Business groups planning to build $32 million war chest.

WITH the November election four months away, business groups and allied interests have built a $17 million war chest to run campaigns on three key measures. These groups intend to raise at least another $15 million, signaling that this will be one of the most expensive ballots for business in recent memory.

So far, the measure generating the most contributions is Proposition 64, which would restrict the filing of lawsuits under the state's unfair competition law.

The measure's supporters, including a group representing auto dealers, have raised $7 million. They claim that many of these suits are frivolous and cost companies millions of dollars to fight.

Consumer and environmental groups fighting the proposal say unfair competition lawsuits are essential to reining in harmful corporate practices. As of late last month, opponents had not filed any campaign statements.

The measure was placed on the ballot after a sweeping reform package backed by business was watered down in the Legislature last year.

Next in the fundraising derby is the campaign against Proposition 67, which would levy a 3 percent surcharge on all phone bills to fund emergency and related medical care.

Phone companies have led the fundraising of between $5.5 million and $6 million to fight this "phone tax" initiative, according to Todd Harris, spokesman for Californians to Stop the Phone Tax.

Virtually all of that money was raised during the first quarter, before one of the major sponsors of the measure--the California Healthcare Association (a hospital trade group)--backed out.

"Given the fact that supporters of the initiative have been running away from it, we did not need to put as much focus on fundraising in the second quarter," Harris said.

Supporters of Proposition 67 reported raising $2.6 million as of the end of March.

And business groups led by the California Chamber of Commerce have raised $4.5 million against Proposition 72, the referendum on SB 2, the employer health care mandate.

The chamber helped place SB 2 on the November ballot in order to run a campaign against it and thereby overturn the law that former Gov. Gray Davis signed just before last October's recall election.

The measure was once expected to be the ballot's biggest fight for business. While so far that hasn't quite panned out, No on 72 campaign co-chair Jot Condie--who is also president and chief executive of the California Restaurant Association--said that could change.

"We expect that when all is said and done, we will have raised at least $15 million and probably much more than that," Condie said.

Supporters of SB 2 reported raising $177,000 as of March 31.

Wage Commission Disbanded

For years, the California Industrial Welfare Commission was the bane of employer groups. Mandated to review the state's minimum wage laws every two years, the IWC repeatedly put business groups on the defensive, forcing them to continually come up with arguments against raising the minimum wage. In addition, the IWC constantly issued other wage orders, some over the opposition of employer groups.

But as of July 1, the IWC was defunded and will be completely shut down by the end of the summer, a victim of budget cuts and of a dwindling core of support.

While employer groups won't shed too many tears for the IWC's demise, the commission's death knell came not from business but from labor. After repeated attempts to get a minimum wage increase through the IWC earlier this year, the California Labor Federation turned against the commission, saying it had abandoned its mission.

"We didn't think they were worthy of their money because they were not fulfilling their mission," said Labor Federation President Tom Rankin. "They were there to protect low-wage workers ... not to protect business."

While California Chamber of Commerce spokeswoman Sara Lee said the folding of the IWC represented the loss of a forum for addressing key issues impacting business, employer groups did not fight the closure.

It's not the first time that the IWC was shut down. In 1997, Democratic lawmakers cut off funding after the IWC, then stacked with appointees of former Gov. Pete Wilson, refused to consider a hike in the minimum wage. The commission's funding was restored under Davis.

Edwards' Los Angeles Spigot

Likely Democrat vice presidential nominee John Edwards may be from North Carolina, but he has a strong L.A. connection.

The largest single nationwide contributor to all of Edwards' campaigns for federal office--including a 1998 run for U.S. Senate and his presidential run earlier this year--is Girardi & Keese, an L.A. trial lawyer firm. Before he entered the Senate, Edwards was a trial lawyer.

According to a report issued last week from the Washington, D.C.-based Center for Responsive Politics, employees at Girardi & Keese have raised $158,000 for Edwards, led by founding partners Tom Girardi and Robert Keese. That's slightly more than investment house Goldman Sachs' $136,000.

Girardi, the firm's senior managing partner, was traveling outside the country last week and did not return calls.

Staff reporter Howard Fine can be reached at [phone], ext. 227, or at [e-mail].