How Corporate Money Crushed Progressive Ballot Initiatives Across the Country With $140 Million

Election '16

In the late 19th and early 20th centuries, reformers were frustrated at the many roadblocks they faced in solving the problems that beset American society. “At many times and in many localities, there have held public office in the States and in the Nation men who have, in fact, served not the whole people but some special class or special interest,” complained President Theodore Roosevelt. So it was that these Progressive reformers introduced the concept of ballot initiatives and referenda, tools that are today used in 24 states, giving the public a way around the corruption and greed that previously stymied reform efforts.

Over a century later, these tools for direct democracy are being undermined and even subverted by the very interests they were created to combat, according to a new report by watchdog group Public Citizen. The report, titled “Big Business Ballot Bullies,” outlines how corporate interests have spent close to $140 million across eight ballot initiatives in fives states through September 15, outspending their opposition by a ratio of 10 to 1.

This flood of money is immensely useful for the groups that receive it. They can use it to pay for advertisements and buy air time in the hope swaying voters, hire public relations firms and use it to fund their own competing ballot initiatives.

“Clearly, direct democracy is undermined when business groups can dominate the media-moderated political discourse through an unrestricted mobilization of wealth that opponents without the backing of major corporations or billionaires can never hope to match,” reads the report.

The ballot initiatives covered in the report focus on measures ranging from reducing the cost of prescription drugs and levying a new tax on businesses to eliminating payday lending and establishing single-payer health care. In each case, the groups campaigning against the ballot initiatives are funded by businesses that would directly stand to lose profit through their enactment.

The lopsided nature of the battle over the ballot initiatives is evident in the case studies outlined by the report. Take California’s Proposition 61, which would lower prescription drug prices by letting the state pay the same for drugs as the Department of Veteran Affairs. The initiative’s opponents raised more than $86 million to defeat the measure, nine times more than its supporters, a fundraising imbalance that also makes it the most expensive fight out of the eight examined in the report.

This money came from big pharmaceutical companies like Pfizer and Johnson & Johnson, who contributed $7.2 million each to Californians Against the Misleading RX Measure, a group opposing the initiative that was formed by industry trade group the Pharmaceutical Research and Manufacturers of America. Despite their efforts, the measure continues to enjoy broad support among Democrats, Republicans and voters of every region, age and ethnicity.

More successful was the business campaign against Colorado’s Amendment 78, which would require all oil and gas development in the state to take place at least 2,500 feet from either occupied structures like houses and schools or “areas of concern,” such as parks and water sources. Fossil fuel companies started a front group named Protect Colorado that has raised more than $16 million in the effort to defeat the measure, 24 times more than the money raised by the initiative’s backers—the largest fundraising disparity among the initiative campaigns examined in the report.

This massive war chest allowed Protect Colorado to launch a "Decline to Sign” campaign discouraging Coloradoans from providing their signatures to get the initiative up on the ballot, running ads calling signature gatherers “hired guns” who profit from the signatures they collect and warning of “special interests” attempting to rewrite the Constitution. The campaign appears to have worked: The measure fell short of the 98,492 signature threshold required for it to qualify.

Attempting to block initiatives isn’t the only strategy available to corporate-funded groups. Groups can also put forward their own competing initiatives to protect their interests and siphon off support from those they don’t favor.

Such was the case in Florida, where a coalition of environmentalists, solar power companies and conservatives first put forward an initiative that would let consumers lease solar panels and sell solar energy to other consumers—something currently forbidden by state law, making Florida one of only four states to do so. Utility companies soon put forward their own their own competing initiative that would enshrine these restrictions in the state constitution.

The competing initiative, which served to muddy the waters and confuse voters, was charged by the Tampa Bay Times as being deceptively worded and “misleading.” Nonetheless, having raised $21.5 million—10 times that of the other side—the utility companies were able to pay their petition gatherers double the rate of their opposition, securing the necessary number of signatures, while the solar company-backed initiative failed.

It’s worth nothing that the millions of dollars traced by the report as being spent on these ballot initiatives is only part of the money being invested by companies to protect their financial interests from the whims of voters. As well as funding the opposition to Colorado’s Amendment 69, which would establish single-payer health care in the state, companies like pharmaceutical giant Amgen and health insurer Cigna have also donated generously to Democratic officials in the state who have subsequently spoken out against the measure.

The floodgates were opened to unlimited corporate spending in ballot initiative campaigns by two Supreme Court cases decided 40 years ago. In 1978, the Court struck down a Massachusetts ban on corporate spending to influence ballot measures. The Court based its decision on the supposed incorruptibility of popular voting and the view of corporate advertising as legitimate advocacy: “Referenda are held on issues, not candidates for public office. The risk of corruption perceived in cases involving candidate elections … simply is not present in a popular vote on a public issue.” Three years later, the Court struck down contribution limits to ballot measure committees as unconstitutional, partly cited this very same passage.

The report puts forward a number of possible solutions to this dilemma. One is legislation that would empower grassroots ballot initiative campaigns, citing a recently passed law in California that would require groups gathering signatures to have at least 5 percent of those signatures collected by unpaid volunteers. (The bill was vetoed by Gov. Jerry Brown a day after the Public Citizen report came out.)

Another is a constitutional amendment that would overturn the Supreme Court’s 2010 Citizens United decision and allow states to limit or even ban corporate political spending. While constitutional amendments are notoriously difficult to pass, as the report points out, there has been progress on this front in the six years since Citizens United.

Seventeen states, including D.C., and 701 local governments have passed resolutions calling for such an amendment, while a majority of Congress voted in favor of such a measure in 2014, albeit falling six votes short of the 60 needed to stop a Republican filibuster. More recently, Bernie Sanders’ made a constitutional amendment overturning Citizens United a centerpiece of his campaign for the Democratic nomination. Hillary Clinton has since pledged to call for such an amendment in her first 30 days as president, if elected.

Tools like ballot initiatives and referenda, while currently far too easily influenced by big business, nonetheless remain one of the most effective ways for the public to have its will enacted and avoid the inaction of politicians captured by moneyed interests. Reducing the influence of corporate money over the process may be an uphill battle, but it’s a necessary one if Americans want to ensure the political process works, in Theodore Roosevelt’s words, for the “whole people.”

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