for a Better Environment,

444 U.S. 620, 637-38 (1980).

Again, examples from California illustrate this clearly. For

instance, in a heavily contested 1994 California Assembly race,

candidate Steve Kuykendall accepted a $125,000 contribution

from Philip Morris in the last days prior to the election that was

properly reported pursuant to California’s campaign contribution

disclosure law. Although he won the election, the public

reaction to this contribution caused him to refuse to accept any

more tobacco money in subsequent campaigns. Moreover, far

from “kowtowing” to Philip Morris as the government and its

amici would undoubtedly conclude, the Philip Morris contribu-

tion in all likelihood assured Assemblyman Kuykendall’s

support for anti-smoking legislation. As the Los Angeles Times

pointed out:

And ironically, it could be the Philip Morris

contribution that ensures that he backs anti-smoking

legislation while in Sacramento. Otherwise, opponents

could gain even more fodder for a recall.

“He’s not going to be dumb enough to vote tobacco.”

Ted Johnson, Kuykendall Blends Pragmatism, Ideology:

Legislator Says Accepting Tobacco Firm’s $125,000

Contribution Helped Him Beat Incumbent, and Vows It Won’t

Ease His Opposition to Smoking, L.A. Times, Dec. 8, 1994; see

also In Legislative Races, Tobacco Is a Hotter Issue Than Ever:

Several Candidates Get Burned by Foes for Taking the

Industry's Donations. Some Who Accepted Gifts in the Past Are

Now Shunning Them, L.A. Times, Oct. 29, 1996.

A more recent example of disclosure adequately protecting

against the appearance of corruption occurred again in California

during this past 1998 gubernatorial election cycle. One highly

contentious issue during that election was a ballot measure--

Proposition S5--which attempted to legalize Indian gambling

operations on reservations located in California. During this

campaign, the California Legislative Counsel opined that

accepting donations from Indian tribes may be illegal subjecting

recipients to possible criminal sanctions. See Dan Morain and

Dave Lesher, Casino Campaign Donations Questioned:

Legislature's Legal Advisor Says That Lawmakers Could Face

Criminal Sanctions if They Accept Contributions from Indian

Gambling Operations Deemed To Be Illegal, L.A. Times,

July 3, 1998. Shortly after the issue was reported in the press,

then gubernatorial candidate Gray Davis, among others, refused

to accept any more Indian tribe campaign contributions to avoid

the appearance of impropriety. See Virginia Ellis, Labor, Trial

Lawyers Pour Millions Into Davis’ Coffers Funds: A Third of

)

Gubernatorial Candidate’s Money Comes from Two Groups

That Usually Back Democrats, L.A. Times, Oct. 21, 1998.

Given these examples of campaign finance disclosure and

vigilant reporting by the press, it is simply incredulous to assert

the notion that disclosure is inadequate to prevent the appearance

of corruption. Not only does disclosure allow citizens to make

their own judgments about a particular candidate, but such laws

also allow the press and opponents to continually monitor

campaign activity and alleged correlations between contributors

and actions taken in public office. Certainly, these types of

disclosure laws and vigorous reporting by the press further the

“discussion of public issues and debate on the qualifications of

candidates [which is] integral to the operation of the system of

government established by our Constitution.” Buckley, 424 U.S.

at 14; see also Grosjean v. American Press, 297 U.S. 233, 250

(1936) (observing that an “informed public opinion is the most

potent of all restraints upon misgovernment”).

Amici therefore submit that the contribution limits at issue

in this case fail strict scrutiny as they are not narrowly tailored:

If a small minority of political contributions are given to

secure appointments for the donors or some other quid

pro quo, that cannot serve to justify prohibiting all large

contributions, the vast majority of which are given not

for any such purpose but to further the expression of

political views which the candidate and donor share.

Where First Amendment rights are involved, a

blunderbuss approach which prohibits mostly innocent

speech cannot be held a means narrowly and precisely

directed to the government interest in the small minority

of contributions that are not innocent.

Colorado Republican, 116 U.S. at 2329 (Thomas, J., concurring

in part and dissenting in part).

— ——

CONCLUSION

The judgment of the Eighth Circuit should therefore be

affirmed.

DATED: May, 1999.

Respectfully submitted, |

’

JOHN A. RAMIREZ SHARON L. BROWNE |

Of Counsel Counsel of Record

Pacific Legal Foundation Pacific Legal Foundation

10360 Old Placerville Road, 10360 Old Placerville Road,

Suite 100 Suite 100

Sacramento, California 95827 Sacramento, California 95827

Telephone: (916) 362-2833 Telephone: (916) 362-2833

Facsimile: (916) 362-2932 Facsimile: (916) 362-2932

Counsel for Amici Curiae Pacific Legal Foundation

and Lincoln Club of Orange County ;

AAP Oe en Ome tte

APPENDICES

ee ee er ee

Appendix A-1

Los Angeles Times

Wednesday, December 9, 1998

Metro Desk

Justices May Revive Cap on Contributions Politics:

Appeals Court Considers Reinstatement

of Prop. 208, the 1996 Ballot Measure To

Strictly Limit Campaign Fund-Raising

DAN MORAIN

TIMES STAFF WRITER

SAN FRANCISCO -- After a 1998 political campaign in

which state candidates spent more than $200 million, a federal

appellate court Tuesday considered reinstating a far-reaching

ballot initiative that imposed strict contribution limits.

The three-judge panel of the U.S. 9th Circuit Court of

Appeals is deciding the fate of Proposition 208, which was

approved by California voters two years ago. The measure

limited individual contributions to state Senate and Assembly

candidates at $250 and to candidates for statewide offices at

$500. If a candidate agreed to spending limits, the individual

contribution levels could double.

The initiative’s defenders appealed to the circuit court after

U.S. District Judge Lawrence Karlton of Sacramento issued an

injunction in January blocking Proposition 208. Karlton

concluded that the measure’s tough contribution and spending

limits denied candidates their 1st Amendment right to free

speech.

On Tuesday, Judge Stephen Reinhardt repeatedly signaled

his belief that the limits appeared to infringe on candidates’

ability to campaign. The other two judges seemed more willing

to consider upholding the initiative.

“Judging from the questions, two judges seem oriented

toward reversing [Karlton], and one toward affirming,” said

Appendix A-2

UCLA law professor Daniel H. Lowenstein, an opponent of the

initiative who watched the arguments.

Apparently looking for middle ground, Judge Michael D.

Hawkins wondered whether the case could be turned over to

the California Supreme Court to rewrite portions of the measure

to make it constitutional.

Without Proposition 208, campaign fund-raising and contri-

butions in California have continued to skyrocket. Donations of

$100,000 by individuals and corporations to candidates for

statewide office are common. Legislative leaders also pull in

six- figure donations from individual sources.

Candidates in this year’s general election campaign for

governor and other statewide offices raised at least $95 million,

according to the California Voter Foundation. Candidates for

the 100 legislative contests raised about $75 million. Add in

primary spending, and the tab for this year’s campaigns tops

$200 million--not counting ballot initiatives, which weren't

covered by Proposition 208.

Under the initiative, a gubernatorial candidate could raise

no more than $14 million. Without the limits in place this year,

Democratic Gov.-elect Gray Davis raised about $30 million.

His Republican opponent, Atty. Gen. Dan Lungren, raised

about $22 million.

At several points during Tuesday’s court debate, the

argument veered into discussions about this year’s campaigns

and wealthy former Northwest Airlines Chairman Al Checchi,

who spent about $40 million--most of it his own money--in his

failed effort to win the Democratic gubernatorial nomination.

The initiative would not have blocked wealthy people from

spending their own money on their cainpaigns.

Proposition 208’s opponents include many Republican and

Democratic politicians and many of their supporters, including

Organized labor, represented Tuesday by San Francisco

Appendix A-3

attorney Joseph Remcho, and the California Pro-Life Council,

represented by attorney Jim Bopp from Terre Haute, Ind.

The initiative’s defenders included the state Fair Political

Practices Commission and Los Angeles attorney Bradley S.

Phillips, who represented the authors, former acting Secretary

of State Tony Miller and former California Common Cause

director Ruth Holton.

Phillips and FPPC attorney Lawrence Woodlock defended

the initiative as a legitimate effort on the voters’ part to limit

campaign spending and curtail corruption by reducing the size

of donations.

“This is one of the aspirations of 208--to put an end to the

arms race,” Woodlock said.

In his questioning, Hawkins focused on the initiative’s

contribution caps, noting that Oregon, Washington and Arizona

have contribution limits and that $1,000 is the maximum

individual donation permitted by federal election law.

Attorneys attacking the initiative--and Judge Reinhardt--

noted that the $1,000 limit was imposed on federal campaigns

24 years ago, when the average congressional race cost

$73,000. At the time, only 5% of the donations exceeded

$1,000. Today as much as 85% of all donations in California

political races exceed the restrictions of Proposition 208, noted

Bopp.

On the counsel table, Bopp displayed a copy of a book titled

“Bribes” by John T. Noonan, one of the judges on Tuesday’s

panel.

Bopp said some of the book’s passages support his conten-

tion that campaign contributions should not be curtailed, as

long as they are fully disclosed. Noonan, however, seemed

skeptical about the attacks on the initiative. When one lawyer

Noonan

. People throw it away.”

Appendix A-4

opposing Proposition 208 said the limits would deny candidates

“A meaningful mail campaign?” he said. “I’ve never known

the mght to wage a “meaningful mail campaign,”

interrupted:

a meaningful mail campaign . . .

