Politics: Disclosure Flaw

The perils of campaign-finance disclosure laws.


Politics is a realm of unintended consequences. In California, a wave of post-Watergate revulsion with arrogant, corrupt politicians led to the passage of the Political Reform Act in 1974. That law slapped strict campaign-finance disclosure requirements on state political campaigns. Twenty years later, the same law is being used to strike at private citizens who attempted to discipline a powerful politician they considered arrogant and corrupt. The results raise worrisome questions about the possible abuses of even the seemingly most innocuous regulations on citizens' participation in politics.

In October 1995, California's Fair Political Practices Commission, charged with enforcing the PRA, levied the largest fine in its history, $808,000, against Southern Californians Russell Howard and Steve Cicero. They had been the president and treasurer, respectively, of Californians Against Corruption, a now-dormant group of political gadflies that was part of a coalition dedicated to unseating California Democratic state Sen. David Roberti. Roberti, a 23-year Senate veteran, had been Senate president pro tem for 13 years. The recall coalition got its new election in April 1994, collecting more than twice the necessary 20,670 signatures.

But in doing so, CAC didn't keep up with the complicated paperwork requirements the PRA demands. Their hefty fine is mostly for hundreds of counts of not reporting the occupation, employer, and address of people who donated more than $100 to the recall cause.

Despite admittedly not filling out the proper forms at the proper times, a weary Howard insists, as the list of charges is read to him, that the FPPC has at its disposal all the information it wants. "They have a copy of every check we ever received, and the vast majority have those addresses on the check," he says. "My life should be ruined because I didn't fill out the proper forms in triplicate?"

While CAC asked all contributors to fill out employer and occupation information with their contribution, the vast majority simply didn't, Cicero says. Gary Huckaby, an FPPC spokesman, says it's the organization's legal responsibility to collect that information or not accept the money.

The PRA was one part of a national wave of post-Watergate state and federal campaign-finance reform law. The motives and goals of such laws seem pure and sensible: to get a public handle on the possible secret governmental influence of big money interests. But applying such a law to a nonpartisan recall campaign raises different issues.

As Cicero wrote in a letter responding to the FPPC's charges, "It is one thing to practice oversight on the people's behalf to insure that politicians running for office are kept honest. They stand to reap enormous personal gain from the power and influence they will have once elected. It is another thing entirely to harass grassroots organizations seeking to improve the government to which they are subjected."

Some perspective: Californians Against Corruption's entire recall campaign spent only $103,091–about one-eighth the fine they received for not reporting properly. The fine is the largest ever given out by the FPPC. The next largest was $772,000 against a developer for laundering money to Oakland City Council members and mayoral candidates. The level plunges from there; the third highest FPPC fine was $447,500 against a shipping company, also for laundering money to city council members, this time in Los Angeles.

Ken Gross, a former head of enforcement for the Federal Elections Commission, says the fine against CAC "seems totally out of bounds. It offends any sense of reasonableness. [The CAC's violations] don't compare with what are considered more substantive elements of illegal funding."

Though Roberti won the recall election, he has since been ousted by term limits. Still, Howard says Roberti's long years of power in California raise the possibility that the FPPC's huge fine is a political revenge hit. Roberti denies any influence on the fine, and any personal connection with the commission members. "I haven't gone through the details about how they base the fine, and I don't want to second-guess them," Roberti says. "Suffice it to say I think a hefty fine is warranted."

The FPPC's Huckaby agrees. Howard and Cicero's violations were in "outright defiance" of the law, and were "fully intentional, with aggravating circumstances, not mitigating ones. We have a $2,000 maximum per-violation fine, instituted 20 years ago. If the commission were unilaterally reducing fines, you'd quickly lose parity or equity among all the cases." Each donor's missing occupation cost $2,000; each missing employer cost another $2,000; and so on. Few lawbreakers face such hefty fines, however. Generally, the FPPC negotiates a less-costly settlement. But Howard and Cicero refused to cooperate and got hit with the maximum fine for each violation.

