Ron Unz

Software entrepreneur Ron K. Unz, the Silicon Valley millionaire who led the successful campaign to end bilingual education in California’s public schools last July, has a new crusade: campaign-finance reform. While campaigning for the anti-bilingual initiative, Proposition 227, Unz says he was shocked by what he calls California’s “wild, wild West” electoral system. Though the initiative passed with 61% of the vote, Unz found his own $750,000 contribution to “English for the Children” exceeded by a $1.5-million donation from Spanish-language network owner A. Jerrold Perenchio to defeat the proposition. Unz contends that Proposition 227 was also stung by statewide slate mailers, official-looking mock ballots, that solicited paid endorsements from the anti-227 campaign.

Teaming with Democrat Tony Miller, former acting secretary of state, Unz has proposed a complicated series of the most sweeping state campaign laws in years. The bipartisanship of the Unz-Miller plan reflects the growing national consensus on the need for campaign reform, punctuated by the defection last week of five Republican members of the House of Representatives from party leaders in an attempt to force a vote on a long-stalled measure. Unz’s proposals, which he calls the “California Voters Bill of Rights,” would limit individual contributions, subsidize direct-mail advertising and regulate advertising on the Internet, radio, television and newspapers. The Unz-Miller proposal would also provide campaign matching funds, increase disclosure requirements, ban corporate donations and establish voluntary spending limits--$6 million for initiatives and $16 million for gubernatorial campaigns, including primaries and the general election.

That’s not all: The founder, president and CEO of a Palo Alto-based financial services software company (he no longer oversees daily operations) seeks to establish a new method of redistricting, overseen by a commission of nine appointed retired judges. There’s also a requirement that candidates liquidate campaign funds after each election and give 50% of the money to the state’s general fund. The Unz-Miller initiative, which now exists as four separate potential ballot items, needs 670,000 signatures to put the “California Voters Bill of Rights” on the March 2000 primary ballot.

The political maverick first captured attention when he ran a surprisingly strong primary campaign against then-incumbent Gov. Pete Wilson in 1994. Unz also irked GOP leaders that year when he publicly opposed the successful anti-illegal immigration initiative, Proposition 187.

Having returned from meetings with key GOP leaders in Washington, where he pitched campaign-finance reform to wary Republicans, Unz is exhausted. Sinking into a chair at a Glendale coffee shop, the unmarried, 37-year-old theoretical physicist with degrees from Harvard, Cambridge and Stanford universities has come fully prepared. His responses are rapid and he delivers them as if their rightness is self-evident. The political father of Proposition 227 has returned with a new quest: the most sweeping regulation of California’s elections in years.

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Question: Do your initiative’s proposals violate an individual’s free speech by restricting the right to spend money?

Answer: Individual rights have been violated on the federal level for 25 years.

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Q: Does that justify violating rights on the state level?

A: It depends on whether it’s really a violation of rights. If you’re talking pure individual rights, why not allow someone to give a million dollars in exchange for the elected official doing what the donor wants? In some sense, that is a violation of individual rights. What we have now is, more or less, bribery under a different name.

Here’s an example: A corporation has a fiduciary responsibility [to make] profits. If a corporation gives tens of thousands of dollars to an individual candidate, the executives, if they’re acting lawfully, have to be getting something in return. It’s their fiduciary responsibility to get something in return.

We should try to set up a system that, as much as possible, produces a reasonable political playing field, where different candidates and their ideas can compete for votes. The larger and more comprehensive government is, the more it controls the goods in society, the more it decides which company wins and which company loses, which Indian casino exists and which Indian casino gets closed down, the more people have an incentive, either directly or indirectly, to influence government policy. It would be better to shrink the size of government and decrease their leverage over the economy.

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Q: Many states already have campaign-finance laws. Where’s the evidence that these laws result in less corruption?

A: It’s more evidence in the other direction. California’s one of the very few states that [does not prohibit] unlimited contributions, and there’s a lot of evidence that government policy is affected.

Look at Proposition 9, where the utility companies spent $40 million to defeat the utility-rate-cut initiative. They ended up [paying consumer reporter] David Horowitz to do TV commercials saying he opposed [the proposition].

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Q: Is there any evidence that state campaign-finance laws work?

A: I don’t know. I’m not an expert in how these laws have been implemented in other states. On the federal level, at least until recently with the soft-money loophole, you don’t have the same thing going on in terms of federal influence.

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Q: How do you account for the losses of big spenders Michael Huffington, Steve Forbes, Ross Perot and yourself in 1994?

A: I was outspent 4 to 1, so, in my case, that shows that dollars aren’t the only consideration.

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Q: Then, is money the chief determinant of politics, as your proposals imply?

A: Not 100%. The best recent example is Al Checchi. If Prop. 208 [the approved campaign-finance initiative blocked last year by a federal judge], where contributions were limited to $500, had been in place, Al Checchi would be the governor of California. Under Prop. 208, Gray Davis could not have raised that money, and he would have lost. There’s no way he could have beaten Al Checchi.

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Q: Your initiative proposes increased regulation of the Internet, TV, radio, newspaper and direct-mail advertising, including the establishment and control of candidate Web sites by the secretary of state. Candidates would have their own Web sites, but the secretary of state would have a site for each campaign. Doesn’t this regulation violate freedom of speech?

A: That’s not a violation of free speech. Under current law, if you run a TV ad, you have to say which candidate paid for it.

