Campaigns use unlimited cash despite contribution limits

With warm images of Sen. Jeff Denham, R-Merced, driving a tractor, embracing his family and throwing a baseball to a young boy, the television ad that aired last month in the Central Valley had all the hallmarks of a campaign advertisement.

“When he votes, he’s always thinking about our families,” the ad said.

But technically it was not a campaign ad for Denham.

Pioneering a new loophole in California’s campaign-finance law, Republican political operatives have used state and local GOP committees to create thinly guised issue ads that never are reported as political spending on behalf of a legislative candidate.

Unlike a candidate’s official campaign ads, these ads can be paid for by donations of any size, despite the $3,300 voter-approved contribution cap to legislative candidates.

And unlike independent-expenditure campaigns, which must be run independently, a candidate’s own political consultants can create the party-paid-for ads.

“It’s amazing the candidates don’t even give a fig leaf to comply with the spirit of the law,” said Bob Stern, president of the Center for Governmental Studies, of Proposition 34, the law governing campaign money in California. “The law is full of loopholes and it was designed to be full of loopholes.”

Both parties have used party-made issue ads in the governor’s race, but only Republicans have used the tactic at the legislative level. At least three GOP legislative candidates have benefited from such ads–with the spending approaching $1 million.

The only real limit on the issue ads is that they cannot explicitly tell voters to vote for or against a particular candidate and they must stop 45 days before Election Day.

In Riverside, the Agua Caliente Band Cahuilla Indians gave $450,000 to the local GOP committee. The Riverside GOP then hired Matt Rexroad, chief strategist for Assemblywoman Bonnie Garcia’s re-election bid, to create issue ads slamming Garcia’s opponent Steve Clute for supporting new taxes.

“The reality is that it is issue advocacy. We put together a couple of TV spots and mail pieces that didn’t urge people to vote for or against Steve Clute and it is entirely within the letter of the law,” said Rexroad.

Not only did Agua Caliente fund the Riverside GOP, the Indian-gaming tribe gave directly to Garcia and recently contributed $2.85 million to an independent-expenditure effort, Team 2006, which had spent more than $225,000 on behalf of Garcia, as of Wednesday.

Democrats have complained about Garcia coordinating with the independent expenditure and the nature of the Riverside GOP spending, though there have been no rulings that laws have been broken.

In Monterey County, the California Correctional Peace Officers Association and the Pechanga Band of Luise