By Olin Ericksen
Staff Writer

November 7 -- While aimed at halting office holders from seeking favors from big business, a controversial campaign finance law may be hurting incumbents, non-profit board members and those who volunteer for City service the most.

Known as the Oaks initiative, the stringent anti-corruption law passed in 2000 prohibits City office holders from accepting cash, gifts or jobs from anyone that may have benefited through some action taken by the office holder.

However, after a failed six-year legal challenge by the City, Tuesday’s race for three open City Council seats is the first time the law has been put into action in Santa Monica, and it appears to be making an impact.

So far, the three incumbents seeking reelection have returned nearly $6,000, raised mostly in $250 increments, based on interviews with the candidates and an analysis of campaign finance disclosure statements analyzed by The Lookout.

The lion’s share of that money came from board members of non-profits that receive funding from the City, such as Heal the Bay, and people who serve on a volunteer basis on community boards.

“I’m pushing four thousand I have to return,” said Mayor Bob Holbrook, who is seeking a fifth council term.

All but two of the nearly 20 contributions Holbrook returned in order to abide by the Oaks Initiative came from individuals who either serve on the boards of non-profits or as volunteers on City boards and commissions, he said. (see story)

“The problem is that I never dreamed my wife couldn’t contribute to me because she serves as a board member of the Santa Monica Historical Society,” he said.

The same was true for Pam O’Connor, who said the contributions she returned – totaling a little more than $1,000 – came from officials with non-profits or volunteers.

“To me, it is a lot of money,” said O’Connor, who is seeking a fourth term on the seven-member council. “What it means is that I have to fundraise outside the city more, because those who are active members in the community can’t contribute to me.”

Council member Kevin McKeown has returned two contributions, totaling $500, both from people who serve on City boards and commissions, according to campaign finance statements filed with the City Clerk last month.

Casting a wide net to interpret the law, the City Attorney has given incumbents a list of 700 members of the boards of the more than two dozen non-profits that received money from the City.

There were ways the City could have changed the law to avoid chilling citizen participation on non-profit boards and civic bodies, according to experts on campaign finance reform.

“While Oaks impacts some commercial developers as well, it clearly affects, as written, non-profits,” said Bob Stern, president of the Center for Governmental Studies, a non-partisan research organization that studies politics and media.

Testifying before the City Council this summer, Stern -- who helped reshape the problematic Oaks measure for Pasadena, where voters passed an identical law six years ago – suggested that Santa Monica piggy-back on recommendations made by a Pasadena task force.

The Pasadena City Council took up several of the changes recommended by the task force, but opted to not restrict contribution limits, a major component of the law, Stern said.

“How the law affects non-profits is one of the changes made by Pasadena in their new measure,” he said.

Santa Monica council members instead voted to place a new measure – Proposition W – on Tuesday’s ballot that would effectively de-claw the Oaks Initiative, according to Stern.

As written, the six-year-old initiative impacts only incumbents, who generally have a natural edge in elections, or former council members who sat on the dais during the past six years, experts said.

“It does reduce the amount of money that can go to an incumbent, but that was part of the design,” Stern said

Under the current law, for example, Mayor Bob Holbrook and Planning Commissioner Terry O’Day both received $250 contributions from the Bayside Hotel. While Holbrook returned his donation, O’Day, who is making his first run for the council, was allowed to keep his.

As the practical impacts of Oaks are becoming more apparent as the election wraps up Tuesday, many questions may remain unanswered for some time if Prop W fails at the polls and the current law remains in place, City officials said.

“From a constitutional perspective, some homeowners might have to choose between his or her right to participate in contributing to elections and petitioning for a (home improvement),” said City Attorney Marsha Moutrie

“If a homeowner is seeking a variance on home improvements of $25,000 or more, then Oaks kicks in,” Moutrie said.

So far, it appears no homeowners have been affected, but it may be too early to tell, Moutrie said.

The City – which spent nearly $400,000 fighting the Oaks Initiative in court before its appeal was turned down last year -- has long held that the law is unconstitutional

Proponents counter that the Oaks Initiative is constitutional and helps to keep “pay to play” and other back-scratching in politics to a minimum.

Consumer advocates are now waging a high-profile campaign, calling on voters to reject the City Council’s less stringent alternative. Last month, they unveiled a billboard on Olympic Boulevard opposing Prop W. (see story)

Paid for by Election Watchdog, a consumer advocacy group, the sign reads: “For Sale: Santa Monica City Council.”

After the City Attorney challenged the billboard’s uses the City’s trademark Santa Monica Pier sign, opponents of Prop W brought in former presidential candidate, Ralph Nader, to stump against the council-sponsored measure. (see story)