Appendix B-3

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Appendix C-1

Los Angeles Times

Tuesday, August 27, 1996

Metro Desk

Legislators Bypass Mass Mailing Ban

Government: Loopholes Used to Send 35

Million Pieces at Taxpayer Expense

PAUL JACOBS; VIRGINIA ELLIS

TIMES STAFF WRITERS

POLITICAL PERSUASION. Money and patronage: in

California. One in an occasional series

Californians in 1988 voted for an initiative that in the

plainest of language outlawed mass mailings by elected

officials at public expense.

Since then, however, state lawmakers have sent out more

than 35 million pieces of taxpayer-financed bulk mail. Much of

it came from officials facing tough elections.

Legislators have spent almost $6 million on well-organized

“communications” programs by taking advantage of regulations

that created major loopholes in the law, the Times has found.

The mailings have accelerated in the Assembly during the

current two-year session, primarily because Republican

members have sent more than 10 million pieces to constituents.

Records show that the three most prolific GOP members sent

out more mail than all the Democrats combined.

Many mailers are highly political in tone and baldly

self-promotional, touting partisan views on such hot-button

issues as welfare and crime, gas tax cuts and illegal

immigration.

A number appear frivolous, such as computer-generated

letters urging constituents to “Take a Hike!” to celebrate

National Parks and Recreation Month.

Appendix C-2

Others are largely informational, some without discernible

legislative purpose, such as notices of free eye exams and

invitations to have children fingerprinted. One letter marks the

23rd anniversary of the end of the Vietnam War, another the

fifth anniversary of the Gulf War.

What happened in the eight years since passage of

Proposition 73 shows how the expressed will of the state’s

voters can be circumvented and diluted. It also demonstrates

the inventiveness of elected officials in finding ways to use tax

funds to promote themselves and maintain their grip on public

office.

Defenders say mass mailings help them keep in touch with

constituents, who welcome the contact. They also say exemp-

tions allowed by the state’s political watchdog agency permit

them to send as many letters as they want, providing they do

not exceed their budget.

“They give you a chunk of money. You can do a number

of things with it,” said Assembly Majority Leader James E.

Rogan (R-Glendale), who has sent more than 620,000 pieces of

mail this session. “You can take junkets or you can try to keep

your constituents posted on what’s going on. I don’t take

junkets.”

Now, because of criticism from some legislators and a flap

over a provocative GOP mailer on the new three-strikes law,

the Fair Political Practices Commission is considering whether

rules changes are needed.

A Powerful Perk

Free mailing privileges have long been a prime perk of

legislators--one that challengers say gives an unfair edge to

incumbents. And the party in control in each house, through the

power of the purse, has always been able to fire out a larger

volume of mail than the minority party.

Appendix C-3

The 1988 ballot measure sought to change all that with the

simple admonition: “No newsletter or other mass mailing shall

be sent at public expense.”

Mass mailing, said the authors of Proposition 73,

amounted to electioneering at public expense. “The mailings

were little more than thinly disguised campaign pieces,” said

co-author Sen. Ross Johnson (R-Irvine).

Even a rather neutral piece, such as an opinion survey or

list of fire safety tips, can help a lawmaker with name

recognition in his district. “Your name is the name of the

game,” said another co-author, Sen. Quentin L. Kopp (I-San

Francisco).

Mail records, obtained under the Legislative Open Records

Act, show that after passage of the initiative, the volume of

bulk mail sent out by the state Senate dropped sharply and has

never rebounded.

But in the Assembly, the amount of mail had been building

slowly under the Democrats, only to shoot up suddenly after the

Republicans gained a majority in the 1994 elections.

Over the last 21 months, records show, GOP members

have engaged in a mass mailing spree, sending out more than

six times as much as Assembly Democrats, largely targeted

toward districts with contested races.

Five Democrats, some facing stiff election fights, have sent

at least 100,000 pieces of mail. But no Democrats are among

the top 20 mail users identified by a Times computerized

analysis of mail and postage records.

The ban was never popular among legislators, many of

whom say that communication with voters is a vital part of their

job. And the line between legislators informing their

constituents and promoting their own political fortunes is not

always a clear one.

Appendix C-4

Immediately after passage of Proposition 73, elected

officials started complaining that the prohibition, if strictly

enforced, would bring government to a halt--and might even

prevent the mailing of income tax refunds and voter

information pamphlets.

The Fair Political Practices Commission responded by

writing rules intended to keep the government’s doors open for

business by allowing broad exceptions to the law.

These rules reinforced the ban on slick newsletters

featuring photos of lawmakers and flattering articles on their

accomplishments.

But the regulations opened the way for other sorts of mass

mailings that critics say fulfill much the same purpose. For

example, elected officials could mail as many notices of public

meetings, such as town hall forums, as they wished.

This, Johnson warned at the time, was “a very major

loophole that my colleagues and I in the California Legislature

will be driving Mack trucks through very quickly.”

Proposition 73 allowed each legislator to send up to 200

copies of a given letter in one month without violating the

mass-mailing ban. But after a series of rulings by the FPPC,

lawmakers quickly figured out they could ship thousands of

computer-generated letters at a time.

For example, one member sent about 70 different letters

one month in batches of 200 or less--more than 14,000 letters

in all.

The FPPC commissioners “distorted Proposition 73 in the

regulations. They created a means of evading it,” Kopp said.

In recent years, Johnson and Kopp have turned to mass

mailings, but the numbers are relatively small and neither has

sent out bulk mail close to election day.

Appendix C-5

Mass Mailing Machine

Mass mailing has become institutionalized in the Assembly

and the Senate, but with a difference.

Senators are allowed to spend no more than $8,800

annually and cannot make large-scale mailings in the three

months before an election.

Assembly members can spend as much as they want of

their $240,000-a-year basic office budget on mailing Until this

month, members were allowed to send out publicly funded

mailers right up until election day.

The legislative staffs of both houses write the mailers, and

these are reviewed for conformance with FPPC regulations.

The letters are printed and mailed from legislative offices at

public expense.

The party caucuses encourage members to take advantag

of these services.

“Unsolicited mail can provide different types of outreach

for our Assembly members,” states an internal memorandum

earlier this year from the Assembly’s Republican Caucus. It

suggested that the names of office visitors, new homeowners

and newly registered voters in a legislator’s district can be

computerized so they can be contacted for town hall meetings

or future mailings.

In practice, the Times found, the mailings are used most by

legislators facing a stiff challenge in their district or trying to

advance to another office.

Republican Assemblyman Peter Frusetta of Tres Pinos has

sent Out more publicly funded mail in the last 21 months than

any other lawmaker--more than 665,000 pieces so far this

session. A lifelong rancher who calls himself the “cowboy in

the Capitol,” he faces a tough rematch against a Democratic

Appendix C-6

opponent he narrowly defeated two years ago. The outcome

could determine which party controls the Assembly.

Frusetta sends out many computer-generated letters in

batches of 200 letters at a time. In late June, he mailed out more

than 14,000 of these letters. One batch, paying homage to the

U.S. flag, called for support of a federal constitutional

amendment to make flag desecration a crime. Another praised

legislation to bar local school boards from using taxpayer funds

on behalf of candidates or ballot measures. “As a taxpayer |

don’t believe my tax dollars should be used for political

purpose and I hope you agree,” he wrote.

Frusetta said in an interview: “Lots of people come up to

me and say they like the letters. They say they are informative.

That encourages me to continue.”

“I see it as a way to keep the constituents informed, to

keep their interest alive, to get them involved in controversial

issues. I see it as a public service.”

Second to Frusetta in mailing is Rogan, the Assembly

majority leader, who faces a millionaire Democratic business-

man in a key race this November in the partisan struggle for

control of the U.S. House of Representatives.

The Proposition 73 restrictions were designed in part to

prevent lawmakers from using mailers for partisan purposes.

And the FPPC tried to eliminate self-serving statements in

mailers by barring personal pronouns such as “I,” “me” or

“ ”

my.

But one of Rogan’s letters sent out to 43,000 constituents

attacked “the Democrat-controlled Senate” for stalling or

killing “important job-creating legislation that passed the

Assembly.”

Under the FPPC’s rules, Rogan could not sign those

letters, yet he was clearly identified as the author. His name

Appendix C-7

appeared on an official-looking letterhead in large capital

letters, because the rules allow it.

Last spring, Democratic Assemblyman Willard H. Murray

Jr. of Paramount sent out more than 100,000 pieces of

subsidized mail to his district, most of them fliers suitable for

posting on household bulletin boards, with information on local

recreational programs and fire safety.

This mail--the only large-scale mailings Murray sent out

all session--went out in the final weeks before he lost narrowly

to then-Assemblywoman Juanita McDonald (D-Carson) and

others in a race for a vacant congressional seat.

Murray denied that the mailer was used to enhance his

election chances. “We got behind [in the mailing], and they all

wound up going out then,” he said.

Rethinking the Rules

Co-author Kopp and other lawmakers have been urging the

Fair Political Practices Commission to reexamine the rules that

allowed lawmakers to mail millions of mass mailers, despite the

ban.

The commissioners are promising to reconsider the

regulations, perhaps as soon as their November meeting, said

commission general counsel Steven G. Churchwell.

The review is prompted by Kopp and others and by a

recent flap over a “Save Three Strikes” mailer sent out by a

number of Republican Assembly members.