Howard admits contempt for the law. But he has his reasons. He maintains that California's Political Reform Act is a clear violation of the First Amendment. "The law sets up prerequisites for the exercise of First Amendment rights that are extremely complicated and enforced as selectively as they want. I'd have to be an attorney or an accountant to be able to wade my way through [the PRA]. If I had had to stay up until five in the morning filling out those forms, there never would have been a Roberti recall. We were a grassroots organization. We all had other jobs. We're not like the big parties. [Complying properly] would have taken a huge percentage of our resources."

The 1976 U.S. Supreme Court case Buckley v. Valeo declared that paperwork requirements in campaign-finance laws don't violate the First Amendment in and of themselves. But one Supreme Court precedent might help Howard and Cicero: In the 1982 case Brown v. Socialist Workers Party, the Court said that showing reasonable probability that disclosure of donors might lead to threats, harassment, or reprisals could exempt a campaign from disclosure laws.

That's a question of fact that can be difficult to prove. Howard thinks both the unprecedented fine itself and the FPPC's history of niggling investigations of CAC's doings since its 1992 founding show that the commission was intent on harassing them. But such circumstantial evidence is far from definitive.

Still, special complications of recall campaigns against powerful politicians, even beyond the time-consuming paperwork burden, raise the question of whether campaign-finance disclosure laws are appropriate for every kind of political campaign.

One of the motives for the Roberti recall was that he had spearheaded the Roberti-Roos Assault Weapon Control Act, a 1989 law that banned "assault weapons" in California. Because of the popular perception of the recall as a "gun-nut" issue, "We had people afraid of going to jail if their name gets on a list," Howard says. "'We've got a potential Roberti-Roos violator here, let's go check out their home.'"

(Despite consistent media portrayals otherwise, however, gun-rights activists weren't the only ones upset with Roberti. The recall coalition included groups with no direct interest in guns, such as Operation Slushfund, a legislative-spending watchdog group. Roberti was perceived by many as generally too soft on crime and too linked with political corruption. Three men he appointed to committee chairs in the state Senate were later convicted of felony corruption.)

Others had different reasons to fear being publicly connected with the recall effort. Bill Dominguez, one of Roberti's Democratic opponents in the recall election, says that a local newspaper columnist's habit of printing the names and donation amounts of contributors to the recall effort spooked many grassroots activists. "I haven't seen this done for any other political campaign or grassroots group. I've never seen anyone plastering names all over the place like this. We were not being painted in the best light. Every third word in connection with this was white supremacist or neo-Nazi." Some donors received swastikas in the mail, Howard says.

Even beyond public obloquy, anyone working for or doing business with the state of California would understandably be leery of advertising that they were trying to oust the president of the state Senate. "Lots of people applauded what we did but wouldn't touch it with a 10-foot pole for fear of bad things happening to their legislative agenda," Howard says. "Even lots of senators wanted to get involved but couldn't for fear of retribution, worries about 'What'll happen to my crime bill?'"

Neither Howard nor Cicero can afford to pay the $808,000, which they are jointly liable for. Cicero works part-time as a software consultant, and is now already in debt and in default on his mortgage. Howard, a former stockbroker, lost his job because of his work on the recall election and has lately been doing carpentry work around his father's house. Cicero informed the FPPC that he can neither afford to pay the fine nor hire a lawyer, and is now waiting for the next step. Howard will be getting legal help from the Institute for Constitutional Rights, a nonprofit public interest law firm dealing with free speech issues. They are currently seeking a lawyer with the appropriate expertise for the case.

The deadline to pay the fine was December 11. Possible action, says the FPPC's Huckaby, could include garnishing of wages and income tax refunds, attaching bank accounts, and seizing property and automobiles. In its 21 years, the FPPC has failed to collect over one-third of the $6.7 million in penalties it has levied. But the commission has recently stepped up enforcement efforts, Huckaby says. Diligent enforcement of this fine would have Howard and Cicero working the rest of their lives to pay it off.

"I just didn't imagine that there was some sort of Rube Goldberg huge manual that I had to satisfy at peril of my financial future and life to exercise my First Amendment rights," Howard says. "We're just a grassroots organization. If you want to get involved in politics, you should be able to do it. If you have a beef, get involved. But if you get involved above the level of just voting, then the state says they control the whole process. And that's just not right."