Judge Orders Bustamante To Return Funds Transferred to Anti-Proposition 54 Committee

Sacramento Superior Court Judge Loren McMaster yesterday ordered gubernatorial candidate Lt. Gov. Cruz Bustamante (D) to return to donors funds originally obtained through an old campaign account -- most of which were transferred to the Cruz Bustamante Committee Against Proposition 54 -- and told him he can no longer solicit donations through the old account, the Sacramento Bee reports (Bluth, Sacramento Bee, 9/23). Bustamante acquired millions of dollars in funds through six- and seven-figure donations from American Indian tribes and labor unions. While current campaign finance law limits campaign contributions to $21,200, Bustamante was able to receive the funds through his old lieutenant governor campaign committee because it was set up before the law's implementation. Earlier this month, Bustamante announced he would contribute $3.8 million of the funds to a committee to defeat Proposition 54, also known as the Racial Privacy Initiative, which would prevent California government agencies and schools from collecting racial and ethnic data but would allow exemptions in instances involving some medical research data, convicted criminals or crime suspects and occasions in which the federal government requires racial data. The funds transferred to the committee to oppose Proposition 54 funded television ads featuring Bustamante (California Healthline, 9/22).

Richie Ross, Bustamante's campaign adviser, said the donations had been spent, adding, "The judge knew that; we said that in our pleadings last week" (Howard, Orange County Register, 9/23). He added, "It's not our interpretation that we have to pay anything back" (Howard, Orange County Register, 9/23). McMaster's decision ordered Bustamante to return any contributions still possessed as of Monday, six days after the television ad campaign began. Some campaign experts have raised doubts that Bustamante could spend all the $3.8 million in such a short time. Sen. Ross Johnson (R-Irvine), who filed the lawsuit, said Bustamante has an "obligation to tell the people of California when and where and how they spent the money and what percentage of it is recoverable" (Witt, San Jose Mercury News, 9/23).

Bustamante said he will continue his campaign against Proposition 54. "The judge basically said to the FPPC that there cannot be any transfers of any kind and so, what we'll do is that we'll continue to raise money into the Proposition 54 account, and we'll continue to put those ads on the air," Bustamante said (Sacramento Bee, 9/23). McMaster did not address the legality of the anti-Proposition 54 ads, which feature Bustamante. Johnson alleges that the ads also are illegal because they could help Bustamante's gubernatorial campaign even though they are aired as issue ads (San Jose Mercury News, 9/23). NPR's "Talk of the Nation" Monday interviewed San Jose Mercury News reporter Katherine Corcoran about Proposition 54 (Conan, "Talk of the Nation," NPR, 9/22). The full segment is available online in RealPlayer.

Additional Proposition 54 coverage is available online.