The stridently pro-GOP mailer attacks “soft-on-crime

politicians” led by Senate President Pro Tem Bill Lockyer

(D-Hayward) for “doing all they can to destroy the anti-crime

gains we have made these past two years.”

But Churchwell cautions that it will be difficult to craft

rules to end mailings that appear too partisan or are too

Appendix C-8

flattering to the senders. “It’s easy to say the goal is stop fluff

pieces,” he said. “How do you do that?”

University of Virginia professor Larry J. Sabato, who has

written about congressional abuse of mailing privileges, said:

“Some of the most ingenious people in the world are attracted

to politics. And there will never be a way to design a law to

keep [mailings] from being abused.”

The party in power sees to it that its members have the

resources to get out the mail, said Democratic campaign

consultant Richie Ross, who helped plan mail programs as the

Assembly's chief administrative officer under Democratic

Speaker Willie Brown.

“Traditionally what happened was the vulnerable incumbents

sent out more mail than the non- vulnerable incumbents, if your

party was in control of the numbers,” Ross said.

And direct mail to voters plays a crucial role in winning

elections, he said. “Nine times out of 10, campaigns are won

by the candidate who did the most mail.”

Before passage of Proposition 73, officeholders were

barred from sending mass mail once they declared for public

office. After enactment of the initiative, the Senate imposed a

rule of its own, banning mass mail in the three months before

an election.

The Assembly had no such rule until this month, when

Speaker Curt Pringle (R-Garden Grove) proposed one

prohibiting all Assembly members from sending taxpayer-

funded mass mail within 60 days of an election “to remove the

potential to misconstrue any publicly financed mailings as

intended for political purpose.”

A spokesman for Pringle said Republicans had an informal

rule barring mailings any closer than six weeks before the

March 26 primary election.

Appendix C-9

A score of GOP members ignored this policy, sending

874,000 pieces in that period, according to logs at the

Assembly Reproduction Center.

During the same period, seven Assembly Democrats

mailed out 208,000 pieces, including those sent out by Murray.

Democrats have objected to Pringle’s 60-day cutoff

proposal, and the Assembly Rules Committee agreed to a

compromise, 45-day cutoff—a decision that came as lawmakers,

primarily Republicans, were already deluging their districts

with mail.

Assemblyman Jim Cunneen of Cupertino, a first-term

Republican, has already sent more than 565,000 pieces of mail

this session, many announcing town hall meetings with

Cunneen.

Cunneen, who is facing former California Teachers Assn.

President Ed Foglia in another key Assembly race, said: “You

don’t have to come to a fund-raiser to ask me a question.”

Foglia complains that Cunneen’s mailers have made his

challenge more difficult.

“It’s a tremendous advantage,” he said. “I just thought that

under Proposition73, this was taken care of.”

Publicly Financed Mail

Despite a ban on mass mailing, state legislators have taken

advantage of loopholes in the law in increase the amount of

mail they have been sending out at public expense. Since

gaining a majority in the Assembly two years ago, Republican

members have increased their mail dramatically.

Total Assembly mailing cost

Source: Assembly Daily File (1990-1991); Assembly

Rules Committee (1995)

Appendix C-10

Note: Includes all postage by individual members, does not

include printing or processing costs. Totals for 1995 are from

unaudited, unreconciled data.

Top Spenders

These are the Assembly members who spent the most on

mass mailings from Jan.1, 1995, to Aug. 19, 1996.

ASSEMBLY MEMBER: |. Peter Frusetta (R-Tres Pinos)

PIECES: 665,879

POSTAGE: $105,618

COMMENTS: Top target of Democrats in crucial race.

ASSEMBLY MEMBER: 2. James E. Rogan (R-Glendale)

PIECES: 623,977

POSTAGE: $101,705

COMMENTS: Running for Congress against millionaire

Democrat.

ASSEMBLY MEMBER: 3. Jim Morrissey (R-Santa Ana)

PIECES: 617,171

POSTAGE: $93,841

COMMENTS: Seeks reelection in once-Democratic district.

ASSEMBLY MEMBER: 4. Jim Cunneen (R-Cupertino)

PIECES: 565,648

POSTAGE: $79,235

COMMENTS: Democrats threaten to target this race.

ASSEMBLY MEMBER: 5S. Bill Hoge (R-Pasadena)

PIECES: 496,794

POSTAGE: $78,265

Appendix C-11

COMMENTS: Running against popular college president.

ASSEMBLY MEMBER: 6. Jim Battin (R-La Quinta)

PIECES: 470,637

POSTAGE: $71,700

COMMENTS: Faces ex-assemblyman in district with

Democratic edge.

ASSEMBLY MEMBER: 7. Howard Kaloogian (R-Carlsbad)

PIECES: 465,555

POSTAGE: $70,370

COMMENTS: Possible challenge by independent after

primary.

ASSEMBLY MEMBER: 8. Phil Hawkins (R-Bell flower)

PIECES: 459,770

POSTAGE: $69,702

COMMENTS: Faces ex-assemblywoman in Senate bid.

ASSEMBLY MEMBER: 9. Steven T. Kuykendall

(R-Rancho P.V.)

PIECES: 443,008

POSTAGE: $70,643

COMMENTS: Narrow winner in 1994; has new Democratic

challenger.

ASSEMBLY MEMBER: 10. Brett Granlund (R- Yucaipa)

PIECES: 442,119

POSTAGE: $70,412

COMMENTS: Safe after winning contested GOP primary.

Appendix C-12

ASSEMBLY MEMBER: 11. George House (R-Hughson)

PIECES: 421,618

POSTAGE: $66,115

COMMENTS: Target of Democrats in seat they once held.

ASSEMBLY MEMBER: 12. Steve Baldwin (R-E1 Cajon)

PIECES: 408,313

POSTAGE: $61,990

COMMENTS: Seeks reelection in once-Democratic district.

ASSEMBLY MEMBER: 13. Marilyn C. Brewer (R-Irvine)

PIECES: 383,379

POSTAGE: $57,191

COMMENTS: Withstood primary challenge.

ASSEMBLY MEMBER: 14. Fred Aguiar (R-Chino)

PIECES: 377,842

POSTAGE: $56,975

COMMENTS: Considered a safe bet for reelection.

ASSEMBLY MEMBER: 15. Scott Baugh (R-Huntington

Beach)

PIECES: 334,932 .

POSTAGE: $50,266

COMMENTS: Election law indictment clouds chances.

ASSEMBLY MEMBER: 16. Tom J. Bordonaro Jr. (R-Paso

Robles)

PIECES: 310,779

POSTAGE: $48,083

Appendix C-13

COMMENTS: Seeks reelection in safe district.

ASSEMBLY MEMBER: 17. Brooks Firestone (R-Los Olivos)

PIECES: 292,788

POSTAGE: $48,169

COMMENTS: No threat expected in reelection effort.

ASSEMBLY MEMBER: 18. Jim Brulte

(R-Rancho Cucamonga)

PIECES: 265,631

POSTAGE: $39,202

COMMENTS: Stepping up to Senate in safe Republican

district.

ASSEMBLY MEMBER: 19. Richard K. Rainey (R-Walnut

Creek)

PIECES: 243,578

POSTAGE: $33,848

COMMENTS: Senate race against Democratic county

supervisor.

ASSEMBLY MEMBER: 20. Gary G. Miller (R-West Covina)

PIECES: 242,125

POSTAGE: $36,804

COMMENTS: Easy time expected in reelection bid.

Source: Assembly Reproduction Center

About This Series

In this election year, control of the state Legislature is on

the line. Two initiatives seeking to reform campaign

fund-raising are on the November ballot. And term limits for

Appendix C-14

the state Assembly take effect--prompted in part by rising

public concern about the way politicians use incumbency to

advance their careers.

In this occasional series, the Times explores how money

influences governmental action and how elected officials use

their positions to reward supporters and improve their prospects

at the polls.

TODAY: How incumbents, particularly Assembly

Republicans, are taking advantage of loopholes in a mass

mailing ban to send millions of pieces to voters in their districts

at taxpayers’ expense.

TABULAR OR GRAPHIC MATERIAL SET FORTH IN

THIS DOCUMENT IS NOT DISPLAYABLE

Appendix D-1

Los Angeles Times

Sunday, November 5, 1995

Metro; PART-B; Metro Desk

POLITICS ‘95

A Behind-the-Scenes Look at Orange County’s

Political Life; Foes Frankly Furious at Allen’s

Late Mailers at Taxpayers’ Expense

Lacking the big bucks to fight a Nov. 28 recall, embattled

Assemblywoman Doris Allen is using her prerogative as a state

lawmaker to dispatch a ton of mail at taxpayer expense to

voters in her district.

Allen is mailing a non-political brochure, which announces

a series of seven “town hall” meetings Nov. 17 and 18, to

160,000 households in the 67th District. Under state law, the

mass mailing is allowable as long as the lawmaker’s name

appears just twice--announcing the meeting, and as part of a

return address.

At 15 cents apiece, the mailing will cost Allen’s office

budget $24,000. While the move doesn’t violate state law,

recall proponents say she is trampling a cardinal tenet of

Assembly Republicans--thou shall not use franking privileges

within six weeks of an election.

“It’s no secret what she’s doing,” groused Jeff Flint, a

recall organizer. “She’s low on funds so she’s campaigning

against the recall at taxpayer expense.” The recall was launched

after Allen cut a deal with Assembly Democrats to have herself

elected Speaker, in what GOP leaders called a betrayal of the

party. She has since resigned the Speaker’s post.

