Albion Monitor /News

Special Interests Hiding Behind "Grassroot" Ballot Items

by Stephanie Limb

Becoming another vehicle for wealthy special interests to unduly influence public policy
A record 91 initiatives were on the November 1996 state ballots, forcing voters to decide a range of issues that included bottle deposits, annual educational testing, public employee pay, prohibiting HMOs from "gagging" doctors, capping lawyers' contingency fees, and taxing the sugar industry to fund the Florida Everglades cleanup.

Most initiatives deal with local issues, and they get on the ballot through the hard work of grassroots workers. Others, however, attract national support from corporations, trade associations, and interest groups, blurring the line between local and national impetus.

Proponents of ballot initiatives advocate their use, in the tradition of the Progressive movement, to allow citizens to function as lawmakers and bypass state legislatures. Ballot initiatives are a product of this political reform movement that abhorred the cozy relationship of state legislatures with special-interest groups and big corporations.

But a cursory look at several ballot initiatives around the country in the last two elections raises questions about whether they remain a grassroots tool or have become another vehicle for wealthy special interests to unduly influence public policy.

Christian Coalition and other religious right organizations behind parents' rights initiative in Colorado
Like candidate contests, the need to disseminate information and the reliance on expensive TV advertising have raised costs and spurred the professionalization of proposition campaigns. Increasingly, the tactics are the same that candidates employ: direct mail, paid signature gatherers, polling and focus groups, message development, and newspaper and TV advertising.

Even beginning the process requires money. Organizers of initiative campaigns must gather the required number of signatures in a short time, and voters in states with ballot initiatives are used to seeing campaigners at malls and grocery stores. The cost of collecting the necessary signatures can be steep.

For example, the Washington [State] Dentists Association was accused of buying the right to put its agenda on the 1994 ballot by paying signature gatherers $160,000. The dentists argued that the initiative process provided the only fair opportunity to make their arguments because their competitor -- the dentists association -- enjoys close political and financial ties to the state legislature.

Similarly, in Nebraska, proponents of an initiative to limit lawmakers' terms in office spent $139,000 on signature gathering. Except for one $2,000 contribution by a deceased resident's estate, the money came from organized out-of-state interests: $102,000 from the U.S. Term Limits, $20,000 from Americans for Term Limits, and $15,000 from the Coalition for a Citizens Legislature, David Martin reported in Political Finance and Lobby Reporter.

Colorado proponents of adding parents' right language to the state constitution received in-kind support and contributions totaling $387,000 from the Christian Coalition and other religious right organizations, published reports said. A conservative Virginia-based consulting group ran the campaign. The national Christian Coalition also backed Colorado's 1992 initiative to prohibit anti-discrimination laws for gays and lesbians. And a California-based organization called the Traditional Values Coalition sponsored a similar initiative in Arizona and helped organize such initiatives in Oregon, Washington State, and Missouri.

Joining the battle against Proposition 211 were the stock exchanges, which gave a combined $820,000 despite their status as quasi-governmental regulatory agencies
But economic ballot issues generate the most campaign spending. Thomas Proulx, sponsor of Proposition 202 in California to cap lawyers' contingency fees, raised more than $6 million from high-tech companies and their executives -- almost 10 times what all PACs affiliated with high-tech companies contributed to congressional candidates nationally in the 1994 elections, The Wall Street Journal reported. Most contributions came in amounts of $100,000 or more. Opponents -- including the trial lawyers' association, Ralph Nader, and senior citizens groups-- reportedly spent $1 million a week on TV commercials attacking the big contributors supporting the initiative.

The trial lawyers got involved in the initiative process with California's Proposition 211. The measure would make it easier for investors to sue if a company's share price does not meet its forecast. Attorney William Lerach and partners in his law firm, Millberg, Weiss, Bershad, Hynes & Lerach, contributed more than $1.8 million to the cause and more than $550,000 to federal candidates during the 1996 election cycle.

The firm is involved in about 25 percent of all securities class-action suits filed nationwide and earned about $75 million from settlements of such suits in 1994. Proposition 211 supporters, known as Citizens for Retirement Protection and Security, raised a reported $9.2 million and spent $8.8 million to rally support for the initiative.

Wall Street -- which had scored a big national victory against the trial lawyers in 1995 when Congress overrode a presidential veto of a bill making it harder for investors to sue securities firms -- spent $36.7 million to defeat the proposition.

Joining the battle against Proposition 211 were the New York Stock Exchange, the NASDAQ stock market, and the American Stock Exchange, which gave a combined $820,000 despite their status as quasi-governmental regulatory agencies, according to The Washington Post. The fight prompted Wall Street to seek federal legislation barring state initiatives designed to circumvent federal laws governing lawsuits and the securities industry.

The casino industry spent $6 million in 1996 on measures in several states that dealt with the expansion of legalized gambling
California also was the battleground for two competing propositions to bar HMOs from prohibiting doctors from telling patients about treatments their health plans don't cover. The Chamber of Commerce and several managed care companies pledged to spend "whatever it takes" to defeat the initiatives. The opponents hired the public relations firm that orchestrated the "Harry and Louise" ads that helped defeat President Clinton's health care reforms. In These Times magazine reported that one opponent, the California Healthcare Committee on Issues, assessed a $10 fee per staffed bed on non-public hospitals to finance the campaign. Both initiatives lost.

Less successful was Philip Morris' $20 million 1994 campaign for an initiative to repeal California's anti-smoking ordinances. The measure failed 70 percent to 30 percent, despite company claims that its profitability was at stake.

The casino industry spent $6 million in 1996 on measures in several states, including Arkansas, Louisiana, Michigan, and Ohio, that dealt with the expansion of legalized gambling. In Florida, the sugar industry -- which gives generously to national campaigns to maintain federal price supports that critics say cost consumers $1.4 billion annually -- spent $22.7 million in 1996 to defeat an initiative that would have assessed a penny per pound tax to finance Everglades cleanup. Supporters of the initiative, the environmental group Save Our Everglades, spent $13 million in a losing cause. Conclusions about the impact of campaign spending on ballot initiatives are mixed.

But the Progressive-era reformers who envisioned the ballot initiative as a tool for ordinary citizens might find it ironic and troubling to see powerful, wealthy special-interest groups using the device today to advance their own agendas.

This article first appeared in Capital Eye

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Albion Monitor March 14, 1997 (

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