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Props 16 and 17: The Defeat of Corporate Politics

June 16th, 2010

By Robert Gammon, EAST BAY EXPRESS

The voters’ rejection of two statewide ballot measures might convince large corporations to think twice before attempting to game California’s initiative process.

Meg Whitman, Carly Fiorina, and Jerry Brown may have garnered the most attention, but the June 2010 California Primary could go down as the election in which voters rejected dishonest corporate politics and disingenuous ads. The defeat of Propositions 16 and 17 also may convince large corporations that attempts to game California’s initiative process are extremely risky, and, ultimately, very costly endeavors.

No one knows that better than PG&E. In the weeks leading up to June 8, Pacific Gas and Electric Company blanketed the airwaves, the Internet, and newspapers with ads touting Prop. 16 as the “Taxpayers Right to Vote Act.” PG&E boasted in advertisements and on its web site that a wide range of groups had endorsed Prop. 16. But while many groups voiced their support of the measure, only one of them — the California Chamber of Commerce — donated any money to the cause, and its relatively small contribution of $91,258 appears to have originated with PG&E. According to campaign finance reports, the chamber’s donation came right around the same time that PG&E contributed $250,000 to the chamber’s political action committee. Thus, the only real donor to the campaign appears to have been PG&E itself, which contributed a whopping $44.1 million, according to the latest campaign finance reports. No other taxpayer, consumer, or voters’ rights group appears to have donated a single dime to getting the measure passed.

To sum up, the Prop. 16 campaign was about one company — PG&E — trying to protect its monopoly by sponsoring and bankrolling a measure that would have made it nearly impossible for cities and counties to jump into the power market and increase their renewable energy use. It wasn’t the Taxpayers Right to Vote Act. It was PG&E’s Attempt to Keep Its Monopoly Act. And it lost by nearly 200,000 votes — 52 to 48 percent.

Similarly, the Prop. 17 campaign referred to itself as “Californians for Fair Auto Insurance Rates,” but a more accurate name would have been: “Mercury Insurance for Unfair Profits.” That’s because the only “Californian” who donated any significant amount of money to the campaign was Mercury Insurance Company, the sponsor of the initiative. According to the latest campaign finance reports, the state’s third-largest auto insurer donated $13.84 million to the campaign — representing 99.5 percent of the contributions received. The Prop. 17 campaign also could have billed itself as “Elect Republicans for Higher Mercury Profits.” Public records show that the Yes on 17 campaign helped finance at least seven Republican voter guides, most of them in Southern California. The GOP guides included “Continuing the Republican Revolution,” “Republican Woman’s Voice,” and “Orange County Republican Leadership Voters Guide.” In all, the Yes on 17 campaign donated $35,000 to mailers designed to boost Republicans and Prop. 17.

Republicans did just fine, but voters apparently saw through Prop. 17. It would have allowed Mercury to attract more customers with offers of discounts, while leading to higher rates for low-income motorists, more uninsured drivers, and, eventually, higher insurance rates for everyone else. It lost 52 to 48 percent as well.

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Perspectives: Mercury General, Poizner Make Millions Disappear in Primary Election

June 14th, 2010

By Sean P. Carr, BESTWIRE

WASHINGTON, DC — In the end, the insurance giant just couldn’t convince Californians it had their interests at heart.

Despite $16 million in campaign spending by Mercury General, a controversial automobile insurance ballot question lost at the ballot box. The Mercury-founded and funded Californians for Fair Auto Insurance Rates sought to convince voters that under Proposition 17 some 80% of them would save money on their car insurance by becoming eligible for longevity discounts even if they switch insurers. Extending those discounts is now illegal under Proposition 103 for a reason, opponents argued, saying the effect would have been to necessitate discriminatory higher rates against drivers with any gap in their coverage, including the poor and military personnel.

Faced with a more than 15:1 spending disadvantage, foes including the Campaign for Consumer Rights adopted the slogan, “When was the last time an insurance company spent millions to save you money?”

That catchy bit of politics may have had an impact, said Samuel Sorich, president of the Association of California Insurance Companies, who supported Prop 17. “It did tap into what is an inherent skepticism,” he said.

