Consumer Federation of California

SACRAMENTO’When Hiram Johnson championed an initiative system for California nearly a century ago, he sold it as a grassroots way to "arm the people to protect themselves."

California’s 23rd governor foresaw citizen campaigns that would spring to life and put propositions on the ballot when the Legislature failed to address a pressing need.

"While I do not by any means believe the initiative, the referendum and the recall are the panacea for all our political ills, yet they do give to the electorate the power of action when desired, and they do place in the hands of the people the means by which they may protect themselves," Johnson said during his 1911 inaugural address.

But 97 years after Californians voted to allow themselves to put measures on the ballot, overturn laws adopted by the Legislature and oust elected officials in midterm, Johnson’s experiment in direct democracy has changed dramatically.

He certainly could not have envisioned the multimillion-dollar campaigns for Proposition 10 and several other measures on California’s Nov. 4 ballot, some of which critics say will benefit their wealthy sponsors at the expense of California taxpayers.

Paid petition circulators, not armies of volunteers, typically gather initiative signatures these days. Corporations, wealthy individuals, labor unions, Indian tribes and other monied interests frequently spend millions to battle over the proposals.

The Center for Governmental Studies, a Los Angeles think tank, issued a report in May saying there had not been a successful initiative signature-gathering drive conducted almost exclusively by volunteers in California since 1982.
Volunteer-driven campaigns put three measures on the November ballot that year’proposals calling for a nuclear weapons freeze, more water conservation and a bottle recycling program.

Robin Swanson, a spokeswoman for this year’s Proposition 2, said volunteers also collected most of the signatures to qualify that measure, which would set enclosure standards for farm animals.

Nevertheless, former Assembly Speaker Robert Hertzberg, a Los Angeles Democrat who formed a commission in 2000 to consider ways to reform the initiative process, said the system has been undermined by big-money campaigns.

"The whole thinking behind the initiative was it comes from the people, not the few people that have a checkbook," he said. "That’s not the case in the initiative process anymore."

To its critics, Proposition 10 is a prime example of that change.

It was placed on the ballot by oilman T. Boone Pickens, a Texas billionaire, whose natural gas company stands to gain financially if it’s approved.

The proposal, one of 12 statewide propositions on California’s ballot, would set up a rebate program for alternative-fuel vehicles and authorize the state to borrow $5 billion to fund it at a time when it’s struggling with multibillion dollar budget deficits. Interest payments would boost the cost to California taxpayers to $10 billion over 30 years.

Half the money would be used to provide rebates of up to $50,000 to consumers who buy vehicles that run on natural gas and other non-petroleum fuels. Critics say that would mostly benefit companies that have large vehicle fleets, not average consumers.

There also would be $340 million to fund rebates for buying high-mileage vehicles such as the Toyota Prius and money for research and development of alternative energy technologies, as well as for training, education and demonstration projects dealing with alternative energy.

"This is going to do a lot to help consumers in California who want to buy cars that run on something other than gasoline," said Marty Wilson, a consultant to the Yes-on-10 campaign.

He also said Proposition 10 would help clean the air and reduce the state’s dependence on foreign oil.

But opponents point to the contributions made to the Yes-on-10 campaign and suggest the measure is mainly about promoting natural gas-powered vehicles and enriching one firm, Clean Energy Fuels Corp., a Seal Beach company started by Pickens.

Clean Energy, which bills itself as the "largest provider of natural gas for transportation in North America," has given nearly 90 percent of the $21.2 million raised so far to pass the proposal.

Two other natural gas companies, Chesapeake Energy and Westport Fuel Systems, have contributed most of the rest.

"This is the most naked money grab that I have ever seen in terms of using the ballot, using the voters to advance a business proposition," said Richard Holober, executive director of the Consumer Federation of California, who says there are better ways to curb emissions.

Holober said there is nothing in the measure that would prevent a trucking company, for example, from qualifying for the rebates and then moving the vehicles out of state. But a spokeswoman for the Yes-on-10 campaign, Amy Thoma, said the measure would allow state officials to adopt regulations that would prevent that from happening.

Proposition 10 isn’t the only California ballot measure that’s attracting million-dollar donations this year.

Nearly half of the more than $175 million raised so far for November initiative campaigns has come from individuals, corporations or groups that gave at least $1 million.

The parents of the state’s two biggest utility companies, Pacific Gas & Electric and Southern California Edison, have contributed a total of $27.6 million to defeat another energy-related initiative, Proposition 7. The parent of the third biggest utility, San Diego Gas & Electric, has given $2.1 million to the No-on-7 campaign.

One man, Arizona billionaire Peter Sperling, vice chairman of Apollo Group, which operates the University of Phoenix, has given nearly 97 percent of the $9.2 million raised to support Proposition 7, which would require utilities to get 50 percent of their electricity from solar, wind and other alternate sources by 2025.

Several polls in recent years have found that Californians believe the initiative system is flawed. Sixty-four percent of the 2,002 adults questioned by the Public Policy Institute of California in September had reached that conclusion. Sixty percent said too many initiatives make the ballot.

Several studies over the years have recommended changes, but bills to alter the initiative system tend to die in committee or on the governor’s desk.

Gov. Arnold Schwarzenegger vetoed legislation in 2006 that would have prohibited initiative campaigns from paying petition circulators on a per-signature basis, a step the bill’s supporters said would remove an incentive for circulators to mislead potential signers.

Schwarzenegger also rejected a bill in 2005 that would have required initiative petitions to disclose if they were being circulated by volunteers or paid workers and to list the five biggest contributors to the initiative campaign.

Schwarzenegger said both measures would have made it tougher to qualify initiatives, something he opposed.

The Center for Governmental Studies’ report earlier this year recommended 17 changes, including giving initiative proponents up to a year to gather signatures, a step it said would aid volunteer campaigns. Currently, the limit is 150 days.

It also suggested trying to impose a $100,000 limit on donations to initiative campaigns, although that could run afoul of a 1981 U.S. Supreme Court ruling that shot down a $250 donation limit adopted by the city of Berkeley.

Any person or group with $2 million usually can get an initiative on the ballot in California, which ranks second behind Oregon in the number of initiatives that have qualified over the years.

Having a lot of money won’t guarantee approval, but sometimes the public sees only one side of an initiative debate’"the side that has the money," said Robert Stern, the Center for Governmental Studies’ president.

"Bottom line, money talks…," he said. "At some point, it really does corrupt the system."