Proposition 32: Political contributions by payroll deduction. Contributions to candidates

Background

Political Reform Act. California’s Political Reform Act of 1974, an initiative adopted by the voters, established the state’s campaign finance and disclosure laws. The act applies to state and local candidates, ballot measures, and officials, but does not apply to federal candidates or officials. The state’s Fair Political Practices Commission (FPPC) (1) enforces the requirements of the act, including investigating alleged violations, and (2) provides administrative guidance to the public by issuing advice and opinions regarding FPPC’s interpretation of the act.

Local Campaign Finance Laws. In addition to the requirements established by the act, some local governments have campaign finance and disclosure requirements for local candidates, ballot measures, and officials. These ordinances are established and enforced by the local government.

Political Spending. Many individuals, groups, and businesses spend money to support or oppose state and local candidates or ballot measures. This political spending can take different forms, including contributing money to candidates or committees, donating services to campaigns, and producing ads to communicate opinions. Under state campaign finance laws, there are three types of political spending:

• Political Contributions. The term political “contribution” generally includes giving money, goods, or services (1) directly to a candidate, (2) at the request of a candidate, or (3) to a committee that uses these resources to support or oppose a candidate or ballot measure. Current law limits the amount of political contributions that individuals, groups, and businesses may give to a state candidate (or to committees that give money to a state candidate). In 2012, for example, an individual, group, or business could contribute up to $26,000 to a candidate for Governor and up to $3,900 to a candidate for a legislative office. In addition, current law requires political contributions to be disclosed to state or local election officials.
• Independent Expenditures. Money spent to communicate support or opposition of a candidate or ballot measure generally is considered an independent expenditure if the funds are spent in a way that is not coordinated with (1) a candidate or (2) a committee established to support or oppose a candidate or a ballot measure. For example, developing a television commercial urging voters to “vote for” a candidate is an independent expenditure if the commercial is made without coordination with the candidate’s campaign. Current law does not limit the amount of money individuals, groups, and businesses may spend on independent expenditures. These expenditures, however, must be disclosed to election officials.

- Other Political Spending. Some political spending is not considered a political contribution or an independent expenditure. This broad category includes “member communications”—spending by an organization to communicate political endorsements to its members, employees, or shareholders. This spending is not limited by state law and need not be disclosed to election officials.

Payroll Deductions. Under limited circumstances, employers may withhold money from an employee’s paycheck. The withheld funds are called “payroll deductions.” Some common payroll deductions include deductions for Social Security, income taxes, medical plans, and voluntary charitable contributions.

Union Dues and Fees. Approximately 2.5 million workers in California are represented by a labor union. Unions represent employees in the collective bargaining process, by which they negotiate terms and conditions of employment with employers. Generally, unions pay for their activities with money raised from (1) dues charged to union members and (2) fair share fees paid by non-union members who the union represents in the collective bargaining process. In many cases, employers automatically deduct these dues and fees from their employees’ paychecks and transfer the money to the unions.

Payroll Deductions Used to Finance Political Spending. Many unions use some of the funds that they receive from payroll deductions to support activities not directly related to the collective bargaining process. These expenditures may include political contributions and independent expenditures—as well as spending to communicate political views to union members. Non-union members may opt out from having their fair share fees used to pay for this political spending and other spending not related to collective bargaining. Other than unions, relatively few organizations currently use payroll deductions to finance political spending in California.

Proposal

The measure changes state campaign finance laws to restrict state and local campaign spending by:

• Public and private sector labor unions.
• Corporations.
• Government contractors.

These restrictions do not affect campaign spending for federal offices such as the President of the United States and members of Congress.

Bans Use of Payroll Deductions to Finance Spending for Political Purposes. The measure prohibits unions, corporations, government contractors, and state and local government employers from spending money deducted from an employee’s paycheck for “political purposes.” Under the measure, this term would include political contributions, independent expenditures, member communications related to campaigns, and other expenditures to influence voters. This measure would not affect unions’ existing authority to use payroll deductions to pay for other activities, including collective bargaining and political spending in federal campaigns.

Prohibits Political Contributions by Corporations and Unions. The measure prohibits corporations and unions from making political contributions to candidates. That is, they could not make contributions (1) directly to candidates or (2) to committees that then make contributions to candidates. This prohibition, however, does not affect a corporation or union’s ability to spend money on independent expenditures.

Limits Authority of Government Contractors to Contribute to Elected Officials. The measure prohibits government contractors (including public sector labor unions with collective bargaining contracts) from making contributions to elected officials who play a role in awarding their contracts. Specifically, government contractors could not make contributions to these elected officials from the time their contract is being considered until the date their contract expires.

