PAC With O.C. Ties Steps Out of Spotlight

For the better part of the 1990s, the conservative California Independent Business PAC was among the most free-spending political outfits in the Golden State.

But these days, this GOP grizzly is in hibernation.

Phone calls to the PAC, a klatch of four wealthy families led by Orange County philanthropist Howard Ahmanson, now land in the Azusa home of their part-time secretary, her two cockatiels squawking in the background.

The group’s Pasadena office, once a year-round Republican nerve center, is shuttered. Its three full-time staffers and myriad political gofers are pared down to the lone secretary catching stray calls.

Those are telling changes for a group that was a dominant player in state politics, giving more than $9 million in the past five years to conservative candidates and causes. In 1994, it helped Republicans seize the Assembly for the first time in a quarter century.

“They were the paradigm of big money coming into the process to influence elections,” said Tony Miller, a campaign reform activist and former acting Secretary of State. “They fueled the engine that resulted in the Republican takeover.”

Lately the news has been bad for the PAC. It has been buffeted by the state’s new campaign contribution law and brushed by bad press about a surreptitious GOP effort to influence a pivotal 1995 special recall election in Orange County to replace Assemblywoman Doris Allen.

Some conservatives worry that the PAC won’t reemerge as a force unless the courts strike down Proposition 208, the political donation limit voters imposed last November that caps contributions to political groups at $500.

They also say the group’s biggest donors--Ahmanson and his wife, Roberta--seem burned out by the bad publicity linked to the PAC.

“I’m concerned,” said Assemblyman Steve Baldwin, an El Cajon Republican who got more than $200,000 from the group to help him capture his seat in 1994. “These guys seem to be taking themselves out of the ballgame.”

Others say it is hardly so dire, that the group may well reemerge in a new form to help the conservative cause.

“Any suggestion that they’re undergoing some unique or special transition might be a little bit premature,” said Wayne Johnson, a Sacramento political consultant who has run several campaigns backed by the PAC.

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As the Independent Business PAC slumbers, political groups run by teachers, doctors and trial lawyers are gearing up for 1998. They too face strict limits on donations they can collect but should be able to overcome the restrictions by passing the hat among their myriad members.

California Independent Business PAC doesn’t have that luxury. Founded by savings and loan heir Ahmanson and Orange County manufacturer Rob Hurtt, who used his own wealth to campaign for and capture a state Senate seat in 1993, the PAC has always been composed of a handful of wealthy men and their wives.

What it lacked in membership it made up with money. Last year, it contributed $2.6 million to political campaigns in the state. The mighty California Teachers Assn., which has 269,000 members and traditionally gives more than any other group, donated $2.7 million.

With such largess, the Independent Business PAC has virtually rebuilt the statehouse’s Republican caucus in its own image.

Using the fiscally strict practices of the business world, they kept a tight grip on how money was spent and carefully screened candidates, yielding a crop that was mostly white, male, conservative and Christian.

While the Independent Business PAC espoused traditional family values, it sometimes practiced politics with bare knuckles.

Its members weren’t shy about using stealth campaign tactics if necessary. Most notable was the group’s successful efforts in last year’s Republican primary to vault the nephew of PAC member Ed Atsinger, a Christian radio magnate, to victory over maverick GOP Assemblyman Brian Setencich for a Fresno seat.

Former employees are now coming forward to describe tactics the group used on occasion. They tell tales of masquerading as Democrats to infiltrate campaigns and combing trash cans--they dubbed it “dumpster diving”--to gather intelligence on foes.

“What bothers me most about them is they try to portray themselves as these upstanding Christians and yet they will stoop to the most unethical means,” said Mark Jackson, Setencich’s former chief of staff. “It is anything to win, and it is wrong.”

None of the PAC’s current members--Ahmanson, Atsinger, dirt bike magazine publisher Roland Hinz and manufacturer Rich Riddle--returned calls for comment. Their attorney also declined comment.

But they have numerous defenders among the Republican elite.

