“The California Supreme Court ruled 6 to 1 this week that the state Legislature has the authority to ask voters whether the Legislature should propose an amendment to the U.S. Constitution to overturn the U.S. Supreme Court’s Citizens United decision,” as the Los Angeles Times noted in an editorial.

A complex ruling

Opinion has swiftly split on the wisdom of allowing a statewide vote on a political position rather than a piece of law. The San Jose Mercury News observed that the court “for the most part upheld the state Legislature’s power to put nonbinding, advisory measures on the ballot — allowing state politicians to essentially test the waters on issues with voters without actually enacting new laws. The justices left some questions unanswered as to how far the Legislature can go in using such measures in the future.”

The lopsided majority “found that the Legislature has the clear power to seek voter input if considering ways to back a federal constitutional amendment,” the Mercury News continued. “However, the justices sent mixed signals on whether the ruling gives the Legislature blanket authority to use advisory measures to glean voter attitudes on other issues.”

Politically speaking, the decision made a strange fit within California’s prevailing partisan lines. Typically, Republicans incline toward supporting greater independence in the way states shape their policies, while Democrats often prefer that so-called laws of the land uniformly and unambiguously prevail across the country.

Liberals divided

But the court opened itself up to criticism even from anti-Citizens United analysts by requiring state lawmakers to reintroduce legislation that would replace the original ballot measure in question, last election season’s Proposition 49. “The suggested amendment would have allowed for the full regulation or limitation of campaign contributions and spending for the purpose of ensuring that all citizens, regardless of wealth, may express their views to one another and to make clear that the rights protected by the United States Constitution are the rights of natural persons only,” according to Ballotpedia.

Michele Sutter, co-founder of the organization that originally sponsored the bill that became Prop. 49, took to the Sacramento Bee to express her disapproval of the hurdles set up by the court. “In a striking reversal, the state court concluded that Prop. 49 was wrongfully removed from the ballot. Unfortunately, the court’s muddleheaded meddling has left California voters, who were wronged in 2014, disenfranchised again in 2016,” she opined. “Instead of ordering Prop. 49 directly to the November ballot, the court suggests that the Legislature can pass a new bill to do so.”

Last time around, Gov. Jerry Brown opposed the inclusion of Prop. 49 on the ballot, despite his longstanding opposition to the more corporate-friendly wing of his own party.  “We should not make it a habit to clutter our ballots with nonbinding measures, as citizens rightfully assume that their votes are meant to have legal effect,” he said, as the Los Angeles Times noted in its editorial. “The problem with Proposition 49 was that it was a purely advisory referendum that would essentially have turned the polling place into a Gallup Poll, as if California voters need to further crowd a ballot already stuffed full of complicated initiatives and referendums,” complained the board.

But other liberals rallied to the court in the name of the bigger legislative picture. “This is good news for the fight for reform in California and nationally, as it provides legal justification and support for the use of advisory initiatives and referendums to build popular support for this necessary amendment — and to put pressure on lawmakers to act,” The Nation suggested. “With Democratic presidential contenders Hillary Clinton, Bernie Sanders, and Martin O’Malley talking up the idea of an amendment, along with a majority of Democrats in Congress and a growing number of enlightened Republicans, there is momentum for reform.”

The findings, released by Forward Observer, paint a surprising picture of California politics in the wake of the 2012 election changes. By constitutional amendment, Proposition 14 scrapped the traditional party primary system, as citizens embraced arguments that the new approach would help insurgents and better represent voter choice.

A noteworthy byproduct of the open primary system though appears to be that the opponents who spent the most to defeat Democrats in same-party races were fellow Democrats.

Numbers contradict usual assumptions

According to research by Forward Observer, out of 52 same-party races across elections for California’s state Senate, Assembly and House of Representatives, Democrats faced Democrats in 36 contests, while Republicans went head to head in 16 match-ups. Democrats poured $69 million into those three dozen races, while Republican totals reached just over $20 million, according to information drawn from the offices of the state Fair Political Practices Commission and the Secretary of State’s Office, as well as the Federal Election Commission.

Democrats, researchers concluded, outspent or outraised Republicans in same-party general elections by over three times — $3.42 in Democrat dollars for every $1 Republican.

Moreover, independent expenditures on behalf of Democrats well exceeded those made on behalf of Republicans. Elections where Democrats squared off caused almost $20 million to be raised or spent, while Republican dogfights attracted slightly more than $7 million.

The substantial sums represent outlays made over the course of only two election cycles, 2011-2012 and the current 2013-2014 campaign.

2011-2012 cycle not what might be expected

Forward Observer tallied the cash totals at play in each subset of races leading up to the 2012 elections. Research revealed that, among same-party Assembly races, Democrats raised $18.75 million across ten contests, while Republicans raised $8.4 million across seven. In both cases, those figures included independent expenditures.

Among same-party state Senate races, Democrats raised nearly $4 million between Democrats over two races — again inclusive of independent expenditures. (No Republicans went head to head in a 2012 state Senate race.)

During the six same-party contests between Democrats seeking congressional seats, meanwhile, candidates raised over $26 million. Republican candidates in the same situation raised just $6.3 million.

2013-2014: same pattern shaping up

Because this election cycle is not yet over, fundraising numbers have reached lower totals for the same classes of same-party contests. Among eight same-party Assembly races featuring Democrats, candidates raked in $8.4 million, inclusive of independent expenditures, prior to the middle of the month. Republicans facing one another in four same-party Assembly races, by contrast, have raised just over $1 million in total, including independent expenditures.

Regarding same-party Senate races, Democrats once again outpaced Republicans within the same time frame, with a haul of $5.5 million versus nearly $2 million, independent expenditures included.

Finally, in current Congressional races, Democrats have maintained their sizable edge in total funds raised and independent expenditures. Across five same-party contests for Congress, Democrats generated $8 million in funding prior to Sept. 15 of this year. Across two such races, by the same date, Republicans have so far amassed less than $3 million.

BIG BROTHER

The committees will also have to report the name of the website where the content appears.

The long arm of the government has found a chilling new way to intimidate new-media.

Political bloggers writing online will be subjected to new disclosure rules under state regulations the Fair Political Practices Commission approved Thursday.

Here's how the State, under California Code Section 82013, defines a “committee”:

“Committee” means any person or combination of persons who directly or indirectly does any, of the following: (a) Receives contributions totaling one thousand dollars ($1,000) or more in a calendar year. (b) Makes independent expenditures totaling one thousand dollars ($1,000) or more in a calendar year; or (c) Makes contributions totaling ten thousand dollars ($10,000) or more in a calendar year to or at the behest of candidates or committees. A person or combination of persons that becomes a committee shall retain its status as a committee until such time as that status is terminated pursuant to Section 84214.

Any writer who receives indirectly or directly, $1,000 or more, will be subjected to this state-required reporting. The FPPC claims this is to corral the campaigns, but it's really aimed at political writers.

That could mean non-profit journalism, which is supported through voluntary donations, will now be under mandatory reporting by the State. (Full disclosure: CalWatchDog.com's parent think tank, the Pacific Research Institute, is a nonprofit.)

Conflict of interest lobbying and Capitol staff

Adding another twist to California's new FPPC regulation, The Sacramento Bee reported Democratic consultant Steven Maviglio, who is also the Communications Director for Assembly Speaker John Perez, has been involved in the decision-making process.

The Bee left Maviglio's Assembly job out of the story. He is paid $9,500 a month by the California Legislature for the part-time job.

“Democratic campaign consultant Steven Maviglio, who writes for the California Majority Report blog and has been working with the FPPC on the regulations for more than a year, said he was unhappy with the final product,” the Bee reported Thursday evening.

“The goal has always been righteous,” Maviglio said. “Implementation is going to be an avalanche of paperwork that is unenforceable.”

Maviglio's “work” with the FPPC on this new regulation is highly suspect. As Communications Director for the Assembly Leader, he does more than just write press releases. He advises the leader on the potential fallout or benefits of certain legislation. And he reports the pulse of the other Assembly members, as well as the constituents they represent. Maviglio plays a big role in influencing what happens in the Assembly.

There is a legislative manual which states a “consultant” like Maviglio can't have clients or do outside business with while on the state payroll, especially where there might be the slightest hint of a conflict of interest, according to a Capitol source who asked to remain unnamed for this story.

History repeating

Maviglio is not alone. Infamous political consultant Richie Ross helped Democrats get elected, and then proceeded to lobby them unabashedly at the Capitol. This went on for decades. He vehemently defended his duel roles, and insisted there was no conflict in his interests.

In 2003, Democratic Assembly Speaker Herb Wesson appointed a task force to address what he referred to as a growing problem of aggressive lobbying tactics and conflict of interest by political consultants who lobby legislators they helped elect. He had Richie Ross in mind after Ross verbally abused the staff members of two legislators who refused to vote against a bill that was of interest to one of his lobbying clients, the United Farm Workers Union, CalState News reported.

In 2006, Gale Kaufman, a top political strategist to Assembly Speaker Fabian Nunez and the California Teachers Association Union, returned to the state payroll as a consultant to the speaker's office, Capitol Weekly reported.

“'I'm only working part time. I can still rake in the big bucks on the outside,' Kaufman joked in a conversation with Capitol Weekly. “'I'm in and out of [the Assembly] all the time. This time around, for the next little while, I'll be doing some more work, so I decided to go on the payroll.'”

“Kaufman even has a small office on the third floor of the Assembly annex, around the corner from the Assembly floor,” Capitol Weekly found. “She says she will be working out of the office part time.”

The conflict lies with the revolving door between political parties, labor unions, consultants, and paid staff, and rarely with the people doing the writing, reporting and exposing.

But now, Maviglio and his political ilk have influenced more than the Assembly leadership — they've gone in through the back door of the state, into the bowels of state code, in an attack on dissent.

This is the first article in a two-part series on the battle against corporate political speech.

The U.S. Supreme Court’s Citizen’s United decision in 2010 affirmed the right of businesses, associations and unions to freely engage in politics. Since then, leftist groups have increased the pressure on corporations to eliminate or at least disclose their spending on candidates, ballot measures, political action committees, trade associations and the like.

But when corporations cave in to such pressure, they open themselves to the possibility of boycotts and protests from leftist groups that disagree with something a candidate says or an association does.

Whether the pressure campaign has been effective — and whether corporations would be committing suicide by going along with it — were topics debated at a recent conference of the Society of Corporate Secretaries & Governance Professionals.

Bruce Freed, president and founder of the Center for Political Accountability, has been in the forefront of the corporate pressure campaign. His group publishes an annual index that tracks large U.S. companies’ policies on political spending. CPA also pushes corporations to adopt its model political disclosure resolution. It calls on companies to:

* Report soft money contributions, independent expenditures and payments to trade associations and other tax exempt organizations that are used for political purposes.

* Identify the titles of the individuals involved in the expenditure decisions.

* Disclose their political spending guidelines.

* Require the board of directors to conduct oversight of the company’s political spending.

Belly of the beast

Freed went into the belly of the beast on July 12 to urge a room full of corporate pros to do just that.

“Why has political disclosure become such an important issue to both companies and shareholders?” he asked. “I think it can be summed up in one word: risk. Over the past several years shareholders and companies have come to recognize that political spending using corporate treasury funds poses a range of risks. Those risks are reputation, business and legal. A serious problem exists today with the rise of 501(c)(4) groups. We have a real threat of extortion and shakedown. Because those groups, the 501(c)(4)s, do not disclose their donors. They are really conduits for secret political spending.”

Freed assured his audience that their companies would not be the only ones disclosing their political spending.

“What’s interesting today is that political disclosure has become a mainstream corporate practice,” he said. “Companies in ever-growing numbers are adopting disclosure and accountability policies. As of today, 118 companies — these are large companies in the S&P 500 and over half of the S&P 100 companies — have reached disclosure agreements with CPA and its partners…. [A]bout three-fourths of the companies in the S&P 500 do have policies of some sort on political spending.”

And Freed argues that transparency is good for business.

“Our experience has been that there’s no question that disclosure is good for companies and shareholders,” he said. “It allows them to know what companies are spending directly and indirectly. We have found through our surveys that directors do not necessarily know their company’s political spending. We’ve also found in discussing with companies that political disclosure really has not had serious consequences, has not led to pressure from shareholders and various stakeholders. It hasn’t led to requests for more contributions. I think we are at the point now where we find that standardized disclosure creates a level playing field. That’s something that we are finding more companies are saying to us that they want.”

Focus is on corporate speech

Although Freed argued against political spending in general, it appears that it’s mostly corporate political spending that concerns him.

“We see political spending as distorting markets in policy making and creating a skewed playing field,” he said. “That’s one of the reasons why we have been pressing companies to disclose their political spending. To at least have it out there for shareholders, others, even for directors and management to know the full extent of the company’s political spending. I think you can look at political spending and see … that it really can create problems for a well functioning market economy.”

Freed summed up his opening statement with “two important takeaways. The first is that the steady growth in the number of companies adopting disclosure and accountability is making it a corporate governance standard. We have critical mass today.

“Secondly, it’s in a company’s self interest to have robust disclosure and accountability policies. With the rise of 501(c)(4) groups, with the rise of trade associations engaged in political spending and doing it with anonymous funding, disclosure is very important in helping to protect companies from risk and it also leads to considered decision making.”

Different planets

Freed’s debate opponent Brian Cartwright, a former general counsel at the Securities and Exchange Commission, opened by saying, “It may appear that Bruce and I come from different planets. We couldn’t diverge more in our views. There’s little that he said with which I agree. I just have to set the scene as to what is really going on here from my perspective.”

Cartwright argued that businesses would be crazy to kowtow to the pressure from what he called “the anti-business community.”

“I start from the premise that the government is large enough at all levels — local, regional, state and federal,” he said. “It’s pervasive enough, it’s intrusive enough that the business community has really little choice but to engage with the government. Whether business thrives, or sometimes whether it survives, often depends on what the government does and doesn’t do. We all know that. So as a pragmatic matter you have to engage with the government; the business community does.

“The folks who view themselves as usually adverse to business — not always, but usually; the big labor federations, the trial lawyers and others, you know who they are — have got lots of money. They have got lots of manpower. They are very sophisticated. And they are very aggressive, as you all know, in their involvement in electoral politics. So, the business community really can’t afford to cede the field to them. Because if it does, it’s just going to get rolled.”

Targeting Target

The 2010 boycott against the Target Corporation is an example of what can happen when corporations engage in political spending and disclose it. The retail giant contributed $150,000 to Minnesota Forward, a pro-business group that supported the campaign of a gubernatorial candidate who opposed gay marriage. After gay-rights groups launched a boycott, Target apologized for the contribution and promised to make amends by focusing on diversity and inclusion in the workplace. The boycott then fizzled out.

“The anti-business community wanted to use this as an opportunity to send a message broadly as to what can happen to you if you participate in politics,” said Cartwright. “Target emerged unscathed. Undoubtedly they had an episode they had to manage that they would rather not have managed. And these incidents have been few and far between. So on a probability basis, your likelihood of having to face something like this isn’t too great. Nonetheless, you’re on notice. It’s kind of, ‘Nice business you have there — it would be shame if anything should happen to it.’”

The corporate pros nervously laughed.

Cartwright concluded his opening remarks:

“So if you want to, capital T, target companies in order to dissuade them from entering the political process at all, it poses at least a modest obstacle. So they would very much like to overcome that. I think it was Lenin who said a capitalist is the guy who will sell you the rope to hang him. Here they are suggesting, not that they buy the rope, but that you give it to them. Because they want the disclosure that will enable them to at least threaten to, capital T, target you.

“The ultimate goal here … is to remove the voice of business from the playing field. That strikes me as almost obviously not in the best interest of companies and therefore indirectly their investors and stockholders, at least those who are not conflicted with another agenda.

“So why would anybody do it? I don’t think anybody really would. But the pitch … is that ‘resistance is futile.’ That’s supposedly because of two things. First, all your peers are doing it. And then arguing in the alternative, second, ‘If they are not doing it now, they will be soon. This wave is unstoppable. So you don’t want to be an outlier, do you? That will expose you even more. So why don’t you get on board with the program?’ That is very much the pitch. I’m here to say that all your peers aren’t doing it, this wave is not unstoppable and it is not in the best interest of stockholders.”

Doing it

The largest part of the debate concerned whether everybody is in fact “doing it.” Freed said shareholder support for political disclosure policy proposals has risen from 9 percent in the 2004 proxy season to more than 30 percent now. Boeing jumped from 22 percent support in 2011-12 to 29 percent this year.

“The experience is that there has been a significant increase,” said Freed.

Freed’s numbers are based on counting just the “for” and “against” votes on disclosure resolutions. Cartwright countered that with a slide using statistics that also include abstentions on those resolutions. It shows that there is very little support (18 percent) for limiting corporate political speech, the same as what it was in 2006.

“These [anti-corporate] proposals get clobbered every single year,” Cartwright said. “The overwhelming rejection by shareholders of these proposals is manifestly evident.”

The debate ended with Cartwright stating something that both he and Freed could agree on.

“It does make sense for the board to have some monitoring supervision of this,” said Cartwright. “It does makes sense to have internal policies that guide the activity in this area as in many others.”

To listen to the debate, click here, or on the YouTube below.

Next story: Leftists seek SEC regulation of corporate speech.

By Steven Greenhut

SACRAMENTO — California residents are depressed about the economy and see little hope for change in the near future, yet they seem more reluctant than ever to change the current high-tax, union-dominated political course that has led to the struggling economy.

As the Field Poll revealed in July, “Californians have had an extremely gloomy view of the state’s economy since 2008. … Currently nine out of 10 residents … describe the state’s economy as being in bad times.” The data is a couple months old, but nothing suggests any drastic change since then.

Meanwhile, the latest polling for the two highest-profile November ballot initiatives brings good news for those who embrace the status quo. A Public Policy Institute of California survey shows Gov. Jerry Brown’s Proposition 30, which would temporarily increase the state sales tax and income taxes on those earning at least $250,000 a year, ahead, 52 percent to 40 percent. By the way, how often have you met a temporary tax hike that actually goes away?

Furthermore, PPIC reports that voters have soured on perhaps the most significant statewide initiative on the statewide ballot, Proposition 32, a “paycheck protection” measure that is losing, 49 percent to 42 percent. (Even though support for it is fading, PPIC found a solid majority of voters in favor of the goals of the initiative, which makes California voters even more perplexing.)

The proposition stops the state’s politically dominant unions from using automatic payroll deductions to finance their political activities. The initiative has some other features, such as a bans on political payroll deductions from corporations, on direct giving to political candidates and on political donations from government contractors seeking favors.

Pointless

But these other provisions are mostly pointless. Corporations do not use payroll deductions to fund political efforts. Following the U.S. Supreme Court’s Citizens United decision in 2010, few corporations or unions give political contributions directly to candidates, preferring to use independent campaigns to help chosen candidates. Typical of all initiatives, Prop. 32 includes a few provisions that are meant more to sway voters than to change policy.

Nevertheless, the core issue here — restricting those payroll deductions that are the foundation of union political power — is not just principled, but crucial if California voters are serious about moving the state away from its current political and economic trajectory.

No one should have their money taken by force and used for political purposes that often are at odds with one’s beliefs. No one should have money deducted automatically from their paycheck and given to a private organization without one’s consent. This is a freedom issue as well as a political-influence issue. The current situation is pure coercion.

Under Prop. 32, the unions can still deduct an agency fee from members’ paychecks to pay for collective-bargaining activities. Ironically, liberal groups are complaining that corporations and conservative donors are funding ads supporting Prop. 32, even as massive union spending, thanks to the current forced-donation situation that Prop. 32 addresses, is pounding the initiative with ads making dubious claims about exemptions for wealthy businesses.

States that have passed paycheck-protection-type laws have seen mixed results because of various loopholes and legal challenges, but there’s little question that public- and private-sector union political influence has been reduced in those states. A study by the conservative Heritage Foundation found that, on average, state laws that limit these political payroll reductions slash union political contributions in half. Unions are still able to raise plenty of money — but they have to ask for it rather than just take it.

Death Star

One major California union called Prop. 32 “the Death Star for unions,” which is an overstatement, but illustrates how concerned the unions are about this proposition.

Consider why it is on the Nov. 6 ballot. Last year, Brown signed Senate Bill 202, requiring ballot initiatives to be decided during general elections, not during lower-turnout primary elections. “Everyone knows that passing SB 202 was to diminish chances that voters would pass a so-called ‘paycheck protection’ measure that would eat into unions’ ability to gather campaign funds from public employees — money that almost always goes to Democrats,” opined Sacramento Bee columnist Dan Walters.

Brown was elected with strong support from unions and has governed in a way that usually puts their priorities first. The Democratic Party, which controls every statewide constitutional office and could soon have two-thirds control of both houses of the Legislature, is always doing the bidding of the unions. If this doesn’t change, it’s hard to envision an optimistic future here.

Some Democrats understand how unions are destroying public services.

Former Democratic state Sen. Gloria Romero of Los Angeles is a spokesperson for Prop. 32, because she — as a devoted education reformer — has watched the teachers’ union squelch reform and turn California’s public schools into bureaucratic nightmares.

“If we don’t deal with how the beast is fed, and what maintains that, and what gives it status and opportunity to run roughshod over the educational lives and futures of 6 million kids in California, then shame on us,” Romero told the Wall Street Journal’s Allysia Finley.

Even the San Francisco Chronicle, which opposed Prop. 32 in an editorial, grasps the heart of the problem: “There is no question that organized labor has a powerful grip on the state Capitol, and that works against the public’s interest on issues such as education reform, government efficiency and pension reform.”

Then why not take serious steps to loosen that grip? If California voters reject Prop. 32 and support Prop. 30, the unions will maintain their financial control over the political process, and all Californians will pay more to prop up the current dysfunctional system. And, no doubt, the same California voters will continue to tell pollsters how unhappy they are with the current state of affairs.

Steven Greenhut is vice president of journalism at the Franklin Center for Government and Public Integrity; write to him at: steven.greenhut@franklincenterhq.org.

At issue is the Citizens United v. Federal Election Commission Supreme Court decision.

In January 2010, the United States Supreme Court  reached the landmark decision which reaffirmed that the First Amendment did in fact, prohibit the government from restricting political expenditures by corporations and unions. The Court stated that political contributions are a form of free speech, and should not be regulated or narrowly tailored by the government for its own interest.

One of the outcomes of the Citizen United decision was the creation of Super Committees and SuperPacs, which may accept unlimited contributions from individuals, unions, and corporations.

Despite the Supreme Court stating that the First Amendment “must protect corporations and individuals with equal vigor,” California Democrats  passed a resolution this week urging Congress to amend the Constitution, and limit corporate contributions to political PACs.

Out of the Ashes…

Thursday, the Assembly voted 48 to 22 to pass Assembly Joint Resolution 22 which calls on Congress to reverse the Supreme Court’s decision in Citizens United v. Federal Election Commission.

However, arguments and floor speeches by Democratic legislators only addressed corporate contributions – Democrats in the Assembly never mentioned union contributions. Democrats said that AJR 22 wasn’t just a resolution, but was part of a national movement to limit and control corporate political contributions.

AJR 22, by Assemblymen Bob Wieckowski, D-Fremont, and Michael Allen, D-Santa Rosa, is one of 13 resolutions seeking to overturn Citizens United. Wieckowski said that with his resolution, California will be part of a “grassroots movement that believes corporations are not people and money is not speech,” a quote made famous by David Kairys, the civil rights law professor who warned that the decision would unleash “a new wave of campaign cash and adds to the already considerable power of corporations.”

A recent favorite phrase of Democratic Assembly Speaker John Perez is similar: “Corporations aren’t people until Texas executes one.” Perez made the statement at a labor caucus meeting at the recent Democratic convention.

All of the other 13 resolutions seek to overturn the decision in different ways. Some of the resolutions also claim that corporations are not humans; others would seek more Congressional power to regulate campaign contributions and expenditures more narrowly.

Wieckowski stated that the ruling opened a floodgate for unlimited corporate donations, which he said he opposes. “We’ve had a distortion of the political process because of all the money flowing into politics,” said Allen.

The bill analysis states: This measure would memorialize the Legislature’s disagreement with the decision of the United States Supreme Court in Citizens United v. Federal Election Commission, and would call upon the United States Congress to propose and send to the states for ratification a constitutional amendment to overturn Citizens United v. Federal Election Commission and to restore constitutional rights and fair elections to the people.

Republicans who opposed the resolution said that the opposite should happen – that government imposed restrictions should be removed from political campaign contributions, and complete disclosure and transparency about who is contributing should be required instead.

“What is a corporation? A corporation is an assembly of people,” said Assemblyman Tim Donnelly, R-Hesperia. “If you’re regulated by the government, don’t you have the right to address your government?”

MAR. 23, 2012