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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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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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Voters Get Wise To Sly Corporate Power Plays

June 10th, 2010

By Dan Morain, THE SACRAMENTO BEE

Once again, California voters delivered a two-edged message, or so it seems.

Republicans nominated two deep-pocketed former chief executives who had spent heavily on their campaigns to be their standard bearers for governor and U.S. Senate.

At the same time, Californians sent two heavily funded initiatives backed by individual corporations down to ignominious defeat.

Proposition 16, backed by PG&E’s $47 million to the opponents’ $90,000, and Proposition 17, backed by Mercury Insurance’s $16 million to less than $1 million for its foes, lost by nearly identical margins.

PG&E and Mercury join a select few corporations that came up with way-too-clever concepts, then tried to sell them to a supposedly disengaged electorate notorious for deciding weighty issues based on 30-second television ads, only to find out that we Californians aren’t so gullible after all.

Both initiatives had powerful themes. PG&E was promising Californians the right to vote on issues related to government expansion into power generation. Mercury promised most auto insurance customers a break on their rates.

But once voters scratched below the surface, they were able to sniff out the true intent – corporate grabs to solidify and expand their markets.

“It’s hard to con voters into voting yes,” said Robert Stern, an initiative expert and president of the Center for Governmental Studies in Los Angeles. “The default position is ‘no.’ If voters are confused, they will vote ‘no.’ ”

Gale Kaufman helped organize the No-on-16 campaign by using $90,000 to pay for a poll and consumer activists. She didn’t have money for television, and instead bought Internet ads.

“There is a growing anger and huge skepticism about who is paying for what goes on the ballot,” Kaufman said. That attitude seems to be growing, especially as initiative promoters devise ideas that clearly benefit a particular company or industry.

Chris Lehane, who helped run the campaign against Proposition 17, said a change is taking place in the world of initiatives. Voters are relying less on traditional television advertising about ballot measures and are looking elsewhere for information, including news accounts and editorials in mainstream publications.

Voters also are becoming more attuned to bogus endorsements, he believes. In PG&E’s case, the company touted the endorsement of an entity that called itself a consumer alliance. But no one from established consumer groups had ever heard of it.

So what does all this mean for former eBay CEO Meg Whitman and former Hewlett-Packard chief Carly Fiorina? It might not be a good sign.

Whitman and Fiorina won in a closed Republican primary in which 1.7 million Republicans voted.

A far larger group of roughly 4 million voters including Republicans, Democrats and people who state no party preference voted down Propositions 16 and 17.

A look at how counties voted sheds more light. Propositions 16 and 17 lost big in Democratic parts of the state. In San Francisco and Yolo counties, for example, the initiatives were trounced by 2-to-1 ratios. Proposition 16 lost by 42 percent to 58 percent in Sacramento County, another Democratic bastion.

In the Republican areas of the state, including Orange, Riverside, San Bernardino and San Diego counties, both measures won by significant margins. The pattern played out in much of the rest of the state, where counties that have Democratic majorities opposed the measures and voters in Republican-leaning counties approved them.

Republicans have nominated Whitman and Fiorina, but neither has won office in an election that includes Democratic voters and people who decline to state party preferences.

The general election campaign is now in its second day, way too early to gauge who will win. But at least on primary election day, voters took a very dim view of corporate interests.

dmorain@sacbee.com

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Where Greed Lost

June 10th, 2010

Editorial, THE SAN FRANCISCO CHRONICLE

Pacific Gas & Electric Co. dumped $46 million into Proposition 16, the initiative that would have blocked cities from offering a public energy alternative without a two-thirds voter approval. Mercury Insurance poured more than $15 million into Proposition 17, which would have allowed them to raise car insurance rates for people who had had gaps in coverage.

Both measures failed.

It’s a David and Goliath tale for the ages. Editorial boards and consumer groups chastised both measures as blatant attempts by businesses to gain competitive advantage via the ballot box. Opponents had no money to counter the barrage of advertisements. Still, voters were not fooled.

What happened? Rule 1: If you want to have your way at the ballot box, show your corporate citizenship. Mercury was under fire from the state for gouging customers and PG&E was drawing complaints for its not-so-smart meters and for unfairly stifling Marin County’s public power plan. Whatever the reason, corporate greed lost big on Tuesday night. Any companies that believe they can try the same thing in November had better pay attention.

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Five Lessons: Things Learned From Tuesday’s Statewide Primary Election Results

June 10th, 2010

Editorial, THE DAILY NEWS OF LOS ANGELES

Tuesday’s statewide primary election concluded with few surprises. When it came to the measures, for the most part voters wisely supported the good initiatives and ignored the stinky ones. Party front-runners and big money spenders won – as expected – in their particular races.

But the election results did have a few important lessons to which both the electorate and those running a race or campaign ought to pay heed:

1. There is a limit to the generosity of voters.

Officials at the Los Angeles Unified School District found that out Wednesday morning when they learned voters rejected the $100-a-year parcel tax even though it was sneakily sold as an “emergency teacher retention measure.”

The passage of five school-building bond measures, including one less than two years ago for $7 billion, must have convinced officials that there were no limits to Los Angeles voters’ willingness to give to public education. What other reason could induce otherwise intelligent people to put a tax on the ballot in the middle of a deep recession with a half-baked justification for its necessity and little campaigning?

Hopefully, the failure of Measure E, which needed two-thirds voter approval, will teach school officials some restraint.

2. Voters are tired of the status quo.

Proposition 14, the open primary measure, was subject to all manner of fearmongering by established political parties. They warned that under the so-called top-two primaries only party hacks would be elected, shutting out third parties altogether. They warned that this would make elections more partisan than they are now. Voters recognized that it is hardly possible to make local elections worse and the inherent logic of open primaries bodes well for electing better politicians.

On a side note, it’s interesting to note that the only two counties in California that did not support Prop. 14 were the two most partisan in the state – San Francisco and Orange County.

3. Money can buy you a shot at an elected position.

Meg Whitman, the former CEO of eBay, has no public service record to speak of, but she does have a personal fortune. She spent $71 million of her own money to campaign successfully to be the GOP candidate for the November governor’s race. That was enough to convince Republican primary voters that she would make a good opponent to a professional pol like Jerry Brown.

4. But money can’t necessarily buy you a measure.

Both Mercury Insurance and Pacific Gas & Electric found that out. The two companies each put up millions of their own dollars to fund statewide initiatives – Proposition 17 and Proposition 16, respectively – that would improve their money-making ability. That naked self-service doesn’t fly with voters who understand that no company is going to spend millions of its hard-earned revenue on a campaign that only helps customers. Voters might be naive at times, but they aren’t stupid.

5. Women are the new ol’ boys in the grand ol’ party.

Former Alaska Gov. Sarah Palin has some competition as the sweetheart of the GOP in both Whitman and Carly Fiorina, the effervescent Silicon Valley businesswoman who won the Republican nomination to challenge Sen. Barbara Boxer’s re-election in November.

Fiorina, the former CEO of Hewlett-Packard, is as charismatic as Palin, but superintelligent to boot. She might not be a grizzly mom, but she fought off cancer and looks like she might be able to fight off any mud slung her way during the general election.

The overall takeaway from this week’s election, however, is that old assumptions about politics and campaigns no longer hold. What Californians want – particularly those who vote – is for government to work for the people and not the special interests. And that’s a lesson that everyone in politics ought take to heart.

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Victory! California Voters Reject Two High-Priced Corporate Attempts to Hijack Democracy

June 10th, 2010

By Daniela Perdomo, AlterNet.org

On Tuesday voters squarely rejected two corporate-backed measures that would have cost ordinary Californians millions of dollars.

Proposition 16, cleverly disguised as the Taxpayers’ Right to Vote Act, was placed on the state ballot as a constitutional amendment requiring a two-thirds vote to create public power districts or allow local governments to purchase their own renewable power. In other words, it was a way for electric utility behemoth PG&E to further protect its monopoly. PG&E saw such potential for its bottom-line that it spent $45 million to persuade voters to approve the measure. But 52.5 percent of California voters saw through the language and knocked it down.

Similarly, Proposition 17 was framed as an opportunity for auto insurance companies to overturn a state law that prohibits insurance companies from extending “loyalty discounts” to customers even if they switched insurance providers. While Mercury Insurance, which spent nearly $16 million on the measure, claimed this was a way to lower rates for drivers, consumer advocates were successful in making the case that in turn, existing consumer protections would be weakened and insurance companies would be able to charge drivers as much as double premiums for making late payments. Prop. 17 failed, too, with 52.1 percent of voters nixing it.

The success achieved by the underfunded activists at the opposing campaigns — No on 16 and Stop Prop 17 — is all the more impressive considering the minuscule amounts of money they spent relative to the corporations that financed the measures. Put simply, the myth-busting worked, even in the face of millions of dollars.

What makes the defeats of Props 16 and 17 especially interesting is that they took place in an election that had an appalling turnout — about one-third of voters came out — when corporate money normally has the most sway, says Rick Jacobs, founder and chair of the Courage Campaign, a progressive advocacy group in California with 800,000 active members. “But we saw that people are smart. They looked through the smokescreen these two companies were using and said no,” he says.

Jacobs believes the Supreme Court’s Citizens United ruling certainly affects voters’ views of corporate influence in elections. But he also thinks progressive groups worked to get the vote out in effective ways. His own organization produced a Progressive Voter Guide that was passed around by like-minded groups such as CREDO and MoveOn.org, and was downloaded by at least 100,000 people. (For perspective, Prop. 16 trailed by 185,000 votes; Prop. 17 by 156,000.)

“People actually shared information with each other, and tuned out the expensive ads, and said, ‘We’re going to trust each other,’” Jacobs says. This shows that “with targeted communication to people who actually vote, you can defeat these things.”

But this is only the first fight this year. In November, more moneyed interests will once again attempt to make a mockery of the democratic process in California and trample on progressives’ goals.

The Courage Campaign is already gearing up its fight against a still-unnamed measure that would indefinitely suspend California’s beacon Clean Energy law. To date, at least 15 oil companies have contributed $1.6 million to the effort. The three largest funders — Valero, Occidental Petroleum and Tesoro — all rank in the Political Economy Research Institute’s list of the top 100 corporate polluters in the country.

There aren’t any other major corporate-backed measures on the November ballot yet, but the budget process isn’t yet over in Sacramento, and this makes it likely that a slew of unpleasant initiatives may be added later on.

Activists are looking forward to the Tax Cannabis initiative being on the November ballot. There is hope that it will bring out a whole slew of younger, more progressive-minded voters. In fact, many precincts on Tuesday reported disappointed voters who had turned out to vote for the marijuana legalization measure.

The general election on Nov. 2 is now just five months away.

Daniela Perdomo is a staff writer and editor at AlterNet. Follow Daniela on Twitter. Write her at danielaalternet [at] gmail [dot] com.

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