campaign finance

Most political ads running on YouTube, sent via e-mail or otherwise distributed on the Internet must now disclose their funding sources in much the same way as traditional print and television ads, according to new rules approved Friday by the Fair Political Practices Commission.

The FPPC has been wrestling for months with how to regulate advertising on the Internet, where the lines between ads and opinion content are blurry and the space limitations of some ad formats, such as Google AdWords, make disclosure more difficult.

As they do with traditional advertising, the new rules require ads to disclose the candidate committee that paid for it, or in the case of independent expenditure or ballot measure committees, the top two funders of $50,000 or more who gave money to the committee.

They apply broadly to text and graphic ads (like the Whitman for Governor ads that routinely swarmed any news story about Meg Whitman), audio and video ads, and ads sent via text messages and micromessaging services like Twitter. In cases where space limits make it impossible to cram in all the relevant donor information, the rules lay out several alternatives, such as using various shorthand methods of disclosure.

The nitty-gritty can be found here [PDF].

Opponents of the regulations had raised concerns that due to the thin lines separating paid campaigning from volunteer work or opinion-writing on the Internet, average Joes would risk running afoul of state regulations for, say, e-mailing a political YouTube video to their friends.

State Sen. Leland Yee took a major step yesterday toward running for mayor of San Francisco, opening an exploratory committee that will allow him to raise money for his bid – but the way he has been spending his campaign cash this year, it's probably fair to assume he's been thinking about the office for a quite a while.

You probably wouldn't know it by reading the headlines, but Yee was up for re-election in the senate this year, thoroughly drubbing Republican challenger Doo Sup Park by a 79-21 margin. Not that a Republican like Park stands much chance of winning in deep-blue San Francisco, but that didn't stop Yee from spending more than $1 million on polling, media and consulting services, all while rumors of his mayoral ambitions were looming large.

Or as his consultant, Jim Stearns, told the San Francisco Chronicle's Phillip Matier and Andrew Ross: "We needed to keep people informed on what the senator had been doing."

Opening an exploratory committee will allow Yee to officially begin raising money for the mayor's race, but the initial investment from his senate account could give him a nice head start.

Contributions to municipal candidates in San Francisco are limited to $500 apiece, and despite generous public financing laws in the city, major candidates must raise millions to stay competitive. Outgoing Mayor Gavin Newsom spent nearly $6 million on his first campaign in 2003.

The Supreme Court's landmark Citizens United ruling earlier this year helped major corporations and other interest groups spend more than $5 million on California's Senate race without disclosing their contributors, according to independent spending reports analyzed by the Center for Responsive Politics.

Ten months ago, when the high court handed down Citizens United, effectively allowing businesses and trade groups to contribute unlimited sums to federal elections, the punditocracy was eager to predict an unprecedented flood of secret interest-group cash that would soon flow into competitive elections nationwide.

Many of those predictions have come true. In the months since, the U.S. Chamber of Commerce has emerged as exhibit A in the ruling's predicted consequences, contributing millions of dollars to primarily Republican candidates while taking advantage of new legal covers to keep the sources of its contributions secret.

Here in California, the chamber was by far the largest outside spender on behalf of GOP Senate candidate Carly Fiorina. The organization spent neatly $5 million on attack ads tearing down Boxer – more than they spent in any other federal race, according to CRP data.

Meg Whitman didn’t just outspend Jerry Brown in her losing campaign for governor.

The billionaire Republican outspent the entire field of 15 other candidates for statewide office combined, Democrats as well as Republicans.

The secretary of state’s totals don’t cover spending after Oct. 16, but final numbers are unlikely to change the trend line.

It looks like this:

Statewide candidates and ballot measures who ended up on the wrong side of Tuesday's election spent nearly a quarter billion dollars on their failed election bids, including at least $15 million on campaign consultants and more than $120 million on ad spending, state and federal campaign records show.

Last week, the Center for Responsive Politics estimated that candidate and independent spending on federal elections alone could exceed $4 billion this year – more than was spent during the 2000 presidential election.

Here in California, the biggest winners among the losers have been media buyers, campaign consultants and signature-gathering firms. In all, at least 17 firms were paid $1 million or more for working on losing efforts. It's worth noting that media-buyers, who top the list, typically pass most of that money through to television and radio stations to purchase advertising.

Amid growing criticism and government scrutiny of for-profit colleges, Democrat Jerry Brown and other California candidates this year reaped a healthy chunk of campaign cash from education giant Apollo Group and its wealthy chairman.

The Arizona-based parent company of the University of Phoenix and its employees gave more to Brown than to any other state office seeker in the country, the Chronicle of Higher Education reported this week.

Some observers said Apollo likely favored Brown and other California candidates in part because of the potential profits here and fear of beefed-up regulation under the new governor.

"California is a huge marketplace and it's open territory, where some states are not," said Betsy Imholz, director of special projects at Consumers Union, the nonprofit publisher of Consumer Reports. Imholz has advocated for better regulation of the state's proprietary schools.

