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For Immediate Release:
June 24, 2004
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Get Big Money out of California's Ballot Questions

Californians should pay close attention to what regulators at the Fair Political Practices Commission (FPPC) do about big money in ballot campaigns, according to TheRestofUs.org, a non-partisan watchdog.

"Big money is distorting and corrupting California's ballot initiative process," said Derek Cressman, director of TheRestofUs.org. "The initiative is for citizens to use when wealthy private interests prevent the legislature from protecting the public interest. There's a problem when those same private interests, like Indian casinos, can then turn around and influence ballot measures through big money campaigns."

There are additional concerns when candidates control ballot measure campaigns. For example:

• Governor Schwarzenegger's staff are suggesting that he will raise some $20 million, possibly from Indian tribes, to defeat two ballot measures dealing with gambling on this fall's ballot.

• · Lieutenant Governor Cruz Bustamonte was fined by the FPPC for taking unlimited contributions (largely from Indian tribes) into an old candidate committee which he then transferred into his ballot committee against Proposition 54. But nothing to date would have prevented Bustamonte from soliciting unlimited contributions directly into that ballot committee. Indeed, his committee did receive direct contributions from:

The Santa Rosa Rancheria for $478,000
Jerry Perenchio for $100,000
AFCSME for $200,000
Angelo Tsakopoulos's AKT Development Corporation for $45,000

• · Arnold Schwarzenegger's committee to support Proposition 49 in 2002, which helped position him to run for governor, received contributions from:

The Emulex Corporation for $60,000 plus at least another $320,000 from its CEO Paul Falino
Richard Santullie, CEO of Net-Jets Corporation for at least $100,000
Todd Wagner of Dallas, Texas for at least $600,000
Jeff Pericho of Univision for at least $1,000,000
Conexant Systems for $50,000
The Morongo Band of Indians for $25,000
The Yucaipa Companies LLC for $100,000
Developer Alex Spanos for $100,000

• Arnold Schwarzenegger and Steve Westley's Committee to Support Propositions 57 and 58 received contributions from:

Western Manufactured Housing Companies for $50,000
Kaiser Foundation Health Plan for $150,000
the California Building Industry Association for $50,000
Anheiser-Bush for $100,000

According to Cressman, there are at least two serious problems for our democracy with contributions this massive:

1) Wealthy interests can easily drown out the voices of the rest of us in public debate about ballot measures, creating an unlevel playing field for public policy decisions. It is particularly troubling when corporations or tribes use state-conferred advantages that allow them to accumulate massive amounts of money to distort the political process.

2) Many donors who give to ballot committees that are controlled by candidates, future candidates, and officeholders, have business pending before the state of California or other private interests at stake dealing with state action or regulation. They could easily gain privileged access and favorable treatment by public officials by giving such huge amounts to ballot campaigns either controlled by or prominently featuring those elected officials.

On Friday, the FPPC has the opportunity to do something about the second problem by counting contributions to a candidate controlled ballot committee as contributions to the candidate that are already limited by current law and by requiring all ballot committees that use candidates as spokespersons to abide by candidate contribution limits.

The first problem is more vexing and would require action by the legislature and approval by the courts. Some courts have indicated that they would uphold a ban on corporate contributions to all ballot committees, whether or not they are tied to a candidate. The California legislature could pass such a law. The courts could also go further and reverse their previous rulings that struck down commonsense contribution limits to ballot measure committees. But, the courts cannot do this unless a state such as California or a local government enacts limits that can create a test case.

"The FPPC cannot solve all of our problems with money in ballot initiatives this Friday. But it could take a step in the right direction by limiting what candidates can raise for initiatives," concluded Ned Wigglesworth, a researcher for TheRestofUs.org.

TheRestofUs.org is a non-partisan watchdog that exposes the role of big money in politics and tells citizens what we can do about it.

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