Gil Ferguson, a former Orange County assemblyman

helping Alien fight the recall, countered that the town hall

Appendix D-2

meetings will simply give Allen a chance to set the record

straight on a variety of issues.

County Republican leaders “have cut off her money. Now

they're objecting to her trying to get the truth out to her own

constituents,” Ferguson said.

ee ee

Ce OTN Ne eres

Appendix E-|]

The Sacramento Bee

Sunday, June 19, 1994

MAIN NEWS

It Wasn’t Easy to Sting Capitol

Obstacle-Plagued 8-Year Effort

Dan Bernstein Bee Capitol Bureau

Capitol Sting Operation

The sun had just come up that Friday in the late summer of

1987, and FBI agents in Sacramento were already at work,

hoping that a big break in their Capitol sting operation would

come waltzing through the door.

The agents had set up a ruse to lure a burly, astute state

Senate aide named John Shahabian into the sprawling federal

complex that houses their offices on Cottage Way at 7 a.m.

Although Shahabian arrived on time, it took nearly 14 hours

of coaxing, prodding and threatening before authorities secured

his cooperation as a government informant in the undercover

operation. Until then, the FBI was having trouble penetrating

corruption at the highest levels of the Legislature because it

lacked an insider whom lawmakers trusted.

“At different parts in our discussion, I almost ended it

because it wasn’t clear to me that he was going to be 100

percent truthful,” recalled James Wedick Jr., the lead FBI agent

in the case. “If he was going to [cooperate], he was going to

have to demonstrate that day his commitment.”

Shahabian finally agreed to begin wearing a hidden

recording device the very next day and to tape his conversation

with a state senator. With that, the investigation flourished and

ultimately resulted in the convictions of more than a dozen

lawmakers, legislative aides, lobbyists, and other public figures.

The final convictions came Thursday, when a Sacramento

federal jury returned guilty verdicts against state Senator

eee

Appendix E-2

Frank Hill, R-Whittier, and former Democratic legislative aide

Terry Frost on extortion and conspiracy charges.

While federal prosecutors chalked up a perfect record of

convictions, the eight-year investigation was fraught with

obstacles and headaches.

Extraordinary restrictions on the undercover probe were

imposed by top federal officials in Washington. Key witnesses

refused to talk. Records at the Capitol were destroyed.

“There were times where you just got fed up banging your

head against a wall,” said Assistant U.S. Attorney John

Vincent. “Sometimes I would come back here, slump in my

chair and think, ‘God, why bother?’”

Because of the public’s low regard for politicians, some

defense lawyers have claimed that legislators and other Capitol

figures were an easy mark--particularly when they were

captured on video and audio tapes.

But prosecutors said they never thought any of the cases

would be easy, because they were operating in a legal gray area

of duly reported campaign contributions.

“We all felt these cases would be difficult to prove,” said

David Levi, a former U.S. attorney in Sacramento who is now

a federal judge. “I felt that these would be very articulate

defendants. These are very intelligent people. They are

winning people, persuasive people, and they’re used to dealing

with controversy and to speaking in public.”

One by one they fell, however.

The casualty list included three once-powerful Democratic

state senators--Joseph Montoya, Paul Carpenter and

Alan Robbins--as well as a former Assembly Republican

leader, Patrick Nolan of Glendale.

The investigation also netted former California Coastal

Commissioner Mark Nathanson, former Sacramento lobbyist

Yue a ai?

Appendix E-3

Clayton Jackson, and former legislative aides Tyrone Netters,

Darryl Freeman, and Karin Watson.

And, in a spinoff case that preceded the Capitol corruption

cases, prosecutors secured influence-peddling convictions of

former Yolo Sheriff Rodney Graham and his undersheriff,

Wendell Luttrull.

How Sting Was Launched

The sting operation was the brainchild of FBI agent

Wedick, who began toying with the idea in 1982, when an

informant recorded conversations with a legislative staffer

suggesting that legislation was for sale.

With several other major cases on his plate, Wedick put off

the notion until 1984, when he teamed up with then- Assistant

U.S. Attorneys George O'Connell and Levi.

To help justify an undercover operation at the Capitol, they

had the informant record additional conversations with the

staffer and compiled a record of other alleged

influence-peddling in the Legislature from public complaints

and newspaper articles.

Their idea was to introduce a bogus special-interest bill on

behalf of a dummy company whose

representatives--undercover FBI agents--were ready to pay

legislators who were willing to help them enact the legislation.

Officials at the U.S. Department of Justice and at FBI

headquarters were skeptical of the proposal because it was the

first time that the FBI had proposed creating legislation to catch

corrupt politicians.

“The initial response was . . . ‘The chances are slim we're

going to approve something like this,” said Wedick, who last

month received a national FBI award for his work in the case.

“This was such an intrusive kind of a step . . . for the federal

government to reach into state government.”

Appendix E-4

Still, the trio managed to convince a special undercover

committee of the Justice Department that the operation was

warranted and, in October, 1985, they received approval for

Operation Brispec--bribery-special interest.

But officials in Washington imposed some special

conditions: There would be no secret tape recording of any

legislators not specifically targeted, and no payments would be

made without prior consent from top-level FBI officials.

That second condition led in 1986 to a frantic phone call at

3 a.m. to try to reach then-FBI Director William Webster at

home to approve a $30,000 payment demanded by one

legislative staff member. Webster couldn't be reached.

“It was frustrating,” said Levi. “It was like a bad joke.”

The undercover operation featured a bogus FBI company

called Gulf Shrimp Fisheries, which purportedly wanted to

build a warehouse and packaging plant in West Sacramento to

provide shrimp to restaurants throughout Northern California.

The firm was pushing a bill--drafted by federal prosecutors--to

create an exemption in the state’s banking requirements that

would enable the firm to reduce the cost of a construction loan

for its proposed plant.

Prosecutors almost tipped their hand early on. O'Connell

said that before agents were about to submit their copy of the

bogus bill to the Legislature, he decided as an afterthought to

check the stationery: When he held the paper up to the light, it

revealed a Department of Justice watermark. The bill was

retyped on plain paper, and it was then introduced in the

Assembly.

Operating under utmost secrecy even within their own

office, Levi and O’Connel! occasionally would seek inspiration

from slogans written on a blackboard in Levi's office. “Who

dares, wins,” was a favorite of O’Connell’s, who, like Levi,

later headed the U.S. attorney’s office.

Appendix E-5

Ironically, at the time they launched the sting, Sacramento

officials were completely unaware that Nolan had pointed a

finger at Assembly Speaker Willie Brown in a series of

conversations with FBI agents in Los Angeles. Nolan, the

Assembly Republican leader, claimed in mid-1985 that Brown

directed certain Democratic lawmakers to “milk” lobbyists for

campaign contributions in return for special-interest bills.

Sacramento officials said they first learned of those allegations

when they were reported in the Bee.

In fact, Levi said that despite widespread speculation--some

fueled by Brown himself--the powerful San Francisco

Democrat was never a target or a subject of the undercover

investigation. But Levi would neither confirm nor deny that

Brown might have been investigated in a spinoff probe.

Getting Past the Staffers

Although the FBI did not have an insider when it launched

the sting in January, 1986, it did have a reliable informant:

Marvin Levin, a Sacramento developer with a squeaky-clean

past who was willing to strap a tape recorder to his boot and

record conversations with acquaintances at the Capitol.

Pretending to be a family friend of FBI undercover agent

Jack Brennan--who was posing as a sleazy Alabama

businessman--Levin introduced the agent to Freeman, a former

legislative staff member who had become a lobbyist.

aman assed the aguas to Newer, an side to Assembly.

woman Gwen Moore, D-Los Angeles. Netters immediately

began demanding campaign contributions in return for his

assistance on the shrimp bill, while Freeman pocketed

payments for arranging a loan application through a nonprofit

agency he headed.

But Brennan encountered resistance from Netters when he

attempted to meet personally with Moore and other legislators

Appendix E-6

to discuss his contributions, making it nearly impossible to

gather direct evidence against targets.

Brennan had a little more luck in the Senate, where he

managed to tape several conversations with Paul Carpenter, to

whom he had contributed $20,000 at the direction of

Shahabian, one of his top aides.

In all, more than $100,000 worth of campaign contributions

and “honorariums” were given to legislators and others by

undercover FBI agents during the operation.

However, some in the U.S. attorney's office thought the

case against Carpenter could not be won without stronger

evidence that Shahabian was soliciting the contributions at

Carpenter's behest. Even after Shahabian agreed to cooperate

and testify against his former boss, one key prosecutor thought

that the senator could effectively refute that testimony.

That prosecutor, John Panneton, said a key break in the

Carpenter case came in late 1989, when he told Carpenter's

lawyers that the senator would be indicted within 10 days

unless he could convince prosecutors otherwise.

“There was a degree of puffing in that statement,” Panneton

said, adding that Carpenter might not have been indicted if he

hadn’t asked for a meeting with the U.S. attorney and tried to

explain away his conduct with claims that he was doing his

own investigation. °

“For the next 3 1/2 hours, we had a prosecutors’ delight,”

Panneton said. “For the first time, he [Carpenter] laid out his

knowledge that he knew what John Shahabian was doing and

that was a tremendous hole in the case.”

Back in 1987, however, the case against Carpenter had been

tenuous, and there had been no case against Moore. Without

indictments against elected officials, the investigation might

have been seen as another disappointing effort by the FBI,

ie oti or

= ath Nie.

