A ballot initiative to reform ... initiatives

Perhaps more than any state in the nation, California loves its ballot initiatives. Over the years, citizen-led initiatives in the state have sparked tax revolts, imposed a "three strikes" law on criminals, and spurred stem-cell research.

This election year, amid concern that special-interest money and deep-pocketed corporations are unduly influencing statewide initiative campaigns, a new ballot measure comes before California voters on Nov. 7. Proposition 89 would, among other reforms, limit the amount companies and organizations can contribute to ... what else? Citizen ballot measures.

If Prop. 89 passes, the state would be the first to limit corporations' donations for initiatives – an area of election law that the measure's backers see as ripe for challenge in the courts.

The proposed caps are just one piece of Prop. 89, a sweeping measure that would also provide for public financing of candidates' campaigns (via a tax on certain businesses) and reduce the amount individual donors can give to candidates for office. If Prop. 89 were to pass, many of its provisions are expected to be challenged in court on grounds that they curtail the free-speech rights of campaign contributors.

No broad polls have yet gauged Prop. 89's popularity. Its backers cite statewide polls showing that 64 percent of likely voters believe campaign contributions negatively affect public-policy decisions – and that 92 percent feel special interests control the state's initiative process.

"We have a massive problem with money in politics – a transactional system in which the biggest spenders give money to politicians and get favors in return," charges Charles Idelson, communications director for the California Nurses Association (CNA), the union that is Prop. 89's official sponsor. "This has a huge impact on the daily lives of Californians, and the problem is a microcosm of the problem with political campaigns nationwide."

The 70,000-member CNA decided to pursue campaign-finance reform after last year's defeat of a labor-backed ballot initiative that would have curbed prescription-drug prices. It cites $80 million in campaign contributions from drug companies. The union says "clean money" laws elsewhere, notably in Maine and Arizona, have established a track record that points to higher voter turnout, more candidates, more competitiveness, and some reduction in total money spent on elections.

Prop. 89 – also known as the Clean Money and Fair Elections Act – would transform California politics, political analysts say. Elections in the state have recently been distinguished by a string of record-spending Senate, gubernatorial, and initiative campaigns, even as voter participation has dropped to its lowest in 80 years. More than $1 billion has been spent in California on initiatives alone in the past decade.

Prop. 89 would cap individual donations to legislative candidates at $500 (down from $3,300) and to candidates for statewide office at $1,000. It would restrict fundraising by political parties, limit individuals and organizations to $15,000 per election, and cap direct corporate donations to $10,000 per ballot measure. It sets out to raise about $200 million a year from corporate and banking taxes to create a pool of funding for candidates for state office.

"This would have a major impact in California and probably spur efforts in other states," says Robert Stern of the Center for Governmental Studies. "It is a comprehensive measure that would drastically reduce campaign contributions [and] would increase competition because more candidates would run ... [as well as tax] corporations to pay for the public financing."

Opponents say Prop. 89 is too complex and unfairly silences businesses while allowing others – trial lawyers, unions, and Indian tribes – to spend freely. While it sounds good, they say, it has too many loopholes to deliver the reforms it promises. "What we have ... is a nifty way to rig elections: allow one side to spend money without limitations while silencing the voice of the other side," says Tony Quinn, editor of California Target Book and a veteran political analyst.

Some political analysts say the measure has an uphill battle because it is so complex. "It's an awfully big gulp," says Steven Schier, a political scientist at Carleton College in Northfield, Minn. "The harder an initiative is to understand, the harder it is to get a vote."

They also cite legal hurdles, noting a 1978 Supreme Court case that protects corporate spending on campaigns. "Everyone is concerned about corrupt financing of campaigns, but the US Supreme Court has spoken very clearly about this one ... no limits on corporations," says Larry Sabato, a political scientist at the University of Virginia.

Lawyers for the CNA say several rulings since then signal a possible shift in the court's views. In Austin v. Michigan Chamber of Commerce in 1990, the court found "unique risks" posed to the political process by unchecked corporate spending. Other cases since 2000 give similar signals.

"We feel the US Supreme Court is ready for a reexamination of campaign-finance regulation," says Rick Hasen of Loyola Law School.