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Do Corporations Dominate Statewide Ballots?

The opinions expressed by columnists are their own and do not necessarily represent the views of Townhall.com.

While Californians recently celebrated the centennial of their state’s full-bodied system of citizen initiative and referendum, the Associated Press pushed a story headlined, “Corporations, wealthy dominate initiative process.”

“Insurance, oil, pharmaceutical and utility companies,” the article explained, “are among the well-funded interests that have spent tens of millions of dollars in recent years to promote their causes through California initiatives.”

Reporter Judy Lin gave specific examples:

• In 2010, Pacific Gas & Electric spent $46 million promoting Proposition 16, a measure to make it more difficult for localities to go into the utility business, thus competing with the company. PG&E’s massive bankroll swamped the opposition by an incredible margin of 161 to 1.
• Another measure on last year’s primary ballot, Prop 17, was funded almost entirely by $14.6 million from Mercury Insurance. The measure sought to allow auto insurance companies to offer discounts to their continuous customers.
• In 2008, T. Boone Pickens’s company contributed over $22 million to Proposition 10, outspending the ballot measure’s opponents 100-to-1. The initiative encouraged use of natural gas, which certainly would benefit the billionaire’s business interests.
• A 2006 ballot measure advancing a severance tax on oil production with the goal of funding alternative energy programs, Prop 87, was bankrolled with nearly $50 million dollars from real estate heir and Hollywood producer Steven Bing.

What the AP story by Ms. Lin did not emphasize, however, was that each of these big-spending corporate/rich-dude campaigns culminated in the same result: The voters defeated their ballot measure.

The millions spent didn’t sway the people.

The contrast is stark between big spending in ballot measure campaigns and in candidate races. A spending advantage overwhelmingly correlates with electoral success for candidates. For example, in 2008, 93 percent of U.S. House races and 94 percent of U.S. Senate races were won by the candidate spending the most money.

Meanwhile, when University of Michigan Professor Elisabeth Gerber conducted a comprehensive study of campaign finance records from 168 initiative campaigns in eight states, she concluded that “economic interest groups are severely limited in their ability to pass new laws by initiative. . . . By contrast, research found that citizen groups with broad-based support could much more effectively use direct legislation to pass new laws. When they are able to mobilize sufficient financial resources to get out their message, citizen groups are much more successful at the ballot box, even when economic interest groups greatly outspend them.”

Gerber is not alone on this. “The idea that the initiative process empowers special interests doesn’t fit with the facts,” says Professor John Matsusaka, who as president of the Initiative and Referendum Institute at the University of Southern California, has also extensively studied the initiative process. “You can still dislike the initiative process after seeing my results, but not because you think it allows special interests to subvert the majority.”

True, big business and big labor sometimes launch initiatives, even while both groups oppose the very existence of the process. But the academic research tracks with my experience in more than 20 years of working on ballot measures: No matter how well-heeled, special interests don’t have much luck peddling their political agendas with the entire electorate.

During the 1990s, as the head of U.S. Term Limits, I helped organize over 100 state and local petition drives to put term limits measures before voters. Virtually every one passed and by large margins. Yet, no news story ever charged that the term limits movement was “dominating” the initiative process.

There is an obvious double standard here. Insiders dislike competition from the initiative, hate being trumped by voters, chomp at the bit of citizen control. Citizens, on the other hand, understandably dislike fortunes determining policy. So of course insider politicians, bureaucrats and lobbyists use the money issue to undermine support for citizen initiative and referendum rights. But the actual effectiveness of big money in the two spheres — citizen lawmaking and legislative deal-making — is poles apart: not very effective in the former, extremely effective in the latter.

If special interests “dominated” our state legislatures or Congress with the same inefficiency they do on statewide ballots, we’d be dancing in the streets.

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