Proposition 34, the so-called campaign finance limit, is one of the worst laws ever written. That’s no surprise, it was written by politicians for their own benefit. The objective was to supplant a 1996 campaign finance initiative that set very strict contribution limits. Proposition 34, put on the ballot by the legislature and passed in 2000, loosened the contribution limits. It limits an individual contribution to a legislative candidate to $3,900. But it also created a big fat loophole for the pols to launder money to themselves. And that is just what has been happening over the past decade. Now one politician may be in trouble for it.
Last month, the San Diego Union reported that in May Assemblyman Joel Anderson (R-La Mesa) contributed $32,400 from his 2008 campaign fund to the Fresno County Republican Central Committee. In June, he sent $32,400 to the Placer GOP committee and an equal amount to the Stanislaus County committee. Also in May, three members of the Hamann family of El Cajon – longtime supporters of Anderson – contributed $30,000 to the Fresno Committee. In June, the Barona Band of Mission Indians in San Diego County gave $10,000 to the Fresno party.
Sounds like Fresno, Placer and Stanislaus are doing mighty well off Anderson and his friends, but in fact all this money, minus a small amount retained by the counties, was sent back to Anderson for his planned 2010 campaign for an open State Senate seat. According to the San Diego Union, here’s how much was sent to the committees, and how much was sent back to Anderson:
Fresno: $32,400 from Anderson 2008 committee; $31,400 to Anderson 2010 committee.
Placer: $32,400 from Anderson 2008 committee; $31,400 to Anderson 2010 committee
Stanislaus: $32,400 from Anderson 2008 committee; $31,400 to Anderson 2010 committee.
Hamann Family: $30,000 to Fresno GOP Committee; $28,500 from Fresno Committee to Anderson 2010 committee.
Barona Band of Mission Indians: $10,000 to Fresno GOP Committee, $9,500 to Anderson 2010 Committee.
What is going on here? Well, Proposition 34’s $3,900 limit to a candidate does not apply to party central committees. They may contribute as much as they want to party candidates. Proposition 34 was purposely written with this loophole in mind so party committees could act as “pass through” agents to ship money from interest groups to candidates. But there cannot be any coordination between the donor, the party committee, and the candidate, or you would have a prima facie case of illegal money laundering.
Anderson is certainly not the first politician to benefit from this loophole, but he may be the first where a hometown newspaper has detailed the transfer of funds in such detail. The San Diego Union articles have led the Fair Political Practices Commission to open an inquiry into whether campaign finance laws have been broken, specifically was there any coordination between the candidate and the party committee in advance of the contribution. That would be against the law.
Not surprisingly, all the principals have denied coordination. Tom Hudson, chairman of the Placer County GOP, denied coordination, according to the Union, adding, “It’s easy to make any contribution seem a little bit odd by taking it in isolation and out of context. There is nothing against the law. I don’t see this as unusual.” The Union, however, pointed out that the Placer County Republican Party had only collected $1,500 other than the Anderson contribution during the first six months of 2009, and the donation back to Anderson was the only money going out.
A question arises, why was Anderson sending money from his 2008 account to these three county central committees hundreds of miles away? The newspaper pointed out in its stories that had he simply transferred his 2008 money to the new account for his 2010 Senate race, the $3,900 contribution limits would have applied to those funds. However, once the money passes to the country central committee and then back to Anderson, the $3,900 limit no longer applies.
This behavior may be a modern day version of George Washington Plunkett, the famous New York politician who defined “honest graft” as, “I seen my opportunities and I took ‘em”. The FPPC investigation will certainly determine whether any of this was in fact illegal. The FPPC may place anyone subject to an investigation under oath and may subpoena records, so the facts will come out. But the real culprit here is a terrible law that imposes unreasonable limits on campaign contributions and then encourages politicians to violate its own provisions to skirt these limits.