There was quite a lively and lengthy discussion about Santa Monica City Council election financing during last Tuesday’s council meeting.

At issue was a proposed raise of the maximum allowable individual campaign contribution to City Council candidates to $400 from the current $250 and adding an indexed adjustment based on the Consumer Price Index every five years. Council approved a $325 limit.

This is sore point for many neighborhood leaders who claim increasing the limit would allow more money from non-Santa Monica interests to pour into council campaign coffers. I say that sword swings both ways.

The $250 limit was established in 1992 and hasn’t even kept up with inflation. The proposed amended ordinance stated, "decisions of the United States Supreme Court and lower courts have invalidated campaign finance restrictions like Santa Monica’s on First Amendment grounds; and … based on this development in the case law, the City Council has determined that Santa Monica’s contribution limit must be revised, in order to maintain its constitutionality."

In other words, if City Hall didn’t raise the maximum individual donation limit, that part of election law could be challenged and quite likely invalidated — removing all limits on individual donations to council candidates. It’s an important fact that seems to have escaped advocates for the $250 limit.

Donations directly to council candidates come primarily from one of two sources: (1) friends and family or (2) entities that have a financial interest or want to or do business in the community and are looking to curry political favor.

The Transparency Project, a citizens coalition that tracks and reports on local campaign expenditures, issued a statement last week that said, "An average of 64 percent of donations to current council members comes from donors who don’t live in the city … Each council campaign differs in percentage of donations from outside Santa Monica, ranging from a high of 80 percent to a low of 43 percent …”

The project disclosed that donations from outside the city are larger, on average, than Santa Monica donations. A total of 804 out-of town donors donated the maximum amount compared to 256 local donors.

Big money and special interests have many ways to get around the limit such as asking family, friends, employees, suppliers, associates and others to pony up $250 each.

For example, employees, their spouses and other family members associated with Texas-based, mega-developer Hines, its law firm and financial partner made numerous $250 contributions totaling thousands of dollars to a number of council candidates in 2010. Hines wants to develop the former Paper Mate site on Olympic Boulevard at 26th Street.

Four members of the Gorby family, behind a proposed 230-room, 81-foot-tall hotel at Wilshire Boulevard and Seventh Street, donated $250 each (total: $1,000) to a number of successful “pro-development” council candidates. Their hotel also needs an approved development agreement from the council.

Although it is vigorously opposed by neighbors because of height, density and traffic concerns, how do you think those council persons who accepted Gorby money will vote?

Another end run is through independent or controlled committees such as Santa Monicans for Renters’ Rights, Santa Monica Democratic Club, local police, fire and municipal employees unions, Community for Excellent Public Schools and other special interest groups such as Santa Monicans for Quality Government, which is financed primarily by a hotel and the usual developers.

There are no restrictions on how much an entity can donate to an independent committee supporting a candidate or slate of candidates.

Money buys elections because a viable council candidate must raise enough funds to do at least two citywide mailings. It’s the only sure way to get a message directly into the hands of voters. These mailings can easily cost $50,000 each.

Coupled with mailings and support from independent organizations such as SMRR, public safety unions, school and environmental groups, etc., a candidate’s exposure to voters multiplies thus increasing credibility and electability.

Incumbents also have a distinct advantage. They are better connected with deep pocket donors, and are generally more successful at fundraising and being re-elected.

School board candidates have no donor limits. There’s also more turnover in school board members. The turnover may have nothing to do with contribution limits, nevertheless it appears the “influence buying” factor is not a big issue in school races and therefore they’re more democratic.

Many residents are fearful out-of-town interests are controlling City Hall — a legitimate concern because the policies or decisions that enrich deep-pocketed campaign contributors may not benefit residents and actually foster negative effects.

It’s impossible to keep money out of politics. However, knowing who is buying who and why can offset the big contributions. It’s why some council members in January energetically opposed having public disclosure reports available at council meetings.

Perhaps, the best solution is organizations such as the Transparency Project and citizen watchdog groups who will sound the alarm when something begins to smell. And, of course, an alert local press who will doggedly follow the money trail.

Bill can be reached at mr.bilbau@gmail.com