The Independent Expenditure Fraud

by Tony Quinn
May 1, 2006

Nothing is worse than the reformer when the reforms catch up with him. Gubernatorial candidate Phil Angelides is running as the great liberal; that means he has to mouth the anti-corporate money line of the campaign finance reform crowd. Only he’s got a problem; the very reforms he has championed are now preventing him from competing on an even playing field in the Democratic primary, and could well cost him the nomination for governor.

This is the first governor’s race under Proposition 34, a self-serving “campaign finance law” put on the ballot by the legislature several years ago to counter a much harsher reform law. The people passed Proposition 34 and among its provisions is a $22,000 limitation on the amount that you can contribute to a candidate for governor.

But thanks to Supreme Court rulings, the limitation does not apply to candidates’ spending their own money, or to “independent expenditures” by someone else on the candidate’s behalf.

Angelides is a wealthy Sacramento developer whose wealth resulted from his relationship with Angelo Tsakopoulos, Sacramento’s richest developer. Angelides was once president of the Tsakopoulos firm.

But Angelides is not quite wealthy enough. His millions cannot compete with his multi-millionaire primary opponent, Steve Westly, who has put about $20 million of his own dollars into his campaign. Westly has spent lavishly on well-produced television ads, and what do you know, multi-millionaire Westly now has the lead in the race for governor over the plain old millionaire Angelides. The two of them sort of remind one of the famous brother in Arthur Miller’s Death of a Salesman, who walked into the jungle poor and walked out rich.

Poor Angelides is just not rich enough. But not to worry. His mentor and patron, Angelo Tsakopoulos, has walked out of the business of developing Sacramento real rich, and he has enough money to make Angelides competitive once again in the millionaires’ battle for the Democratic nomination for governor.

Given smart lawyers and clever political consultants, the Angelides supporters figured out the way to match the huge Westly spending is the circumvent the campaign finance law by Tsakopoulos making an “independent expenditure” on behalf of the Angelides campaign. So in late April, a $5 million television buy promoting Angelides began running on statewide, paid for by Angelides’ mentor Tsakopoulos.

This we are told is “independent” of the Angelides campaign; there was no coordination between the two efforts; the $5 million just sort of showed up.

That’s absurd. Angelides is about as independent of Tsakopoulos as George Bush is independent of Karl Rove. Angelides has been joined at the hip with Tsakopoulos for 30 years.

But let’s not fault developer Tsakopoulos for coming to the aid of his friend at a time when he is being outspent and cannot compete for all important television time. Steve Westly is successfully buying the primary election because he is a bigger millionaire than Phil Angelides. Angelides is being forced to depend on the kindness of his old patron Angelo Tsakopoulos to save his campaign. And the two of them are dancing with each other without touching to create the fiction that Tsakopoulos is making an “independent expenditure”.

No, the real fault is with the hypocritical politicians of both parties who promoted the phoney “campaign spending limitation” law knowing that as soon as necessary politicians of both parties would conspire to get around it.

Angelides is not alone. The US Chamber of Commerce is running “independent expenditure” television commercials promoting Gov. Schwarzenegger, who these days is a bit short of cash thanks to his disastrous 2005 special election.

If politicians of both parties had any guts they would repeal Proposition 34 and be honest about their campaign spending. Tsakopoulos could give money directly to Angelides and the Chamber could give money directly to Schwarzenegger. And it would be properly reported, and the public would know where these politicians were getting their campaign funds. There is no reason for the fiction of “independent expenditures” and there is no reason for the law that created them.

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