Fiscal effects

The state would experience increased costs to investigate alleged violations of the law and to respond to requests for advice. In addition, state and local governments would experience some other increased administrative costs. Combined, these costs could exceed $1 million annually.

Yes on 32: Cut the Money Tie between Special Interests and Politicians

Politicians take millions in campaign contributions from corporations and government unions and then vote the way those special interests tell them. Politicians end up working for special interests, not voters.

The result: massive budget deficits and abuses like lavish pensions and bad teachers we can’t fire.

Prop. 32 prohibits both corporate and union special interest contributions to politicians. NO EXEMPTIONS. NO LOOPHOLES. Individual Californians can contribute, not special interests!

Voters Beware:

Special interests have spent tens of millions of dollars to prevent Prop. 32 from cutting the money tie between them and politicians. They’ll say anything to protect the status quo.

They’ve invented a false, bogus, red-herring argument:

They claim Prop. 32 has a loophole to benefit the wealthy and corporations to fund independent PACs. The fact is both unions and corporations fund independent political committees protected by the Constitution that cannot be banned.

“Prop. 32 ends corporate and union contributions to California politicians. Period. No exceptions. It goes as far as the U.S. Constitution allows to end special interest influence in state government. I urge you to vote Yes on Prop. 32.”

• Retired California Supreme Court Justice John Arguelles

Yes on 32: three simple, straightforward reforms

• Bans corporate and union contributions to politicians
• Stops contractors from giving to politicians who approve their contracts
• Makes political contributions voluntary and prohibits money for political purposes from being deducted from employees’ paychecks

Cuts the money Tie between special interests and politicians

Politicians hold big-ticket, lavish fundraisers at country clubs, wine tastings and cigar smokers. Fat-cat lobbyists attend these fundraisers and hand over tens of millions of dollars in campaign contributions. Most happen when hundreds of bills are up for votes, allowing politicians and special interests to trade favors:

• Giving multi-million dollar tax loopholes to big developers, wealthy movie producers and out-of-state corporations
• Exempting contributors from the state’s environmental rules
• Handing out sweetheart pension deals for government workers
• Protecting funding for wasteful programs like the high-speed train to nowhere, even as they are cutting funds for schools and law enforcement while proposing higher taxes

STOPS SPECIAL INTERESTS FROM TAKING POLITICAL DEDUCTIONS FROM EMPLOYEE PAYCHECKS TO GUARANTEE EVERY DOLLAR GIVEN FOR POLITICS IS STRICTLY VOLUNTARY

The Supreme Court recently said the political fundraising practices of a large California union were “indefensible”. (Knox vs. SEIU)

Prop. 32 will ensure that California workers have the right to decide how to spend the money they earn. They shouldn’t be coerced to contribute to politicians or causes they disagree with.

Stops contractors from contributing to politicians who approve their contracts

Today, it is legal for politicians to give contracts to political donors, shutting out small businesses in the process. Prop. 32 will end this special treatment and the waste it causes, like a $95 million state computer system that didn’t work. (CNET, June I2, 2002)

All of this Special Interest corruption will continue without your vote. Yes on 32!

www.stopspecialinterestmoney.org

GLORIA ROMERO , State Director Democrats for Education Reform GABRIELLA HOLT , President Citizens for California Reform JOHN KABATECK , Executive Director National Federation of Independent Business—California

Before you vote on Prop. 32, answer two questions: Would billionaires pay to place this on the ballot unless they were getting exemptions? When’s the last time a proposition backed by special interests in California didn’t contain loopholes or exemptions?

There’s always a catch, and Prop. 32 is no different.

Real estate developers, insurance companies and billionaire venture capitalists are just three groups EXEMPT from provisions of Prop. 32, while a union will no longer be able to contribute to candidates. In addition, huge corporate special interests can continue to spend unlimited money on politics.

Prop. 32 supporters claim workers are forced to contribute to politics or causes they disagree with. They aren’t. Current law protects workers from being forced to join a union or paying fees to unions for politics.

What’s really going on?

• Major contributors to Prop. 32 are former Wall Street investors, insurance company executives and hedge fund managers—they’re EXEMPT from provisions of Prop. 32. Ask yourself why.
• Other Prop. 32 funders own development companies that have sought exemptions from laws that protect our environment and neighborhoods. Prop. 32 EXEMPTS those companies too. Ask yourself why.
• Business Super PACs and independent expenditure committees are EXEMPT from Prop. 32’s provisions.
• Prop. 32 adds to the massive state bureaucracy, and costs Californians over a MILLION DOLLARS for phony reform.

The League of Women Voters opposes Prop. 32. It’s a thinly disguised attempt to fool voters into thinking it’ll improve Sacramento’s mess. In fact, it’ll make things worse.

JO SEIDITA , Chair California Clean Money Campaign JOHN BURTON , Chair California Democratic Party ROBBIE HUNTER , Executive Secretary Los Angeles/Orange Counties Building and Construction Trades Council

The League of Women Voters of California, California Common Cause and the California Clean Money Campaign all oppose Proposition 32.

That’s because Proposition 32 is not what it seems. Prop. 32 promises “political reform” but is really designed by special interests to help themselves and harm their opponents. That’s why we urge a No vote.

Will not take money out of politics

• Business Super PACs and independent expenditure committees are EXEMPT from Prop. 32’s controls. These organizations work to elect or defeat candidates and ballot measures but aren’t subject to the same contribution restrictions and transparency requirements for campaigns themselves.
• A recent Supreme Court decision allows these groups to spend unlimited amounts of money. Prop. 32 does nothing to deal with that.
• If Prop. 32 passes, Super PACs, including committees backed by corporate special interests, will become the major way campaigns are funded. These groups have already spent more than $95,000,000 in California elections since 2004. Our televisions will be flooded with even more negative advertisements.

Not real campaign finance Reform

Real campaign reform treats everyone equally, with no special exemptions for anyone. Proposition 32 was intentionally written to exempt thousands of big businesses like Wall Street investment firms, hedge funds, developers, and insurance companies. Over 1000 of the companies exempted by this measure are listed as Major Donors by the California Secretary of State. They have contributed more than $10,000,000 to political campaigns, just since 2009.

Unbalanced and unfair

This measure says it prohibits unions from using payroll-deducted funds for political purposes. It says it also applies to corporations, so it sounds balanced. But 99% of California corporations don’t use payroll deductions for political giving; they would still be allowed to use their profits to influence elections. That’s not fair or balanced.

Just take a look at the official summary. You can see the imbalance from this line: “Other political expenditures remain unrestricted, including corporate expenditures from available resources not limited by payroll deduction prohibition.”

Look who’s behind it

Many top contributors to Proposition 32 are former insurance company executives, Wall Street executives, developers, and big money donors to causes which benefit from Prop. 32’s special exemptions.

Sacramento has too much partisan bickering and gridlock. The money spent on political campaigns has caused all of us to mistrust the political campaign system. The sponsors of Proposition 32 are trying to use our anger and mistrust to change the rules for their own benefit.

Proposition 32 will make things worse

Some say “this is unbalanced but it’s a step forward.” Here’s the problem with that. Restricting unions and their workers while not stopping corporate special interests will result in a political system that favors corporate special interests over everyone else. If you don’t want special interests in control of air and water safety and consumer protections, vote NO on Prop. 32.

Go to http://www.VoteNoOn32.com and see for yourself why Proposition 32 is not what it seems and will hurt average Californians. Vote NO on Proposition 32.

JENNIFER A. WAGGONER , President League of Women Voters of California DEREK CRESSMAN , Regional Director California Common Cause DAN STANFORD , Former Chairperson California Fair Political Practices Commission

Special interests are not telling you the truth

They say they oppose Prop. 32 for WHAT IT DOESN’T DO. But they’re trying to stop it for WHAT IT DOES.

The fact is, Prop. 32 goes as far as the Supreme Court allows: It stops both corporations and unions from giving money to politicians. No exemptions. No loopholes.

Yes on 32: three simple reforms

• For the 2010 elections, corporations and unions gave state politicians $48 million. If Prop. 32 had been in place, that $48 million never could have been given to candidates.
• Never again will contractors give money to politicians who approve their contracts.
• No more will corporations or unions take money from workers’ paychecks to spend on politics. Under Prop. 32, every employer and union will have to ask permission, and every worker can say no.

Big-money special interests are spending millions to stop Prop. 32. They refuse to lose their power over Sacramento.

Just one example:

When the LA school district couldn’t move quickly to fire a teacher for sexually abusing his students, it asked lawmakers to pass a law making it easier. But the state’s largest teachers union—which gave $1 million to politicians over two years—called in its army of lobbyists. They killed the reform.

LA Mayor Antonio Villaraigosa called it “cynical political manipulation.” To the San Francisco Chronicle it was “sickening.”

Business as usual hurts real Californians.

Take the big money out of politicians’ hands. YES ON 32.

MARIAN BERGESON Former California Secretary of Education JON COUPAL , President Howard Jarvis Taxpayers Association HON. JOHN ARGUELLES California Supreme Court Justice (Retired)

Arguments printed on this page are the opinions of the authors and have not been checked for accuracy by any official agency.