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A handful of deep-pocket donors drive November election

Money talks. For the state ballot propositions in next month’s elections, it’s never talked louder.

Of the roughly $200 million sunk thus far into the committees supporting or opposing the various initiatives, a third — $68 million — has come from out of the deep pockets of four people.

The big spenders include Pasadena civil rights attorney Molly Munger, who has put some $28 million toward promoting her tax-for-education spending proposal, Proposition 38. Munger and Proposition 38 pose a direct challenge to Gov. Brown’s own tax initiative, Proposition 30.

Tom Steyer, a San Francisco-based hedge fund manager, has contributed $21.9 million to the campaign for Proposition 39, which would close a loophole approved three years ago and force multi-state corporations to pay California state income taxes on their Californian sales and temporarily dedicate some of the revenue to clean energy projects.

Molly Munger’s brother, Republican Charles Munger Jr., just dropped $10 million into campaigns to defeat Brown’s initiative and to support Proposition 32, an effort to thwart labor unions’ ability to raise political cash.

George Joseph, the venerable chairman and founder of Mercury Insurance Group, has put $8.2 million into his effort to allow insurance companies to calculate premiums based in part on the customer’s coverage history. His Proposition 33 – which embodies a concept that Joseph has sought for years – enables insurers to charge higher premiums to those who have gaps in their coverage. Those who have uninterrupted coverage for five years or more could be eligible for discounts. Voters earlier rejected a similar measure.

Financially, Molly Munger and Steyer’s motives are straight forward: They both have put their money behind propositions that could only increase their own tax liability by hitting taxpayers, including high-income earners, and multistate corporations, respectively.

Munger says she was willing to take on Brown’s proposal in order to help fund California’s education system without exposing it to the vagaries Capitol politics. “[Voters] are willing to pay the tax,” she says, “but they insist, rightly, the money not go to Sacramento.” A privately-funded ballot initiative affords her the opportunity to legislate over Sacramento’s head.

Steyer, in an Aug. 31 appearance on Lt. Gov. Gavin Newsom’s TV show,  said his decision to promote Proposition 39 show is an an attempt to counter the powerful political impact of multi-state corporations and traditional energy companies.

“I really have a passion for this state” he said. “We’re really pushing back against out-of-state corporate interests, who in my mind are trying to take advantage of us.”

Compared with the other wealthy crusaders, Joseph stands out for his links to the industry that would be affected by his own initiative.

Derek Cressman, regional director of the nonprofit government-reform group Common Cause, says this is something the state has not seen before.

“We have seen wealthy individuals almost single-handedly bankrolling ballot measures for some time now” he says. “We’re now also seeing [George Joseph] personally funding a measure that would benefit him economically, and that is more of a new development.”

Other members of California’s ultra-high income class have of course weighed in on the November ballot, though none quite so dramatically as the Mungers, Steyer and Joseph.

Chris Kelly, onetime Chief Privacy Officer for Facebook and unsuccessful candidate for state attorney general, has donated over $1.8 million to the passage of Proposition 35, which imposes harsher penalties for sex trafficking.

Investor Nicholas Berggruen, a reform-minded billionaire and founder the good-government think tank Think Long Committee for California, invested $1.5 million for the passage of Proposition 31, which would among other reforms establish a two-year budget cycle and increase the power of the Governor over the budget.

The goal of the state’s initiative system, a product of a century ago when then-Gov. Hiram Johnson sought to break the stranglehold of the railroads and bypass a corrupt Legislature, has always been to provide an injection of direct democracy into a system often seen as remote and unresponsive.

The infusion of hefty chunks of cash isn’t limited to Californians: Last month, a group with ties to the billionaire brothers Charles and David Koch, who are based in Iowa, dropped $4 million into the effort to approve Proposition 32, which is intended to make it harder for unions to collect political cash from their members. 

Through the ballot, a simple majority of Californian voters can amend the state constitution and enact or reject laws while bypassing their representatives in the Legislature.

   
One side effect of this system is that with enough money to pay for a petition campaign, just about any person or group can bring an issue directly to the voters.

The price tag?

“A single donor can place a question on the ballot for around $3 million, guaranteeing at least a change in the political debate,” Cressman said.


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