As Prop 17 opponents raised Mercury’s history with regulators as an issue, the Department of Insurance made fresh allegations of wrongdoing by the insurer, including the overcharging of customers. The Yes on 17 campaign sought to separate the merits of the question from Mercury’s regulatory issues — even while Mercury continued to fund virtually the entire enterprise.

Mercury “got taken for a ride” by political consultants, said Jamie Court, president and chairman of Consumer Watchdog and a board member of its CCR affiliate. Prop 17, which lost by a 4% margin, was never going to pass, he said.

“The entire coalition is disappointed with the outcome, as we all believe California consumers will ultimately end up losing as a result,” Mercury said in a company statement.

With the same amount of money, Mercury could have given $250 rebates to 64,000 new policyholders. Because the company claims a better-than-96% renewal rate, that might have given the insurer’s customer rolls a nice boost — which wouldn’t hurt. Mercury General Group’s share of the California private passenger vehicle insurance market slipped from 9.4% to 8.7% from 2008 to 2009. It dropped from being the third-largest such carrier to fifth-largest, according to BestLink, which provides online access to A.M. Best’s Global Insurance & Banking Database.

In the California scheme of things, perhaps Mercury General’s losses don’t amount to much. Sitting Insurance Commissioner Steve Poizner spent approximately $25 million of his own money on a race for governor, only to be crushed by Meg Whitman in both spending — who spent three times that just from her own eBay fortune — and in the vote — where she doubled his total. At least he covered the spread.

But the June 8 primary wasn’t all about money. While as surprised as anyone, 16-year Department of Insurance enforcement attorney Brian FitzGerald holds a tenuous lead over veteran Assemblyman Mike Villines, despite investing in little more than the filing fee, a blog and a Facebook page. Counting of outstanding mail-in votes, provisional ballots and damaged ballots could go on for weeks, according to the Secretary of State’s office.

Meanwhile, FitzGerald is back at work — though maybe with a closer eye on the corner office.

Contact the author, Sean P. Carr, Washington Correspondent at: sean.carr@ambest.com

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California Voters Defeat Two Threats to Good Public Policy, Initiative Process

June 13th, 2010

Editorial, THE OAKLAND TRIBUNE

One of the most puzzling and troubling aspects of California elections is the abysmally low voter turnout even when voters have an opportunity to directly make important public policy decisions through ballot measures.

In Tuesday’s primary, only 24.8 percent of registered voters participated, which translates to an even lower 18.3 percent of all Californians who are eligible to vote.

Low turnouts can produce odd results that are not representative of the state as a whole and can establish harmful policies. Fortunately, that was not the case on Tuesday, when two misleading ballot measures designed to benefit special interests at the expense of the public narrowly failed.

Propositions 16 and 17 each were heavily funded primarily by two corporations solely for their own financial benefit.

Proposition 16 had a single purpose   to protect Pacific Gas and Electric Co.’s financial interests against competition from publicly-owned electric service providers.

Had Proposition 16 passed, local governments would have had to get a difficult-to-achieve two-thirds vote to create a publicly owned and operated utility.

The supermajority vote would be even harder to get if PG&E funded the opposition, which it has in the past.

PG&E spent at least $45 million of ratepayer and investor money on ads and mailers to promote its self-serving measure.

The utility tried to fool people into thinking Prop. 16 was a pro-voter initiative instead of a means of thwarting cities and counties from combining to contract with an electricity provider other than PG&E.

To their credit, a majority of those who did participate in Tuesday’s primary were not taken in. In fact, Prop. 16 lost by a wide margin inside the PG&E service area and won narrowly outside the utility’s service region.

This says much about what customers think about PG&E. One also has to wonder why PG&E is so fearful of competition from publicly owned utilities that it would spend tens of millions of dollars to prevent their growth.

Proposition 17 was the other self-serving measure that was defeated on Tuesday. It was almost entirely funded by Mercury Insurance. It hoped to fool voters into thinking it was just a change in the law that would allow insurers to offer “continuous coverage” discounts on policies to new customers who changed auto insurance companies.

That was only half the story. Insurance companies also would have been allowed to increase the cost of insurance to drivers who dropped their car insurance for 91 days or more in the past half-decade.

Evidently, voters figured out that no insurance company was going to spend millions of dollars just to save its customers’ money.

While both of these harmful ballot measures failed, they did so by disturbingly small margins. Prop. 16 was defeated 52.5 to 47.5 percent, and Proposition 17 lost by a 52.1 to 47.9 percent margin. Both were winning early in the vote count.

Had either of these ballot measures passed, a far-reaching and dangerous precedent would have been set, severely undermining the entire initiative process.

If a single well-heeled company can pay signature gatherers to place a self-serving measure on the ballot and then successfully finance a misleading campaign to pass it, public policy could be distorted for the benefit of any number of special interests.

No doubt there will be future attempts by individual companies to fool the public with dishonest initiative campaigns.

We can only hope voters will continue to be vigilant enough to see through the propaganda and reject initiatives that are not in the public interest, as they did with Propositions 16 and 17 on Tuesday.

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Power Grabs Hit a Wall

June 13th, 2010

By Michael Hiltzik, THE LOS ANGELES TIMES

We may finally have discovered a remedy for corporate executives with more greed than brains: Let them invest corporate funds by the millions in California ballot initiatives, then vote the things down.

Isn’t that the lesson of Tuesday’s balloting on Propositions 16 and 17, those majestically cynical initiatives sponsored by Pacific Gas & Electric Co. and Mercury Insurance Group?

To recap for the 82% of eligible voters statewide who didn’t bother to vote last week, Proposition 16 was an initiative concocted by PG&E, the state’s biggest private utility, to hamstring the public power agencies that are its chief competitors — pretty much its only competitors. Of the $46 million in cash contributions raised to pass the initiative, $46 million, or 100%, came from PG&E.

Proposition 17 was an initiative concocted by Mercury to undermine the insurance consumer protection system put into place by Proposition 103 of 1988. Of the $13.56 million in cash raised to promote Prop. 17, $13.5 million came from Mercury, whose founder and chairman, George Joseph, has turned the punching of holes in Prop. 103 into a personal obsession. That spending may make Mercury a cheapskate by PG&E standards, but by any rational standard of democratic process, the scale of it was obscene.

Yet these initiatives went down in defeat by almost identical margins, losing about 52%-48%.

That doesn’t speak well of the management prowess of the executives in charge. PG&E Chairman Peter Darbee walked his company down a $46-million plank to secure it nothing but a permanent place in the corporate citizenship hall of shame. He collected $10.6 million in compensation last year.

Do the PG&E directors really believe that the outcome of Tuesday’s vote is the sort of performance they’ve so lavishly paid Darbee to achieve? If they do, I have a follow-up question: What makes them qualified to serve on a corporate board?

Considering that the U.S. Supreme Court has given the green light to almost limitless political spending by corporate interests, it’s worth pondering how the initiatives lost, the better to deal with the oil slick of electoral cash sure to be heading our way on the next tide.

The most striking statistic that emerges from Tuesday’s results, as my colleagues Marc Lifsher and Dianne Klein have observed, is the margin by which Proposition 16 got beaten within PG&E’s service area in Northern and Central California — a “no” vote of more than 60% in much of the region.

The measure lost by narrower margins in many Southern California counties, where there wasn’t enough familiarity with PG&E to breed that much contempt.

The “no” vote on Mercury’s Proposition 17 followed a similar pattern, which suggests that the proximity on the ballot of the two corporate power grabs made anti-PG&E sentiment infectious.

That indicates that the antidote to unrestrained corporate political spending is to make sure that voters know that a corporate interest is behind an ad, an issue campaign or a candidate.

As it happens, that’s the approach chosen by Sen. Chuck Schumer (D-N.Y.) and Rep. Chris Van Hollen (D-Md.) in their Disclose Act, which would require CEOs to appear on camera to endorse any ad or commercial their companies fund, as candidates do. (The act has recently run into opposition from the National Rifle Assn. and the AFL-CIO, which don’t care to be held to the same rules.)

That the proposed disclosure rules would likely have a disinfecting influence follows from a very interesting pattern discernable in the corporate initiative campaigns in this state — along with Props. 16 and 17, let’s throw in the attempt by the oil company Venoco to cripple the municipal planning process in the city of Carpinteria (slaughtered Tuesday 70%-30%), and the oil industry’s developing campaign to suspend the state’s emissions limits (due for a vote in November).

The pattern is that the companies and industries most willing to subvert democracy by turbo-funding deceitful initiative campaigns are those with already dodgy records of corporate citizenship.

PG&E’s reputation for customer service and its compliance record on regulatory directives are unremittingly foul — so much so that the Public Utilities Commission had to issue a four-page letter last month explaining to the company, in terms even a 4-year-old could understand, how its machinations against Marin County’s renewable energy initiative violated the law.

Mercury has been repeatedly accused by regulators of dealing with the state’s rules on insurance underwriting by simply ignoring them. Occasionally the company has agreed to rectify illicit practices, according to a complaint filed in April by the Department of Insurance, and then failed to do so.

“Ultimately, Mercury does not believe that we have the authority to require them to change … their business practices,” observed a 2004 agency memo, which is as concise a description of this company’s attitude as you could wish.

As for the oil industry, the evidence of its concern for the public interest has been washing up on the beaches of the Gulf of Mexico every day for a month and a half.

One lesson of the Proposition 16 and 17 campaigns may be that PG&E and Mercury, as regulated companies, have been treated far too indulgently by government overseers. The regulators plainly have allowed both companies to overcharge their customers so much that the excess cash has been burning a hole in their pockets.

Take PG&E, which currently has an application before the PUC for a multibillion-dollar rate hike. The utility maintains that the $46 million it spent on Proposition 16 belongs to its shareholders, not ratepayers, but that’s a typically neat piece of deception. The truth is that every penny PG&E has comes from its customers’ pockets; it’s possible that eventually the firm will have to cut shareholder returns to cover the Prop. 16 campaign, but it won’t have to document for the PUC how it accounted for those expenditures until years have passed. In the meantime, it was able to use the customers’ money, essentially for free, against those customers’ interests.

As for Mercury, it reported that it spent well below 70% of its collected premiums on claims last year. Even health insurers typically pay out more than that.

Both firms have proved that they can’t be trusted to use their spare cash for their shareholders’ good, much less the public interest. The PUC and Insurance Department should take the evidence to heart: Give companies like this too big an allowance, and they’ll only use the money to cause trouble.

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Michael Hiltzik’s column appears Sundays and Wednesdays. Reach him at mhiltzik@latimes.com, read past columns at www.latimes.com/hiltzik, check out www.facebook.com/hiltzik, and follow @latimeshiltzik on Twitter.

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Californians Turn Back PG&E and Mercury’s Attempt to Rewrite Laws for Their Own Profit

June 12th, 2010

By David M. Greenwald, THE PEOPLE’S VANGUARD OF DAVIS

A lot of people I think took for granted that given the amount of money that PG&E spent on Proposition 16, to essentially put public power out of business, that it would prevail.  In fact, PG&E was not alone.  Mercury Insurance also spent about $16 million to pass Proposition 17.  PG&E spent $44 million.

Given the fact that PG&E’s deceptive ads were on TV every day, every hour, heck every minute, I will fully admit I had no faith that the average person would be able to see through the rhetoric.  And yet somehow just enough people did.

Jack Pitney, a political science professor from Claremont McKenna College, said Wednesday, the lesson is that “if you’re going to win a special-interest initiative, you need a better disguise. The link was too obvious, and the voters smelled a rat.”   He continued, “People like the idea of free enterprise, but in (Propositions 16 and 17) people sensed that one specific corporation was seeking a benefit for (itself).”

We have discussed Proposition 16 on these pages a few times, it was known as the “Taxpayers Right to Vote Act,” a deceptive title given the fact that taxpayers already have the right to vote, but this would actually make their voice worth a good deal less as it would require a two-thirds vote before a public utility could extend service to new customers or new territories.  It was a naked power play intended to make service expansions such as the proposed expansion of SMUD into Yolo County from four years ago an impossibility.

PG&E was able to defeat that effort, but it cost them $10 million.  They obviously felt the threat and sought to avoid such a fate in the future.

Proposition 17 was placed on the ballot by Mercury Insurance and it would have overturned state law prohibiting insurance companies from considering a driver’s insurance history to set rates.

Los Angeles Times analysis found that in counties served by PG&E, voters rejected the measure by large margins while counties less familiar with PG&E supported it.  Writes the LA Times on June 10, “Fed up with big bills, distrustful of new meters that show higher usage and chagrined by power shutoffs when payments are late, PG&E’s customers sent a vote of no-confidence to the giant utility this week when they rejected the utility-sponsored Proposition 16.”

According to the San Francisco Chronicle on June 10, “Prop. 16’s strongest showing came in Southern California, which gets its electricity from other utility companies. The measure fared worst in the Bay Area, PG&E’s home. San Francisco, site of the company’s headquarters, voted 67.8 percent against the measure. A majority of voters in every Bay Area county rejected the measure.”

“It shows that the more people know about PG&E, the less popular it is,” said Mark Toney, one of the leaders of the campaign against Prop. 16. “That’s a problem for any company.”

“It sends a message to corporate America that it doesn’t matter how much money they put into this,” said Toney, executive director of The Utility Reform Network, a consumer watchdog group.

Well not exactly.

According to Gale Kaufman, a campaign consultant to the No on 16 effort, the opposition only spent about $100,000 with nearly one-third of that going to an early poll.  She told the Sacramento Bee that the poll showed that Proposition would lose convincingly from the start.

“Kaufman said voters didn’t see Proposition 16 as a citizen-empowerment measure, but as a cleverly worded ploy of a single for-profit utility.  ”(PG&E’s) biggest miscalculation, besides spending all that money, was that they really thought they could trick people by the phrasing they used on that initiative,” she said.”

That is one way to look at it, the other way to look at it is that PG&E took a convincing defeat and turned it into a narrow loss with their heavy spending.

Nevertheless, it would seem that questions about PG&E and the accuracy of their new SmartMeters along with rate increases which drew angry protests last year swayed key areas.  These rate increases hit hardest in normally conservative enclaves in Fresno and Kern counties.  And so for one of the few times, conservative Fresno and Kern counties joined with liberal portions of the state like San Francisco to vote against Proposition 16.

“When does the Central Valley ever vote with the coast?” asked Bill McEwen, columnist for the Fresno Bee. “The SmartMeter thing really eroded the trust between PG&E and its customers.”

State Sen. Mark Leno a strong opponent of Proposition 16 said on Tuesday night, “I think [Prop 16] represents the epidemic of corporate greed that is so challenging in this country right now, whether its banking or the oil industry.  I think a victory tonight would really speak to California voters rebuking the lies and the deceit spread by PG&E.”

Mark Toney made the comment early on, “PG&E has one thing, and one thing only on their side, which is money.  The fact that were so close is amazing, given that they’ve outspent us 500 to 1.”

Unfortunately it appears that PG&E even in defeat did not get it.

Greg Pruett, senior vice president of corporate affairs for PG&E, issued a statement that said, in part: “While the election outcome hasn’t diminished our steadfast belief that citizens should have a vote in local government efforts to enter the electric utility business, we respect the decision voters made on this initiative.”

He continued to spew the same rhetoric even as it was their own customers that ultimately rejected their efforts.  That had to be a stinging blow.

Mercury Insurance’s statement was equally obtuse, as they continued to play it as a blow to consumers.  The company issued a statement Tuesday night which read in part, “Proposition 17 was a pro-consumer initiative that would have lowered auto insurance rates for millions of California drivers.”

California survived two insidious propositions by the skin of their teeth.  But more and more I believe this is a flawed process.  The original initiative system was supposed to free Californians from the stranglehold that moneyed interests had on the legislature.  The legislature certainly remains strangled, but unfortunately, companies and backers with deep pocket books are generally able to get measures on the ballot, back them with tens of millions, and usually they are able to pass them.  A lot of factors played a role in the defeat, many of them had less to do with the measure and more to do with the messenger.

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Take a Breath; November is Coming

June 11th, 2010

Editorial, THE CHICO ENTERPRISE-RECORD

Our view: There were a number of interesting elements to this primary election season.

Some random thoughts on the election just completed: This was an unusual election in that there seemed to be a number of races in which the voters really couldn’t lose. Either candidate would have been just fine. However there were a number of races where one candidate was great and the other was a disaster. It’s usually a lot more nuanced than that.

* All candidates can tell you who they claim to be, but a better indicator is how quickly they get their campaign signs down. The visual pollution is bad enough during the election, and those who really care about us and our area will prove it now by cleaning up after themselves, win or lose. Kudos to those who are doing it themselves. Larry Wahl was out collecting his election night, and when we reached Maureen Kirk Thursday morning for a post-election comment, she was doing the same.

* Speaking of Wahl, you have to give him the prize for election tactics. By filing for election at the last minute he guaranteed there would be just two candidates in the race for the 2nd Supervisorial District.

That meant the decision would be in June, when the students are out of Chico, rather than in a runoff in November, when they’d be back. Student support is a big reason Jane Dolan has held that job for 32 years. There are a lot of votes yet to be counted and the decision is uncertain, but you have to admit it was a pretty clever move by Wahl, who told the editorial board he’d be quietly planning for the race for 14 months.

* Mail-in voting appears to be the way we’re headed, as a majority of the votes in Butte County weren’t cast in a voting booth Tuesday. There are a number of good things about this. In the comfort of your home, you usually have the resources to check up on issues you aren’t sure of, and the time to make sure you get your vote right.

And almost as important, this trend pretty well kills the last-minute “hit pieces” that used to fill mail boxes the weekend before voting day. Most of the votes were already cast by then. There were a few nasty mailers earlier in the campaign, but their impact was diluted as their targets had time to respond.

* The biggest scammers in this race weren’t candidates, but rather the companies that sold “robocalls” to office seekers. Really, does anyone listen after picking up the phone and hearing, “Hi this is Meg Whitman …” These calls don’t sway voters, they annoy us. How the candidates can’t seem to understand that and keep forking over good money for such a bad idea is a puzzler.

* Californians seem to be catching on to corporations using the initiative process for their own gain, as two such measures went down in flames. PG&E’s Proposition 16 and Mercury Insurance’s Proposition 17 both went down by nearly identical 52-48 percent margins.

All we can say is what were that 48 percent thinking?

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Voter Skepticism of Big Moneyed Interests Could Play Role in Fall Campaign

June 11th, 2010

By Steven Harmon, CONTRA COSTA TIMES

SACRAMENTO, CA — The big smackdown of big money in Tuesday’s primary might have big implications for the fall.

The same level of skepticism that voters showed in rejecting lavish, multimillion dollar messages of two corporate-backed ballot measures could doom campaigns that hope that money alone will buy an election in the fall, political observers said.

And voters in a handful of Democratic legislative primaries also rejected candidates backed by the insurance and oil industries, signaling an anti-corporate mood that may spur Democrats as they face two wealthy ex-CEOs at the top of the Republican ticket.

“This has been an election drenched in money,” said Thad Kousser, a visiting political science professor at the Hoover Institution. “There were lots of things that showed the limits of money in politics, nothing more than props 16 and 17.”

Propositions 16 and 17 were measures backed by PG&E and Mercury Insurance, respectively, in which they combined to spend $62 million against woefully underfunded opponents — and lost.

In the case of PG&E, spending $46 million to pass a “self-serving initiative at a time when they are asking for a $1.1 billion rate increase was too much for voters,” said Larry Gerston, political-science professor at San Jose State University.

“Any time interest groups are spurned, it really does show that the public is not about to roll over because a lot of money is spent,” Gerston added.

Consumer groups hailed the victories of Democratic candidates over industry-backed opponents in five primary contests, saying that voters reacted unfavorably once they found out that big money was behind the flurry of campaign mailers reaching their doorstep.

In the race to succeed Assemblyman Alberto Torrico, D-Fremont, for example, a candidate with the backing of insurance companies, Garrett Yee, fell in defeat to Bob Wieckowski, who had the support of more traditional Democratic backers, labor and trial attorneys.

“Right now in California, having the support of oil and insurance companies is the kiss of death in a Democratic primary,” said Niall McCarthy, a vice president and political chairman of Consumer Attorneys of California. “Voters have had five to six years of watching undeterred greed in the business community, and now their corporate decisions are coming back to haunt them at the ballot box.”

Sam Sorich, the president of the Association of California Insurance Companies, disagreed, saying people should not read too broadly into the results.

“I don’t think there’s a basis to make a general conclusion that voters are opposed to anything business might support,” he said. “It’s just as incorrect to say that people in favor of previous initiatives backed by business that passed supported it just because they were put on the ballot by business.”

Consumer groups are already gearing up for a bruising battle over an initiative, backed by large oil companies, that would suspend Assembly Bill 32, the state’s emissions regulations law scheduled to take effect next year.

And Democrats have for weeks been painting Meg Whitman, the billionaire Republican gubernatorial nominee and former CEO of eBay, as a creature of the culture of greed and excess.

“There is an anti-corporate sentiment out there, and I do think it’s not helpful for Whitman to be identified with the corporate culture, certainly in the general election,” said Sherry Bebitch Jeffe, political analyst at the University of Southern California.

Whitman spent $71 million of her personal wealth in the primary alone to defeat GOP opponent Steve Poizner and has promised to spend $150 million to win, and could easily exceed that total in what is expected to be a brutal race with Democrat Jerry Brown.

“Whitman is going to see a backlash if she doesn’t watch how she spends her money,” Gerston said. “As time goes on this kind of spending begins to weigh on people. It bought her legitimacy in the campaign, but if that kind of spending continues at that outrageous rate, say another $100 million, the question becomes is she doing it to be known or is she trying to buy the election?”

Republicans say that Brown’s accusations against Whitman’s excessive spending will resonate less because he will have big-bucks backing of labor, though they’re unlikely to come close to matching Whitman’s spending.

Still, the lesson from the primary is clear, said Tom Del Baccaro, vice chairman of the state Republican party: Candidates and initiative campaigns can’t appear self-serving.

“This campaign showed that just throwing a lot of money at today’s electorate isn’t enough,” said Del Baccaro, a former chairman of the Contra Costa County GOP. “The voters’ ability to get information through the Internet and other sources makes this a more sophisticated electorate.”

Voters had to work hard to sift through the “obfuscation” and “deception” employed by PG&E and Mercury Insurance, said Doug Heller, executive director of Consumer Watchdog, whose political action committee ran the opposition campaign to Prop. 17.

“They had to resist an all-out attack by special interests,” Heller said, “and they managed to go to the newspapers and blogs and editorial boards and pick through the rubbish.”

There’ll be a lot more rubbish to pick through over the next five months.

Contact Steven Harmon at 916-441-2101.

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Initiative Process Worked This Time

June 10th, 2010

Editorial, THE MODESTO BEE

Somewhere Hiram Johnson is smiling.

The California governor introduced the initiative as a reform tool, a way for the public to wrest power from railroads and other powerful interests that held sway over the Legislature in the late 19th century. In recent years, the people’s tool has been co-opted by such power players. During this election season, the poster child for this phenomenon was Proposition 16, the measure bankrolled by Pacific Gas and Electric Co. to shield the giant private utility from competition.

But the voters proved they saw through the spiel. Despite spending $46 million to pass the initiative, PG&E lost its campaign.

The utility’s stockholders should take note. Proposition 16 failed most heavily in PG&E service areas. Two-thirds of voters in Yolo County, where in 2006 PG&E narrowly defeated an effort by the Sacramento Municipal Utility District to expand into its territory, rejected Proposition 16. San Francisco, where PG&E is headquartered, voted it down by 68 percent.

We’re a little troubled that Proposition 16 was favored by a slight majority of Stanislaus County voters, many of whom benefit from power provided by public utilities — the Modesto and Turlock irrigation districts. The local results suggest that either valley voters were swayed by the misleading label — the “taxpayers’ right to vote act” — or that the MID and TID need to do more to explain the advantages that public utilities offer.

How can PG&E fend off competition? But doing it the old-fashioned way — by offering better service and cheaper rates.

Voters also wisely rejected Proposition 17, another initiative put on the ballot by a self-serving business. Mercury General, an insurance company, spent $16 million to pass Proposition 17, but lost in the end.

Voters can sometimes be bamboozled into approving bad initiatives. But this time they saw through the smokescreens.

Finally, we’re pleased that Stanislaus County voters and those around the state supported Proposition 14, which will create an open primary called top-two.

