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CES In The News

Sacramento Bee
Monday May 19, 2008
Ballot Battle is All About the Money
Both sides allege tainted funds in duel over Propositions 98, 99
By John Hill

In the June 3 ballot showdown over governments' power to take private property, both sides agree on one thing: Their opponents rely on tainted money that reveals their true motives.

One side gets much of its money from landlords and mobile home park owners that stand to benefit from Proposition 98's ban on rent control.

The other side opposes Proposition 98 and supports a far less restrictive initiative, Proposition 99. Much of its campaign money comes from local government groups that resist major curbs on their use of eminent domain.

Both sides have made an issue of the other's campaign cash, using it to discredit their stated motives.

"It's pretty clear," Jon Coupal, president of the Howard Jarvis Taxpayers Association, one of Proposition 98's sponsors, said of the initiative's opponents. "It's the interests that benefit from being able to take property rights from other people."

Opponents of Proposition 98 counter that the measure's financial base shows it is really about ending rent control, not eminent domain reform.

"Prop. 98 was written by landlords, is paid for by landlords, for the sole financial benefit of landlords," said Janis Hirohama, president of the League of Women Voters of California.

Prop. 99 is more narrow

Proposition 98 would bar state and local governments in California from taking private property to transfer to a private interest, such as redevelopment agencies taking land for a private developer's project.

It would also ban rent control in apartments and mobile home parts. Currently, about a million Californians live in one or the other.

Proposition 99 takes a far narrower approach. It outlaws only the taking of a single-family home, occupied by the owner for at least a year, to hand over to a private interest. Small businesses, farmland and other kinds of private property still would be subject to that use of eminent domain.

Proposition 99 does not address rent control at all.

It's supported by associations representing local governments, as well as others who argue that Proposition 98 would hamper the ability of governments to pass land use and environmental regulations.

Proposition 98's campaign focuses on ending alleged abuses of eminent domain. But opponents say its money tells a different story. A detailed analysis commissioned by Proposition 98's opponents found that 37 percent of the $5.2 million in contributions came from apartment owners and their associations. Another 47 percent came from mobile home park owners and associations, according to the analysis, with the remaining 16 percent donated by the California Farm Bureau Federation and other supporters.

That means 84 percent of the money was ponied up by those who would benefit from the provision of Proposition 98 that bans rent control.

Opponents say rent control is a much more pressing concern for these contributors that any unfairness in government takings of private property.

"You just need to look where it's coming from," said Kathy Fairbanks, spokeswoman for the No 98/Yes 99 campaign. "Obviously, they don't care about eminent domain."

The supporters of 98 declare they are motivated primarily by what they see as abuses of eminent domain. What's more, they say it's unfair to label the contributions from the Howard Jarvis Taxpayers Association as "apartment owner interests."

The question is significant, because the Jarvis association's contributions add up to almost a quarter of the $1.9 million attributed to apartment interests.

"The money that comes from our members comes from homeowners," said Coupal, the association president. "Their percentages are screwy."

Opponents of Proposition 98 counter by citing a long history of Howard Jarvis, the mastermind behind Proposition 13, and the association he founded fighting rent control laws.

"We see them totally linked at the hip," said Larry Gross, executive director of the Coalition for Economic Survival in Los Angeles. Gross said the Jarvis association fought his group when it pushed for rent control in Los Angeles.

The Jarvis organization and other Proposition 98 supporters likewise find hidden motives in the opposition's campaign funding.

Despite Proposition 99's claim to protect private property owners, they say, the measure is so riddled with loopholes that it does almost nothing. And that is the whole point, they say: cities, counties and redevelopment agencies don't want to be hamstrung by new rules restricting their power to take property.

Not easy to follow money

They see another problem with the money behind Proposition 99: No one can tell exactly where it comes from.

Almost $3 million of the $6.7 million raised so far comes from something called the League of California Cities Non-Public Fund.

The league is a nonprofit association that collects dues from cities for lobbying. It also publishes a magazine geared toward city officials and raises money by charging for exhibition and booth space at conferences.

The league says the money it contributes to the Proposition 99 campaign comes from the magazine advertising and exhibition revenues. Both enterprises are completely self-supporting and don't rely on the dues paid by cities, Executive Director Chris McKenzie said.

The league also contributes money from its political action committee, whose contributors do have to be listed in campaign finance forms.

Proposition 99 opponents say the enterprises that contribute to the league's "non-public" fund could not be self-sustaining and must be supported by the dues paid by cities. That would make it taxpayer money, they say. And using tax revenues in a political campaign is illegal.

"It's pretty obvious to us that the League of Cities is laundering money," Coupal said.

The Jarvis association and others made a complaint to the California Fair Political Practices Commission, which has not yet issued an opinion.

McKenzie, the league's executive director, says the league's use of business income to support a political cause is no different than Intel or General Motors contributing to a campaign. It's absurd, he said, to ask the league to reveal the source of the money since it comes from overall revenue.

Funding method untested

Robert Stern, head of the nonpartisan Center for Governmental Studies based in Los Angeles, said the league's new way of contributing to initiatives first surfaced a few years ago and is relatively untested.

The league, Stern said, is like a private company that does business with a government and uses some of that money to pay for political activities.

The arrangement would probably comply with the law, Stern said, if the dues collected from cities are not being used to support the magazine and convention businesses.


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