The issue:If approved, Proposition 32 would prohibit the use of employee payroll deductions for political purposes; prohibit corporations and unions from making direct contributions to state and local candidates; and prohibit government contractors from making contributions to pubic officials who award them contracts.
Proposition 32 is a deceptive measure. It is disingenuously presented as a step to reform campaign financing.
If passed, it would prohibit unions, corporations and government contractors from using payroll-deducted funds for political purposes. On the surface, it appears as though Proposition 32 would eliminate lobbying by special interest groups.
The proponents claim it would prohibit special interests from making political contributions to those state and local politicians who embrace their agenda; consequently, they would be unable to exercise any influence on legislative and regulatory processes.
The fact is that it is a devious plan by big corporations, wealthy individuals and super PACs to eliminate any counterinfluence by unions. They would have a free hand to use enormous resources to influence the political process to align it with their own interests. It would result in an uneven playing field because 99 percent of California corporations do not use payroll deductions for political contributions, while unions rely mostly on automatic payroll deductions to raise funds for various purposes, including political campaigns.
According to Daniel Mitchell, a professor emeritus at the UCLA Anderson School of Management, “This would be a big deal for unions if (Proposition 32) passes since it would largely cut off their participation in state and local California politics.”
Proposition 32’s principal backer is the Lincoln Club of Orange County, an ultraconservative organization. The commercials supporting Proposition 32 are paid for by a shell entity called California Future Fund for Free Markets led by Jill Vogel, a lawyer and a Republican state senator in Virginia.
California Future Fund for Free Markets received more than $4 million from American Future Fund. American Future Fund is funded by a group of wealthy donors who are led by Kansas oil billionaire brothers Charles and David Koch.
Interestingly, American Future Fund, based in Iowa, claims to be a “social welfare” corporation. Its president, Sandy Greiner, is a Republican state senator in Iowa. According to Environmental Working Group, Greiner — a staunch proponent of conservative free market ideals — and her husband are recipients of federal farm subsidies amounting to tens of thousands of dollars.
American Future Fund became actively involved in political campaigns nationally in 2010 after receiving $13 million from another “social welfare” group called Center to Protect Patient Rights that is headquartered in Phoenix. The funding for this organization also comes from the Koch brothers. This is a classic example of money laundering, albeit legal in this case because all of the organizations involved are so-called “social welfare” corporations and not businesses.
Dan Morain of The Sacramento Bee pulled all this together succinctly, “So here we are: A group represented by a Republican lawyer in Virginia takes $4 million from a ‘free market’ group led by a Republican senator in Iowa, which took money from a ‘free market’ group in Phoenix.”
Morain concluded: “Talk about deals cut in shadows.”
Proposition 32 is opposed by the League of Women Voters of California, California Common Cause, California Clean Money Campaign and editorial boards of major newspapers.
The ban that would apply to unions exempts other major sources of political contributions, e.g., real estate trusts, hedge funds, Wall Street investors, Wall Street investment firms, corporations (funds that are not payroll deducted), venture capitalists, hedge fund managers, insurance companies and their executives, business super PACs, to name a few.
With growing economic disparity in California and the United States, any measure contributing to this serious problem will lead to catastrophic economic as well as societal consequences. Proposition 32 must be defeated to avoid worsening this serious problem.
Zaf Iqbal is past associate dean and professor emeritus of accounting at Cal Poly’s Orfalea College of Business. He volunteers with local nonprofits including Habitat for Humanity, the Retired Senior Volunteer Program and the Children’s Resource Network. He is president of the San Luis Obispo Democratic Club.
Democrat Zaf Iqbal and Republican John Peschong write monthly about issues of local, state and national importance. If you have comments or suggested topics for future columns, email firstname.lastname@example.org.