Wednesday, September 26, 2012




          Businesses are shying away from backing Proposition 32, the latest Republican revival of the so-called “paycheck protection” plan for emasculating the political efforts of all labor unions.

          This proposition would ban contributions from unions and corporations directly to candidates, but leaves them free to put as much as they like into so-called Super Political Action committees that fund supposedly “independent” ads for candidates and causes. More importantly, it forbids unions from using their members’ dues for political purposes for more than one year after members give their permission.

          There are no similar protections for corporate shareholders, many of whom have no way even to know what companies are giving political cash or how much, since many contributions to independent expenditure committees no longer have to be reported.

          This notion has lost twice before, in 1996 and 2005, both times by about a 53-47 percent margin, indicating sentiment on the issue may not change much. But maybe this time, with public employee unions at a popularity nadir, it will. That, at least, is what Charlie Munger Jr. hopes.

          Munger, the son of the eponymous billionaire investor and Warren Buffett partner and the brother of civil rights attorney and activist Molly Munger (the force behind this fall’s Proposition 38 tax-for-schools initiative) has put tens of millions of dollars given him by his father behind political causes over the last decade.

          Charles Munger Jr.’s efforts have done some good. A physicist at the Stanford Linear Accelerator complex in the San Francisco Peninsula foothills, he was one of the main funders of the 2008 Proposition 11, which took legislative redistricting out of the hands of legislators. He gave $12.16 million to the 2010 initiative that added congressional redistricting to the tasks of the Citizens Redistricting Commission. He spent $700,000 on primary races last spring, aiming to help moderates running against hard-line Republicans.

          But his efforts on behalf of Proposition 32 amount to an effort to make the political world safe for corporations and billionaires like himself (even those who did not inherit, but earned their money).

          For a clue about who might benefit, it’s only necessary to look at the list of donors to this measure (see: Besides Munger, the list includes the likes of banking heir Howard Ahmanson, producer Jerry Perenchio, venture capitalist William Draper and the Lincoln Club of Orange County, sometimes described as “a group of corporate bigwigs…” This is the third time around for the Lincoln Club on paycheck protection, which began as that club’s brainchild.

          Basically, the corporate tycoons and CEOs and wealthy heirs are in this to deprive the lowliest of workers of their political voice. Think DMV clerks, building janitors, restaurant dishwashers. If firefighters and police also lose their voice, that’s alright with these folks, too. And that might actually be OK, but only if the voices of big employers were similarly controlled by letting shareholders veto corporate political expenditures in proportion to the shares they hold either directly or indirectly via pension systems and mutual funds.

          A measure that included limits on both those interests would be a fair way to take at least some special interest money out of politics. But a measure dealing with only one side of the political equation is unbalanced, allowing business interests to advertise their arguments – true and false – as much as they like with only a limited response from labor unions which often disagree with them.

          Setting up this kind of one-sided political climate could endanger everything from overtime pay to mandatory breaks and sick leave. In the pre-union America of the 19th Century and early 20th Century, none of those things were provided by the vast majority of employers.

          That's why Proposition 32 has sometimes been labeled as a sucker punch against workers, with the middle class possibly the next target of the billionaires.

          What’s in this for Munger? A former member of the state’s Curriculum Commission, he became disenchanted with state legislators and what he’s told some reporters are their inept education bills. Legislators, mostly Democrats, are too much swayed by the labor unions that often fund their campaigns, he plainly believes.

          So he’s done everything he could to remove their job security, via the new redistricting system. That didn’t work, as it appears likely union-backed Democrats this fall will end up with legislative majorities anyway. So now he’s going after the groups that fund them, and never mind the collateral damage.

          Of which there could be plenty to almost everyone short of the super-wealthy.

         Email Thomas Elias at His book, "The Burzynski Breakthrough, The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It," is now available in a soft cover fourth edition. For more Elias columns, visit




          Just a few months after pulling back about $12 million in grants to help build fueling stations for the new generation of hydrogen fuel cell cars due to debut by 2017, the California Energy Commission is back with a new grant-issuing proposal that still appears to favor huge international corporations over smaller companies and a modicum of pollution over completely clean air.