“To my mind, they came across as ordinary citizens who just felt very strongly about the issues and were financially in a position to contribute to candidates,” said Ron Unz, a Silicon Valley entrepreneur who briefly joined the PAC after an unsuccessful gubernatorial run in 1994. “In many ways they were more like your next-door neighbor than a politician or consultant.”

Hurtt, who broke away after winning a seat in the Senate, said he hopes the PAC leaders will “retain their resolve.”

“They’ve done a great thing for the state of California,” he said. “They’ve proven that a small group of people can get together and make a difference.”

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In the Capitol, Democrats have long groused that the PAC exerted undue influence over conservatives it financed. Republicans counter that the group has done nothing to sway their views, asking nothing in return for the hefty contributions. Meanwhile, they argue, liberal labor unions spend huge sums backing Democrats and hire armies of lobbyists to shape the law.

“The Democrats are vilifying them for doing exactly what the unions have done for the Democrats for years--fund campaigns,” said Assemblyman Robert Prenter Jr., a Hanford Republican and Atsinger’s nephew. “It’s hypocrisy.”

Hurtt was the driving force behind formation of the group, dubbed Allied Business PAC, before it adopted its current moniker in 1995. He recruited the other members with a vision of creating a counterforce to liberal interest groups and yanking the GOP leadership away from moderates seemingly content in the minority.

The PAC launched its first assault on the status quo in the 1992 GOP primary, winning 12 of the 14 open seats against a slate backed by Gov. Pete Wilson and other moderates.

With victory, power shifted to newly anointed Assembly GOP Leader Jim Brulte and the PAC. Republican leaders say Brulte and Danielle Madison, the PAC’s executive director, coordinated on most campaign activities--strategic planning, candidate selection, expenditures--to marshal the GOP takeover of the Assembly in 1994.

Tony Russo, a Republican political consultant, said the group mastered the political chessboard, zeroing in on where to spend time and money. They also became a clearinghouse for information. When it came to knowing who would or wouldn’t run, Russo said, “they did it better than the caucuses or anyone else.”

Lobbyists and other Capitol insiders turned to the PAC for advice about candidates. “The [lobbyists] would ask, ‘Who has the best shot?’ And if Allied was backing them, that became good enough for some folks,” said Jim Camp, a political aide for Hurtt during the early years.

The PAC exerted a measure of control by helping candidates pick political consultants and campaign managers. Many candidates accepted the advice, but some bucked, among them Setencich.

When he first ran in 1984 for a Fresno Assembly seat, the PAC outlined a program that included spies in the opposition campaign and sifting through Democrats’ dumpsters for “campaign intelligence,” said Jackson, Setencich’s campaign manager at the time.

“They even had names for this stuff,” Jackson said. “Eyes and Ears for the spying. The other was called Dumpster Diving and it was done by the Trash Rangers.”

It was routine, former staffers say today. Catherine Rayner, a onetime field worker for the group, said she lied her way into “a lot of Democratic campaigns. They didn’t know what I looked like.”

When the PAC faced off in 1994 against Democrat Assemblywoman Betty Karnette in Los Angeles County, Rayner--who is half Indonesian--used a Latino name to infiltrate, she said. “I collected any information I could get my hands on short of stealing.”

Camp confesses to dumpster diving behind the headquarters of Democrat Steve Peace during a 1994 special election for a San Diego County Senate seat. He recalls toting a garbage bag back to Hurtt’s firm, finding everything from phone messages to key mailing schedules for campaign literature.

“I was sitting on the floor with [campaign consultant] Tony Russo going through a bag of trash,” he said. “There was coffee grounds and all sorts of garbage mixed in with the stuff.”

Russo said he doesn’t remember it that way, “but that is not to say it didn’t happen. I do remember him sending me some stuff . . . from an operation like that.”

Camp said Hurtt did not explicitly direct him to do covert activities. But, he said, the senator would enjoy hearing about them afterward.

