Saturday, February 6, 2010




The bleating from the left has been loud and long over last month’s U.S. Supreme Court ruling that will allow political advocacy advertising by corporations – even foreign-owned ones – right up until Election Day.

Meanwhile, the right rejoices over the decision rammed through by the court’s narrow conservative majority.

Both sides are likely mistaken, at least as far as this rule change figures to affect California.

Corporations and wealthy individuals have been spending almost as much as they want here for many years, with little to restrict them in anything besides races for federal offices like president, the U.S. Senate and Congress. Just as with laws covering federal elections, their donations to individual candidates are limited in state elections, but not their spending on either advocacy or issue-oriented politics.

To see how this works, there’s no need to look any farther than the initiatives that have already qualified for this year’s two statewide ballots or are in the process.

Mercury Insurance, for example, spent over $1 million to gather the signatures needed to qualify Proposition 17, a June initiative that would let it and other car insurance firms penalize anyone who has not previously had an insurance policy or has allowed one to lapse, even if a policy was suspended because someone moved out of state for something like college or military service.

In other states that allow such surcharges, the cost of a Mercury policy can almost double for those with no record of constant coverage. This won’t happen here, Mercury insists, while also asking voters to believe its claim that the change would result in discounts for drivers with continuous coverage.

Then there’s Pacific Gas &Electric Co., which has so far put more than $3 million into its bid to require a two-thirds vote in any city whose elected council wants to set up or expand a municipal electric utility of its own, on the June ballot as Proposition 16.

Both these measures are purely about money, not ideology. But the reality is still plain: companies are already spending plenty to move public policy in California their way. So how has the Supreme Court changed things in here?

Meanwhile, there’s another twist in the 5-4 Supreme Court decision holding that corporations have the same free-speech rights as individual persons: American subsidiaries of foreign-owned companies most likely will be able to kick in money, so long as it comes from revenues taken in from their American operations.

This opens the way to some very ironic possibilities. Venezuelan leader Hugo Chavez, for example, has for years been a leading villain in the conservative pantheon of foreign figures. But Chavez controls the Citgo gasoline and oil refining company, a wholly-owned subsidiary of Venezuela's state-owned oil company, Petroleos de Venezuela S.A., that runs thousands of service stations in much of America.

Some California Republicans like the idea of corporations running supposedly “independent” ads blasting Democratic Sen. Barbara Boxer right into November, but how will they like it if Chavez uses Citgo cash to buy ads plugging Boxer and other liberals?

How much would those same Republicans, who often deplore the way many American jobs have migrated overseas, like it if Chinese money backs politicians favoring an even more internationalized economy?

This points up one problem with getting overly excited about Supreme Court decisions when they first come down: Sometimes their effects are very different from what analysts first expect.

Then there’s the fact that California voters don’t always go for the candidate or cause with the most money. True, if one side has virtually no cash and the other spends $100 million or so – as happened with a failed 1998 initiative aiming to rescind a state electric deregulation plan that eventually led to the energy crunch of 2000 and 2001 – the big money will win.

But as long as a candidate or cause has enough cash to make itself heard at all, big money doesn’t guarantee victory. For evidence, see the history of fully or partially self-funded candidates like Michael Huffington, Norton Simon, William Matson Roth, William Simon and Al Checchi, none of got elected to anything despite vastly outspending the competition.

Or the fate of the 1990s-era initiative that used many millions of tobacco industry dollars in an unsuccessful attempt to roll back anti-smoking regulations.

The bottom line: Both the panic and the gloating that followed the Supreme Court’s corporate money decision are probably overreactions. This ruling will surely have some effects, but likely will not bring nearly as profound a change as many expect.

Email Thomas Elias at His book, "The Burzynski Breakthrough," is now available in a soft cover fourth edition. For more Elias columns, visit

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