Take the For Sale Sign off the State Capitol
by Richard Holober, Executive Director, Consumer Federation of California
Since 2004, Chevron gave $3 million in political contributions in
California. For a company that made a record $14 billion in profits
last year, it was money well spent. Despite public indignation, big oil
crushed a proposed state tax on windfall oil profits.
During one 18-month period, banks, insurance companies and other
financial interests contributed $8.8 million to state politicians. They
defeated financial privacy legislation that enjoyed the support of 90%
of California voters.
Phone companies gave $20 million to the governor and Sacramento
candidates since 2000. Their generosity bought them new Public
Utilities Commissioners, which promptly buried telephone consumer
protection regulations just after being adopted by their predecessors.
Our campaign finance system has produced the best government that money can buy.
lawmakers of both parties salivate for assignments to "juice"
committees such as insurance, banking, utilities, and government
operations (which regulates gambling). These industries know that
"money talks" in the capitol. Their checkbooks are always out to assist
friendly lawmakers. Is it any surprise that elected officials end up as
shills for the industries that they are supposed to regulate?
Gray Davis’ $30 million in fundraising in an election cycle
seems a quaint reminder of a simpler time. Since 2003, Arnold
Schwarzenegger has raised $100 million for his various campaign
committees. The governor wields a steady veto pen when bills that upset
his contributors survive the legislature and reach his desk.
Of course, there are principled elected officials who vote against
these big money donors. Some even take the money, smile, and then vote
their conscience. There are simply not enough of them to make a
difference on issues that face major corporate opposition.
This November, we can take the "For Sale" sign off the state
Capitol. The Consumer Federation of California supports Proposition 89,
the Clean Money Initiative, because we must change the rules of
politics before ordinary Californians will have a chance to put our
interests on an even footing with big corporate donors.
Prop 89 would create a Clean Money Election system similar to the ones that now exist in Arizona, Connecticut and Maine.
The Clean Money and Fair Elections Initiative allows candidates
who run for state office, and who agree not to accept private
contributions, to receive public campaign financing. The funding comes
from a 0.2% increase in the corporate tax rate. That’s less than 20
cents for every $100 of profits. Personal income tax rates are not
These funds are available to candidates who demonstrate widespread
support. A "Clean Money" candidate for the State Assembly would have to
collect 750 contributions of $5 each to qualify for the $250,000 in
public financing to run in the primary election. If you won your
party’s primary election in June, you’d receive an additional $400,000
to run your general election campaign.
The initiative also dramatically reduces the amount that businesses and
others can give to candidates who decide not to participate in the
Clean Money system.
The real beauty of Proposition 89 is that it stops a candidate who
takes special interest money from drowning out a Clean Money opponent.
If a well-funded politician tries to buy the election by spending
record amounts of PAC dollars, Proposition 89 increases the public
financing of a Clean Money candidate by up to five times, keeping the
playing field level.
If you were running for governor you’d have to gather 25,000 small
contributions to get public financing. In other words, to qualify for
public financing you’d have to really go out and solicit support from
the people — not just from a small number of special interests or
The Clean Money Initiative also sets strict limits on
contributions to independent expenditure committees, political action
committees and political parties.
Proposition 89 will limit contributions by corporations in support or
opposition of a ballot measure to $10,000. That’s good news for
consumers. Last year, pharmaceutical companies spent $87 million to
defeat a ballot initiative that would have forced them to give drug
discounts to moderate income families. Companies like Johnson and
Johnson, Merck and Pfizer each ponied up $9.8 million to protect their
bloated profit margins.
Proposition 89 may not be a cure all, but it is a huge step forward. It
allows candidates who demonstrate a real base of public support to run
competitively, freed from groveling before big check writers. That
alone will make a big difference in the way the issues are debated.
The Consumer Federation of California has joined with The
League of Women Voters, California Common Cause, The California Nurses
Association and many others in saying "Yes on Proposition 89". It’s our
best chance to restore a system that has degenerated into "one dollar ‘
one vote" back to the principle of "one person ‘ one vote".