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Bustamante rakes in $500,000 from tribe but some ask whether he's bending the rules
Cruz's Cash Questioned

August 30, 2003

Lt. Gov. Cruz Bustamante reported Friday receiving a $500,000 contribution from a Riverside County Indian tribe as he faces questions about his use of a campaign finance loophole that may allow him to skirt new political spending laws.

The contribution from the Pechanga Band of Mission Indians, which operates a successful casino, is the first of what is expected to be a flood of campaign cash from casino-operating Indians to various candidates and committees in the recall election.

"I think it's possible the tribes will participate in the $10 million range, " said Michael Lombardi, chairman of the gaming commission of the Augustine Band of Mission Indians.

New campaign laws have complicated recall fund raising. Contributors are allowed to give a maximum of $21,200 to candidates. But groups can form independent committees and spend an unlimited amount for a candidate as long as they don't work directly with the candidate.

Bustamante believes he has found another way to raise money. The lieutenant governor is using a campaign committee that predates Proposition 34, which enacted the new laws. Bustamante says the old committee can raise money with no contribution caps and then shift that money into his new committee.

Bustamante's campaign did not return calls for comment Friday. But the lieutenant governor defended the fund raising this week in an interview on

CNBC. "My attorneys have clearly worked with the Fair Political Practice Commission . . ." he said, referring to the panel that sets fund-raising guidelines. "We have opinions from both of them as well as my attorneys making sure that everything we do is scrupulously done properly. So we play by the rules. And whatever the rules are, that's the way we're going to work."

In a press release this week, the FPPC said it had generally advised candidates they couldn't "solicit contributions into a pre-Prop. 34 committee" -- such as Bustamante's 2002 committee -- "for the purpose of using those funds in a post-Prop. 34 election." The statement emphasized that the commission was not commenting on individual candidates.

The commission also has recommended legislation to impose the $21,200 limit on contributions to those pre-existing committees.

"This is unprecedented for the FPPC to put out a press release like this," said Jim Sutton, an election law attorney in San Francisco. " . . . At the very best, (Bustamante) is pushing the bounds of the campaign finance law."

Prop. 34 left an opening for candidates to make use of committees that remained open from previous runs for office. The idea, said Sutton, was for those committees primarily to be used for a one-time transfer of leftover funds but not to raise new money for new campaigns.

Bustamante's 2002 committee, however, has recently taken in more than $1.1 million, including contributions this week from the Pechanga Indians and $300, 000 from the Sycuan Band of the Kumeyaay Nation.

Bustamante's lieutenant governor committee recently also took in $200,000 from the American Federation of State, County and Municipal Employees AFL-CIO and $100,000 from the Northern California Carpenters Regional Council.

"It seems as though we have Bustamante's campaign saying we are permitted by law to raise funds in excess of contribution limits into a previously established account and use those for the purposes of running for office in 2003, an election that clearly falls into the scope of Prop. 34," said Paul Ryan, the political reform project director for the Center for Governmental Studies in Los Angeles.

'ACCOUNTING TRICK' "It seems to be an accounting trick that's definitely not within the spirit of Prop. 34," Ryan said.

Friday's reported contribution appears to be just the

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