Bustamante's Big Donor Loophole

Gray Davis is exempt from fundraising limits because he is not actually a candidate in California's recall election - he is the defendant, so to speak.

However, his second-in-command, Cruz Bustamante, is not exempt. He cannot take more than $21,200 from any single donor.

No problem for Cruz, though. He's going to be accepting big money, special interest donations in large chunks anyway, to the tune of about $4M of his $12M fundraising goal.

How can he do that?

He can just accept donations into his 2002 reelection coffer, and spread the money out amongst the people who donated (even if they have nothing to do with current donations), and then transfer the funds into his new campaign fund. That's how.

Specifically, FPPC officials told the Mercury News: "Transferring money is legal under accounting rules approved by the commission after voters approved Proposition 34 in 2000. Those rules say a committee that existed before Nov. 6, 2002, when the limits went into effect, can continue to raise money and transfer those funds - as long as the dollars transferred are 'attributed' to individuals who made donations before that date."

``It's a shell game,'' said Jim Knox, executive director of California Common Cause. ``Do we have contribution limits or not?''

Both Knox and Thomas Hiltachk, an attorney for Rescue California, the organization that gathered signatures to place the recall of Gov. Gray Davis on the ballot, said the practice amounted to ``money laundering.''

In fact, the "laundering" has already begun. The San Jose Mercury News reports that the Sycuan Band of the Kumeyaay Nation, a San Diego-area Indian tribe with casino interests, has given Bustamante's committee $300,000.

``We're abiding by it the way they wrote it,'' said Bustamante campaign adviser Richie Ross. ``We didn't write Proposition 34. If they want to change it, they need to change it.''

In addition, Ross said, "If they rewrite it, can they please rewrite it to create a level playing field between multimillionaires like Arnold Schwarzenegger and the rest of humanity?"

Of course, the basis for Arnold's campaign is exactly that: He says he's got his own money and can't be bought or influenced by the special interests that are seen as a big part of California's problem. Bustamante is actively courting those interests.

Incidentally, there is another of the multitudinous candidates for governor who could use the same loophole, should he so choose: Tom McClintock.

Both he and Bustamante have the necessary, preexisting campaign committees. However, McClintock spokesman John Stoos said the candidate had never heard of the loophole and told the Mercury News, "we're not contemplating doing that."