Appendix E-7

which had flubbed two Capitol corruption investigations in the

1970s.

So a decision was made to try to extend the undercover

operation.

Given that the sting bill had been vetoed by then-Governor

George Deukmejian at the request of the FBI, federal officials

needed a new bill, a new scenario, and a new entree into the

Legislature.

Enter John Shahabian.

Even though he went on to gather crucial taped evidence

and testify against some of the biggest targets of the probe,

Shahabian caused fits for federal authorities along the way

Months after agreeing to cooperate, he hired a lawyer and

successfully demanded full immunity from prosecution despite

being told that no deals could be made until after he completed

his work as an informant. When the cases in which he was

involved went to trial, he waited until the last minute to review

transcripts on which he would be called to testify.

And last year, he wrote a letter to prosecutors, which

became public, accusing the FBI of “unethical police methods”

in persuading him to become an informant. Federal authorities

denied those allegations but were afraid to call Shahabian as a

witness in the last corruption case that went to trial.

“There was a constant tension between John and the FBI,”

said Panneton, who is now in private practice. “He threatened

to walk out at least once. He always had the sense that he was

betraying his friends at the Legislature.”

All-night Raid at Capitol

One of Shahabian’s most important contributions was

introducing an undercover FBI agent to Karin Watson, a key

aide to Nolan who later admitted to investigators that her role

Appendix E-8

was to identify legislation that could be used to solicit

campaign contributions from special interests.

That, in turn, led to separate videotaped meetings between

FBI agent George Murray--posing as Georgia businessman

George Miller--and Nolan and Hill at the Hyatt Regency

Sacramento, where money changed hands.

On August 24, 1988, after Deukmejian had vetoed a second

shrimp bill, the FBI decided to confront Watson with evidence

of extortion on her part and see if she would cooperate and

gather further evidence against Nolan and Hill.

Wedick interviewed Watson for nearly six hours that day,

but she denied any knowledge of a money-for-votes scheme.

“She lied her way all the way through it,” Wedick said.

“She never told the truth, so I could never ask her to wear a

wire.”

Still, Watson said she would cooperate with investigators

and consented to have her Capitol office searched.

Meanwhile, a team of more than 30 FBI agents was

mobilized at the Hyatt with search warrants for several other

Capitol offices. Shortly before 10 p.m., they descended on the

Capitol and began their all-night raid.

In Watson’s office, investigators found documents that

suggested she and Nolan were engaged in influence-peddling

activities other than on the shrimp bill. “Smoking guns,”

Wedick called them, and they turned out to be the only

documents from the search that were used in any of the five

trials.

Because the original search warrant pertained only to

documents associated with the shrimp bill, Wedick had to

propose another search warrant at about 2 a.m., and awaken a

federal magistrate for approval.

Appendix E-9

The search did not end until about 5 a.m., and the next day,

news of the Capitol sting was splashed across newspapers and

television screens.

After the investigation became public, federal prosecutors

hoped that it would prompt lobbyists to come forward with

other incidents of alleged bribery involving targeted

lawmakers. But those hopes were dashed.

“It was very frustrating pulling together the non-sting

aspects of the case,” Levi said. “The lobbying community was

very hard. They did not want to cut their own throats or hurt

their friends .... Even when they were prepared to testify,

they were anxious to make it appear that they were not

cooperating, that they were under subpoena and were not

helping the government.”

As it turned out, the investigation would focus three years

later on one of the most prominent lobbyists in the

Capitol--Clayton Jackson. The towering, cigar-chomping

Jackson was implicated largely by Robbins, who agreed in

1991 to wear a hidden tape recorder to gather evidence of a

$250,000 bribe offer regarding workers’ compensation

insurance legislation.

In 1993, prosecutors confronted Jackson with the tapes that

Robbins had made, and tried to get him to cooperate with them

in their expanding probe. But Jackson, who had hired the same

defense lawyer who represented Shahabian, refused to enter

into a plea agreement, and he went to trial.

“We tried real hard to twist Clay Jackson, to get him to

cooperate,” said O’Connell, who is now in private practice.

“And there were no limitations on the level of cooperation.”

Jackson eventually was convicted of racketeering, among

other crimes, and is serving a 6 1/2-year prison sentence.

Wedick also said the investigation was thwarted by the

destruction of records at the Capitol by Nolan and Robbins.

Appendix E-10

“Alan (Robbins) had his secretary destroy records: He

knew it and I knew it,” Wedick said. “He also had his secretary

alter records.”

Although Robbins was immediately implicated by

Shahabian on the shrimp bill, it was his other activities that led

to his downfall--seeking bribes on other legislation and his

outside business dealings. When investigators intensified their

investigation of him, he started to panic.

Prosecutor Vincent said that even though the 1990 search

of Robbins’ Encino home tured up no valuable evidence, it

was “the major impetus for Robbins to start negotiating a (plea

bargain).”

Today, the key players in the sting operation say that the

string of successful cases has changed some behavior at the

Capitol, and that lawmakers are less likely to link campaign

contributions with their official actions--at least overtly. But

they believe that money will continue to play a role in the

legislative process.

“I have the impression that people are more careful, more

aware,” said O’Connell. “I’m not sure there isn’t some winking

and nodding going on. But there’s less criminal corruption

”

now.

“I think the undercover project made some legislative and

interest groups more sensitive to the fact that campaign

contributions shouldn’t be dangled as a reward or withheld as

a threat,” Levi said. “One undercover project doesn’t eradicate

a type of crime, but it acts as a deterrent.”

Said Wedick, “We definitely corralled some of the biggest

players down there, but I don’t think we got them all.”

Bee staff writer Denny Walsh also contributed to this

report.

Appendix F-1

The Fresno Bee

THE VALLEY IN REVIEW 1998

Big Names Surface in Operation Rezone Case

The Year Ahead Will Be Filled with

Lots of Court Time for the Feds

and the Defendants, Including a Former Assemblyman

Jerry Bier, The Fresno Bee

The headline was dramatic: “Bonadelle, Lung, Logan

indicted in Rezone probe.”

The federal government’s public corruption investigation,

dubbed Operation Rezone, had in early 1998 swept up one of

the most powerful behind-the-scenes political figures in Fresno

history, along with a former Fresno City Council member and

one of the most successful developer-lobbyists in the city.

They were only three names in a growing list of local

politicians and development industry officials indicted in the

investigation, but they were big names.

Fresno developer John Bonadelle, former council member

Bob Lung, and lobbyist Jim Logan had been dominant figures

on the local political scene.

Their criminal indictment highlighted 1998, even though

another followed, this time naming former Fresno City Council

Member Brian Setencich, who also went on to serve a brief

term as state Assembly speaker.

Bonadelle and Logan have denied the charges and face an

April trial date. Lung pleaded guilty and is cooperating with

government investigators. Setencich has called the charges

against him “ludicrous” and said he, too, will go to tnal.

Now, with Operation Rezone nearing the end of its fifth

year, some observers question whether FBI and Internal

Revenue Service agents and federal prosecutors will continue

Appendix F-2

to pursue the investigation with the same resolve as when it

began in early 1994.

Was the Bonadelle case the culmination of the

investigation?

Was Bonadelle, whose influence has been felt in local

politics and development for nearly 40 years, the target that

most satisfied investigators?

Federal authorities insist the Rezone investigations are not

over.

“There are still leads and allegations, and investigations are

continuing,” said U.S. Attorney Paul L. Seave.

James Maddock, FBI special agent in charge in the Eastern

District of California, agreed: “Public corruption is our No. |

priority in the Eastern District, and that’s certainly true for

Rezone. As long as we have indications that there is

corruption, we are going to pursue it and dedicate the resources

to it.”

Neither Seave nor Maddock would discuss specific cases or

comment on the details of ongoing investigations, however,

both men are known for targeting white-collar criminal

corruption cases.

While there has been no official pronouncement, it has been

reported that federal agents raided the office of developer R. J.

Hill and the home of developer Bud Long in Fresno, as well as

subpoenaed payroll records of former Fresno City Manager

Michael Bierman.

“I can’t really give you any specifics except to tell you we

do have a number of anti-corruption initiatives and

investigations underway and | think if those reach the

prosecutive stage, people will see our commitment to that,”

Maddock said.

a a

Appendix F-3

Thus far, the Fresno investigation, with 11 convictions, still

trails the federal government’s nine-year Capitol corruption

cases in the late 1980s and early 1990s that resulted in

convictions of 14 lawmakers, legislative aides, lobbyists, and

other public figures.

Both Operation Rezone and the Capitol cases were led by

FBI special agent James Wedick Jr., an investigator who has

been honored nationally for his work on white-collar crime

investigations.

Assistant U.S. Attorney John K. Vincent, the lead

prosecutor in Operation Rezone, also was involved in the

Capitol corruption prosecutions, as was Howard Moline, an

Internal Revenue Service special agent who continues to work

on Operation Rezone.

1998 also produced the longest sentence thus far in

Operation rezone. Former Fresno City Council Member

Robert C. Smith was given an eight-year term following his

jury conviction on extortion, racketeering, and other charges.

‘Smith went to trial after backing out of a plea agreement in

which prosecutors were recommending that he spend no more

than a year in a halfway house in return for his cooperation in

Operation Rezone.

