SAN FRANCISCO(AP) - A group that trashed Gov. Gray Davis on the airwaves last year doesn't have to register as a political committee or disclose its financial backers, the California Supreme Court said Wednesday.
Without comment, the court's seven justices unanimously declined to review a San Francisco-based appeals court's September decision, which ruled against a lawsuit brought by Davis.
Finally a court that would have been happy with the anonymous pamphlets that flourished when our Country was young.
I've noticed that the union ads seem to be a lot more issue orientated and don't mention who to vote for or against. It must be a coming thing.
The lunatic libs never worry about exploiting a loophole in most states. They know that there is no controlling legal authority over them, like in Kali!
In the Sac Bee today--
Attack ad's backers can stay hidden
The state high court rules on anti-Davis TV spots.
By Claire Cooper -- Bee Legal Affairs Writer
Published 2:15 a.m. PST Thursday, December 12, 2002
SAN FRANCISCO -- The California Supreme Court voted Wednesday to leave intact a lower court decision loosening disclosure requirements for political advertisers.
The court's brief order allows sponsors of an attack on Gov. Gray Davis to remain unnamed, probably forever, and, said political analyst Bruce Cain, opens new opportunities for anonymous hit pieces in future elections.
"If you're an interest group and you have reason to believe that your identification hurts your cause, then this is perfect," said Cain, a University of California, Berkeley, professor. As examples, he mentioned tobacco companies that might want to go after liberal or centrist candidates.
Following custom, the justices announced their unanimous decision without explanation.
The case arose in mid-2001, when a television ad campaign blaming Davis for the then-critical energy shortage appeared, and Davis went to court to find out who was behind it.
The ads, carrying the catch line "Gray-out from Gray Davis," were sponsored by a group calling itself the American Taxpayers Alliance, run by Republican strategist Scott Reed. Davis contended the financers were energy companies that he had accused of bilking the state.
Davis won in the trial court but lost in the state Court of Appeal.
The governor, state Attorney General Bill Lockyer, the state Fair Political Practices Commission and several major cities all asked the state Supreme Court either to review the case or wipe the Court of Appeal ruling off the law books so it could not be cited as precedent.
Davis said Wednesday that the Supreme Court "favored anonymous out-of-state donors over the right to know of California" by turning them down.
The alliance's lawyers were not available after the vote was made public.
In its June ruling the Court of Appeal cited the U.S. Supreme Court's 1976 decision balancing campaign disclosure laws with the constitutional right of freedom of speech.
Under the 1976 decision, sponsors of negative political ads are not bound by campaign finance disclosure statutes as long as they avoid any express exhortation to elect or defeat a candidate in terms such as "vote for" or "vote against."
In the future, said James Harrison, Davis' lawyer in the case, "groups will look carefully at their message to be sure they avoid those magic words."
The Court of Appeal acknowledged that its ruling "easily permits careful selection of language to circumvent the statutory reporting requirements."
But the court also noted -- as Cain did -- that the balance between the First Amendment and campaign reporting statutes could change as the 2002 federal Bipartisan Campaign Reform Act works its way through the federal courts.
Meanwhile . . . the budget crisis continues . . .:
The following commentary appeared in The Orange County Register on December 8, 2002:
California, the debtor nation
Massive but uncalculated debt burden
may be an undiagnosed cancer
By Jon Coupal
California is frequently described as the world's fifth largest economy. Even though our standing as an economic power may have slipped to sixth or seventh, there is no disputing that the Golden State is worthy of virtual "national" status. Fair enough. Let's talk
about our "national debt."
First, no matter what's its rating du jour as an economic power, we first have to acknowledge that, unlike other "nations," California has no central bank and, therefore, cannot print its own money. (Indeed, imagining that our current political leadership would ever possess
such a power is a taxpayer's nightmare.)
A natural consequence of this limitation is that, over time,
California could not engage in sustained deficit spending. This is a practical limitation on debt complementary to our state constitutional limitation requiring -- in theory -- a balanced budget.
Second, the costs of public debt are staggering and usually a poor deal for taxpayers.
