“It just seems to me it is improper. It reduces confidence in government and also particularly the Party. I think the Party is going to have a tough time with all this publicity raising money from the smaller donors.”

-Bob Stern, President, Center for Governmental Studies on KCRW last night talking about the California Democratic Party wasting $450,000 on Senator Don Perata’s criminal defense fund. CDP flack Roger Salazar refused to go on at the same time as Stern and Rick Jacobs to debate the scandal.

Yesterday, David Dayen explained Why The Perata/CDP Scandal Threatens The Budget Fight. Yet that isn’t the only casualty from the culture in Sacramento that has put the California Democratic Party in crisis.

TPM Election Central is reporting on the target list for $34 million in DCCC reserved TV time this fall. Of the 31 races targeted, zero are in California.

Which brings me back to last night’s ill-timed fundraiser with Speaker Karen Bass. The actblue page to RSVP for the account said the money was going to support the California State Democratic Committee – Federal Account. Great idea, Madame Speaker Bass helping Madame Speaker Nancy Pelosi pick up more seats and be able to overcome the Blue Dog Caucus siding with the GOP to obstruct Pelosi’s leadership.

With California unable to count on DCCC ad money against any of the very vulnerable Republican Representatives, it is clear California Democrats need to plan to win on our own. Which is why yesterday’s LA Times editorial on the CDP wasting money on Don Perata is so counterproductive. We need the resources to win on our own and we need small dollar donors to get there. Yet the actions of the CDP discourage small dollar donations. The results are clear, including last night, the CDP has only raised $6,630 ALL CYCLE in federal money on actblue. To put in perspective, San Diego County Democrats have raised more than 20 times that much federal money on actblue — from more than 30 times as many small dollar contributions.

It could be another landslide year, but it probably will be yet another year when Democratic Congressional challengers don’t get the support they could and should count on from the CDP. In fact, when taking into account outstanding debt, the CDP Federal Account had less than $300,000 as of the end of May. And Democratic state senate challengers have already seen $450,000 wasted on not helping elect Hannah-Beth Jackson and Lois Wolk. We can trust in the CDP if the goal is to seize defeat from the jaws of victory (which it might be, Perata already called uncle on two state senate races so far this year). Or we can reform and begin fighting to beat Republicans instead of coddle the Democratic Party establishment. The first step is accountability. Again, Senator Don Perata needs to give back the $450,000 and Art Torres should step down as CDP Chair for wasting $4,450,000 not electing Democrats this fall.

Roger Salazar has been firing back about the shaky legal ground the Pro-Hillary 527 he is working for is treading on, or will be treading on when they ask for money and pay to air ads.

There isn’t anything in our efforts that would warrant such a barefaced attempt to quell free-speech with this kind of unsupported legal bullying.

The American Leadership Project was organized in strict adherence to all new federal rules and regulations as a result of a recent Supreme Court decision. It was established to highlight issues of importance to middle-class families. The type of 527 we have organized does not intend to engage in express advocacy or the functional equivalent of express advocacy and so will not qualify as a political committee under the Federal Election Commission rules, but it will, however, fund “electioneering communications” – ads that feature a candidate and run within the 30 days before the election – and so will have reporting requirements with the FEC as well as the IRS. We intend to be open, transparent and to make all full and appropriate disclosures as required by the law.

I am no lawyer, but what they are arguing is that this organization is not actually working to help Hillary Clinton win the Democratic primary.  It means that they cannot ask people for money to help Hillary.  Someone else can sort all of that out.  

What I am concerned with is the messaging Salazar is using.  I’m sorry, but questioning the legality of this organization has not approached anything close to bullying.  There is no big powerful entity trying to shut up the little guy.  Not to mention the fact that they are twisting themselves into pretzels to be able to claim that this is legal with phrases like “functional equivalent of express advocacy”.  

This is a bunch of really rich people trying to evade campaign contribution limits.  Those of us raising concern about this are not trying to take away their free speech.  We just don’t want them to have a bigger megaphone than the rest of us and have disproportionate impact on the outcome of this race.  The use of “free speech” to talk about campaign finance law is a right wing frame.  It is extremely distressing to see it used by a Democrat in the context of campaign where one candidate is outspending the other on the basis of an unprecedented amount of small donors.

(more on the flip)

This to me is the perfect example of the impact of BCRA (McCain-Feingold) on campaign financing.  BCRA both raised the hard dollar contribution limit and attempted to eliminate the use of soft money.  Democrats were expected to be hit the hardest due to our over-reliance on large donors and the Republican’s success at creating a large small donor base, mostly through direct mail.  The goal was to reduce the ability of people to spend large chunks of money on elections.  The Supreme Court upheld these restrictions due to the inherent corrosive influence of money on politics and impact of the appearance of corruption.

Now 6 years later we have a race where one candidate relied on large checks from a small pool of donors and the other raised more money from what is now nearly one million people who have given small contributions.  Hillary Clinton now has a group of donors who want to go back to the days of soft money.  It is a full-fledged attack on BCRA.  Barack Obama’s fundraising is the dream of campaign finance reformers coming to life before their eyes.  

If you go to the Barack Obama home page right now you will see a big flash graphic that reads “The Goal ONE Million People Who Own This Campaign”.  Those now 951,887 (and growing) people who have donate to the campaign have bought the candidate.  In contrast, you have the major donors to Clinton who own her campaign crowing about “free speech” and cutting six figure checks to try and make sure Clinton is not drowned out by nearly one million people.

Look at the messaging Hillary Clinton is using.  This is from a campaign fundraising email she sent out yesterday.

If we want to win in Texas, Ohio, Rhode Island, and Vermont, we’ve got to even the odds. We can’t let the Obama campaign overwhelm us financially. Today, I am calling on you and other online supporters to act together, making sure we have the resources to create a fair, level playing field on March 4.