          There is even the possibility that grants under the new plan could wind up going mostly to the same two multi-billion-dollar companies that had been due to receive last spring's grants.

         Those awards were rescinded last spring after this column exposed how executives of one set of billion-dollar corporations steered the state money toward cronies in other giant companies. Both the old grants and the ones to come involve vehicle license tax money earmarked to help make driving the new, totally non-polluting H2-fueled cars practical when they hit showrooms and roads.

          Grants to be awarded before next June 30 could total more than $29 million, a combination of funds coming in during the fiscal year that started July 1 and the money not used last spring.

          The problem with the cancelled grants was that the Energy Commission required approval from at least one of the eight automakers that will build H2 cars before any station could be approved for a grant. This was also how tens of millions in previous grants were made under ex-Gov. Arnold Schwarzenegger.

         The two companies that at first won all those grants – German-based Linde Group and Pennsylvania-based Air Products & Chemicals Co. – are members of the semi-private California Fuel Cell Partnership, along with all eight car companies. Those include Toyota, Honda, Nissan, GM, Chrysler, Mercedes-Benz, Volkswagen and Hyundai.

          With corporate executives from all these firms and commission staffers attending the same meetings and seminars several times yearly, the cronyism and collusion was obvious. The Energy Commission and all companies involved denied there was any, but service station locations proposed by companies other than Linde or Air Products could not get car company approvals for the grants, which in some cases will pay more than half the cost of adding hydrogen pumps to existing gas stations.

          The tentative new proposal cuts carmakers out of the process, allowing Energy Commission staff alone to evaluate which station locations are most likely to encourage H2 car sales. It also lists 12 areas around the state as preferred locations, all places that posted significant sales of very early model gas-electric hybrids like the Toyota Prius and Honda Civic.

          Those two changes make the new Energy Commission plan far cleaner than the old one scrapped last spring.

          “The intent is to fund the best…stations in each of the identified areas,” the commission said in a statement.

          But there are still potential problems. The new proposal commits just 10 percent of grant money to refueling stations that would produce hydrogen by electrolysis, and be powered by totally renewable sources like wind, geothermal or solar energy.

          Hydrogen made this way on site would not have to be trucked to stations like compressed H2 produced using natural gas. Although natural gas emits far fewer greenhouse gases than oil or gasoline, it’s still dirty compared to wind energy and other pure renewables.

          So this plan lets the Energy Commission claim it is promoting pollution-free fuel while still giving H2 produced with polluting fossil fuels a large role. Setting aside more of the grant money for hydrogen produced purely from renewables could fix this problem.

          The new plan also sets just a 50 kilogram per day minimum for sales by stations the grants might fund. If on-site electrolysis systems produce that little hydrogen, chances are the stations will often run out and have to get supplies shipped in by industrial gas providers. Read: Linde and Air Products.

          The new plan also calls for separate 50-page grant applications for each new station considered. That creates a lot of duplicate paperwork for companies aiming to set up multiple stations with identical equipment and business plans. It favors big companies with large staffs over small outfits that hope to grow through supplying the new fuel.

          Then there’s the matter of who evaluates applications for the tens of millions of state tax dollars. The commission says only that its staff will do that, but this would be the same staff which wrote the old, cronyistic plan and still hobnobs with car and industrial gas company bigshots at Fuel Cell Partnership functions.

          This one could be fixed by putting into the evaluation process a technical committee of academic experts not tied to any company seeking grants.

          The bottom line: The new plan is a big improvement over the old one, but unless it is tweaked some more before anyone starts applying for grants, it could end up favoring the same big companies as the old, discredited system.

Email Thomas Elias at His book, "The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It" is now available in a soft cover fourth edition. For more Elias columns, visit

Thursday, September 20, 2012




          On the surface, Proposition 36 on the fall ballot seems like it should be an absolute slam-dunk. That’s the initiative seeking to change California’s landmark Three-Strikes-and-You’re-Out law, the 1994 measure imposing an automatic 25-years-to-life sentence on most three-time felons.