Depending on the type of debt and the repayment period, interest costs alone usually exceed the amount of proceeds generated by the sale of the bonds.
Proposition 47, passed a few weeks ago, is a good example. The amount of money generated (going for school construction, we are told) is $12.5 billion. The interest costs are estimated by the state's own experts to be $13 billion. Thus, the total repayment obligation coming
out of the taxpayers' wallets is $26 billion.
In short, 50 cents out of every dollar will not be going to schools but, rather, to banks and bond holders. This helps explain why the bond industry -- underwriters, lawyers, investors -- contributes heavily to the passage of these proposals.
Third, public debt limits flexibility.
The alternative to bonds, of course, is to pay for schools, highways and water projects as money becomes available. This "pay-as-you-go" approach is not difficult with prudent budgeting. Indeed, although Republicans are currently the more fiscally prudent force in Sacramento by advocating a series of pay-as-you-go policies, it was Democrat Gov. Pat Brown who managed a fixed percentage of the general
fund -- as high as 7 percent -- going directly into infrastructure.
The beauty of this approach is that more money can be appropriated in good years without large, fixed obligations taxing the general fund in bad years. Bonds, on the other hand, are long-term obligations that restrict the ability of political leadership to direct money where it is most needed. Although not usually referred to in these terms,
voter-approved debt is simply another variant of "ballot box
budgeting."
Fourth, let's examine California's current public debt load. The damage inflicted just this year is huge.
Adding all the general obligation bonds at the state and local levels with their respective interest costs, California voters have managed to obligate themselves to pay nearly $100 billion in debt obligations.
Public finance experts note that, on the November ballot, over 500 bond issues were on the ballot across America. Of those 500, 7 of the 10 largest were in California.
Fifth -- and saving the worst for last -- we really don't know how much public debt we have in California.
We do know that the $100 billion in future obligations approved just this year is only a fraction of total debt, but what about total accumulated debt? Certainly this information is crucial to rational policy making. Indeed, the Legislature enacted a statute in 1998 requiring California's debt oversight agency, the California Debt
Advisory and Investment Commission (CDIAC), to "prepare an annual report compiling and detailing the total amount of outstanding state and local public debt ... ." The law further requires that "the report shall reflect all bonded indebtedness issued by governmental entities".
Amazingly, the 1998 law has been ignored by CDIAC - headed by state Treasurer Phil Angelides -- until just recently. Four years late, CDIAC issued a report on Oct. 1 purporting to quantify California's debt load. However, the report -- even by its own admission - is woefully incomplete.
Because there are significant restrictions in California for general obligation debt, such as voter approval, both the state and local governments have relied increasingly on non-general obligation debt including leasebacks, creative debt instruments such as "certificates of participation," Mello-Roos financings and redevelopment debt.
But rather than acknowledge that the data is fundamentally flawed, the report suggests that all is dandy in California because our relative general obligation debt is manageable.
In this regard, the report probably does more harm than good. Better our elected and financial leaders tell us the truth that we have no idea how much public debt exists in California than giving us a partial, deceptive picture.
Since no one knows for sure how much public debt burdens California, let's throw out the figure of $500 billion or, stated another way, half a trillion dollars. We challenge anyone to disprove it.
Will we ever come to appreciate the dangers of putting ourselves and our children in excessive debt? It does not appear so. Two new massive bond proposals have already been approved for the 2004 ballot: $10 billion for a "bullet train" and $12.5 billion as the second "installment" of Prop. 47's education debt. And there is no sign that local debt proposals are slowing their torrid pace.
California's massive debt burden may prove to be an undiagnosed cancer, insidious and hidden as it wreaks damage on the body politic and our future.
As with cancer, education is the first step. A disciplined response is the second. Because California is not a nation, crawling to the World Bank begging for a bailout is not even an option.
Mr. Coupal is an attorney and President of the Howard Jarvis Taxpayers Association.
The URL of this article is:
http://www2.ocregister.com/ocrweb/ocr/article.do?id=14942§ion=COMMENTARY&year=2002&month=12&day=7
