Drug Makers Shatter Campaign Records

The nation’s drug makers, shattering spending records on California initiative campaigns, have poured $76.5 million into television ads, mail and other activities to persuade voters to embrace their cause on the Nov. 8 ballot, reports filed with the state Thursday show.

The pharmaceutical industry’s spending exceeds the $65 million that Indian tribes spent in 1998 in an effort to legalize gambling on their reservations. And it approaches the $84.7 million that drug companies have spent directly on federal campaigns since 1990, according to the Center for Responsive Politics in Washington, D.C.

The drug manufacturers’ main opponent in the lopsided fight over discounted medicines for low-income Californians is organized labor, which has spent $503,375 on get-out-the-vote efforts and other campaign activities. Labor has aired no ads and made only passing mention of its position on the measure in mailings to voters.

The pharmaceutical industry is running a joint campaign for Proposition 78, its preferred way to cap the cost of their products, and against Proposition 79, organized labor’s version.

Proposition 78 would make discounts from pharmaceutical companies voluntary and provide them to as many as 6 million Californians who are without coverage. Proposition 79 would cover as many as 10 million people and permit the state to stop doing business with companies that declined to discount their prices.

The drug makers’ $76.5 million “is a really astonishing expenditure of money to preserve the ability to price-gouge,” said Beth Capell, a labor lobbyist and healthcare specialist opposing Proposition 78 and backing 79.

A drug industry campaign representative declined to comment.

Altogether, campaigns for and against the eight initiatives on the Nov. 8 ballot have raised more than $230 million and spent more than $200 million, according to the campaigns’ reports, filed with the Secretary of State’s office. The reports do not include money raised or spent since Saturday.

Most public attention has focused on the package of four initiatives embraced by Gov. Arnold Schwarzenegger and opposed by organized labor and Democrats. But the pharmaceutical industry’s heavy spending has implications beyond California.

Larry Noble, director of the Center for Responsive Politics, said drug makers would not be pouring such large sums into the race unless they expected to profit by increasing business. He also said the industry is making clear to would-be opponents in California and across the nation: “Don’t mess with us.”

“It is a scorched-earth policy,” Noble said. “Candidates raise a lot of money to scare off opponents. This is the same type of policy.”

Schwarzenegger called the special election to promote his initiatives: Proposition 74, to make it harder for teachers to obtain tenure; Proposition 75, to restrict public employee unions’ collection of money for political campaigns; Proposition 76, to restrain state spending and give governors more power over the budget; and Proposition 77, to strip lawmakers of the power to draw legislative and congressional districts and turn the task over to retired judges.

In addition to placing Proposition 79 on the ballot, labor gathered signatures for Proposition 80, a measure to increase regulation of the electricity market. Unions and consumer groups have spent $249,000 on the measure, while a handful of independent energy companies and other businesses have spent $2.15 million opposing it.

Another measure, Proposition 73, would require parents to be notified before minors obtained abortions. Foes led by Planned Parenthood and other abortion rights groups reported spending $1.12 million. Proponents’ reports had not been filed at press time.

Schwarzenegger reported having spent $32.5 million from his main initiative fund to promote his four measures and several million more from another account. Altogether this year, for all of his causes, he has raised $42.8 million. In addition, he has given his campaign $4.25 million from his own pocket.

Schwarzenegger reported spending at least $20.2 million on television commercials between Sept. 25 and Oct. 22, the period covered by the latest reports. Much of it was spent on air time in the Los Angeles area.

During that period, the campaign paid $2.15 million for air time on KABC, $1.9 million at KNBC, $868,000 at KCBS, and $743,000 at Univision affiliates statewide. The campaign reported no air time purchases on network affiliates in the Bay Area, where the governor’s support is weakest.

The California Teachers’ Assn., the 330,000-member union that represents public school teachers, has spent $54.01 million on the special election campaign. The bulk of that money has come from dues imposed on its members, but the National Education Assn. has given $10 million to its California affiliate.

The teachers’ union has given much of its money -- $17 million -- to the Alliance for a Better California, a coalition of labor unions opposing Propositions 74, 75 and 76. It has spent directly on each of the measures, giving $13.5 million to defeat Proposition 76, $12 million against Proposition 75 and $7.4 million to oppose Proposition 74.

Labor has spent more than $35 million fighting Proposition 75, the union dues measure.

Assembly Speaker Fabian Nunez (D-Los Angeles) and Senate President Pro Tem Don Perata (D-Oakland) are leading the effort to raise money to defeat Proposition 77, the redistricting measure. With congressional members, the Democratic legislative leaders have raised $8.8 million to oppose it.

The Yes on 77 campaign reported spending $4.7 million.

Until Thursday, Nunez and Perata were not required to name donors because of holes in disclosure laws. Perata disclosed that he had collected $90,000 from Philip Morris U.S.A., the world’s largest cigarette maker, $50,000 from a state employees union, $50,000 from the wine and alcohol industry and $35,000 from gambling interests.

Nunez disclosed receipt of $100,000 from Southern California Edison, a utility that has an extensive lobbying operation in Sacramento. Eight healthcare companies, most of which benefit from the current workers’ compensation system, gave $25,000 each.