Baan Che

Appendix G-|1

Los Angeles Times

Thursday, December 8, 1994

South Bay; PART-J; Zones Desk

Kuykendall Blends Pragmatism, Ideology: Legislator

Says Accepting Tobacco Firm’s $125,000 Contribution

Helped Him Beat Incumbent, and Vows It Won’t Ease

His Opposition to Smoking

TED JOHNSON

TIMES STAFF WRITER

If the state Assembly takes up campaign finance reform

again, Assemblyman Steven T. Kuykendall (R-Rancho Palos

Verdes) admits that he might be singled out.

“I may have taken what is the largest single contribution

to an individual Assembly candidate, except for maybe Willie

Brown,” said Kuykendall, who was sworn in Monday as the

assemblyman in the 54th District, which includes the Palos

Verdes Peninsula, San Pedro and Long Beach. Campaign

reform would limit the size of contributions to state Assembly

and Senate campaigns.

In the waning days of the campaign, Kuykendall accepted

a $125,000 check from tobacco giant Philip Morris even though

he is on record as supporting anti-smoking legislation.

It might look like a contradiction. But this is how the

political system works, Kuykendall says, a sentiment echoed by

former colleagues on the Rancho Palos Verdes City Council

and even a few of his former opponents.

A more polished politician might be coy about it, but

Kuykendall freely admits that accepting the money was a

pragmatic move that may have helped him defeat incumbent

Betty Karnette by 597 votes.

Appendix G-2

Now, Kuykendall, an ex-Marine and mortgage banker, is

facing threats of a recall launched by Sacramento Democrats.

The state party has already filed a complaint over the

contribution with the state Fair Political Practices Commission.

But so far, there’s been little protest beyond Sacramento

Democrats. Kuykendall and his supporters dismiss the

complaint as frivolous and doubt that a recall will go anywhere

“It's something that he’s always going to have to deal

with. But I'd rather accept the check and be the winner with

controversy than be the loser,” said Republican consultant Tom

Shortridge, president of Bear Republic Political Services in

Redondo Beach.

Even anti-smoking groups say they are confident

Kuykendall won't be beholden to the tobacco company.

“I expect we are going to be working with him,” said Paul

Knepprath spokesman for the American Lung Assn. in

Sacramento.

This is not the first time that pragmatism and ideology

have clashed for Kuykendall. Elected to the Rancho Palos

Verdes City Council as a “read-my-lips, no-new-taxes”

conservative, he soon found himself justifying tax increases as

a way to resolve the city’s fiscal crisis.

He voted for a utility tax, which the council passed last

year, and supported a parcel tax, which narrowly lost when it

was put on the ballot in 1992. With the city in need of new

revenue, Kuykendall even suggested a referendum to ask

residents if they wanted to hand control of the city over to the

county.

“It’s not a question of ideology, but whether a locally

controlled city government can survive or not,” he said at the

time. “It’s that simple.”

Appendix G-3

The Draconian proposal went nowhere, but did get people

talking.

“As a businessman, he had a way of saying ‘Look at this

problem or we'll be in bankruptcy,” former Councilwoman

Jacki Bacharach said.

Affable and frank, Kuykendall seldom displays a hard-

nosed attitude people have come to expect from former

Marines. He served two tours of duty in Vietnam, including a

1972 stint in which he was among the troops stopping the North

Vietnamese Easter offensive. (One of his three children,

daughter Kerry, followed him into the military as an ensign in

the U.S. Navy. She is training to be a fighter pilot.)

After he retired from the military, Kuykendall worked at

several banks and then helped start Lockheed Mortgage Corp.,

a subsidiary of Lockheed Corp. He is now a principal in the

David Buxton Financial Corp. in Torrance and works as a real

estate consultant and lobbyist, including work for the Palos

Verdes Medical Center and Peninsula Medical Plaza.

But in recent years, his business affairs have taken a back

seat to politics. In fact, during the primary, opponent Jeffrey

Earle tried to cast him as a career politician. Kuykendall made

an unsuccessful run for the school board in 1987 and then the

City Council in 1989 before he won a council seat in 1991. And

about a year and a half after his council election, he was in the

race for the state Assembly.

“Some people said he was running too soon,” said former

Rancho Palos Verdes Councilman Bob Ryan. “But Steve’s

been (active) in representative politics since he was knee-high.”

Although opponents Lave tried to use his change of view on

taxes and his political aspirations against him, their attacks

haven't seemed to work. One reason, colleagues on the council

say, is that he has been more of a peacekeeper than a combatant

during council meetings.

Appendix G-4

“He didn’t bring too much of his personal agenda to the

table,”Bacharach said. “In fairness to Steve, | thought it was

really good of him to (switch on taxes). | thought it was wrong

of him to run on a platform of no new taxes. But he became a

problem solver.”

Even Earle, Kuykendall’s primary opponent, backed him

in the general election. Kuykendall sent a last-minute mailer

during the primary, noting that Earle lived with his mother and

suggesting that he didn’t have enough experience to succeed in

Sacramento. Earle explained that he moved in to help his

mother when she had heart surgery.

“I wasn’t really thrilled by (the mailers),” Earle said. “But

these were the typical last-minute hit pieces that come out in a

campaign. | didn’t harbor any longstanding resentment for the

stuff that came out.”

And Kuykendall’s supporters say that voters have little if

any resentment over the Philip Morris contribution. Kuykendal!

notes that the tobacco giant has a number of subsidiaries,

including real estate and food products.

“That company has got a lot more at stake than whether or

not they sell cigarettes,” Kuykendall said.

And ironically, it could be the Philip Morris contribution

that ensures that he backs anti-smoking legislation while in

Sacramento. Otherwise, opponents could gain even more

fodder for a recall.

“He’s not going to be dumb enough to vote tobacco,” said

Shortridge, the Republican consultant. “I don’t think he owes

them anything.”

Steven Kuykendall says donation might look like a

contradiction but it’s how politics works.

Appendix H-|

Los Angeles Times

Tuesday, October 29, 1996

Metro Desk

In Legislative Races, Tobacco

Is a Hotter Issue Than Ever:

Several Candidates ‘;ct Burned by Foes

for Taking the Industry’s Donations. Some Who

Accepted Gifts in the Past Are Now Shunning Them

DAN MORAIN

STAFF WRITER

SACRAMENTO -- Tobacco is being used as an issue in

California legislative campaigns like never before, with several

candidates pummeling their foes for taking tobacco money and

casting pro-tobacco votes.

Some politicians who took tobacco donations in the past

are on the defensive, and some are shunning such contributions

now. “What do you call a nurse who takes money from the

tobacco companies?” one mailer asks. Open up the brochure,

and there’s a drawing of Joe Camel in a nurse’s uniform.

“Tricia Hunter. The Tobacco Nurse.”

Democrat Howard Wayne is sending this attack as part of

his campaign against Republican Hunter for a San Diego-area

Assembly seat. When she was in the Assembly in the 1980s

and early 1990s, Hunter took roughly $6,500 from tobacco

concerns.

That sum is paltry by California standards. But as she tries

to reclaim a seat in the lower house, Hunter says, she won't be

taking a dime more.

“Absolutely not worth the hit,” she says.

Tobacco long has been an issue in California, the first state

to approve a tobacco tax for anti-cigarette advertising. That

was in 1988. California also led the nation in imposing

Appendix H-2

smoking bans, and overwhelmingly rejected a tobacco

industry-sponsored initiative in 1994.

But candidates for California state office, and some for

congressional seats, are using the issue with greater frequency

in this campaign.

Pollsters, consultants and politicians cite several reasons:

President Clinton has placed tobacco at the fore nationally,

calling for increased regulation. At the same time, more state

and local governments have sued tobacco firms to recoup the

cost of treating tobacco-related illness.

Experts say that a candidate’s acceptance of tobacco

money, or an elected official's votes for tobacco bills, probably

won't be enc ‘gh to sway an election. But when tobacco is

raised as p. -f a cluster of issues, voters may begin to

question a poh. -ian’s independence.

Indeed, some candidates are telling voters that they accept

no money from tobacco, the gun lobby or the oil industry.

“It creates a general atmosphere that you're beholden to

special interests,” said state Senate President Pro Tem Bill

Lockyer, who is overseeing Democratic campaigns for the

upper house.

So far, tobacco is a significant issue in four of the hottest

five races for the state Senate. For the most part, Democrats are

using the issue against Republicans. But some Republicans are

assailing Democrats who take tobacco money

In a coastal Senate race, Assemblyman Bruce McPherson

(R-Santa Cruz) is preparing to send mailers citing tobacco

donations accepted by his opponent, former Assemblyman

Rusty Areias of Los Banos.

“It is part of a whole package,” said McPherson, citing his

refusal to take oil industry money.

Appendix H-3

All this is not to say that tobacco firms aren't major

players in the election. Philip Morris, the world's largest

Cigarette firm, poured more than $300,000 into California

campaigns in the first half of the year.

_ The New York conglomerate has given $217,000 to

legislative leaders, including $55,000 each to Lockyer and

Senate Republican Leader Rob Hurtt of Garden Grove.

“Every campaign is under-funded,” Lockyer said,

explaining why he takes tobacco money. “I recognize that it

sets me up for some future political hit. But it’s my job as the

financier of the campaigns, as the Democratic leader of the

Senate, to try to maximize the amount of resources in

As legislative leaders go, Lockyer takes relatively small

sums of tobacco money. Republican Speaker Curt Pringle of

Garden Grove, by contrast, has accepted more than $102,000

from the tobacco industry this year.

