After the victory in Wisconsin, many wondered where conservative interests would strike next to finish off unions and permanently alter the power relationship between labor and capital. It appears the next step is California. In November, voters will decide on an initiative, Prop 32, that would “eliminate unions from having any voice in politics whatsoever,” according to one labor official.
In its simplest form the measure, often called “paycheck protection” on the right, would stop unions from using automatic payroll deductions from their members for political activity. Similar measures have been on the ballot before in California, and have been beaten back both times. In 1998, voters rejected Prop 226, and in 2005, they similarly beat back Prop 75. But those were frontal assaults against unions. The difference here is that the supporters have dressed up this initiative as a campaign finance reform measure that affects corporations and unions in equal measure. Prop 32 supports call it the “Stop Special Interest Money Initiative.” Nothing could be further from the truth, says the opposition to Prop 32.
“The people who drafted this are the same people who twice before tried this and failed,” says Brian Brokaw, the communications director for No on 32. “They claim that it’s even-handed, in that it bans both unions and corporations from collecting political funds via payroll deductions. But corporations don’t use payroll deductions for political funds, they just use their own treasuries.”
It’s actually more insidious than that. The initiative has two parts. First, it bans direct political donations to state candidates from both corporations and unions. Neither side does a whole lot of that, as independent expenditures are more common in support of or opposition to individual candidates. But the definition of a “corporation” is made so narrow in the initiative language, granting a number of special exemptions to entities such as LLCs, limited partnerships, insurance companies, hedge funds, developers, Wall Street investment firms and more. “They carefully drafted this to exempt themselves,” Brokaw says. Any corporation could set up a shell company and continue the practice of direct political contributions.
As to why unions could not engage in such behavior, that brings us to the second part of the initiative. This is the payroll deduction part. As said before, both unions and corporations would be banned from using payroll deductions for political activities, yet only unions use this function. “Political activities,” incidentally, is so broadly defined, that it would include internal communications, i.e. unions talking to their own members and educating them about upcoming elections and legislative votes.
Unions can ask their members to voluntarily donate to political causes, say the backers of Prop 32. But the initiative contains an additional measure that requires an annual written authorization from each union member on even voluntary contributions. Unions typically have an automatic process to collect dues and use them in part for political ends. Now they would have to go through a time- and resource-consuming process of collecting all dues individually, getting written authorization for how the dues can be used, in such a way that would be logistically impossible.
“This attacks our ability to engage in politics from every conceivable angle,” says Steve Smith, the communications director for the California Labor Federation. “The whole reason to have a union is to collectively bargain. This would take political action, and say you can’t do that. In terms of those who would be able to spend resources on elections, it would be wealthy individuals and Super PACs.”
The intent of the law can be seen by looking at the leading funders who paid to get in on the ballot. So far, the leading funder is billionaire Thomas Siebel, the founder of Siebel Systems, since purchased by Oracle. Siebel, a funder of Super PACs and a huge Sarah Palin fan, introduced her at a 2008 rally with this bit of schmaltz:
“Sarah Palin has risen as if from some mythical kingdom of the north. She carries the flag of outrage for the rest of us: the employers who create jobs, the shareholders, the parents, the people who raise children … and the students, the future of America,” he said. “Sarah Palin carries the flag of outrage for each of us … who cries out, ‘We’re mad as hell, and we’re not going to take it anymore.’”
Other funders all have companies that would qualify them for the corporate exemptions under the law. Jerry Perenchio, the founder of Univision, now has an LLC. Other funders include insurance company executives and Wall Street investment managers. “This is the least grassroots campaign in the history of America,” said Steve Smith of the Cal Labor Fed. “All of these guys are billionaires, trying to rig the system. If this goes through you open the floodgates for corporate and billionaire funding of campaigns.”
In fact, one of the driving forces behind the ballot measure has a particular history here. The Lincoln Club of Orange County, long a conservative powerhouse in California, has put up some money for the initiative. They happen to have been the executive producers behind “Hillary: The Movie,” which ended up becoming the impetus for the Citizens United decision. So the self-described backers of Citizens United are now funding an initiative purporting to get special interest money out of politics.
So far, mostly state money has gone to back Prop 32, and No on 32 has the edge in terms of fundraising. But it’s very early yet, and given that this plays into a national movement to constrain union power, we could easily see national money play here. “What keeps us up at night,” Smith said, “is the chance that a Koch brother or a national guy needs to drop some money and comes to California to bring it.”
Indeed, passage of Prop 32 would have a national impact. It plays into the recent dynamic of the rise of SuperPACs and big money at the national and state levels. “Without having a couple million workers pooling their money in California to counter-balance corporate cash, it’s not going to happen,” Smith says. “There would be a domino effect. If California falls, what chance does a smaller state have?” The goal, according to Smith, is a two-step maneuver. First, they pass this measure to de-fang union power and allow for corporate spending to dominate political campaigns. Then, the money flows into California, to elect corporate Republicans and Democrats and change the system from within. “We couldn’t fund anything to stop them,” Smith says. “You’ll see ballot measures stripping away the minimum wage, family leave. The electoral dynamic would completely shift immediately.”
With Prop 32 on the November ballot, it has the potential to get lost in the shuffle. It will be one of 11 initiatives before voters, and not the most high-profile one. Governor Jerry Brown will probably turn all his attentions to a tax measure, Prop 30, that is needed to secure the state budget. And there’s a Presidential election and a multitude of high-profile state races that will garner more attention.
But the No on 32 team, which is fighting this as the “Special Exemptions Act,” specifically on the grounds of how this measure makes a mockery of campaign finance reform by granting exemptions to all kinds of corporate actors, sees that as a possible benefit. “The fact that we will see such a disgusting display of corporate-backed campaign spending is good for us,” says Brian Brokaw of No on 32. “It will be an example of what happens when you take away transparency and anonymous donors can influence elections.”