Debt Consolidation

The Great Money Chase

Posted on: June 11, 2008
Written by: UWSA Staff
Up to the California Campaign Finance Reform Page

A study authored by Kim Alexander, with research assistance provided by Brian Tanner and Tracey Norwood. Published by California Common Cause, April 1995.

Contact Information:

California Common Cause
926 J Street, Suite 910
Sacramento, CA 95814
(916) 443-1792
comcause@netcom.com

Author: Kim Alexander
California Voter Foundation
(916) 737-6270
kimalex@netcom.com

Hardcopy reprints of this report are available for $5 and may be ordered through California Common Cause.

CONTENTS:

The 1994 Election Season: An Overview

The 1994 elections will be remembered for the highly competitive campaigns for Governor, U.S. Senate, and Proposition 187, a successful initiative that restricts public services to undocumented Californians. But bitter contests over legislative seats were also fought up and down the state, resulting in another record-setting campaign season.

In 1990, California voters approved Proposition 140, an initiative that limits Assembly members to six years in office, and senators to eight years. Although Proposition 140's term limits technically don't take effect until 1996, the consequences can already be seen. The 80-member California State Assembly today includes only 17 members who were elected prior to 1990. The Senate has seen remarkable turnover as well; since 1990, 20 new members have been elected to the 40-member Senate, 15 of them former Assembly members.

In 1994, California politicians engaged in a massive game of "musical chairs"; several constitutional officers either retired or ran for other statewide offices, resulting in many "open" statewide seats with no incumbent running. 27 legislators chose not to seek re-election to the same office, many opting instead for statewide bids, while some chose to run for other elective offices. This turnover resulted in 22 "open" Assembly seats and four open Senate seats, where no incumbent was running.

One of the goals of term limits was to return seasoned politicians to the private sector. However, of the 27 legislators who did not seek re-election, only five retired from public office. The other 22 ran for other elective positions, often against other incumbents, resulting in even more costly and bitter contests.

Of the 79 legislative incumbents who did seek re-election in 1994, 71 won, resulting in a 90 percent incumbent re-election rate. Seven incumbents lost in the General election; Margaret Snyder, Julie Bornstein, Tom Connolly, Dan McCorquodale, Bob Epple, Betty Karnette, and Phil Wyman, who lost to another incumbent, Jim Costa. One incumbent, Vivian Bronshvag, was defeated in the Primary by fellow Democrat Kerry Mazzoni. Of the seven legislative incumbents who were defeated in the General election, six were Democrats.

California congressional candidates, including Senate candidates, raised a total of $90.3 million during the 1993/94 election cycle. Dianne Feinstein, the Democratic incumbent, raised a total of $13 million for her re-election bid, while her opponent, Republican Michael Huffington, raised a total of $29.4 million, bringing their combined fundraising to a total of $42.4 million. According to the Federal Elections Commission, Huffington contributed or loaned a total of $27.9 million to his campaign.

Campaign Financing Trends

The 1994 election marked yet another campaign season with no restrictions on campaign financing practices. It is noteworthy that legislative fundraising continued to climb, despite the fact that statewide candidates were also competing for campaign dollars.

  • 1994 Legislative campaign fundraising totaled $78.4 million, up from $71.9 million in 1992, representing a nine percent increase.
  • In 92 percent of the legislative races, the candidate who raised the most money won.
  • Legislative incumbents outraised challengers by five to one in 1994, the same rate as in the 1992 election.

Total 1993-94 Fundraising

Assembly
     General Election Candidates:     $46,436,684
     Defeated Primary Candidates:      $7,180,827
     Total Assembly:                  $53,617,511

Senate
     General Election Candidates:     $23,563,615
     Defeated Primary Candidates:      $1,239,040
     Total Senate:                    $24,802,655

  Total Legislature:                  $78,420,166

Statewide Race
     General Election Candidates:     $92,122,859
     Defeated Primary Candidates:     $14,991,072


  Total Statewide:                   $107,113,931 

  Special Election Candidates:        $10,701,885 

Total 1993/94 Fundraising:           $196,235,982
 
 
Most of the analysis in this report is based on fundraising by those candidates who ran in the 1994 General election, and excludes defeated Primary candidates and special election candidates, unless otherwise noted. The above chart provides a useful reference.