Apollo may want to ensure California remains as open as possible, said Barmak Nassirian, associate executive director of the American Association of Collegiate Registrars and Admissions Officers and an outspoken critic of the for-profit college industry.

The company may be trying to ensure that the state's regulatory body overseeing for-profits, the newly revived Bureau for Private Postsecondary Education, is as "weak as can be," he said.

"If (Brown) were to be elected," Nassirian said in an interview, "he would have direct jurisdiction over how this agency operates."

There were the fundraisers at the U.S. Grant Hotel in San Diego (cost to stage: $71,000), the Beverly Hilton in Beverly Hills ($42,900), the Bernardus Lodge & Winery in Carmel Valley ($20,564), and the Princeton and Harvard clubs in New York City ($12,300 combined).

Then there were the private flights aboard ACM Aviation’s corporate aircraft ($961,000), the legal bills from the Sacramento firm of Bell, McAndrews & Hiltachk ($845,000), and the donation to the state Republican Party ($248,000).

Tack on $11.6 million for political consultants, $10.5 million for mail and an astonishing $106.9 million for broadcast advertising, and you get an idea of how Meg Whitman spent more than $160 million – most of it her own money – on her campaign for governor of California.

Expenditure reports filed with the secretary of state’s office only cover the campaign through Oct. 16, so the final spending numbers will be higher.

But a California Watch review of the candidates’ spending underscores the extraordinary amount of money the former eBay CEO spent in an effort to get traction against Attorney General and former governor Jerry Brown.

Overall, Whitman outspent Brown by $6 to $1, the records show, but as voters went to the polls today the veteran Democratic official was leading the Republican political newcomer in most polls.

Media barrage

Over the last two weeks, more than two dozen major campaign donors to Meg Whitman and Jerry Brown have been scrambling to hedge their bets.

At least 14 donors who once backed Whitman have donated $5,000 or more to Brown's campaign since Oct. 14, perhaps owing to her recent decline in the polls. An additional 11 Brown donors have given at least $5,000 to Whitman, and a handful have donated to both candidates, secure in the fact that no matter what happens, their money will be backing a winner.

Among the donors who have jumped to the Brown camp since mid-October are tech billionaire Marc Benioff, Los Angeles First Deputy Mayor Austin Beutner and a number of large corporations, including PepsiCo, Disney and alcohol distribution conglomerate Diageo.

Benioff, the CEO of web-based business software provider Salesforce.com, gave Whitman $10,000 when her campaign was just gearing up in April 2009. He followed that up with a donation of $25,900 – the legal maximum – to Brown last week.

Beutner gave $5,000 to Whitman in June 2009 before giving Brown $25,900 of his own this month. It wouldn't be the first time Beutner gave to both sides of the aisle – federal contribution records show that he contributed to both Republicans and Democrats in the 2008 elections as well.

Large corporations like PepsiCo, AT&T, PricewaterhouseCoopers and others also gave to both candidates, but such behavior is hardly unusual. Large organizations regularly give to both parties, presumably because it ensures that they support the winning candidate.

When Republican U.S. Senate candidate Carly Fiorina didn’t show up at a Sarah Palin rally in Anaheim, she wasn’t just avoiding the darling of the Tea Party Movement. Fiorina also was ducking a political donor.

On Aug. 5, nearly two months before Fiorina failed to appear at Palin’s get-out-the-GOP-vote event in Orange County, the former Alaska governor donated $2,500 to Fiorina’s campaign, federal records show. The check was cut by Sarah PAC, Palin’s political action committee.

Palin is one of more than three dozen past and present Republican Party officials, almost all of them from outside California, who have donated to Fiorina since she won the GOP Senate nomination in the June primary, according to recent Federal Election Commission filings. Most of the approximately $170,000 in donations came, like Palin’s, from PACs the officials control.

Fiorina’s no-show at the Anaheim event Oct. 16 was pragmatic politics: Although celebrated by many conservatives, Palin is disliked by two-thirds of California’s independent voters, according to a recent Field Poll [PDF]. Those are voters Fiorina needs to attract if she is to unseat Democratic incumbent Barbara Boxer in next week’s election.

For her part, Fiorina said she was unable to appear with Palin because she had a prior engagement – campaigning in San Diego with Sen. John McCain, R-Ariz.

Groups supporting Proposition 19 have hauled in approximately $2 million in October even as polls find shriveling popular support for the marijuana-legalization initiative.

Those dollars are funding the first television ad promoting the ballot measure, which will air throughout this final week of the campaign.

Half of the cash is from multibillionaire George Soros, who on Tuesday pledged $1 million to the Yes on 19 political action committee.

Nearly all other late campaign dollars also came in as large donations from wealthy individuals, data from the secretary of state’s office shows. There does not appear to be a groundswell of donors with smaller bank accounts joining the cause.

Contributions this month for $25,000 and more to the three committees backing Prop. 19 include: