Money and Direct Democracy in California

Professor Richard L. Hasen (rick.hasen@lls.edu)Loyola Law School, Los Angeles

Prepared for presentation at 2010 Global Forum on Modern Direct Democracy, San Francisco, CA, August 1, 2010

Outline of presentation

1. No era of “hybrid democracy” in California.

2. The connection between candidate elections and ballot measure elections in California

3. The importance of disclosure in California ballot measure elections

“Hybrid democracy”

Some predicted era of “hybrid democracy” after 2003 recall election, where initiatives would play greater role in governance

Gov. Schwarzenegger tried to use initiative process to bypass legislature

Over $1.3 billion spent on ballot-measure related activity between 2000 and 2006

Passage Rates of California Initiatives

Time period Percentage approved

1912-2002 34.5%

1970s 29%

1980s 48%

1990s 40%

2000s (through June 2010) 31%

California government seen as dysfunctional during period

Perennial budget battles (disagreement over effect of initiatives on budget process)

Record deficits Divisive fight over Prop. 8 Lots of government reform (open

primaries, redistricting), but no constitutional convention

Candidate controlled ballot measure committees

No limits on contributions in ballot measure elections because no candidate to corrupt (U.S. Supreme Court CARC case)

Ignores reality of California politics

California Elected officials and the Ballot Measure Process

Extensive party involvement At least 43 candidate-controlled

ballot measure committees 1990-2004, raising at least $84 million

63% of ballot measures feature argument or rebuttal in pamphlet signed by elected official

Top Donors to California Recovery Team (controlled by Gov. Schwarzenegger) as of Nov. 1, 2004

NAME OF CONTRIBUTOR AMOUNT

AMERIQUEST CAPITAL CORPORATION/LONG BEACH ACCEPTANCE CORP $750,000.00

JERRY PERENCHIO LIVING TRUST $750,000.00

MR. ALEX G. SPANOS $500,000.00

WILLIAM LYON HOMES, INC. $250,000.00

AG SPANOS COMPANIES $250,000.00

WILLIAM A. ROBINSON TTEE $250,000.00

AMERICAN STERLING CORPORATION $250,000.00

PAUL F. FOLINO $250,000.00

HEWLETT - PACKARD COMPANY $250,000.00

ROBIN P. ARKLEY II $250,000.00

TWENTIETH CENTURY FOX FILM CORPORATION $200,000.00

TARGET CORPORATION $200,000.00

Importance of Disclosure of Funders in Ballot Measure Elections

Prop. 16: would have protected private electrical utility from public utility competition

Total contributions to “Yes” campaign: $40.6 million

(amount from PG&E: approximately $40.5 million)

Total contributions to “No” campaigns: approximately $80,000

Measure went down to defeat 47% - 53%. Why?

Disclosure