Corporate "Smart" Initiatives Will Test California Voters' Smarts Tuesday

by Jamie Court, President, Consumer Watchdog During my two decades battling in California's ballot initiative process never before have large corpo

by Jamie Court, President, Consumer Watchdog

During my two decades battling in California's ballot initiative process never before have large corporations been poised to gain so much so cleverly as in next Tuesday's election.

Industries have long tried to lard ballots with outright power grabs and voters have sent them packing. What Tuesday's ballot represents is new stealth strikes by corporations going at it alone for discrete rights and privileges that legislatures, courts and voters have denied them before.

These new "smart initiatives" cloak their corporate sponsors and target a single change to their business model, at the expense of the general public, so they don't risk incurring the collateral damage of hurting another special interest with the money to fight back. If the smart initiative strategy succeeds, spending tens of millions of dollars on deceptive television advertising could be enough to buy public policy in California. You can bet companies across America will be watching closely to see what happens.

Propositions 16 and 17 are the model for the smart initiatives. Pacific Gas and Electric has spent more than $40 million on Proposition 16 to create a nearly insurmountable two-thirds vote hurdle before a municipality can create a public utility to challenge the company. Listening to the advertising PG&E is buying, the average voter would think the issue is taxpayer waste, preserving local police departments and taxpayers' right to vote, not a big utility wanting to stifle competition through a political power play.

You need to have strong eyesight or powerful glasses to read about PG&E's funding in the fine print of the disclosure at the end of the television advertisement. Since there's not sufficient moneyed opposition to the proposal to run advertising against Proposition 16, PG&E is able to create its own narrative. The cutbacks in newspaper, television and radio newsrooms over the last few years have created even less chance that honest reporting can hold the sponsor of Prop 16 accountable for its true motives.

Prop 17 is an almost identical case. One insurance company, Mercury Insurance, has spent $15 million to allow it to raise or lower rates based on a factor that voters ruled illegal in 1988: whether or not you had insurance previously. Courts and regulators have told the company 'no' repeatedly, but hidden behind a paper tiger coalition of nice sound groups, which largely only exist around election time, the insurance company is going to voters under the pretense of offering "discounts" for continuous coverage. Every major editorial board in the state has weighed in against Proposition 17 under the grounds it's deceptive, hurts those who don't drive during domestic military service and will raise rates for those least able to afford it. A group of consumer advocates, including myself, have raised about $1 million for television advertising to warn the public an insurance company is behind Prop 17. All we can really say in the 15 second television ads we can afford is this: when has an insurance company spent millions of dollars on a ballot measure to save you money? Will it be enough?

Corporate corruption of the ballot initiative process is nothing new, but what is unique in this primary is companies taking the offensive and exploiting the demise of a vital free media sector to buy all the paid media they need to overcome the few opinion leaders that help the public see past their advertising. The Federal Communications Commission once had a "Fairness Doctrine," which required equal time for both sides on electoral issues, regardless of who paid for advertising, but it fell prey to legal and lobbyist attacks. Now we have conditions where a powerful corporation with a story to tell may be able buy its own laws from an unsuspecting public.

Most initiative battles come down to finger pointing. The details of ballot initiatives are usually way beyond the public's attention span, so what matters in the end is who stands on which side of an issue. Consumer groups vs. insurance companies. Cops vs. marijuana dispensaries. The governor vs. public employee unions. Voters will have a hard time knowing whose interests are being served by the key ballot measures Tuesday.

More than six out of 10 ballot initiatives fail because voters are rightly suspicious of proponents and their snake oil. Getting a "no" vote is a lot easier than winning a "yes." Until now, the real power of an influential interest group rested in its ability to frighten voters and defeat populist ballot initiatives that threatened business as usual. The pro-active smart initiatives on Tuesday's ballot will have their own policy ramifications but they are also trial balloons for a new wave of corporate comeuppance. Let's hope voters again prove that they are smarter than corporations think they are.

About Naomi Seligman

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