Gavin Newsom can raise unlimited money in a recall. Candidates to replace him can’t
Gavin Newsom and other political candidates typically face campaign finance limits aimed at curbing rich donors’ ability to sway election results.
But that won’t be the case later this year, when Newsom faces a likely recall election.
Under the campaign finance rules that govern recall elections, Newsom can raise unlimited amounts of money to defend himself, a perk that could help the embattled governor and will provide an avenue for interest groups to pour money into his defense.
It also opens the door to unlimited spending on negative ads against him.
But individual candidates who want to tout their own credentials to become governor will face the ordinary limits.
Recall money rules
Newsom will face different finance rules than the others because of the unique, two-part structure of recall elections in California.
If recall supporters trigger an election later this year, California voters will have to answer two questions: 1) Do you want to recall Newsom? And 2) If the recall succeeds, who should replace him?
California law treats the first question like a ballot measure, where unlimited spending is allowed.
In the Golden State, ballot measures can generate tens of millions in spending from individual donors.
For example, in 2018 a handful of dialysis companies funded a more-than $111 million campaign against a ballot measure that would have capped their profits. Last year, gig-economy companies Uber, Lyft and Doordash spent $160 million to pass a measure that allows them to treat their drivers like independent contractors.
Rose Kapolczynski, a veteran Democratic political consultant, said politicians facing a recall are in a unique situation and need to be able to make their case to voters on a short timetable. For Newsom, the recall will likely come just before he would run for reelection anyway.
“He can both argue against the recall and make the case that he’s done a good job and deserves to stay in office, and then he can roll right into a reelection campaign, where he will again argue he deserves to stay in office,” she said. “The unlimited contributions mean his best friends and strongest allies can write large checks like we see in ballot measure campaigns.”
California law treats the second recall question like a more traditional race for elected office. That means the candidates running to replace Newsom can’t raise more than $32,400 from individual donors.
Marty Wilson, who oversaw finances on Republican Arnold Schwarzenegger’s campaign to replace Democratic Gov. Gray Davis and now works for the California Chamber of Commerce, said the rules favor Newsom.
“Assuming this thing qualifies, Gov. Newsom will have a huge cash advantage to fight the recall because there are no contribution limits for the recall question,” Wilson said.
The rules for the other candidates are more complicated. Replacement candidates can raise unlimited money to campaign on the first question — whether Newsom should be recalled. But to campaign for themselves as replacements, they’ll have to set up separate fundraising committees subject to contribution limits.
In 2003, that’s what Arnold Schwarzenegger did. He had two committees — a “Total Recall” committee that supported the Davis recall, and a separate candidate committee dedicated to promoting the movie star as Davis’ replacement.
Unlike Schwarzenegger , however, the candidates seeking to replace Newsom aren’t as well known as the “Terminator,” meaning they’ll need to raise a lot of money to boost their visibility among voters, Wilson said.
“It does put potential replacement candidates at a disadvantage compared to Newsom,” said Stephen Puetz, campaign manager for Kevin Faulconer, a former San Diego mayor running to replace the governor.
The rules could give Newsom’s campaign much more control over its message than in a traditional gubernatorial race, when a candidate’s official campaign can’t communicate with big spenders running independent campaigns. In 2018, Newsom attracted millions of dollars in independent efforts to support him, including from labor unions and health care groups.
At least one independent effort has cropped up to defend Newsom against the recall, but future donors can write big checks directly to Newsom’s campaign.
“It provides an opportunity for the governor’s defense to be much more efficient,” former Schwarzenegger aide Rob Stutzman said.
It’s not all good news for Newsom. Although specific replacement candidates will face limits, groups campaigning generally to oust Newsom can also raise unlimited amounts of money.
If they raise enough to launch tens of millions of dollars in negative ads, that could really hurt Newsom, Stutzman said.
“It really could go either way, and it’s really difficult to forecast at this point,” Stutzman said.
Big donations already flowing
Although the recall still hasn’t officially qualified for the ballot, the money race is already heating up.
Newsom’s anti-recall campaign says it raised more than $538,000 in its first 48 hours from online donations. The campaign says 5% of its donations are from out-of-state contributors, who represent all 50 states. That’s on top of $350,000 the California Democratic Party gave when the campaign launched.
Newsom was already sitting on lots of campaign cash before launching the anti-recall effort last week.
Newsom’s ballot measure committee had $460,000 in cash at the end of last year, and United Healthcare Services has already contributed another $100,000 this year.
At the end of last year, Newsom’s 2022 reelection campaign had $20 million in cash, most of which was left over from his 2018 run when he raised more than $50 million. And this year, donors including Lieutenant Gov. Eleni Kounalakis’ family, Netflix founder Reed Hastings and former Google CEO Eric Schmidt have already given $1.3 million to his reelection campaign.
Meanwhile, the Republican Governors Association has launched its own pro-recall fundraising effort. Arizona Gov. Doug Ducey, who chairs the association, and executive director Dave Rexrode had a call with major donors Wednesday night, according to the association.
The Republican National Committee has also committed $250,000 to the race.
Other groups supporting the recall effort have raised more than $3 million, but it’s not clear how much of that money is left after they spent part of it gathering signatures to place the recall on the ballot.
Faulconer, a Republican, has reported $1.3 million in donations since he opened his exploratory 2022 committee in January. Former Republican Congressman Doug Ose hasn’t reported any contributions since announcing his candidacy last week. Republican businessman John Cox put $2 million of his own money – which is not subject to limits - into an exploratory committee this year, and raised another $440,000.
Potential for influence — and big fundraising totals
The lack of contribution limits also gives big donors an unusual opportunity to curry favor with the embattled governor.
Newsom has long said that he doesn’t let campaign donations influence his policy decisions, but he’ll likely need support from major California labor unions to defeat the recall, Stutzman said. In 2018, labor unions spent millions on independent efforts to elect Newsom. This year, they can make those contributions directly.
“It’s the reality of the nature of politics that the governor is going to be more sensitive than ever to constituencies of his who can spend a lot of money,” he said, although he noted that’s a reality that affects all politicians, not just Newsom. “It’s generic dynamic. If it was a Republican, they’re likely to be more attentive to businesses than they otherwise would have.”
Kapolczynski said Democratic organizations’ main motivation in the recall will be blocking a Republican from becoming governor, but they’ll also want to let Newsom know they’re on his side.
Usually, donors do that by giving the maximum contribution allowed by law to a politician’s campaign. But with no donation limits, the pressure to give more will be much higher.
“A donor won’t be able to say, ‘oh I’ve already given the maximum,’” she said. “They’re going to be pushed throughout the recall to do more.”
This story was originally published March 22, 2021 at 5:00 AM with the headline "Gavin Newsom can raise unlimited money in a recall. Candidates to replace him can’t."