Just as regular advertisements sometimes can be given reasonable guidelines and restrictions by government agencies that regulate commercial free speech, political free speech should be regulated to disclose whether something’s an advertisement or not.

Take slate mailers. People are receiving things in the mail that look like they are official party mailings that say these candidates have, in effect, been endorsed by the Republican or Democratic Party. Those endorsements are paid for. Forcing people who are sending out paid endorsements to indicate the endorsements are paid for, and not based on the person’s ideas or beliefs or policies, is reasonable.

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Q: You’re defining the terms under which a candidate may exercise freedom of speech, aren’t you?

A: I’m saying there must be some restrictions on freedom of speech to prevent political fraud. Certain people have such strong philosophical principles that they would argue even if the net result might be a less corrupt system, they couldn’t tolerate the means used to achieve that end.

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Q: Your proposal limits individual campaign contributions to $5,000. Isn’t the donor who gives $ 5,001 exercising free speech?

A: We’re trying to decrease corruption and the appearance of corruption.

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Q: Are you saying individual contribution above $5,000 is inherently corrupt?

A: It’s a continuous scale. If you put the contribution limits too low, the courts will strike it down and you can’t run viable campaigns in California. It’s a trade-off.

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Q: Why are you promoting campaign-finance reform?

A: During the 227 campaign, we were approached by the slate mailers. They asked for money in return for their endorsement, and I don’t believe in paying for endorsements. They ended up being bought by the other side. Our initiative was opposed by virtually every slate in the state, including conservative Republican slates.

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Q: Voters still passed 227. Why not let the voter beware?

A: Most voters don’t care about politics. We’re making it easier for them to get information. . . . If all this stuff is up on the Web, you click on the Web site and find it.

Under the current system, contributions are reported every three months. During one of those blackout periods [in the 227 campaign], we didn’t have time to react to opponents’ TV advertising. We didn’t know where their money was coming from. Two weeks before the election, a report comes out that the bulk of the other side’s money is coming from one individual: A. Jerrold Perenchio. He owns the Spanish-language TV network Univision. If his ratings drop one point, he loses hundreds of millions of dollars in net worth. If children learn English in school, they’ll watch less Spanish-language TV when they grow up.

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Q: Would your proposal have prevented his actions?

A: No. But we would have known that day.

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Q: Are you removing corruption if politicians retain control over subsidies, grants, contracts and regulations, whether on a state or federal level? Won’t a business owner still need to curry favor with politicians?

A: It’s the balance of power. A politician looks for two things: money and votes. They’re supposed to be looking more for votes and less for money. I’m trying to shift the balance of power away from the money. I’m not saying we’re fixing all the problems in the current system.

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Q: Your initiatives propose major changes in government. Does your brand of populism circumvent a real debate of ideas?

A: I don’t think so. Initiative campaigns are useful. Win or lose, they sometimes effectively focus attention, media coverage and analysis on an issue that’s been ignored. Take bilingual education. Our initiative got more media coverage focused on the issue of bilingual education--whether it worked, what it was, what it meant--in one year than had happened in 30 years. A lot of the abuses in our current system of campaign finance or campaigning are very much ignored by the media. I’ll bet that right now in California only about 5% of the population knows what slate mailers are and how they operate. I’ll bet by the end of this campaign, a lot more people will know about them.

This campaign initiative is ironclad constitutional. If people vote for it, it will be enacted, it will change the nature of the political system in California and it will be a useful example for national election reform.

When you look at California in the last 15 or 20 years, I would argue most of the most important changes that have taken place in state law, either for good or for ill, have been through the initiative process. The state legislature is so deadlocked they never get anything done. They can’t even pass a budget on time.

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Q: Fundamentally, doesn’t an individual have a right to contribute money to a candidate or a campaign that shares her or his philosophy?

A: The individual can [contribute] through independent expenditure efforts. If you personally, as an individual, say, “I like [state Atty. Gen.] Bill Lockyer so much that I’d like to give a million dollars to support his candidacy,” you are constitutionally protected by the Supreme Court. Under my initiative, you produce the TV commercials, you send out the mail, you do whatever on behalf of any candidate. You simply can’t coordinate with that candidate’s main campaign.

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Q: Where is the evidence that your proposals prevent corruption?

A: Evidence in what sense? Many of the provisions we’re talking about have not been implemented in this way in other states yet. For example, we’re proposing subsidized mailing privileges. That is a cost-effective way to allow all candidates to get their message to voters. One of the best ideas in our initiative is requiring every radio, television or other type of advertisement to be posted on the Web by the secretary of state within 24 hours in a multimedia format.

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Q: Who pays?

A: The state. It’s very cheap. All a candidate has to do is e-mail a copy of the ad to the state. The state probably automatically puts it up on their Web site, and anybody who has a PC can see every candidate’s radio and TV commercials. Candidates often send entirely different messages to different voters. Direct mail is probably the worst example: A candidate might send out a mailer saying, “I’m liberal,” to one group of voters and at the same time they send out another mailer saying, “I’m conservative,” to a different group of voters. They’re saying all things to all people.

Under our initiative, you can’t stop candidates from lying--that’s freedom of speech--but you can require those contradictory lies to be posted side by side on a Web page so rival candidates and the press can say which candidates are being honest. That’s a very important innovation that has not been tried elsewhere.

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Q: What do you personally have to gain from passing this initiative?

A: The satisfaction of fixing a major problem in society.