Assembly Democratic Leader Richard Katz of Sylmar has

not taken tobacco money on behalf of Democrats running for

the lower house. However, other Assembly Democrats have

taken tobacco money, including at least one potential successor

‘o Katz, Assemblyman Cruz Bustamante of Fresno.

Even more cigarette money undoubtedly will flow into

State races during the final week of the campaign, if 1994 is any

indication

On the day before the 1994 election, Philip Morris shipped

$125,000 to one Assembly candidate, Republican Steve

Kuykendall of Rancho Palos Verdes, giving Kuykendall the

money he needed to pay for political mailers against his

incumbent opponent. Kuykendall won the Assembly seat.

This year, Kuykendall’s foe, Democrat Gerrie Schipske, is

running a campaign built almost exclusively around the

$125,000 donation Kuykendall took two years ago. Among her

Appendix H-4

campaign props, Schipske hands out pill bottles, filled with

“Tobacco Cash Withdrawal Pills.” The pills are jellybeans.

“WARNING,” the pill bottle label says. “Taking $125,000

from Philip Morris during 1994 campaign without telling voters

will result in loss of your Assembly seat in 1996.”

“Why don’t you campaign on something the public is

interested in?” Kuykendall says to his foe. fle points to what

he sees as the main issues in the Long Beachwarea district: jobs,

crime and education, not tobacco.

“It has caused a lot of heartburn, I must say that,”

Kuykendall said of the donation. He added that he has no plans

to take more tobacco money this year. “There is no need to go

back. Just the aggravation it causes, why put up with it?”

Among the other races in which the tobacco issue is a

factor,

In the campaign for a state Senate seat in the Long Beach

area, Democrat Betty Kamett, who was unseated by

Kuykendall in 1994, is devoting much of her mail campaign to

tobacco donations accepted by her opponent, Assemblyman

Phil Hawkins (R-Bellflower), and pro-tobacco votes Hawkins

has made.

Democrat Adam Schiff, running for a Pasadena-area

Senate seat, cites tobacco company money accepted by his

opponent, Republican Assemblywoman Paula Boland of

Granada Hills. Boland responded by accusing Schiff of

hypocrisy because he has taken money from Democratic

leaders who have taken tobacco money.

The tone is getting personal in the hard-fought Senate

campaign between Assemblyman Richard Rainey (R-Walnut

Creek) and Democrat Jeff Smith, a physician and Contra Costa

County supervisor.

Appendix H-5

“The only way he is going to be able to win is to tear down

my reputation,” Rainey said in an interview.

Smith opened with.a volley of mailers, including one

signed by a lung cancer patient Smith had treated, citing

Rainey’s acceptance of $3,750 in tobacco money, and votes

against anti-tobacco bills.

Rainey responded with a letter signed by his daughter,

Gina, pointing out that her mother, Rainey's first wife, died of

breast cancer in 1986. Accusing Smith of an especially low

blow, the letter declared, “No election is worth winning if it

means sacrificing common decency.”

Given the anti-tobacco messages in several campaigns, the

Legislature that returns to Sacramento could be willing to take

steps to further limit cigarettes, some observers say. At a

minimum, lawmakers who have made an issue of tobacco will

find it hard to vote for pro-tobacco legislation.

“It’s a clear message to tobacco companies: I’m not one of

their votes in Sacramento,” McPherson said. “If they want a

vote, go someplace else.”

Appendix I-1

Los Angeles Times

Friday, July 3, 1998

Metro Desk

Casino Campaign Donations Questioned: Legislature’s

Legal Advisor Says Lawmakers Could Face Criminal

Sanctions if They Accept Contributions from Indian

Gambling Operations Deemed To Be Illegal

DAN MORAIN; DAVE LESHER

TIMES STAFF WRITERS

SACRAMENTO -- Fueling an already heated debate over

gambling, the Legislature’s legal advisor has issued an opinion

warning that lawmakers could face federal criminal sanctions

if they accept campaign donations from Indian gambling

operations deemed to be illegal.

The opinion, obtained Thursday, comes as Native

Americans battling to operate casinos on reservations emerge

as a major political force in the capital. Among the largest

campaign donors in California, they have given Democrats and

Republicans more than $1 million so far this year.

Opponents of the expansion of gambling on reservations

immediately seized on the opinion, saying lawmakers who

support the tribes’ position should immediately refrain from

taking any additional money from them.

“I wouldn’t take it,” Senator Quentin Kopp, a San Francisco

independent, said, adding that he intends to introduce

legislation next week to prohibit contributions from such

sources. “I’d advise anyone not to accept such contributions in

the future.”

Several state legislators and candidates for the Senate and

Assembly have taken five-figure donations from various tribes.

But the implications of the opinion by the legislative counsel

extend to the races for governor, attorney general, and other

Appendix I-2

statewide offices; in those campaigns, some candidates have

accepted hundreds of thousands of dollars.

“Nothing but a legal opinion,” said Senator Richard

Polanco (D-Los Angeles), one of the main proponents of the

tribes’ position and a large recipient of their donations. “[The

casinos] are functioning today. If they were out of compliance,

they would be shut down. They have not been shut down. The

courts have not ruled.”

The legislative counsel's opinion acknowledges that many

aspects of the issue are not settled.

Federal prosecutors across the state have filed civil suits

seeking to shut down the gambling operations. However,

courts have not held conclusively that the operations violate

state and federal law.

Still, the opinion raises the possibility that lawmakers who

take money from illegal gambling operations could be forced

to return the money, whether or not they know the operations

are illegal. If they know that the operations violate the law,

candidates who take donations could face prison time, the

opinion stated.

Citing federal laws against money laundering and

racketeering, the opinion says that “money that is generated at

an Indian casino from gambling activities that are illegal under

state or federal law is potentially subject to seizure by federal

authorities.”

The opinion also says that “any person who knows that the

underlying activity is illegal and nonetheless participates in a

financial transaction involving that money in excess of $10,000

may also violate [federal criminal law], and consequently be

punished by up to 10 years in prison.”

Legislative counsel opinions generally do not become

public. They are intended to be confidential, between

Appendix I-3

lawmakers and their in-house attorneys. This document was

leaked anonymously to the Times and other publications.

Underscoring the intense lobbying and the high stakes

involved in the fight over gambling, the opinion was dated

June 26, indicating that it was circulated among legislators as

they prepared to vote on legislation to ratify a gambling

compact negotiated by Governor Pete Wilson and the Pala

Indians, a pact that was denounced by several other tribes that

want greater mghts over the future of their gambling

enterprises.

The major gambling tribes won an initial victory this week

when the pact was voted down in an Assembly committee,

although the issue is expected to be voted on again this

summer.

Nevada gambling interests are among the main opponents

of the California gambling tribes, mounting a major lobbying

effort in Sacramento. Nevada casinos want to limit the

expansion of gambling in California to protect a major part of

their customer base: gamblers from this state.

In the gubernatorial campaign, Lieutenant Governor

Gray Davis, the Democratic nominee, has accepted more than

$125,000 from Indian gambling interests, while Republican

Attomey General Dan Lungren, the Republican nominee, is not

accepting the money.

Garry South, Davis’ campaign manager, said: “Let’s not

lose sight of one fact here--this alleged illegal gambling activity

is Only that because Pete Wilson has refused to negotiate and

bargain in good fa’ ‘1 with the Indians. This is playing with

semantics and tricky definitions here.”

Lungren’s campaign issued no comment on the opinion.

In the race for state Attorney General, Dave Stirling, the

Republican nominee and Lungren’s chief deputy, took

$300,000 from Indian gambling interests during the primary.

Appendix I-4

The Democratic nominee, Senator Bill Lockyer, has taken only

minimal sums in the past, and did not accept any such

contnbutions during the pnmary.

Lockyer said the opinion raises “sufficient questions about

the pnonty of relying on this funding source to cause concer.”

However, Stirling's campaign manager, Sal Russo,

dismissed the opinion: “This is all about the Nevada casinos

protecting their economic stake in gambling, to the detriment

of Native Americans in California.”

In a related development Thursday, a memo by attomey

Joseph Remcho, an expert in initiative law, was leaked. It said

that an initiative pushed by several tribes to allow them greater

rights over gambling is probably illegal.

The memo, obtained from one of the competing factions

involved in the gambling fight, says the initiative is improper

because it seeks to authorize gambling activities prohibited by

the state constitution. The attorney said such a change would

require a constitutional amendment, not an initiative.

“To the extent that the Constitution prohibits a type of

gaming, the state cannot authorize such gaming by statute or

compact alone, but only by amending the Constitution,” the

memo says. “The initiative does not include a constitutional

amendment. Thus, any gaming [activities] authorized by the

initiative . . . are subject to these constitutional restrictions.”

George Forman, an attorney representing several of the

tribes, dismissed Remcho’s opinion: “He's wrong.... He's

real good in some stuff, but not so good in others.”

Times staff writer Max Vanzi contributed to this report.

Appendix J-1

Los Angeles Times

Wednesday, October 21, 1998

Metro Desk

Labor, Trial Lawyers Pour Millions Into Davis’ Coffers

Funds: A Third of Gubernatorial Candidate’s Money

Comes from Two Groups That Usually Back Democrats

VIRGINIA ELLIS

TIMES STAFF WRITER

POLITICAL CURRENCY. The Candidates and Their

Finances. One in an occasional series

SACRAMENTO -- In August, Democratic gubernatorial

hopeful Gray Davis sat before health care providers and assured

them that his biggest campaign dollars had not come from

unions and trial lawyers.