Statewide Races

Statewide candidates in the General election raised a total of $92 million, and candidates who were defeated in the Primary raised another $15 million for their unsuccessful bids, bringing the total amount raised for statewide races in 1994 to $107 million. For a listing of funds raised by individual candidates, see California Statewide Campaign Fundraising, 1993 - 94

  • 1994 Statewide fundraising rose to $92 million, up from $67.8 million in 1990, representing a 36 percent increase.
Nearly half of the 1994 statewide funds were raised by gubernatorial candidates Pete Wilson and Kathleen Brown, who raised a combined total of $50.2 million.

  • Pete Wilson raised a total of $29 million for his 1994 gubernatorial campaign, while his opponent, Kathleen Brown, raised a total of $21.2 million;
  • Fundraising in the 1994 Governor's race increased by eleven percent over 1990 fundraising, making it the most expensive gubernatorial race in California history.
  • The median amount raised by winning 1994 statewide candidates (excluding governor) was $3.3 million;
  • Democratic statewide candidates raised a total of $44.8 million, while Republican statewide candidates raised a total of $44 million.
With the exception of the Treasurer's race, every statewide winner outraised his or her opponent:

  • Attorney General Dan Lungren raised a total of $3.7 million, while Tom Umberg raised $3 million;
  • Insurance Commissioner Chuck Quackenbush raised a total of $3.4 million, while Art Torres raised $2.3 million;
  • Superintendent of Public Instruction Delaine Eastin raised $2.8 million, while Maureen DiMarco raised $617,000;
  • Lieutenant Governor Gray Davis raised $4.7 million, while Cathie Wright raised $1.2 million;
  • Controller Kathleen Connell raised $3.3 million, while Tom McClintock raised $1.4 million;
  • Secretary of State Bill Jones raised $1.5 million, while Tony Miller raised $1.3 million.
Only Treasurer Matt Fong raised less than his opponent, Phil Angelides:

  • Fong raised a total of $3.2 million, while Angelides raised $6.8 million.
Angelides raised more than any other "down-ticket" statewide candidate, and ended his campaign over $3 million in debt - the largest debt of any 1994 candidate.

State Senate Races

Many 1994 Senate races were highly competitive, with several challengers mounting well-financed campaigns against legislative incumbents. One of the principle reasons for the intense competition over Senate seats was that 1994 marked the first election held for even-numbered seats redrawn after the 1990 reapportionment. Consequently, many Senate incumbents ran for seats that included unfamiliar territory.

Senate candidates in the General election raised a total of $23.6 million, and candidates who were defeated in the Primary raised another $1.2 million for their unsuccessful bids, bringing the total amount raised by Senate candidates to $24.8 million. For a listing of funds raised by individual candidates, see California State Senate Campaign Fundraising, 1993 - 94.

Incumbent senators sought re-election in 16 of the 20 Senate seats that were up in 1994. Four Assembly members sought and won "open" Senate seats, and one Assembly member, Jim Costa, defeated incumbent Senator Phil Wyman in SD 40.

  • Senate candidates raised a total of $23.6 million in 1994, up from $11.1 million in 1992, representing a 113 percent increase;
  • The median amount raised by a winning Senate candidate in 1994 was $676,000, up from $501,000 in 1992, representing a 35 percent increase.

Incumbents vs. Challengers

Assembly members who sought Senate seats have all the traditional fundraising advantages of incumbents, and are therefore treated as such throughout this report, rather than as "open seat" candidates. Similarly, their opponents are considered challengers.

  • Incumbents raised 82 percent of all the money raised for 1994 Senate races, while challengers raised 18 percent;
  • Incumbents raised a median amount of $831,000, while challengers raised a median amount of $32,300. By comparison, in 1992, Senate incumbents raised a median amount of $501,000, while the typical challenger raised $18,200.