The hundreds of thousands of small Obama donors are in Clinton’s mind and those of her big donors creating an unfair, unlevel playing field.  So they are crowing about “free speech” and saying it isn’t fair when people tell us that we aren’t legally allowed to run a stealth campaign mirroring the messaging of the official campaign.

It is dispiriting to me to see fellow Democrats bemoaning the influence of small donors.  We should be celebrating it and figuring out how we can free our own state and politicians from the corrosive influence of big donors who want something in return for their money.  We shouldn’t have the spokesman for the California Democratic Party, which should be working on their own small donor program accusing us of bullying.

This seems like a very clear contrast between the old way of doing things and the new school approach.  Democrats will go much further by running campaigns and candidates that rely on small donors and volunteers and not simply top down organizing and big media buys.

(And here’s AdamB’s post on this at the Big Orange. – promoted by Brian Leubitz)

In the wake of Feburary 5th some of Hillary’s major bundlers started floating the idea of financing a Pro-Clinton 527 to try and make up ground on Obama’s phenomenal small donor fundraising.  Today they are launching it and Roger Salazar, who has served as a spokeman for many a campaign here in California will be running it.

The new pro-Clinton 527, the American Leadership Project, incorporated with the IRS on February 15, and lists as its chief a former Clinton White House deputy press secretary and former Gray Davis aide, Roger Salazar, according to its federal filing.

They are targeting white women under 50 and are running tv, radio and sending mailers.  More details here.

The AIP may have some serious FEC problems establishing itself as a 527.  MoveOn and other orgs payed huge fines after the 2004 cycle for incorporating that way and doing express advocacy in the presidential election.  This is from the press release on the fines from the FEC.

If an organization receives contributions or make expenditures in excess of $1,000, and its major purpose is involvement in campaign activity, it must register with the Commission and abide by the contribution restrictions and reporting requirements of the Federal Election Campaign Act.  Each of these entities registered with the Internal Revenue Service as “Section 527” organizations – tax exempt groups whose function is to influence the selection, nomination, election, or appointment of any individual to Federal, State, or local public office or office in a political organization, or the election of Presidential electors.

I imagine we will see an Adam B post on this over at the big orange later today.

[UPDATE] Roger just called.  He noted that they have not actually done any campaign work, thus they have not filed with the FEC and therefore could not have broken any laws yet.  Indeed this is true.  He did confirm to me that they will be operating as a 527.  Thus I believe they may have a legal issue once they do start working.  Now they may just proceed and deal with any fines afterwards.  This is huge soft money and the whole organization is an attempt to get around contribution limits and BCRA.

UNITE-HERE and their allies in the race track community and others submitted what appears to be enough signatures to get four initiatives on the ballot to repeal the gaming compacts with four tribes that were approved by Arnold and the legislature.  However, the tribes under the auspices of their new coalition “Coalition to Protect California’s Budget and Economy” are challenging the signature submission process in court.  They are now trying to claim that they did not submit them in time and that the Secretary of State has been misinterpreting the state constitution for the past decade.  John Meyers:

The language at issue is found in Article II, Section 9: A referendum measure may be proposed by presenting to the Secretary of State, within 90 days after the enactment date of the statute, a petition certified to have been signed by electors equal in number to 5 percent of the votes for all candidates for Governor at the last gubernatorial election, asking that the statute or part of it be submitted to the electors.

With that in mind, did the 433,971 signatures have to be certified within 90 days? Or did they merely have to be gathered within 90 days?

Secretary Bowen, using guidelines established by her predecessors, said that it’s the latter, that the 90 days only refers to the gathering and submitting of signatures. And that’s consistent with a bench ruling by a state judge in 1998 about how the referendum process works (ironically, a case that also revolved around Indian gaming).

But the new legal challenge argues that the constitution intends for the entire process to be over in the 90 days. And if that’s true, then there will be no referendums on the ballot; local elections officials have not yet sent their final tabulations to Bowen’s office.

The tribes have hired Roger Salazar, spokesman for the CDP and co-founder of CMR as their press flack.  His quotes and their strategy on the flip.

Desert Sun:

“They had 90 days to collect, submit and have the signatures they paid for verified and certified by the secretary of state,” said Coalition spokesman Roger Salazar. “They did not, therefore the referenda are invalid.”

“Our message to the racetracks and the Nevada gambling interests that want to undo our compacts and take $9 billion away from the taxpayers of California is very simple,” said Morongo tribal Chairman Robert Martin. “The clock has run out.”

The tribes are clearly going to make the argument that the consequence of repealing these compacts is that state gets less revenue.  That is indeed correct, but I am sure the pro-side will argue that this was not a good deal for the state to begin with and that they need to go back to the drawing board to get the appropriate amount of revenue for the state.  The sides are testing their messages out now as this campaign gets off the ground.

And of course this story would not be complete without some serious hypocrisy, as Meyers alluded to above.

He also pointed to an irony in the action, noting absence on the part of the Agua Caliente to file a petition challenging the signature collection and certification timetable.

“It is the height of hypocrisy for the ‘Big 4’ to sue on this basis because the Agua Caliente filed a lawsuit years ago to establish that their tribe had 90 days to collect signatures on a referendum petition,” Macdonald said.

The Agua Caliente prevailed, Macdonald said, and that case provided the foundation for the secretary of state’s official signature collection calendar for the referenda.

Can’t have it both ways folks.  Either you get 90-days to collect your signatures, or you get 90-days to collect and have them approved.  To me this is a sign that the tribes really are reluctant to have this fight on the ballot.  Obviously they would save money by keeping it off, but you have to wonder about the polling, if they are taking this tact.  (No I have not seen any numbers on this issue.)