Big spenders lose in California prop battles


Proposition 16, backed by PG&E, dealt with local governments getting into the electricity business. PG&E conceded the very tight race. The "no" votes beat "yes" votes by less than 17,000 votes.

Proposition 17, the insurance initiative, lost. 52 percent of voters said "no" and 48 percent said "yes."

More than $40 million was spent by PG&E and more than $16 million was spent by the auto insurance companies in two David versus Goliath stories in which Goliath lost both times. Experts say there are some things money cannot buy when the people with the money are not trusted by voters.

Proposition 16 seemed to have it all including $46 million in PG&E money to pay for it. The commercials always mentioned they were paid for by a group called "Californians to Protect Our Right To Vote."

But, ABC7 political analyst Bruce Cain says all voters needed to know about the measure is was who was sponsoring it.

"Bottom line is, when there are measures on the ballot that are heavily financed by special interest groups, the warning antennae for voters go right up," he said. "And, they realize if it's good for the company or it's good for the utility, it's probably not good for the consumer. At least, that's what their instinct is."

The measure would have required a two-thirds approval by voters before local governments could use public funding to get into the electricity business.

In reaction to the narrow defeat, in which PG&E outspent opponents $46 million to about $100,000, Senior Vice President of Corporate Affairs said, "We will continue to work with our coalition partners to help ensure that the state's voters and retail electric consumers have a voice in the future if their local governments attempt to make far-reaching decisions to use public money or incur debt to enter the retail electricity business without a vote."

It was a similar story for the insurance companies which backed Proposition 17. That would have allowed insurers to penalize drivers who let their insurance policies lapse, but also reward drivers who kept their policies intact.

Supporters outspent opponents 16 to one, but even the possible reward of lower insurance rates could not overcome the negatives.

"Voters could see some potential self interest for themselves, but in the end, again, I think the same logic went in," Cain said. "If the insurance company wants it, then I suspect it's not good for me, is the way I think a lot of voters thought about it."

Cain also talked about the critical importance of the Senate and gubernatorial races in California. He says the nation will be watching. It will generate huge out-of-state money and it could change the face of state politics for many years to come.

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