Democrats vs. Republicans

Democratic Senate candidates raised considerably more money than Republican candidates, no doubt due to the fact that ten of the sixteen senators who sought re-election were Democrats.

  • Democratic Senate candidates raised $15.3 million, while Republican Senate candidates raised $7.5 million;
  • The median amount raised by a Senate Democratic candidate was $599,000, while the median amount raised by a Republican Senate candidate was $165,000.

Million-Dollar Senate Races

In nearly half of the 20 Senate races, the amount of money raised by both candidates exceeded one million dollars. By comparison, in 1992, only two senate races exceeded $1 million. Below are the most expensive Senate races of 1994:
 

District              Candidates                             Amount  

     
SD 16       Jim Costa vs. Phil Wyman                     $2.0 million     
SD 18       Jack O'Connell vs. Steve MacElvaine          $1.9 million     
SD 36       Ray Haynes vs. Kay Ceniceros                 $1.9 million     
SD 04       Maurice Johannessen vs. Michael McGowan      $1.9 million     
SD 34       Rob Hurtt vs. Donna Chessen                  $1.5 million     
SD 28       Ralph Dills vs. David Cohen                  $1.4 million     
SD 06       Leroy Greene vs. Dave Cox                    $1.3 million     
SD 12       Dan McCorquodale vs. Dick Monteith           $1.3 million     
SD 40       Steve Peace vs. Joe Ghougassian              $1.0 million    
 
 

Top Senate Fundraisers

For a ranking of winners by amount raised, see Senate Winners: Fundraising, High to Low.

  • Bill Lockyer, the Senate's President Pro Tem, ranked as the number one fundraiser among all Senate winners, raising a total of $3.9 million during the 1993-94 cycle;
  • Jack O'Connell raised the second highest amount among Senate winners, raising a total of $1.4 million;
  • Ken Maddy, the Senate's Republican leader, raised $1.3 million - the third highest amount among Senate winners.
Neither Lockyer nor Maddy raised their money to stave off serious challengers; Maddy's opponent reported raising just $625, while Lockyer's opponent raised $700. Rather, their fundraising is a reflection of their leadership positions, and their funds are raised almost exclusively for the purpose of transferring money to those candidates of their respective parties who are favored by their caucuses.

State Assembly Races

The Assembly 1994 campaign season was quite similar to 1992, with another high number of open Assembly seats. 58 Assembly incumbents sought re-election, and 52 won. Six winning challengers join 22 "open seat" Assembly winners to comprise the 28-member Assembly Freshman Class of 1995.

Assembly candidates raised a total of $46.4 million; defeated Primary candidates raised another $7.2 million, bringing 1993-94 Assembly fundraising to a total of $53.6 million. For a listing of funds raised by individual candidates, see California State Assembly Campaign Fundraising, 1993 - 94.

  • The median amount raised by a winning Assembly candidate in 1994 was $299,000, down from the 1992 median of $385,000;
  • Assembly fundraising overall declined by 10 percent compared to 1992 Assembly fundraising.
Two reasons may account for the 1994 decline. 1992 was the first election held under the new redistricting plan, and therefore led to more competitive and expensive races. Also, many of the Assembly's experienced fundraisers, such as Johan Klehs, Delaine Eastin, Rusty Areias, Bill Jones and Chuck Quackenbush, directed their fundraising efforts toward bids for statewide office.

The cost of winning an open-seat Assembly race more accurately reflects the true cost of an Assembly seat:

  • The median amount raised by Assembly winners in open-seat races was $289,000, down from $305,000 in 1992.

Incumbents vs. Challengers

The $46.4 million raised by Assembly candidates was raised as follows:

  • Incumbents raised $29.3 million, or 63 percent;
  • Challengers raised $4.4 million, or 10 percent;
  • Open seat candidates raised $12.7 million, or 27 percent.
The median amount raised by all Assembly challengers was $10,400, while the median for Assembly incumbents was $306,000. By comparison, in 1992, the median amount raised by an Assembly challenger was $19,700, while the median for incumbents was $421,000.