There would be only one primary ballot, open to all candidates and voters. The top two vote-getters, regardless of party, would advance to the general election, similar to the way county supervisors and other local officials are elected.

The goal is to force candidates to appeal to a wider range of voters than just the ideologues in their own party. Voters saw so much of that in this election — from the governor’s race down to Assembly contests such as the 25th — that they wanted to shake things up and to see a wider choice of candidates, especially some centrists.

We sincerely that will happen when Proposition 14 goes into effect in 2012.

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California Voters: Props On Their Proposition Votes

June 10th, 2010

Editorial, THE LOS ANGELES TIMES

The electorate shoots down two propositions that had been heavily funded by corporate backers. But the balloters couldn’t be bought.

Props to California voters. They are smarter than most pundits and political consultants (and sometimes editorial pages) give them credit for being, as evidenced by two failed attempts to buy their votes in Tuesday’s election.

The conventional political wisdom suggested that Propositions 16 and 17 would be tough to beat, given that their corporate backers — Northern California utility Pacific Gas & Electric and Mercury Insurance, respectively — poured buckets of money into deeply misleading ad campaigns. Opponents, meanwhile, raised barely enough to print lawn signs. Yet both measures lost by a margin of more than 4 percentage points.

Does this mean that voters are getting their information from someplace other than TV commercials? Or that money can’t buy elections? Or that there is a new anti-corporate mood riling the electorate, to go with the anti-incumbent sentiment that is sweeping politicians out of power across the country?

Maybe, but we’re not going to say so. We’ve seen enough puzzling election results to know that what holds true in one contest probably will be contradicted by the next one. Yet there are some truisms that help explain Tuesday’s results, such as the one that suggests money is far less effective in passing initiatives than in defeating them. Voters are naturally skeptical of ballot measures, especially complex ones on such arcane topics as public electricity ventures (Proposition 16) and auto insurance discounts (Proposition 17). Ad campaigns can fuel that skepticism to make voters defeat even beneficial initiatives, but ads urging a yes vote are given more scrutiny, especially when they’re funded by a single source.

Only 24.8% of California voters cast a ballot, and such low-turnout elections tend to attract older, better-informed voters — the population least likely to be swayed by misleading campaign ads. And early polling suggested that Proposition 16, in particular, was attracting little support. PG&E doubtless thought it could overcome that initial distaste by pouring $46 million into the campaign, but even the shiniest paint job can’t make a Yugo look like a Bentley.

Those who follow politics tend to develop a jaundiced view of the initiative process, but Tuesday’s results should make anybody interested in good government a little less cynical.

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Savvy Voters Saw Through Two Bad Initiatives On Ballot

June 10th, 2010

Editorial, THE FRESNO BEE

Hiram Johnson might be smiling. The California governor introduced the initiative as a reform tool, a way for citizens to wrest power from railroads and other powerful interests that held sway over the Legislature in the late 19th century.

But in recent years, the people’s tool has been co-opted by the power players. In this election, the poster child for this was Proposition 16, the measure bankrolled by PG&E to shield the utility giant from competition.

But the voters proved they were smarter than PG&E’s campaign henchman. Despite spending $46 million to pass the initiative, Proposition 16 went down to defeat.

The utility’s stockholders should take note. Proposition 16 failed most heavily in PG&E service areas. In Fresno County, 61% of voters opposed the measure. In San Francisco, where PG&E is headquartered, it was voted down by 68%.

How can PG&E fend off competition? By simply providing better service and cheaper rates.

In the wake of Proposition 16’s defeat, it’s also time for the utility’s stockholders to hold its CEO, Peter Darbee, accountable. It was his idea to spend tens of millions of dollars on a dishonest campaign that voters ultimately rejected. In the end, Proposition 16 served to tarnish PG&E’s reputation and make its CEO look foolish.

Voters also wisely rejected Proposition 17, which like 16, was an initiative put on the ballot by a self-serving business. Mercury General, an insurance company, spent $16 million to pass Proposition 17 but lost in the end.

Voters can sometimes be bamboozled into approving bad initiatives. But this time they saw through the smokescreens. Good for them.

Tell us what you think. Comment on this editorial by going to fresnobee.com/opinion, then click on the editorial.

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