Laws for Sale
by George Pillsbury
Dollars and Sense magazine, July / August 2000
Say you're a corporate entity and you want new legislation
that will boost your profits -a tax cut, the repeal of "burdensome"
regulation, or labor law "reform." The old-fashioned
way is to buy access by making campaign contributions to incumbent
politicians and hiring professional lobbyists to help them craft
the desired legislation. This can be expensive and time-consuming.
And the results are not guaranteed. Today there's a better way.
A wealthy interest such as a corporation or individual millionaire
can circumvent those same elected officials and-in 24 states-use
the thriving marketplace of ballot initiatives to buy special-interest
laws directly.
Ironically, they are exploiting hard-won democratizing reforms
of an earlier era. Citizens' organizations fought alongside political
leaders such as populist Democrat William Jennings Bryan and socialist
Eugene Debs for the initiative and referendum (or "I&R")
during the populist era of the 1 890s. The goal was to provide
a way for ordinary citizens-in "emergency" situations-to
circumvent state legislatures when a popular reform was blocked
either by the undue influence of big economic interests or the
narrow self-interest of the legislators themselves. Eastern and
Southern political establishments largely resisted the initiative
and referendum. However, citizens' groups won the reform in more
populist Midwestern and Western states. Voters in these states
used ballot initiatives to regulate businesses, legislate working
conditions, and expand women's rights.
Now the law in 24 states, the initiative and referendum gives
about half the U.S. population the opportunity to exercise a limited
measure of direct democracy. Initiatives give citizens the right
to create and vote on laws directly. Referenda allow voters to
repeal by popular vote any state law. There is also a method for
citizens to initiate constitutional amendments.
However, as in campaigns for public office, big money has
distorted the process. Wealthy interests-whose spending on ballot
questions is not limited by law-have long used their financial
advantage to defeat grassroots initiatives. More recently, large
corporations and newly minted millionaires have begun to use initiatives
and referenda proactively. Sometimes they use the ballot to promote
their special financial interests, sometimes to push personal
political agendas. Either way, private money ends up making public
policy.
HOW DOES ONE BUY A LAW?
A wealthy special interest will start by crafting a ballot
question on which the potential opposition is not very well organized,
lacks the resources to put up an effective resistance, or is vulnerable
and easily scapegoated. Ideally, the initiative poses an issue
on which the public is ambivalent or lacks basic knowledge. This
is often true for the narrowly tailored economic concerns the
big-money interests pursue through the ballot. Then the corporation
or individual spends anywhere from $1 million to $10 million (or
more) to hire:
* a lobbying firm to plot and manage the initiative campaign,
* a firm to pay signature gatherers to secure placement on
the ballot,
* a polling firm to target voters,
* a media firm to run the ad campaign, and
* a top law firm to defend the law every step of the way.
This process has become all too familiar to residents of ballot-initiative
states across the country. In Massachusetts, one of the few Eastern
states with the initiative and referendum, local landlords and
large realtors drafted a 1994 statewide ballot initiative to ban
rent control throughout the state. Rent control then only existed
in three of the state's 351 cities, including Boston. Real-estate
companies poured in more than $ l million to pay the costs of
signature collection, public-opinion polling, and a media campaign.
In the three rent-control cities, voters rejected the measure
by a wide margin. Statewide, however, landlords won their question
with a narrow 51% majority. Today rents have skyrocketed and all
three former rent control cities are beset by an affordable housing
crisis.
Big-money interests also used the ballot initiative to bring
riverboat gambling to Missouri. In the early 1990s the Missouri
legislature authorized, and the majority of voters approved, gambling
on casino boats. After opponents won a court case halting the
measure's implementation, a second vote rejected the gambling
initiative. Las Vegas casinos and other gambling interests upped
the ante by hiring one of the nation's top ballot-initiative firms,
the California-based Winner, Wagner, and Mandabach. With more
money and better polling, they forced the issue back on the ballot
and won. With the same firm's help, the gambling industry won
again in 1998, when further court action forced them to seek a
voter initiative for a constitutional amendment.
Across the country in California, Silicon Valley millionaire
Timothy Draper spent $2 million of his personal fortune to qualify
a school-voucher ballot initiative for this November. Opposed
by most public-school advocates, his effort doesn't even have
the backing of many local school voucher proponents. Draper's
wealth, however, has bought enough signatures to make California
voters consider his personal plan for free-market schooling. All
this without the benefit of any citizen mobilization or legislative
debate.
The main issue is not whether any of these are good or bad
public policy, but the transformation of citizen initiatives into
a marketplace where laws can be bought and sold as commodities.
Two basic factors are at work:
The first is the exploding use of paid signature gathering
-and the emerging signature-collection industry. Large national
firms hire itinerant signature collectors and send them to ballot-question
states. The gatherers typically get paid per signature. They have
only cursory knowledge of the issues and little commitment to
the outcome beyond the paycheck. Setting up at shopping malls
or in front of supermarkets, they will often gather signatures
for two different petitions at once.