  • The median amount raised by a winning incumbent candidate was $279,000, while the median for a winning challenger was $523,000.

Democrats vs. Republicans

Assembly Democrats raised $27.5 million, while Republicans raised $18.9 million. The median amount raised by Democratic Assembly candidates was $188,000, while the median for Republican candidates was $195,000.

Million-Dollar Assembly Races

The number of Assembly races where the General election candidates raised a combined total of more than $1 million declined in 1994 to nine, compared to 13 "million-dollar" races in 1992. Below is a list of 1994 Assembly million-dollar races:
 

District                  Candidates                      Total    

   
AD 35      Brooks Firestone vs. Mindy Lorenz           $1.5 million   
AD 17      Michael Machado vs. Ed Simas                $1.3 million   
AD 44      Bruce Philpott vs. Bill Hoge                $1.3 million   

AD 80      Jim Battin vs. Julie Bornstein              $1.3 million   
AD 56      Bob Epple vs. Phil Hawkins                  $1.2 million   
AD 27      Bruce McPherson vs. Bill Monning            $1.2 million   
AD 77      Steve Baldwin vs. Tom Connolly              $1.1 million   
AD 69      Mike Metzler vs. Jim Morrissey              $1.0 million   
AD 54      Betty Karnette vs. Steven Kuykendall        $1.0 million  
 
 

Top Assembly Fundraisers

For a ranking of winners by amount raised, see Assembly Winners: Fundraising, High to Low.

  • Willie Brown, the Democratic Assembly Speaker, raised a total of $6.8 million n the 1994 election cycle, ranking him as the top fundraiser in the Assembly and in the Legislature.
  • Jim Brulte, the Assembly Republican leader, raised the second highest amount, a total of $2.2 million;
  • Democrat Phil Isenberg raised the third highest amount, a total of $1.9 million.
None of the Assembly's top fundraisers raised their money to stave off serious challengers: Willie Brown's opponent, Mark Wolin, reported raising $31,912; Brulte's opponent raised $4,653, and Isenberg's raised $3,298. As with the Senate, the Assembly leaders' fundraising is a reflection of their leadership positions. Most of their funds were transferred to candidates favored by the partisan caucuses, either directly or through intermediary committees or political parties.

Late Contributions

Candidates in competitive races received a significant percentage of their general election money in contributions of $1,000 or more during the last three weeks of their campaigns:

  • Legislative and statewide candidates raised a total of $21.5 million in late contributions, comprising 25 percent of all money raised in the six-month general election cycle;
  • A total of $3.2 million was transferred between legislative candidates during the last three weeks of the General election, comprising 26 percent of all late money raised by legislative candidates.
Although late contributions must be reported within 24 hours of being received, these reports are only filed with the Secretary of State and the local filing agency, and result in mountains of paper that even experienced campaign finance researchers can't easily track. Consequently, donors and candidates who wish to avoid public scrutiny often wait until the last minute to make their contributions.

Campaign Debts

One alarming campaign financing trend is the increasing amount of outstanding campaign debts at the end of the election. Campaign debts typically include unpaid campaign bills and loans that candidates received during their campaigns - usually from themselves, family members, or other legislators. Financing a campaign through loans or credit from campaign vendors is a gamble; if the candidate loses, he or she has little chance of retiring debts; if the candidate wins, then those loans and bills eventually are repaid, but only after vigorous fundraising. Debt financing of campaigns increases the pressure on officeholders to continue fundraising immediately after the election in order to retire their debts and often to recoup their own "investment" in their campaigns.