          Proposition 36 seeks to change that just a bit, requiring that any third offense yielding the draconian sentence be a violent one. Its supporters say this would produce quick reductions in sentence for about 3,000 current convicts whose third strikes were sometimes as trivial as shoplifting or simple theft, crimes that are often misdemeanors but can be lifted by prosecutors to third-strike status if they wish.

          Pass this measure and those 3,000 prisoners will quickly have their long sentences reduced, freeing them and saving the state a cool $47,000 each every year, or a total of $141 million per year. That’s nice to save in a day when California regularly runs multi-billion dollar budget deficits.

          But wait a minute, says Mike Reynolds, the Fresno photographer whose daughter’s 1992 murder while she resisted a purse-snatcher was one proximate cause spurring both the Legislature and voters to adopt the current compulsory sentencing system, since adopted by 19 other states.

          “We would see a whole new level of offender released,” says Reynolds. “These people had at least two other violent felonies before they got their third strike, no matter what it was for.”

          He also insists that any savings would be illusory. “This law has saved $57 billion in crimes that were not committed, but would have been otherwise, according to the U.S. Department of Justice. And that doesn’t even account for all the murders and rapes that have not happened in the 18 years we’ve had this law.”

          Reynolds is convinced letting 3,000 third-strikers (more than one-third of the 8,000-odd current ones) out of prison would lead to a new wave of serious, violent crime.

          That’s not what the research shows, according to the Three Strikes Project, a Stanford University effort that’s behind Proposition 36. Some three-strikes inmates have long been held on the presumption that misdemeanors are often precursors of major offenses committed later by the same people. But the Stanford project maintains no credible academic study has ever supported this conclusion.

          Supporting this assertion is the fact that violent crime rates are slightly higher in other parts of the state than in Los Angeles and San Francisco counties, where district attorneys past and present have long acted as if Proposition 36 were already in place. Those prosecutors include 2010 Republican attorney general candidate Steve Cooley in Los Angeles and George Gascon (also a former deputy police chief in Los Angeles) and Kamala Harris (the current attorney general) in San Francisco.

         Statewide, crime rates are close to 50 percent lower overall than before Three Strikes passed, and Reynolds maintains there’s a clear cause and effect at work here.

          Michael Romano, the Stanford professor who founded the Three Strikes Project which for years has also helped appeal harsh sentences against nonviolent three strikers, has claimed only 4 percent of persons serving life terms for nonviolent third offenses are likely to commit new crimes if released, about one-fifth the rate for inmates released from the general prison population.

          For sure, there’s one thing Proposition 36 would not solve: It would not do much about the reality that California prisons have become a vast system of geriatric homes, as prisoners with life terms cannot be released upon reaching their 60s and 70s, when committing violent crime is rare.

          Releasing most elderly convicts could save the state far more than the $141 million Proposition 36 would produce, especially since older inmates are the most likely to need expensive medical care.

          The vast majority of the approximately 3,000 prisoners Proposition 36 would let go do not fall into the senior citizen category. Many were sentenced while in their 20s, which puts them in their late 40s or early 50s even when their minimum 25-year-terms are up (often 20 years with good behavior). Those people remain in an age category where violent crimes are a serious possibility.

          Still, there is no doubt that holding some three-strikers is both unnecessary and often a waste of big money. The problem comes in predicting which three-time losers who might be released will commit yet another crime – an imprecise science at best. This makes it clear passage of Proposition 36 would produce at least some additional crime, even if that comes at the low rate Romano claims.

          That, of course, has to be weighed against the flimsiness of the third strikes that put some of today’s prisoners back behind bars for life, or close to it.

          One good thing about this initiative fight is that it’s being waged on the battleground of ideas, not via TV commercials. That’s because neither the yes nor the no side has enough money right now to stage a major campaign. Ideally, that’s how things should be for all ballot propositions.

