CORPORATE BUCKS GET A BIGGER ROLE IN CALIFORNIA POLITICS

CALIFORNIA FOCUS
FOR RELEASE: FRIDAY, AUGUST 27, 2010, OR THEREAFTER

BY THOMAS D. ELIAS
“CORPORATE BUCKS GET A BIGGER ROLE IN CALIFORNIA POLITICS”

Money has always been crucial in California politics. As far back as the mid-1960s, the legendary Assembly Speaker Jesse Unruh called it “the mother’s milk” of his profession.

Unruh was talking about campaign donations from both individuals and businesses. But this year, the role of money has acquired entirely new dimensions.

Yes, self-funded candidates have run in California before, but no primary election race ever saw anything near the $120 million in personal cash spent by former eBay executive Meg Whitman and outgoing state Insurance Commissioner Steve Poizner on their contest for the Republican nomination to be governor.

And no down-the-ticket race ever saw anything like the $12.5 million former Facebook executive Chris Kelly spent in losing the Democratic nomination for attorney general.

Those private expenditures were different in scale from past ones, but not in type. Putting it crassly, rich people have tried to buy public offices since the early days of this republic.

But it was initiative politics that may have been changed the most by the way money poured into the primary, and who it came from.

Yes, special interests have often tried to run initiatives here. The tobacco industry in 1996 tried to overturn all local laws governing smoking. The insurance industry tried in 1988 to install a no-fault system for car insurance. In 1984, Scientific Games Corp., the Georgia company that still prints and sells instant-winner scratch-off tickets to the California Lottery, funded the initiative that set up the Lottery and instituted rules that almost guaranteed it would always be the main supplier of games and tickets.

But never before last spring’s campaigns for Propositions 16 and 17 had single companies piled tens of millions into campaigns that didn’t even try to disguise their self-serving nature. The blatant quality of the effort to buy themselves new laws set apart the campaigns run by Pacific Gas & Electric Co. and Mercury Insurance Co. and may even have backfired on the two firms.

Feelingthreatened by city and special district efforts to set up their own electric sales systems, PG&E spent more than $40 million putting its pet measure on the ballot and then trying to pass it. The company aimed to require a two-thirds vote of local residents before any public power system could start. PG&E outspent consumerist opponents by a factor of 1,000-1 while trying to overcome the common tendency to vote against any proposition that seems confusing. The aim was to prevent future dilution of PG&E’s regional power monopoly, since two-thirds votes are so difficult to attain. And PG&E almost won.

At the same time, Mercury Insurance was seeking to increase its market share via Proposition 17, spending more than $1 million to qualify its pet measure for the ballot and another $20 million trying unsuccessfully to pass it. That meant two companies spent more than $60 million on narrow measures that figured to help almost no one else.

Companies have spent far more than that to defeat initiatives they believed would hurt them, the prime example being the $93 million spent by utility companies in 1998, when they crushed a bid to cancel the state’s electric deregulation plan, which later proved disastrous in the energy crisis of 2001 and 2002.

But the $10 million Texas oilman T. Boone Pickens spent on the abortive 2008 Proposition 10, an alternative energy plan that would have lined the coffers of one of his companies, was the previous record for spending by just one company aiming to feather its nest.

All these figures may be surpassed this fall by two more Texas oil interests, the Valero and Tesoro refining companies, which joined to pay for qualifying Proposition 23, a measure to cancel or greatly delay the state’s pioneering anti-greenhouse gas law, passed in 2006 as AB32. What’s in this for them? Neither company wants to invest in the upgrades to refining operations that would be needed to comply with AB32’s requirement for reducing emissions of carbon dioxide to 1990 levels by the end of this decade.

While PG&E and Mercury had the TV commercial field pretty much to themselves last spring, Valero and Tesoro and their in-state political mouthpieces will have considerable opposition from green power developers and other environmental outfits. Plus, they must deal with confusion stemming from the fact it will take a yes vote on the measure to nix AB32

This combination of factors may push the oil companies to outspend even PG&E and Mercury.

If that happens, it will once again be up to voters to see through the companies' self-serving slogans. If they don’t, this year might see a reversal of the longtime and very healthy tendency by California voters to turn thumbs down on measures that chiefly benefit just one company or one industry.

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Email Thomas Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough," is now available in a soft cover fourth edition. For more Elias columns, visit www.californiafocus.net