  • 1994 Legislative and Statewide candidates reported a total of $15.9 million in outstanding debts at the end of the election cycle, representing an 82 percent increase over total debts reported in 1990.
The level of debt carried by the 28 members of the Assembly Freshman Class of 1995 is also considerable:

  • 1995 Assembly freshman began their first terms carrying a total debt of $1.8 million, an average of $65,000 per freshman.
  • By comparison, the 1993 Assembly Freshman Class began their terms with an average debt of $58,400.
Some of these outstanding debts represent campaign loans received from other legislators. Winning candidates who receive these transfer-loans wind up indebted to their fellow legislators, which can result in the exertion of undue influence or the appearance of expectations and obligations.

For example, in 1992 Bill Morrow ran in a crowded Republican Primary for an open Assembly seat. Nearly half of his primary funds came in the form of transfer-loans from then-Senator Frank Hill, who loaned Morrow a total of $96,000 during his Primary campaign. In June, 1994, Hill was convicted on federal corruption charges, and is now serving out a 46-month prison sentence. In October of 1994, Morrow hired Hill's wife, Faye, as an administrative assistant in his district office, paying her a $60,000 annual salary. Since his conviction, Hill has forgiven $80,750 of the $96,000 Morrow owes to him.

The "Hundred Thousand Dollar Club"

Below is a list of legislative and statewide officeholders who reported campaign debts exceeding $100,000 at the end of 1994:

Constitutional Officers:                         
                Kathleen Connell     $2,100,000  
                     Pete Wilson     $1,500,000  
                    Brad Sherman       $510,000  
                       Matt Fong       $318,000  
                      Bill Jones       $229,000  
                     Dan Lungren       $169,000  
Senators:                 
             Maurice Johannessen       $833,000  
                      Ray Haynes       $224,000  
                       Rob Hurtt       $180,000  
                    Diane Watson       $150,000  
                    Leroy Greene       $148,000  
              Herschel Rosenthal       $127,000  

Assembly Members:                 
                    Paul Horcher       $590,000  
                      Jim Brulte       $274,000  
                      Wally Knox       $225,000  
                  Marilyn Brewer       $177,000  
                   Steve Baldwin       $173,000 
                   Jim Morrissey       $132,000  
                Grace Napolitano       $125,000  
                Brooks Firestone       $120,000  
                     Bill Morrow       $116,000  

Non-Election Year Fundraising

Campaign reform advocates have long advocated a ban on non-election year fundraising. Fundraising during the legislative session not only gives incumbents a tremendous advantage over challengers, but also increases the likelihood that contributions are being given in exchange for access or favorable treatment.

Some who oppose a ban on non-election year fundraising claim that such a ban would hurt challengers. The findings below clearly demonstrate that it is incumbents, not challengers, or open seat candidates, who stand to gain the most from non-election year fundraising:

  • Legislative candidates raised a total of $13.4 million in 1993, comprising 20 percent of all the money raised by candidates in the 1994 General election. Of the $13.4 million:
    • 93 percent was raised by legislative incumbents;
    • 5 percent was raised by open seat candidates;
    • 2 percent was raised by challengers.
  • The median amount raised in 1993 by Assembly incumbents was $98,000, while the median amount raised by legislative incumbents in Senate races was $107,000.

Special Elections

One unforeseen and unfortunate consequence of term limits is the sharp rise in special elections. Many legislators who see limited legislative futures are abandoning office mid-term to pursue other careers or elective offices. In 1993 and 1994, a total of 12 special elections and one recall election were held, up from eight in the 1991/92 cycle.

Four of the special elections were held due to vacancies resulting from legislators retiring in mid-term (Barry Keene, Bruce Bronzan, Becky Morgan and Waddie Deddeh). Five were held to fill vacancies resulting from legislators being elected to other offices (Don Rogers, Ed Royce, Mike Thompson, Sam Farr, and Steve Peace). Two special elections were held to fill vacancies resulting from Pat Nolan and Frank Hill's convictions on federal corruption charges and subsequent retirements. One special election resulted from the death ofAssemblyman B.T. Collins.

