Gov. Arnold Schwarzenegger broke state law last year when he used a loophole to loan his campaign committee $4 million, a move that prevented voters from knowing before Election Day who would end up paying the governor’s campaign bills, a judge ruled late Monday.
Schwarzenegger will probably face no fines as a result of the ruling, but he will be blocked from paying himself back with the more than $3.4 million he has raised since his election and will have to convert the loans into a personal contribution to his campaign.
The millionaire former movie star contributed an additional $4.85 million in cash to his campaign before the Oct. 7 recall election.
Sacramento County Superior Court Judge Loren E. McMaster said Schwarzenegger’s use of a loophole to avoid a $100,000 cap that voters imposed in 2000 on candidate loans “flies in the face of the express purpose of the law.” He said Schwarzenegger’s approach would allow rich candidates to “evade both the $100,000 loan limitation and the requirement of pre-election disclosure of contributions, while those limitations would apply to candidates of more modest means.”