Email Thomas Elias at His book, "The Burzynski Breakthrough, The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It" is now available in a soft cover fourth edition. For more Elias columns, visit




          Ever since the U.S. Supreme Court’s landmark 2010 Citizens United decision that allows unlimited corporate campaign spending, American politics has become less and less transparent. Just now, things are murkier than they’ve been in generations, with Super Political Action Committees so far this year taking in more than $300 million and no one knowing for sure where most of the money comes from.

          This means voters often have no way to tell who is trying to sway their votes, when that very knowledge can be the best way to instill a little healthy skepticism in voters about the many messages they see and hear during election seasons.

          There’s little prospect that Supreme Court justices, who explicitly – and mistakenly – stated in the Citizens United decision that it would not likely make political donations more secretive, will alter their decision anytime soon. But one federal agency could change things quickly if it took a page from the California initiative book.

          That would be the Securities and Exchange Commission, whose job is to protect investors from fraud and other wastes of shareholder money by publicly traded companies.

          All the SEC needs to do is adopt a rule requiring firms to disclose all their political spending. “Corporate shareholders,” wrote state Treasurer Bill Lockyer in an essay the other day, “…have a right to know (that) a company’s policies and actions advance the firm’s legitimate business and financial interests and do not endanger its value.”

          Shareholders today generally have no way to know whether a portion of the proceeds of any company they invest in go to advance political causes that may or may not be related to the business itself.

          Of course, if corporations disclose to their shareholders, it won’t be long before the information becomes public via news media and the Internet.

          There’s nothing to guarantee this would in any way curb the record levels of corporate political spending seen so far this year. But it could make voters more informed about who’s trying to sell them what.

          That’s what California has required for years in its initiative politics, where ads specify the leading contributors to any proposition-related TV or radio commercial. Significant donors to campaign committees and candidates are routinely listed on the secretary of state’s Web site, too. Donors of $5,000 or more must disclose within 10 days. That’s how the public came to know that big tobacco companies, for example, spent more than $47 million to beat back the June Proposition 29, which narrowly missed imposing an additional $1 per pack tax on cigarettes and a similar levy on other tobacco products.

          The California disclosures are usually included in small type or fast talk at the end of spots because voters rejected an early-2000s initiative that would have required listing the top five donors to any TV commercial within the ad in type matching the largest anywhere else in that message. But at least they are present for anyone who cares to look or listen.

          The federal government requires nothing like that. This is unfair to voters and it puts investors large and small at risk.

          Both of California’s largest public pensions systems, CalPERS and CalSTRS, among the world’s largest stock and bond investors, routinely support shareholder resolutions calling for disclosure and board oversight of corporate political spending. So far, that hasn’t gotten the job done.

          To date, just over 100 major companies have adopted full-disclosure policies. These include Altria, Capital One, Pfizer, Wells Fargo, Safeway, Verizon, Merck, Microsoft and General Electric, to name a few. None has been harmed by that self-imposed reform.

          What’s happened in California since disclosure was first required by the Jerry Brown-sponsored Political Reform Act of 1974 demonstrates that corporations are not deprived of a voice by disclosure, while voters who care can at least be informed.

          Take that June tobacco tax initiative, whose outcome wasn’t finally known until almost a month after the vote. The widely-reported tobacco company spending was the main reason the measure lost after it enjoyed poll leads of almost 2-1 before the spending onslaught began. Polls through the spring campaign season showed that the more the tobacco companies spent, the more support for the per-pack tax dropped.

          Corporations exercised their rights to free speech in that campaign, but voters at least knew who was talking.

          By contrast, many television commercials in the ongoing presidential campaign don’t specify who is paying, beyond giving the name of a Super PAC. Corporate and fat-cat donors mostly remain secret.

          That’s wrong because it does not allow for a fully informed electorate. Forcing corporations to disclose would not in any way limit their Supreme Court-given right to unlimited spending, but at least there would be some transparency.

          Congress could fix this, but won’t. The SEC can do it, too, and should. To support this idea, go to the Web site of the Public Citizen organization, and click on “Tell the SEC to Require Corporations to Disclose Political Spending.

      Email Thomas Elias at His book, "The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It," is now available in a soft cover fourth edition. For more Elias columns, visit