“If you want to talk cold turkey about who was there when

you needed them, they were not there,” Davis told a dozen

potential contributors from a coalition that often locks hors

with organized labor and malpractice lawyers. “Unions were

preoccupied . . . and a lot of trial lawyers thought I couldn’t

make it--too dull, too boring.”

It would have been shocking enough that unions and trial

lawyers, two of the deepest pockets for Democratic candidates,

had shunned the party’s front-runner during the primary, just

when he needed them most.

But records show that these two groups had contributed

prodigiously to Davis, pouring millions of dollars into his

primary and general election campaign. By Sept. 30, they had

pumped more than $7 million into his candidacy, providing

more than a third of his campaign financing.

In the meeting with health care leaders, Davis, who has

long enjoyed the largess of organized labor and trial lawyers,

was seeking to allay fears that the two interest groups would

Appendix J-2

wield inordinate influence if he were elected governor. His

campaign manager would later say he really meant that neither

group had contributed substantially in the early days of the

primary campaign, when his candidacy was on the ropes.

Even so, the episode provides a rare glimpse into the

private fund-raising efforts of a candidate eagerly seeking to

broaden his political and financial base and raise the millions

needed to compete in the nation’s most expensive gubernatorial

election.

Davis and his rival, Republican state Atty. Gen. Dan

Lungren, are expected to spend more than $45 million between

them. Davis is leading in the financial competition, having

raised $21 million to Lungren’s $17 million. Besides labor and

trial lawyers, the entertainment industry has opened its wallet

to the tune of $2 million, financial services providers have

donated nearly $1.5 million, real estate interests have given

more than $1 million and Indian tribes involved in gaming have

contributed more than $300,000.

But the backbone of Davis’ campaign came as it has in

past elections from traditional Democratic donors--organized

labor and law firms that represent plaintiffs in civil actions.

The outpouring eclipsed anything labor and the tral

lawyers had contributed to gubernatorial candidates in recent

elections, outstripping donations they made to the campaigns of

Kathleen Brown, the Democratic nominee in 1994, or Dianne

Feinstein, the nominee in 1990.

Support Is Both Blessing, Curse

For Davis, the backing has been both a blessing and a

curse. While providing a strong financial base, it also impeded

his ability to raise money from groups that have vastly different

agendas from unions or trial lawyers.

So Davis was careful to downplay their involvement in his

campaign when he met Aug. 28 in San Francisco with a dozen

Appendix J-3

representatives of Californians Allied for Patient Protection, a

coalition of health care providers that control thousands of

dollars in campaign contributions.

In the past, the member groups had mostly given to

candidates who shared their views on medical malpractice

issues, which often are at odds with trial lawyers who represent

victims of injuries, defective products and physician

negligence.

To their surprise, Davis told the group that his position on

malpractice issues was actually in sync with theirs--a comment

that prompted one member to quickly ask how he could remain

in their camp when he traditionally received strong financial

support from trial lawyers and unions.

“Do I feel allegiance?” the candidate said in tape-recorded

remarks that were later transcribed. “Yes, but not to the groups

that the newspapers say | feel allegiance to, ‘cause they were

not there for me for a variety of reasons.*”

“Rich Republicans,” he said, got him through the primary,

a reference his campaign manager later said was to a handful of

contributors such as A. Jerrold Perenchio, who is majority

owner of the Spanish language network Univision.

California Medical Assn. Executive Vice President Jack

Lewin, who attended the meeting, said the group found Davis’

message reassuring.

“Before meeting with Mr. Davis, [the coalition] was

clearly predisposed toward Lungren,” Lewin said. “After that

meeting, there was really openness toward both candidates.”

The latest campaign reports show that the coalition’s

member groups have since given Davis more than $40,000.

Davis declined a request for an interview. But his

campaign manager, Garry South, said the candidate was only

lamenting the extent of labor and trial lawyer support during

Appendix J-4

the first three months of the year, when he was being outspent

by his millionaire rivals in the primary race, Al Checchi and

Jane Harman.

In that time frame, South said, most of the contributions

and fund-raising efforts came from individuals, including some

Republicans. And he said special interests such as labor and

trial lawyers did not start giving large amounts until April,

when Davis began moving up in the polls.

“A candidate remembers who was there when the going

was tough a hell of a lot more than they do who was piling

money on at the end when it looked like you were a sure

winner,” South said.

Davis’ statement did not seem to dampen the support of

labor leaders contacted by the Times.

“Frankly, | seriously doubt he had us in mind when he

made those statements,” said Perry Kenny, president of the

California State Employees Assn., which has donated

$355,000. “We have been with Gray since the beginning of the

primary. We believe he will be an excellent governor.”

Labor and tral lawyers see Davis’ election as an

opportunity to regain access to the governor’s office, reverse

the anti-union policies of Gov. Pete Wilson and ensure that a

Democratic chief executive oversees the once-in-a-decade

redrawing of legislative and congressional boundaries.

“This a pivotal election,” said Frank Russo, president of

the California Applicants Attorneys Assn., a coalition of

lawyers who handle workers’ compensation cases. “We've

suffered under 16 long years of Republican governors. Our

members are overwhelmingly supporting Gray Davis.”

For labor, the election comes after a bruising eight years

under Wilson, who was able to eliminate the requirement that

workers be paid overtime for more than an eight-hour day, stall

Appendix J-5

labor’s legislative agenda and force it to spend millions to

defeat hostile initiatives.

Earlier this year Wilson backed and campaigned for

Proposition 226, an initiative that would have required written

permission from each worker before union dues could be used

for political purposes. Labor spent nearly $24 million to defeat

the proposal.

“In a sense, it’s payback time for labor,” said Charles

Price, a political science professor at Cal State Chico. “Pete

Wilson went out of his way to throw a monkey wrench in the

labor movement.”

Energized by their defeat of Proposition 226, labor groups

representing teachers and office workers, police and

firefighters, the building trades and government workers have

pumped more than $5.5 million into Davis’ campaign since

January.

“What we're after is a cessation of the labor wars that

Wilson has waged against us for eight years,” said Jim Lewis

of the State Building & Construction Trades Council of

California. .. . “With Gray Davis, we know we won't have to

play defense all the time both in the Legislature and in the

court.”

Nearly half of labor’s contributions came from government

employee groups who have battled Wilson over raises, raids on

their pension funds and union contracts.

Agenda Blocked by Republican Governors

In the same period, records show, trial lawyers gave nearly

$2 million to Davis’ campaign, with big law firms--such as

Robinson, Calcagnie and Robinson of Orange County; Greene,

Broillet, Taylor, Wheeler and Panish of Santa Monica; and

Girardi and Keese of Los Angeles--donating at least $100,000

each. San Diego tral attorney William Lerach contributed

$120,000 as an individual.

Appendix J-6

Mark Robinson, incoming president of the Consumer

Attorneys of California, insisted that there was no coordinated

effort to support Davis. But he said that trial lawyers

traditionally support Democrats and that Davis shares their

views on environmental, consumer and education issues.

“I can just speak for myself,” he said. “I've been very

frustrated, and | feel we need new leadership.”

The tral lawyers’ legislative agenda, like labor's, has been

blocked by Republican governors. Davis supports some of

their positions but he opposes their proposed increase in the

$250,000 limit on pain and suffering damages in medical

malpractice cases.

That demonstrates, South said, that Davis’ critics are

wrong when they say tnal lawyers and labor will have the

inside track in his administration. He insisted that Davis only

offers a sympathetic ear, not an automatic rubber stamp for

what the two groups want.

“They know they aren't going to get everything they want

out of Gray, but they feel a lot more comfortable with him than

they do with Dan Lungren,” South said.

The lieutenant governor already has expressed support for

restoring the eight-hour workday, promised not to tinker with

the prevailing wage, vowed to reach a contract agreement with

state workers and made it clear he would not sponsor anti-union

ballot initiatives.

Jefore the primary, Davis received $319,000 in political

contributions from California Indian tribes that run casinos,

then abruptly in July stopped accepting such donations. His

moratorium followed the indictment of two officials of the

Cabazon Band of Mission Indians. The tribe contributed more

than $115,000 to Davis’ campaign, but the charges against the

officials--laundering illegal contributions--involved six other

Democratic candidates.

Appendix J-7

Davis has openly courted Native American tribes, writing

officials in April to assure them that he did not support the

expansion of card rooms--an Indian gaming competitor.

South said Davis distanced himself from Indian interests

not only because of the indictments but also because of a host

of unresolved gambling issues.

Before the moratorium, the Twenty-Nine Palms Band of

Mission Indians donated $101,100 to Davis. Gene Gambale,

general council for the group, said Davis’ moratorium has not

reduced tribal support because he is still viewed as more

willing than Wilson to “have direct discussions” with the tribes

about gambling issues.

South said that, although Davis opposes the expansion of

gambling in California, “he is not for rolling the clock back and

going onto the reservations and raiding them and shutting down

their gambling operations.”

One of Davis’ other major blocs of contributors is the

entertainment industry, including large contributions from

Hollywood figures such as producer Jeffrey Katzenberg and

Haim Saban, producer of the Mighty Morphin Power Rangers.

South said most of their support is philosophical. “Once

you get past Charlton Heston and Tom Selleck,” he said, “the

number of Republicans in Hollywood is sparse.”

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.