Liquor Industry to Comply With Ruling on Ads

SACRAMENTO —  Under pressure from the state’s Fair Political Practices Commission, alcoholic beverage interests agreed Thursday to revise their political advertisements so they disclose that their major backers are beer, wine and liquor interests.

Lawyers for the industry said the radio and television ads opposing Proposition 134 and supporting Proposition 126 will be re-edited to include the financing interests. Proposition 134, backed by health and law enforcement groups, substantially increases beer, wine and liquor taxes. The industry’s Proposition 126 only modestly increases the taxes.

“We’re going to fully comply with the FPPC’s order even though we don’t agree their order is legally correct,” said campaign spokesman John Jervis.

The industry’s decision came as the controversy over political advertisements that fail to disclose their true backers heightened with several campaigns filing lawsuits and others making formal complaints to the commission, which acts as the state’s political watchdog.

The controversy erupted this week when the alcohol industry, through its political organization, Taxpayers for Common Sense, used an apparent loophole in the state law to avoid disclosing its backing of the commercials on 126 and 134. Although the law generally requires that the disclosure be made in ballot measure advertisements, lawyers contended full disclosure could be avoided if the content of the ad dealt equally with two initiatives.

However, the commission ruled Wednesday that the industry had to make full disclosure because it was not dealing with two initiatives as set by the law but with an initiative, Proposition 134, and a measure placed on the ballot by the Legislature, Proposition 126.

Once the alcohol industry’s ads hit the airwaves, other campaigns moved quickly to air similar commercials. The commission has said it will examine those ads but has yet to make any additional rulings.

Opponents of Propositions 131 and 140, measures limiting the terms of lawmakers, aired spots featuring actress Angela Lansbury that failed to show major financing was being provided by incumbent legislators and political committees organized by Assembly Speaker Willie Brown (D-San Francisco) and Senate President Pro Tem David Roberti (D-Los Angeles).

Political advertisements by supporters of Proposition 130, an environmental measure, omitted identifying their prime backer as millionaire investment manager Hal Arbit. The ads also mentioned Proposition 138, a rival measure backed by the timber industry.

And most recently, anti-tax groups began running commercials on Propositions 136 and 137 without naming the alcoholic beverage industry as a major financial backer. Proposition 137 requires a public vote on any changes in laws governing initiatives and Proposition 136, among other things, rewrites tax law to mandate a two-thirds vote by the people to raise special, or single-purpose, taxes. If Proposition 136 passes it could nullify the vote on Proposition 134, the tax measure opposed by the alcohol industry, providing that proposal does not receive a two-thirds vote.

On Thursday, Atty. Gen. John K. Van de Kamp, an author of Proposition 131, filed suit against the campaign backed by Brown and Roberti and against television stations KGO in San Francisco and KCBS in Los Angeles. The lawsuit complained that the ads as aired by the two stations were illegal because it was not the intent of the law to provide any loophole to avoid disclosure. Furthermore, the suit said, even allowing for a loophole, the ads violated the law by devoting a majority of their content to Proposition 131.

Shortly after the suit was announced, KCBS officials said they were suspending broadcasting of the advertisement until the legal questions are resolved.

“We believe the Truth in Initiative advertising act should not apply to broadcasters, but rather to committees and individuals who act in support of or opposition to initiatives,” said Robert Hyland, station vice president and general manager. He said he was confident of a court victory because “the First Amendment would prohibit its application to broadcasters.”

At the same time, opponents of Proposition 136 filed a complaint with the commission contending that about 85% of the ads for that campaign were devoted to 136 and only 15% to Proposition 137.

“They (the proponents of Proposition 136) are masquerading as ma and pa homeowner who are being overtaxed when really they are ma and pa Coors who don’t ever want to pay their fair share of taxes,” said Steve Hopcraft, of Californians Against Initiative Fraud, the campaign against 136.