Prop. 54 Sponsor Concedes Passage Is Now Unlikely

SACRAMENTO —  Ward Connerly all but conceded defeat Saturday on Proposition 54, his ballot measure to restrict the government collection of racial and ethnic data, after Lt. Gov. Cruz Bustamante said he would spend nearly $4 million to defeat it and Arnold Schwarzenegger also indicated his opposition.

Bustamante’s move is the result of a strategic shift in his campaign for governor. Hoping to defuse an issue that has dogged him on the campaign trail, his chief strategist said, the lieutenant governor is abandoning plans to advertise his candidacy using the nearly $4 million from labor unions and casino-owning Indian tribes.

Instead, he will spend the campaign cash on television commercials featuring himself denouncing Proposition 54, which will share the Oct. 7 ballot with the recall.

“Gulp,” Connerly said when informed of the decision. A nearly $4-million campaign against his measure, he said, “probably dooms” it. “I’m never throwing in the towel. But I’ve been around the block. There is no way we can match that.”

After weeks of refusing to state a position, Schwarzenegger said Saturday that he has decided to oppose the initiative. That leaves only state Sen. Tom McClintock (R-Thousand Oaks) supporting the measure among the prominent candidates for governor and underscores again the ideological split between the two leading GOP candidates.

Schwarzenegger did not address Proposition 54 in an afternoon speech and news conference in Sacramento, where he picked up the endorsement of the boards of the California Farm Bureau Federation, which represents 88,000 farming and ranching families, and the Western Growers Assn., whose members grow, pack or ship most of the state’s fresh fruit and vegetables.

But he told an aide to Connerly that he opposes the initiative, and he mentioned his position in interviews the campaign granted exclusively to two Sacramento-area reporters.

The disclosure came at the end of a week when race and ethnicity emerged as key issues. As Davis signed legislation granting illegal immigrants the right to get driver’s licenses, Schwarzenegger criticized the measure as a threat to national security and came under criticism from Bustamante as being anti-immigrant. On Saturday, the actor learned that an invitation to join today’s Mexican Independence Day parade in East Los Angeles had been revoked by organizers.

Opposed by top Democrats, health care groups and liberal advocates for minorities, Proposition 54 would limit the ability of government to collect and use racial and ethnic data.

“Free country,” Connerly said when asked about Schwarzenegger’s opposition to the measure. “All I can do is make my case that I think this state is becoming very fragmented with people of color on the one hand, and whites on the other. I don’t think that is good for the state. With people marrying across lines of race and having children, this whole system of categorizing people by race is going to crush under its own weight.”

Still, Connerly, a Republican, was glum about the initiative’s chances. Noting that the state GOP is giving the campaign no money, he said, “The microphone has been taken away.”

His campaign message, he added, is getting “drowned out” by the intense attention being paid to the recall campaign.

Bustamante’s decision on campaign finances, in one sense, will change that: It will be the newly flush anti-Proposition 54 effort, not just the recall campaign, drowning Connerly out.

Bustamante is scheduled to make his announcement about the tribal and labor contributions during a rally today at the Fresno Convention Center.

A campaign camera crew will tape his speech and use it in the television spots against the initiative scheduled to begin airing the week of Sept. 15.

Sen. Ross Johnson (R-Irvine), who sued Bustamante last week to bar him from using the $3.8 million in contributions on his gubernatorial campaign, said he intends to press the suit, charging that Bustamante’s latest plan is “still making a mockery” of the campaign finance law Johnson helped write.

“It stinks to high heaven,” he said. “If the commercials feature the lieutenant governor, then the money is being used to support Bustamante for governor.”

In today’s speech, a text of which was provided to The Times, Bustamante says Proposition 54 is “an attack on our public health system, and it must defeated.”

“No matter how you vote on the recall please join me and the California nurses and doctors in voting no on Proposition 54. It’s more important than politics.”

Bustamante will also say that he has “decided to resolve the questions raised by the Republicans about my campaign finances” by devoting the bulk of his contributions from unions and tribes to defeat the initiative rather than in his gubernatorial effort. He has been criticized for using a loophole in campaign law to accept contributions well in excess of the $21,200 limit.

There are no curbs on what Bustamante can raise and spend to defeat Proposition 54. The U.S. Supreme Court has held that the 1st Amendment permits unlimited spending on campaigns for and against ballot measures.

In an interview Saturday, Richie Ross, Bustamante’s chief strategist, said he was pulling back money earmarked to purchase commercial television time for the candidate’s gubernatorial bid, and would redirect it to the campaign against Proposition 54. As a result, the campaign will spend about $3.8 million to defeat the initiative.

