Bustamante Ordered to Return Indian Tribe Donations

SACRAMENTO, Calif. – A judge on Monday blocked Lt. Gov. Cruz Bustamante (search) from using millions of dollars raised by an old campaign committee for his recall election bid, even if the money is spent on ads ostensibly opposing an initiative on the same ballot.

Sacramento County Judge Loren McMaster ordered the more than $4 million raised by Bustamante's campaign committee before voter-approved campaign spending limits were in place to be returned to that old account. From there, the money could be returned to donors.

The spending limits took effect after the November election and affect money raised since then, McMaster said.

He noted that there is nothing to prevent the Indian tribes (search) and labor unions that contributed most of the money from spending it independently on Bustamante's behalf if the money is returned to them.

McMaster ruled in favor of Republican state Sen. Ross Johnson (search), a supporter of GOP front-runner Arnold Schwarzenegger (search), who had sued over Bustamante's acceptance of the money.

Bustamante had argued he accepted the money legally and that any legal questions were resolved when he shifted the money from his campaign fund into a separate effort to defeat Proposition 54, a measure scheduled for the Oct. 7 recall election ballot that would ban government from collecting racial and ethnicity data. The money was used for television ads featuring Bustamante arguing against Proposition 54.

McMaster imposed a preliminary injunction blocking that use of the money and ordering it returned to donors, ruling that Johnson had established he will likely prevail and that the harm from letting Bustamante continue outweighs the damage if he is ordered to stop.

The judge noted his order contradicts an opinion by the Fair Political Practices Commission, the state's campaign spending watchdog.

Bustamante campaign consultant Richie Ross said the lieutenant governor has been following the commission's advice. The campaign has been in compliance with the judge's order "for the last two weeks," he said.

He would not immediately say if Bustamante will return any money received from donors above the $21,200 limit under the voter-approved spending limits, and did not say if the campaign will appeal McMaster's order.