  • 1993-94 special election candidates raised a total of $10.7 million;
  • Campaign fundraising for special elections increased by 73 percent compared to special election fundraising in 1991-92, which totaled $6.2 million.
  • For a listing of funds raised by individual candidates, see Special Election Campaign Fundraising, 1993 - 94.
The rise in the number of special elections in recent years places even more fundraising pressure on the Legislature, and increases the opportunity for special interests to gain influence with legislators by contributing to favored special election candidates. The attention devoted to special elections is yet another major distraction that keeps lawmakers focused on partisanship and fundraising rather than attending to the public's business.

Conclusion

Despite the new faces, the Legislature, as an institution, remains remarkably unchanged in the way its business is conducted. The Legislature's refusal to address the need for reform is an insulting affront to the majority of California voters who voted in favor of two campaign finance reform initiatives in 1988. Although the two measures - Propositions 68 and 73 - included conflicting provisions regarding public financing of campaigns, they shared some common provisions, such as contribution limits and a ban on transfers between politicians. Not only has the Legislature failed to carry out the will of the people by enacting these reforms, but its leaders helped coordinate the lawsuits that resulted in both measures being invalidated by federal and state courts.

The voters of California passed term limits with the hope of creating a citizen legislature that would be free of special interest influence. But the amount of money required to win a seat in the California State Legislature remains prohibitive and requires candidates to either be wealthy themselves, or turn to special interests and legislative leaders to finance their campaigns.

Many reformers had high hopes for the 1993 Assembly Freshman class - hopes that they would question and challenge the corrupting influences of the Capitol. One might even expect that the felony convictions of two more legislators and a legislative staff member resulting from the FBI Sting would have encouraged new members to "clean house". Yet the parade of special interest bills, Capitol fundraisers, and corruption trials continued throughout the 1993-94 Legislative session. While a few new legislators tried in vain to advance reform legislation, the vast majority condoned the status quo with their silence.

Running for public office should be an affordable and honorable undertaking. The endless money chase for campaign dollars and the subsequent erosion of public trust in government will continue until this state adopts reforms that restrict the influence of special interests and decrease the cost of running for office. Campaign finance reform is critical if we hope to restore public trust in California and create a healthier public life.

Methodology

The information in this study was derived from campaign reports filed with the Secretary of State's office, summary reports issued by the Secretary of State, and Capitol Weekly. Historical data was obtained from past Common Cause studies and reports issued by the Fair Political Practices Commission.

The cost of a seat is based on fundraising, including non-monetary contributions and loans. Expenditures are not included in this report because non-monetary contributions, which played a major role in the elections, are not reflected on the expenditure side of campaign finance reports. In some races, the cash contributions raised by opponents were comparable, but when combined with non-monetary contributions, added up to a considerable difference in overall fundraising.

Funds raised by retiring legislators, Senators who weren't up for election in 1994, and minor party candidates are not included in this report. Independent expenditures made in support of or opposition to 1994 candidates are not reflected in this report.

In conducting this research, the author's goal was to determine how much each candidate raised for their 1994 campaigns, and includes money raised by candidate committees that were active during the 1994 cycle. In accordance with this goal:

  • Funds raised by candidate-controlled ballot measure committees are excluded from this report;
  • Loans forgiven from past elections, or money raised to retire old campaign debts is not reflected in a candidate's 1993-94 fundraising;
  • Loans received and paid off during the 1993-94 election period were netted out in order to avoid inflating a candidate's fundraising over the entire cycle.
  • Funds raised by candidates who ran in special elections during the 1993-94 cycle are deducted from those candidates' 1994 fundraising numbers, and are reflected in separate table;
Debts include outstanding debts as of December 31, 1994, and include all of a candidate's campaign committees, not just their 1994 campaign committees

Transfers between candidates have not been deducted from fundraising totals. Although the author initially attempted to account for transfers, the task became impossible, as funds were transferred several times between candidates, legislative leaders and political parties. Transfers are also difficult to track because many are initially given as loans, which are often later forgiven. Transfers were also not deducted from the 1992 Common Cause fundraising study, and to do so in the 1994 study would have led to inaccurate historical comparisons.

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