Connerly and Bustamante are both University of California regents -- Connerly was appointed to the board by former Gov. Pete Wilson; Bustamante has a seat as lieutenant governor -- and for a short time they were political allies of sorts. Bustamante accepted a $2,000 donation from Connerly in 1999, but returned it last summer as he prepared to run for reelection and after Connerly had gathered sufficient signatures to put Proposition 54 on the ballot.

Connerly was the lead proponent of Proposition 209, the 1996 initiative to end race- and gender-based affirmative action in California public works projects, college admissions and other areas. Voters approved that measure, just as in 1994 they approved Proposition 187, which sought to end most government services to illegal immigrants.

Democrats nonetheless use both to rally voters, particularly minorities, to go to the polls. Bustamante hopes Connerly’s latest offering will strike similar chords with Democrats, though it deals with an issue that, at least on its face, seems more arcane than illegal immigration or affirmative action.

At the same time, the lieutenant governor hopes to put to rest the controversy that has been swirling for more than a week.

In a maneuver that resulted in the lawsuit and sharp rebuke by rivals, Bustamante in the last two weeks accepted the $3.8 million to place in an account he set up years ago for his 2002 reelection campaign.

State law allows politicians with old campaign accounts to raise unlimited sums for those accounts. Bustamante planned to transfer the money from his old account into his current gubernatorial campaign coffers.

The move would have allowed him to get around new rules that limit donations to $21,200 from individuals, unions, corporations and other entities.

Several rivals in the recall attacked Bustamante over his fund-raising. Newspapers editorialized against it, and Insurance Commissioner John Garamendi, a fellow Democrat, on Friday became the first statewide officeholder to publicly question the wisdom of the move.

“I think it is a political mistake to be engaged in activity that raises this question in a campaign,” Garamendi told The Times. “The risk outweighs [the benefit].”

Bustamante strategist Ross predicted the lieutenant governor’s critics would continue denouncing him for his fund-raising tactics, but said their argument would be weakened.

“Are they going to attack us for using money that we got from Indians to deal with an issue related to race?” Ross asked.

Referring to the plight of Native Americans, he cited a federal policy in the 1950s under which the government tried to terminate smaller bands, particularly in California. He likened that policy to Connerly’s initiative: “You simply declare that a racial minority no longer exists.”

Ross said he spoke to Bustamante on Thursday night about the idea of shifting strategy. That was the night one tribe gave Bustamante’s old committee $1.5 million, a union representing state engineers contributed $700,000 and a second tribe gave Bustamante $300,000 after having donated $300,000 the week before.

Ross and Bustamante’s attorney -- Lance Olson, the state Democratic Party counsel who also helped draft Proposition 34 -- had contended that the law permitted Bustamante to transfer the money.

But although Ross said the campaign’s internal polls found no damage to Bustamante from the issue, the consultant concluded that the lieutenant governor could be “losing the political argument.”

“This is just not an argument we want to have,” Ross said. “It distracts. I don’t need to add to the confusion. We die in a confused argument. We need to keep this [campaign] simple and direct and straightforward. I can’t afford to have this thing go on and on and on, particularly when you have such an attractive opportunity [in Proposition 54] that he feels strongly about and appeals to our base voters.”

Schwarzenegger’s opposition to the initiative was hardly a surprise. Breaking down educational data by race is a key provision of the federal No Child Left Behind Act, of which Schwarzenegger has been an outspoken supporter. The act requires schools not only to show overall progress on standardized tests but to demonstrate that children of every race are making improvements.

“I haven’t read the proposition, but No Child Left Behind clearly requires the collection of student data disaggregated by, among other things, race,” said Sandy Kress, a Texas lawyer who worked with the Bush administration in drafting the legislation, in an interview last week. “No Child Left Behind is pretty clear about this.”

On another front, Schwarzenegger’s invitation to attend today’s East L.A. parade was revoked by the event’s organizer, the Mexican Patriotic Civic Committee, which is based at the Mexican Consulate. The 57-year-old parade starts at 1st and Lorena streets.

Schwarzenegger’s campaign released letters showing that he had been invited -- both Aug. 5, the day before he announced his gubernatorial candidacy, and again Aug. 22 -- to attend the parade and be its grand marshal

Gina Goldman, who sent those invitations, said organizers had asked her to find a celebrity for the parade. When Salma Hayek turned her down, Goldman invited Schwarzenegger.

She said Enedino Aguirre, head of the Mexican Patriotic Civic Committee, told her that sponsors and unidentified members of the Los Angeles City Council had threatened to drop out of the parade if Schwarzenegger participated. Aguirre did not return repeated phone calls seeking comment Saturday.

“The problem was that he’s a politician, that Pete Wilson is supporting him, Prop. 13 -- there were a million reasons,” Goldman said. She expressed anger that organizers “put me in the middle of this.”

At his campaign stop in Sacramento, Schwarzenegger said of the parade: “I was very happy when I was invited -- and then politics got involved.”

Times staff writer Joe Mathews contributed to this report.