Winners, losers emerge in frenzied spending on initiatives

November 8, 2012 1:31:25 PM PST
Multimillionaire activists, big labor unions and major corporations combined to pump more than $363 million into political fights over 11 propositions on Tuesday's state ballot, a California Watch analysis shows.

That's about $20 in political spending for each of California's 18.2 million registered voters.

By law, state ballot initiatives are exempt from the tough donation limits that otherwise apply in California elections.

In contests over proposed tax increases, car insurance rates, criminal justice reforms and political spending by labor unions, donors with deep pockets took full advantage.

Forty-seven donors ? individuals, companies and political committees ? donated more than $1 million apiece on initiative campaigns, a review of campaign finance data provided by MapLight.org shows.

Seven donors each gave $11 million or more.

The unprecedented spending spree was a sign of just how far the 101-year-old California initiative process has strayed from its origins. In the beginning, initiatives were a Progressive-era reform devised to allow ordinary citizens to sidestep a legislative process controlled by monied special interests.

This year, combined spending over the two most hotly contested ballot measures ? Gov. Jerry Brown's Proposition 30, which sought a tax increase to fund public education, and Proposition 32, a conservative attempt to bar unions from making political donations ? topped $195 million, with special interest donors paying much of the freight.

Here, from campaign finance data, are some winners and losers in California's initiative battles:

The winners

Big Labor:?The state's unions went all in for their successful effort to stop Prop. 32, the anti-union measure pushed by the Lincoln Club of Orange County and other conservative groups. Unions spent more than $60 million to block it. Much of the union money went to committees also pushing Prop. 30, the successful Brown tax measure. In addition to the California Teachers Association ($32.5 million), big donations came from the Service Employees International Union ($21.6 million) and the California Labor Federation ($6 million).

A Facebook tycoon:?Chris Kelly, former chief privacy officer of Facebook and an unsuccessful candidate for state attorney general in 2010, gave $2.3 million to Proposition 35, which would toughen prison sentences for human trafficking. Kelly's donation was more than 60 percent of the measure's total budget. It had no formal opposition and won easily.

Agroscience: Proposition 37 would have required special labels on genetically engineered food. The unsuccessful measure, pushed by the organic food industry, drew multimillion-dollar opposition from Monsanto Co. ($8.1 million) and DuPont ($5.4 million), in addition to Bayer CropScience, BASF Plant Science and Dow AgroSciences ($2 million apiece).

The police lobby: The Peace Officers Research Association of California was on the winning side of four measures Tuesday and had only one loss. The association spent $192,000 to oppose the repeal of the death penalty, Proposition 34. Proponents countered with about $8 million, but the measure failed. The group also put $1.5 million into opposing the anti-union Prop. 32, which lost; more than $150,000 to back Prop. 35, the human trafficking measure, which won; and $150,000 to support Prop. 30, Brown's successful tax measure. The cops' only bad bet: $100,000 to oppose Proposition 36, the measure to reform California's three strikes law, which was enacted.

The losers

The Mungers:?The adult children of billionaire Charlie Munger, vice chairman of Warren Buffett's Berkshire Hathaway, emerged as California's biggest donors ? and losers ? of all.

Molly Munger, a Los Angeles lawyer and liberal crusader, donated $44.1 million to her Proposition 38, to raise taxes for public education. The measure lost, while Prop. 30, a competing tax measure promoted by the governor, was enacted.

Meanwhile, Charles Munger Jr., a Stanford physics professor, donated about $36 million, most of it to defeat Brown's Prop. 30 tax increase and to boost Prop. 32, which sought to bar labor unions from making political donations. Prop. 32 also lost.

By way of contrast, each of the Mungers outspent one of California's best-funded political operations, the California Teachers Association. It donated $32.5 million to support Brown's Prop. 30 and defeat Prop. 32.

Out-of-state corporations:?Thomas F. Steyer, a liberal activist and managing partner of San Francisco's Farallon Capital Management, was a big winner with his Proposition 39, the measure to collect more income taxes from multistate corporations that do business in California. Steyer donated $29.5 million of the measure's $31.4 million budget. General Motors, Kimberly-Clark and International Paper put up $45,000 before opposition to the measure collapsed. The state will collect an estimated $1 billion more in taxes as a result.

An insurance billionaire: Mercury Insurance founder George Joseph spent more than $16 million on Proposition 33, his latest attempt to reframe the state's auto insurance laws to allow discounts for motorists changing insurance carriers. Opponents, including the Consumer Watchdog Campaign, said the measure would weaken consumer protections in present insurance law. Opponents spent only about $276,000 on their successful campaign.

Americans for Responsible Leadership:?The Arizona political committee donated $11 million to boost the failed anti-union Prop. 32 and to oppose the governor's successful tax measure, but those might not be the only losses for the group amid allegations that it illegally laundered the money to conceal its source.

Now, investigators are probing how the campaign cash moved to California from a Virginia-based nonprofit, Americans for Job Security, via a third political committee, the Center to Protect Patient Rights.?An official with that committee, Sean Noble, is a Republican strategist with reported ties to Charles and David Koch, Kansas-based GOP megadonors.

California Attorney General Kamala Harris has vowed to continue investigating the affair.

View this story on California Watch

Story courtesy of our media partners at California Watch (A Project of the Center for Investigative Reporting)


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