Bus Wins in spite of itself

Posted: July 23, 2003
About Business Pulse — Printer Friendly version

Denham/Areias 12th Senate District — analysis

Business wins in spite
of itself

— by William E. Saracino

Lead analyst, California Public Policy Foundation Prosperity Project

About Business Pulse — Printer Friendly version

A “business friendly” candidate won last November’s 12th state senate district election in California’s Central Valley — the state’s only competitive senate race last fall — but you would never know it from the level of “business community” support each candidate received.

An analysis of donations in the race show most business dollars flowed to former Democrat Assemblyman Rusty Areias, who outspent his opponent overall by a commanding 70 percent. As an assemblyman, Areias exhibited a slight independent streak, but neither business nor taxpayer groups ever gave him better than so-so grades. His Republican opponent, farmer/ businessman Jeff Denham —Êa political newcomer with no voting record — campaigned on a strongly pro-business, low-tax platform.

As the nearby chart shows, however, Denham’s total business support trailed Areias’, $182,000 to $223,000. Contributions from big business was much more sharply skewed, with Denham receiving 65 percent fewer dollars from that source than his opponent.

In addition, of big business’s $73,500 that went to Denham, nearly half, $35,000, was donated after the election. Considering only those dollars each candidate could spend to help win the race, big business favored Areias $121,000 to $38,500, a ratio of more than 3 to 1.

Denham narrowly edged Areias in donations from the “medium/small business” category, but a markedly pro-Democrat, pro-unfriendly-to-business-candidate trend is again evident here as the size of the business increases. Virtually all of Denham’s $108,500 in this category came from small businesses, which appear to have shut out Areias almost completely.

The lion’s share of the Democrat’s “small/medium” $102,000 came from medium-sized enterprises. This phenomena appeared repeatedly in 2002 races: the smaller the business, the more likely it is to support pro-business candidates; the larger the business, the more likely anti-business politicians are to find support.

In contrast, trial attorneys and labor unions gave exclusively to Areias, either directly or through donations to the Democrat Party, which gave $2.8 million to the Areias campaign.

Elected leaders in both Parties raise a major proportion of the funding that is then spent to support individual candidates. Republican Senate Leader Jim Brulte collected a total of $701,000. Democrat upper house Leader John Burton took in $3,100,000.

Most of the money reported by Brulte comes from predictable GOP givers: business, including some “big businesses,” and Indian gambling interests. There is even a smattering of union dollars thrown in.

But like Areias, Democrat Burton did surprisingly well among large, powerful business interests, notwithstanding his exceptionally liberal and anti-business governing philosophy, shared by most candidates he supports. Burton reported the following among his business donations: Pac Bell ($27,000), Gallo Wineries ($25,000), California Dental Association ($50,000), The Wine Institute ($35,000), Golden West Savings ($25,000), Anheuser Busch ($20,000), California Real Estate PAC ($50,000).

Democrats also showed themselves better organized to get the most from their contributors under election finance laws. Scores of Areias contributors gave maximum donations before the primary and again before the general. Many gave a third time post-election, so Areias received $6,000 or $9,000 instead of the single-cycle limit of $3,000. Few Denham contributors gave more than once.

Areias’ reports also show many more instances of maximum donations given by two or more members of a single family than do Denham’s. The reports indicate a more effective, thorough Democrat Party apparatus, outdoing Republicans by informing contributors who are willing and able to maximize their giving of all legal options available for doing so.

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