Money talks loudly in California election

Now that the “Money Talks” California election of 2010 is in full swing, it’s timely to examine just how loudly the millions of dollars being spent by major corporations at the ballot box are speaking, and what they’re saying.

To recap, this year stands to yield one of the greatest bumper crops in history in self-serving electoral cash.

With the exception of former EBay Chief Executive Meg Whitman, who has demonstrated impressive skills at fundraising from her own pocket ($38 million for her gubernatorial campaign so far), the kings of campaign spending are corporations.


Pacific Gas & Electric continues to outdistance the field, having spent $28.5 million so far on what I like to think of as the “Immunize PG&E from Competition” initiative, or Proposition 16 on the June 8 ballot. By PG&E standards the runner-up, Mercury Insurance, is a piker — it has donated only $3.5 million to what I’ve deemed the “Let Mercury Trash Consumer Protection Laws” initiative, or Proposition 17.

Bringing up the rear but running very strong is the oil industry, which has raised $1.2 million to collect signatures for an initiative, aimed for the Nov. 2 ballot, which would suspend the state’s greenhouse gas restrictions.

The donors include Valero Energy Corp. of San Antonio, $500,000; Tesoro Corp. of San Antonio, $200,000; and Occidental Petroleum of Los Angeles, $300,000, all of which would face higher costs from the new policy. I’m betting their signature campaign will succeed.

Meanwhile, several good-government groups and well-meaning individuals have tried and failed to get reform initiatives on the June or November ballots. The obstacle generally is lack of money to hire the phalanxes of paid signature-gatherers that are a necessity in this sprawling state.

“We had to depend on volunteers, and you absolutely need professional signature gatherers,” says George Lakoff, the UC Berkeley linguist who failed this year in his effort to collect nearly 700,000 signatures to place his proposed California Democracy Act on the ballot. The measure would have replaced the requirement that budget and tax-raising bills pass by two-thirds votes of both legislative houses with simple majority votes.

Lakoff also maintains that his campaign was undermined by a misleading title and summary drafted for the measure by the office of Atty. Gen. Jerry Brown, which he complains made it seem as though the measure was largely about raising taxes, rather than enfranchising the majority. But suing to overturn the summary would cost money too, placing that tactic out of reach.

“Our estimate was that we really needed $10 million, maybe $13 million,” Lakoff told me. “But where’s that money supposed to come from? Corporations obviously wouldn’t make money off this.”

“Everyone cares about their own interests, and they’ll spend a lot of money for their own good,” says former Assembly Democratic Leader Bob Hertzberg, co-chair of California Forward, the bipartisan good-government group that recently dropped its efforts to qualify two measures for the Nov. 2 ballot. Among other things, Cal Forward’s measures would rationalize the budget process by requiring two-year planning and eliminating the two-thirds rule for passing the budget (though not for raising taxes).

“When it comes to the public good, that’s a very hard check to come by,” Hertzberg says. The inflow of corporate dollars drives up the price of participation for everyone else: While Cal Forward was in the signature-gathering stage, the cost soared from 70 cents per signature to $2 — raising the cost of collecting 1 million signatures from $700,000 to $2 million.

This explains how the initiative process has been turned into the big corporation’s sandbox to play in. Are they playing fair? Not by a long shot.

PG&E’s measure would cripple efforts by municipalities to create or expand public power agencies to compete with corporate utilities such as, um, PG&E. It would require a two-thirds vote by taxpayers for any such efforts to inject genuine competition into the electricity business — in effect, giving bruisers like PG&E permanent domination of your power service.

PG&E says its initiative is backed by “a coalition of taxpayers, business, and labor.” Gee, who does that leave out?

In fact, this coalition consists of about a dozen trade and community groups (at least one that told me it had no idea PG&E was behind the measure), a few dozen chambers of commerce and the California Republican Party. This reminds me of the “coalition of the willing” that the Bush administration assembled for the Gulf War, which if you remember comprised the U.S., Britain and a bunch of little countries that the average member of Congress would have trouble finding on a map.

None of these organizations has contributed a dime to the Prop. 16 effort — that’s wholly owned by PG&E. And even though the earnest, nice-looking lady in the utility’s TV commercial assures me this is all about protecting my “right to vote,” PG&E Chairman Peter Darbee gave the game away when he told Wall Street analysts in March that he was tired of having to spend millions of dollars to fend off competition from public power agencies year after year.

So he hit on the initiative as a way to “greatly diminish this kind of activity.” He indicated that he doesn’t see much of a downside in PG&E’s effort to subvert the democratic process. “There’s going to be some flap … between now and June,” he said during the investor presentation. “Presumably, we’ll mend any broken fences after that.” (I am indebted to former California Energy Commissioner John Geesman for tracking down Darbee’s words.)

Then there’s the proposed oil company initiative, which would suspend the greenhouse gas limits until the state’s unemployment rate drops to 5.5% for four consecutive quarters. (It was 12.6% in March.)

There’s reason to suspect that not all the donations to this effort are on the up and up. The initiative committee says on its state disclosure forms that $498,000 of its funds came from the “Adam Smith Foundation” of Missouri.

What’s that? One St. Louis newspaper has tagged it as a front for former GOP Gov. Matt Blunt, while the foundation’s website identifies it as “an advocacy organization committed to promoting conservative principles and individual liberties in Missouri.”

I would love to know more, but the phone listed on its latest income tax return (for 2008) has been disconnected and I got no reply to my e-mail asking for information.

More to the point, in that 2008 return it declared it had $5,326.04 to its name. Where did it get the $498,000? From some oil company looking for cover?

I don’t know, you don’t know, and the initiative committee feels that it knows just enough. “We know where the money came from — it came from the Adam Smith Foundation,” says the campaign’s spokesperson, Anita Mangels.

Could anyone hope for a better system? Spend lavishly, enact your own pet laws and conceal your identity. The political system in California runs like a Swiss clock — if you’re a corporation.

Michael Hiltzik’s column appears Sundays and Wednesdays. Reach him at, read past columns at, and follow @latimeshiltzik on Twitter.