PALO ALTO, Calif. — Tuesday’s crushing defeat of a sweeping campaign finance measure in California thwarted reform in a state much in need of it. It also put the lie to the conventional wisdom that the Democratic Party is less opposed to campaign reform than the Republicans are.

With absolutely no limits on the size or source of political contributions to restrain them, corporations, unions and wealthy individuals regularly write California politicians in state and local races checks for $100,000 or more — and are allowed to keep the gifts secret for up to six months. The press has documented political decisions favoring the businesses or interests of these large campaign donors.

The system is also tailor-made for a prodigious fund-raiser like Gov. Gray Davis, a Democrat who, three years before he must run for re-election, had amassed a war chest of $14.5 million by Dec. 31 and continues to raise funds.

Proposition 25, a moderate and reasonable reform measure, would have banned corporate contributions and capped other gifts at $5,000 for statewide candidates, while requiring all contributions of $1,000 or more to be immediately disclosed on the Internet. Campaigns that agreed to generous voluntary spending limits would have been given vouchers redeemable for free air time. The use of soft money from the political parties in advertising was to be prohibited.

Though some reform groups scorned Proposition 25 as not going far enough, a surprisingly broad range of reformers backed it, including Common Cause, Senator John McCain and Ralph Nader. The organized opposition included politically active corporations, large unions, the Democratic and Republican Parties and most prominent California elected officials, from Governor Davis on down.

The Republican Party’s opposition was pro forma, consisting mostly of denunciations.

But the Democratic Party and its allied groups financed an active campaign to stop the measure. Unions contributed more than $1.5 million, two Democratic committees provided an additional $600,000, and most of the remaining $1 million or so was obtained through the efforts of Governor Davis. California unions also made the defeat of the measure a primary focus of their phone-bank operations.

Although Democrats have traditionally supported public financing of campaigns, the opposition’s advertising attacked the public-financing provision of Proposition 25 as likely to cause a huge tax increase. (The actual costs would have been less than $2 per Californian.)

The opponents also contended that because Supreme Court decisions have prevented restrictions on millionaires paying for their own political campaigns, it was unfair to impose any contribution limits on other candidates — the very same argument used by many conservative Republicans who favor repealing the $1,000 contribution limit in federal races and allowing unlimited donations.

The endless national debate over campaign finance reform has allowed the Democratic Party to keep its own pipeline of soft money while ostensibly backing reform. Democrats in the House and Senate can vote almost unanimously for the McCain-Feingold ban on soft money, knowing full well that the Republicans will kill it.

The election in California unmasked the party’s opposition to reform.

Rank-and-file California Democrats who want reform are not likely to forget this lesson. The day before the election, several longtime Democratic stalwarts, led by Max Palevsky, a computer executive who had donated $1 million to the Proposition 25 campaign, held a news conference to denounce the cynicism and hypocrisy of their party’s leaders.

Federal campaign reform has been blocked for 25 years, while control of Congress has shifted between the parties.

The sooner we recognize that the establishment wings of both parties are hopelessly addicted to the same financing system, the greater the likelihood that some reform will finally become a reality.

Ron Unz, a Silicon Valley software entrepreneur, was the chairman of the Proposition 25 campaign.