Paid signature gathering has long been recognized as a threat
to the honest and democratic use of the initiative and referendum.
Over a century ago, both supporters and opponents of the reform
noted that petitioning for "ten cents a signature,"
the going rate at the time, would defeat the whole purpose of
signature requirements-to demonstrate widespread public interest
in the proposed initiative.
It is true that in some initiative-and-referendum states the
signature requirements are too high for even legitimate citizen
efforts. However, in most, popular causes with bona fide grassroots
support can collect signatures using volunteers. Initiative backers
may still use funds to pay organizers to recruit the volunteers.
However, it is still local volunteers at shopping centers, post
offices, and community meetings that are the collectors-people
who know and care about the issue at hand. Recruiting volunteers
requires education and movement-building-and is as important to
the initiative process as the final vote itself.
The other particularly troubling feature of ballot questions
is the absence of contribution limits. Corporations or wealthy
individuals can spend as much as they want to
purchase an outcome-whether to defeat a public interest initiative
or buy their own law. The advantage of money has become far more
significant since the advent of mass media, especially television.
Back when government took seriously its role to protect the integrity
of the ballot process, a 1960s reform - called the "Fairness
Doctrine" muted this advantage. If, for example, one side
of an initiative campaign spent $3 million on a media buy, the
Federal Communications Commission (FCC) required broadcasters
to provide either equal time or a ratio of time to the other side
to respond. This policy also served to discourage unbridled spending,
since this would trigger matching ads for the . other side. Under
the Reagan administration, however, the FCC did away with the
Fairness Doctrine, eliminating this important leveler between
those with and without large financial resources.
Until recently, the courts have not helped. In last year's
Buckley v American Constitutional Law Foundation case, the Colorado
Supreme Court turned back attempts to restrict paid signature
gathering or limit contributions, citing the "free speech"
rights of money. In their reluctance to challenge the so-called
"rights" of big money, the courts devalue the speech
and rights of those without money. "Free speech" in
the realm of politics and public policy loses its meaning when
money buys access to speech through ads, polls, phone banks, and
signature collectors. Here speech is actually rarely "free"
but comes at an increasingly high price for media buys and the
like. In a positive turn, the Supreme Court may have begun to
recognize the gravity of the problem with this year's Missouri
u Shrink decision. By a 6-3 majority, the high court upheld the
power of the states to place contribution limits in state election
campaigns.
There are those who would throw the ballot-initiative baby
out with the big-money bath water. Columnist and pundit David
Broder argues, in his Democracy Derailed, that big money has terminally
corrupted the initiative process. He concludes - with other economic
and governmental elites who dislike any form of direct democracy
- that the public should never have the right to vote directly
on the laws that govern it. As corrupting as money has been, however,
ballot questions can remain a positive component of democracy.
They provide voters with a valuable tool, under special circumstances,
to advance political and economic reforms stymied by either the
self-interest of legislators (such as reforming campaign-finance
laws that favor incumbents) or the power of wealthy lobbies (who
can unduly sway legislators with campaign money, prestige, and
perks for their districts, and jobs when they leave L office).
Environmentalists have used ballot questions to block nuclear
power plants, clean up ,~ toxic wastes, promote recycling, and
create conservation land trusts. Recently, proponents of campaign
finance reform have used ballot initiatives to get around the
resistance of entrenched politicians.
Like any part of our democracy, however, ballot initiatives
are only as democratic as their process. Reform and regulation
are necessary, just as in election campaigns, to keep them fair
and true to their original purpose. Comprehensive reform must:
1. Curtail paid signature gathering: The signature-gathering
process is central to the democratic, educational, and mobilizing
value of ballot initiatives. Volunteers committed to a cause should
be the primary gatherers. At the same time, prohibitively high
signature requirements in some states, like Nevada, should be
reduced.
2. Restrict or ban donations from for-profit corporations:
Current federal and state laws already ban corporations from making
direct campaign contributions. While ballot questions are considered
"lobbying," not electioneering, for-profit corporations
already have more than enough influence through lobbyists and
other means.
3. Restore the "Fairness Doctrine" This levels the
playing field-enhancing rather than limiting speech. It also can
discourage the overuse of paid media and provide incentives to
rely more on direct voter education at meetings, from organizations,
over the Internet, or through earned media generated by the campaign
itself.
If the role of money goes unchecked, ballot questions will
continue to be bought and sold like cars, appliances, or any other
consumer good. With common-sense regulation and reform, however,
ballot questions can be saved from this corrupting influence and
restored to their original purpose. They can embody the noble
ideal of democracy. As the Constitution of the State of California
puts it, "All political power is inherent in the people.
Government is instituted for their protection, security and benefit,
and they have the right to alter or reform it when the public
good may require."
George Pillsbury is Director of the Massachusetts Money and
Politics Project, which does research and education on the role
of money in state elections. He is also Development Director of
Boston VOTE, a new coalition working to increase electoral turnout
and promote electoral reform.
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