“Hurtt got into it,” Rayner recalled. “He was like a little kid. The others were more patrician, more white glove.”

Hurtt, who captured the Senate GOP leadership in 1995, said Camp had a reputation as “a night crawler, a trash man” and did indeed regale him with tales of after-hours political exploits. But he never authorized any of the undercover operations. “Camp has stories about lots of things,” Hurtt said, “all of which I didn’t know whether they were true or what.”

The PAC also sometimes recruited opposing party candidates to water down the Democrat vote in key races, according to former employees and the PAC’s internal documents obtained by The Times.

“This is done all the time,” said Rayner, who was laid off by the PAC in December 1995 in what her bosses described as an effort to downsize. “We were under a lot of pressure.”

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The PAC’s internal documents say several Democrats were recruited to run in the race to replace recalled Assemblyman Paul Horcher, a Republican from Diamond Bar who drew GOP ire for backing Democrat Willie Brown for speaker.

At one point, Camp identified three Democrats to run in the Horcher race, but two were talked out of it by Democrat leaders, according to the internal memos, one marked “please shred after reading.”

The PAC cut checks to pay the filing fee for one of the candidates, said Camp, who was campaign manager for the Horcher recall. But the PAC’s members later got cold feet and the money was retrieved, he said.

“They were paranoid that this would get traced back to us,” Camp said. “Not that it wasn’t legal. They were concerned about the appearance of a conservative PAC giving money to a Democrat.”

The tactic backfired when the group pushed GOP leaders to recruit a stalking-horse Democrat in the November 1995 race to replace former Assemblywoman Doris Allen, the Cypress Republican recalled after conspiring with the Democrats to become speaker. Three GOP field staffers have pleaded guilty to misdemeanor charges in the case and a fourth is on trial in Orange County.

Some GOP leaders say the PAC’s wealthy members are being unfairly tarnished for the tactics of their staff. They contend Ahmanson and the others were never fully informed of the effort to recruit a decoy Democrat in the Allen recall and were upset when it became a scandal in the press.

They also say the group acted quickly to mete out punishment. Rayner was let go, and Madison “had her leash shortened substantially” during the 1996 campaign season, one GOP official said.

The episode also prompted the group to adopt a more hands-off attitude toward campaigns, some Republican officials say. Instead of interviewing every candidate and helping steer the party’s election strategy, the group took a less activist approach in 1996.

Part of that change also had to do with personalities. With Allen sacked, hometown Assemblyman Curt Pringle (R-Garden Grove) captured the speakership in January 1996. Republicans say Pringle developed a good relationship with the Ahmansons. Madison, they say, was pushed to the sidelines.

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Meanwhile, the Independent Business PAC’s donations, though still substantial, amounted to a smaller slice of a bigger pie. With the speaker’s gavel in hand, Pringle gained fund-raising clout his predecessors in the GOP leadership hadn’t enjoyed.

“The PAC was the big dog in the playground in 1992 and ‘94, but when the Republicans had the majority in 1996, they weren’t,” said Chris Jones, a Sacramento political consultant. “They went from being the biggest source of funding to simply being one of many big sources.”

Now with contribution limits, the PAC’s prognosis is grim. But it isn’t dead yet.

An October court test is set for Proposition 208. If it is slashed, the California Independent Business PAC could go back to business as usual.

Even if the law remains as it is, some loopholes remain.

State regulators may allow unlimited contributions to PACs if the money goes for ballot measures and not candidates. Under that scenario, California Independent Business PAC might be able to remain a player on some of the more substantial issues of the day.

Under a new state ruling, wealthy donors can also still raise unlimited money through so-called independent expenditure campaigns, but that ruling is under attack by campaign reformers and could be overturned in the coming months.

Democrat leaders hardly expect Ahmanson and the rest to just disappear.

“They are the backbone of Republican Party finance in California, or certainly were in 1994,” said Senate Leader Bill Lockyer (D-Hayward), an arch-foe of the group. “They’re wealthy and they’re political. You have to consider they could reemerge.”