Nava's paycheck protection hypocrisy

JUNE 15, 2010


If Assemblyman Pedro Nava, D-Santa Barbara, has his way, the days of corporate-funded political campaigns like failed Propositions 16, backed by PG&E to halt competition from municipal utilities, and 17, sponsored by Mercury Insurance to provide insurers with additional rate latitude, might be over soon.

In a press conference Monday, Nava introduced the bill that would require corporations to notify all shareholders of political expenditures and their intended company benefits.  If a shareholder objects, he would get his portion of the political expenditure back in the form of a dividend (that presumably will be taxed like all other dividends.)

“Decisions to use corporate funds for political funds and expenditures are usually made by corporate boards or executives, not shareholders, who are the real owners of the company…shareholders have a right to know how their money is being spent,” Nava told the press.

Note that the Assemblyman does not mention political activities of unions. In fact, during his failed run for attorney general, Nava described a similar measure for labor unions, called Paycheck Protection, in ominous terms: “As Attorney General, I will use the office to make sure that all ballot measures are represented to the voters in an honest manner. For example, the title and summary of the so called ‘Public Employee Paycheck Protection Act’ must clearly discuss that the initiative substantially reduces or eliminates labor unions from participating in the political process thereby giving big business an advantage over working class Californians.”

In unions in California, workers are not given the opportunity to opt out of paying union dues entirely.  How is the corporation-shareholder relationship any different?  If anything, a shareholder has more freedom than a union worker — if he doesn’t like what the corporation is doing, he can sell his stock and invest wherever the grass is greener.

Nava warns the press that if his law were currently enacted, shareholders of Valero would be informed of their company’s intent to stop an environmental safeguard in November. But, clearly, Nava doesn’t want union members to be warned of their unions’ efforts to promote various initiatives and candidates.

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  1. daveinirvine
    daveinirvine 16 June, 2010, 08:02

    Hey Nava, how about requiring the same for unions?

    Reply this comment
  2. StevefromSacto
    StevefromSacto 16 June, 2010, 10:14

    As I recall, there was legislation a couple of years back that would have required “paycheck protection” for union members. However, it was killed by the Republicans because an amendment was added that would also have required “shareholder protection” for shareholders in PG&E and other large corporations.

    The only fair way to do this is to do it for both unions AND corporations. However, the unions and the business lobby will never support it.

    Reply this comment
  3. jarvis Johnson
    jarvis Johnson 16 June, 2010, 19:18

    Cute attempt at a point with this article. Unions already have to do what the bill requires. I would recommend taking this article down, and doing a little more research before you post things. That way you can avoid further embarrassment.

    From the committee analysis:
    Under a series of federal court decisions balancing the first amendment right of free association with the right of labor unions to collect union dues, all unions must allow their members to opt out of having their dues spent for political purposes, and must notify their members of this right. Members who wish to opt out must do so in writing. An annual opt-out is not required; once an individual opts out with their union, they are opted out, until and unless they opt back in. Union members who opt out are still required to pay dues to support the activities of their union. However, the union must either refund them an amount reflecting the portion of their dues that would otherwise have gone toward political activity or must donate that amount to a charitable organization selected by the union. Unions are required to annually report their spending on political activity, and to publish the calculations supporting the amount of dues per member that they attribute to political activity spending (i.e., to document the amount they are required to refund or donate to charity for members who opt out).

    Reply this comment
  4. Laura Sucheski
    Laura Sucheski 17 June, 2010, 09:41

    @jarvis Johnson

    The law you mention is not analogous to Nava’s proposed bill.

    For shareholders, the right of free association is already protected. Don’t like a company’s agenda? Don’t invest.

    Unions have to balance the right of free association with the right to collect union dues. Members’ paychecks are automatically deducted union dues, which include any political expenses. But union members can elect to have that percentage of their money go to charity instead of political activities. Unions don’t have to directly reimburse the member, although they can.

    Paycheck protection is more like Nava’s proposal for corporations. Paycheck protection would prevent unions from deducting paychecks for any political purposes without advance authorization, and require them to directly reimburse a dissenting member.

    There’s no “charity” option in the Nava bill. Paycheck protection would increase profit motivation for union members to get a bigger paycheck every month thereby reducing incentives for campaign contributions, something Nava’s bill would also do.

    Supporting this bill but not paycheck protection is hypocritical.

    Reply this comment

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