A Harder Path for O.C.'s Donors

By Phil Willon

Nov. 4, 2002 12 AM PT

Times Staff Writer

From Paul Goldenberg, “the king” of big-screen television salesmen, to George Argyros, U.S. ambassador to Spain, Orange County’s wealthy citizens have lavished the national Republican and Democratic parties with nearly $11 million in federal “soft money” donations over the last dozen years, federal election records show.

The gusher of local political cash, however, will soon dry up -- or be diverted -- because a federal campaign-finance law passed this year bans soft-money contributions after Tuesday’s election.

Leading the pack of Orange County donors is real estate developer Roland Arnall, chairman of Ameriquest Capital Corp. in Orange. In defiance of Orange County’s reputation as a Republican bastion, he has donated all of it to Democrats -- more than $1.2 million since 1991.

Arnall’s political generosity far outweighs that of the top GOP donor -- the Irvine Co. and its owner, Donald Bren, who gave a combined $810,726 to the Republican Party.

“Yes, there are Democrats here in Orange County,” said Frank Barbaro, chairman of the Democratic Party of Orange County. “It’s traditionally been a stopover for fund-raisers from all over the United States, certainly for the Republicans, but for the Democrats as well. We have many well-heeled individuals here in Orange County.”

In fact, since 1991 the amount of soft money given to Republicans -- about $5.8 million -- by Orange County donors is nearly matched by the amount given to Democrats: about $4.9 million. The total contributions do not include money donated to other parties.

Because of the soft-money ban, some of Orange County’s top donors say they may funnel their money to state and local political parties, which can still accept unlimited donations. But others may just keep their checkbooks closed.

“It certainly would be a nice thing for my bank account. I’ll be dollars ahead,” said Robert E. McDonough of Capistrano Beach, founder of Remedy Temps, a national staffing agency with annual revenue of about $550 million.

McDonough, who has contributed $693,000 to the Democratic National Committee and its affiliated organizations since 1991, said he doesn’t really feel like dealing with all the new rules.

$10.8 Million Given

Altogether, Orange County donors have forked over $10.8 million in soft-money contributions since 1991, the first year national parties were required to disclose all donations, Federal Election Commission records show.

Essentially unregulated, soft-money contributions have been criticized for years by election reform advocates such as Sen. John McCain (R-Ariz.), who made campaign-finance reform the cornerstone of his 2000 presidential campaign.

Critics say the flood of money has polluted the political process and called it a mammoth loophole that has allowed corporations, unions and individuals to sidestep contribution limits.

For example, an individual donor is prohibited from giving a federal candidate more than $1,000 per election cycle but is allowed to give a national party committee $1 million or more, which could be used to influence the race.

Federal elections records show that the two major parties collected more than $1.6 billion in soft-money contributions nationwide since 1991. The money can be used for a variety of purposes -- to bankroll television ads, voter drives and other campaigning -- as long as the parties don’t use the money to directly tout or attack a candidate.

The campaign-finance reforms passed by Congress and signed by President Bush in July prohibit national parties and federal officials and candidates from raising or spending soft money.

The law takes effect Wednesday but is being challenged in court by a variety of political parties and interest groups.

“I think the law will have some effect. It will limit the impact of soft money on the national races,” said Larry Noble, executive director of the Center for Responsive Politics in Washington, which advocates election reform. “There are still loopholes -- I think one of the effects will be that a lot of the contributors will get around the reforms by directing their contribution to the state and local parties.”

Ryan Erwin of the California Republican Party agreed that the organization will probably receive some money that, before the reforms were passed, would have gone to the national party. But, he said, those same reforms handicap the state party’s fund-raising ability.

“It will dramatically change how we can raise money. Federal officials can no longer raise money for state parties. That includes members of Congress and the president -- some of the most effective fund-raisers,” Erwin said.

The new federal law also restricts the National Republican Party from transferring funds to the state parties -- taking away the California Republican Party’s largest donor, Erwin said.

Still, so long as politicians reign in Washington, America’s corporations and wealthy will offer generous donations in hopes that they will gain access and possibly influence over policy decision, Noble said.

“That won’t change,” he said.

PacifiCare Health Systems Inc. of Santa Ana, the nation’s largest supplier of Medicare health plans, has had a major interest in several hot issues in Washington, including proposals for HMO and Medicare reform, prescription drug benefits for seniors and patient-bill-of-rights legislation.

The company contributed $580,196 in soft money since 1991, divided between the Republican and Democratic parties. PacifiCare officials did not respond to inquires about the company’ political contributions.

Supporting Agenda

Jerry Holloway, spokesman for the Aliso Viejo-based Fluor Corp., another top Orange County donor, said the company uses contributions to support politicians who advocate the pro-business agenda and policies the company favors.

The mammoth construction and engineering company and its affiliates have made $798,777 in soft-money contributions to both major parties since 1991, federal records show. The company also has been awarded hundreds of millions of dollars worth of federal government contracts.

Holloway said its donations help give Fluor a voice in Washington on critical issues that vary from tort reform to international trade laws, all of which affect the company’s ability to compete and serve clients worldwide. Under the reforms, the company will probably focus more on contributing directly to candidates rather than the national parties, he said.

“We’re not looking at a huge amount of money that’s being impacted. It might mean an increase in support to the local races,” Holloway said.

For Orange County’s top individual donors, the soft-money contributions are less about pushing a specific legislative agenda than espousing their political philosophy.

“I give to the Democrats because I think they’re closer in touch with people,” said McDonough. “I think they do more for the general population -- more so than Republicans, who say cut taxes and nevermind about schools and hospitals.”

Being a well-heeled donor and longtime party supporter also can bring rewards.

Arnall, the county’s top donor and a longtime Democratic fund-raiser, had Gov. Gray Davis officiate at his wedding. Goldenberg, the La Habra TV retailer who for years has crowed, “I am the king!” on radio and television ads, once sipped coffee at the Clinton White House.

And Orange County developer George Argyros, who -- along with his wife and his companies -- has given the Republican party $751,096 in soft money since 1991, was appointed ambassador to Spain shortly after President Bush took office.

Still, though large donations can open both eyes and doors within the nation’s insular political circles, they often go unnoticed by voters, said Barbaro.

“Somebody gives money to Gray Davis, Loretta Sanchez or Joe Dunn, that’s big news locally. Someone writes a check for $900,000 to the National Democratic Party, nobody knows about it,” said Barbaro, chairman of the county Democratic party.

“Now it’s a new game. I think it’s going to go a long way to ending the influences of special interests. Of course, they are going to scramble around a try to find a new way around it.”

(BEGIN TEXT OF INFOBOX)

Top 10 Orange County contributors 1991 -- 2002

Contributor: Roland Arnall, Dawn Arnall, Ameriquest Capital Corp., Orange, Ameriquest Capital Corp., Chairman

Amount: $1,246,000

Beneficiary: Democrats

Contributor: Paul Goldenberg, La Habra, Paul’s Big Screen TV

Amount: $900,900

Beneficiary: Democrats

Contributor: Irvine Co., Irvine, Donald Bren, owner

Amount: $810,726

Beneficiary: Republicans

Contributor: Fluor Corp., Aliso Viejo, Fluor Daniel Inc., Fluor Enterprises, Fluor Public Affairs Committee