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August 26, 2003 Despite a voter-approved measure that was supposed to keep big money donations out of California politics, Lt. Gov. Cruz Bustamante is exploiting a gaping loophole in the law that will allow him to collect up to $4 million in large sums from a handful of special-interest donors. The leading Democrat in the recall race has already received his first big check -- $300,000 -- from the Sycuan Band of the Kumeyaay Nation, a San Diego-area Indian tribe with casino interests. The contribution, which the campaign disclosed Sunday, went to Bustamante's 2002 re-election committee, which isn't subject to the $21,200 fundraising limit established by Proposition 34. But Bustamante can legally transfer the money to his 2003 ``Yes on Bustamante'' committee, formed this month to support his campaign for governor in the Oct. 7 recall election, according to the Fair Political Practices Commission, which governs California election finance. ``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 defense of transfers But the Bustamante campaign said the transfers are legal and necessary for the lieutenant governor to compete in a field that includes millionaire Republicans Arnold Schwarzenegger and Peter Ueberroth. There are no limits on how much money a candidate can give his own campaign. Bustamante, who is not a wealthy man, has a fundraising goal of more than $12 million, a mighty sum if collected in chunks no larger than $21,200. ``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?'' The Bustamante camp has projected that it can raise and transfer roughly $4 million from the lieutenant governor's 2002 campaign committee to his new committee. Asked whether the Sycuan $300,000 contribution means other Indian tribes would soon use the same loophole to inject large doses of cash into Bustamante's campaign, Ross would only say that the various tribes would make individual decisions. But he does anticipate getting additional help from Indian gaming interests. Tribal money is expected to be particularly important for Bustamante, who has collected about $1 million from them for his lower-budget campaigns in the past. FPPC officials said transferring money between the two Bustamante committees 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. No more than $21,200 can be attributed to any single donor. And any attribution may not be greater than the amount the donor actually gave to the old committee. By way of example, the $300,000 the Sycuans gave Bustamante could be ``attributed'' in equal amounts to 14 people who gave at least $21,200 to Bustamante last year, even though they had nothing to do with the tribe's current donation. ``This is a classic example of money laundering and the FPPC should not allow it,'' said Knox, of Common Cause.
Mark Krausse, the FPPC's executive director, said the commission designed the rules as a one-time effort to deal with the transition from committees that
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