Chavez 1

Miguel Chavez
Latino
Government 180
February 10, y

California Proposition 32
In a state where campaign finance laws can be considered loose and piles of
money are handed out by unions and corporations amounting to the millions, a California
proposal aims to take away that powerful influence that unions and corporations have in
California state and local politics. California Proposition 32, also known as the "Paycheck
Protection" Initiative, was on the November 2012 ballot as an initiated state statute. Prop. 32
would prohibit unions, corporations, and government contractors from using automatic payrolldeducted funds for political purposes. It prohibits union and corporate contributions to
candidates and their committees, and government contractor contributions to elected officers or
their committees. Voters know how influential big organizations are in any form of politics.
Proposition 32 is an initiative that tries to regulate and subtract big money from the equation. In
this research paper, we will be discussing Proposition 32 in greater detail about its major
components; talking about its development, analyzation of the bill itself, supporters and
opponents of the initiative, and the voting results of this initiative.
Background
You can be the best candidate running in an election, but if you do not have the
monetary power to back up your campaign, you are going to lose. When you are dealing with
politics, money talks. California state politics and policies are driven to a large extent by special
interests and their ability to bankroll their favorite candidate for the job. This is the type of

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reform that this initiative is trying to correct. Every year, the amount of money that is donated to
local and state officials and candidates by corporations and unions amounts to the millions. There
is little doubt that they lobby the state government with great success to get more taxpayer
money spent for their benefit, to restrict competition, and to exempt them from rules and taxes
that other people have to follow. In every general election, the amount of money that is raised for
ballot measures, candidates and local positions have increased exponentially, from $337,512,365
in 2002 elections to $651,142,214 in the 2012 elections, an amount that almost doubled in only a
ten year span.1
The California political system was a dog eat dog system where laws governing the
conduct of public officials and campaign committees were few, weak and largely ignored by
those in the system. Well that is, until 1974, where the voters passed Proposition 9, or the
Political Reform Act. This revolutionary, new ballot initiative modified Californias political
arena, with the creation of the newly independent agency, the Fair Political Practices
Commission (FPPC). The Political Reform Act watches disclosure of political campaign
contributions and spending by candidates and ballot measure committees. It also sets ethics rules
for state and local government officials that impose strict limits on decisions or votes that affect
the official's financial interests. It regulates lobbyist's financial disclosure and lobbying practices
related to the legislature and California agencies.
The Fair Political Practices Commission, FPPC, was made in order to adopt and amend
campaign practice regulations and put a light on the shadows of the shady political system. The
FPPC was also put in charge of investigating violations of the Political Reform Act, impose
1 National Institute on Money in State Politics. California 2012." State Overviews.
http://www.followthemoney.org/database/state_overview.phtml?s=CA&y=2012. (Accessed
March 31, 2014).

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penalties, and assists state and local agencies in the development and enforcement of conflict-ofinterest codes.2 FPPC was also tasked in educating the public and public officials on the
requirements of the Act and provide written and oral advice to public agencies and officials.
Proposition 9 is an important piece of legislation because it was one of the first initiatives
to develop real accountability and disclosure to those handing out the money. Proposition 9 is not
as effective as it once was, though, as it has been amended more than two hundred times through
Californias current political system.3
The Ones Before: Proposition 226 and 75
This is not the first time that this type of legislation has been put on a California ballot.
Two previous initiatives, proposition 226 and proposition 75, both sought to enable some sort of
paycheck protection. Both of these initiatives failed to become law, however, as they were
rejected by the California voters 53.3%4 and 53.5%5, respectively. Interestedly enough, it seems
like the same groups are bankrolling these different initiatives. In support of the initiatives are

2 State of California. "About the Political Reform Act." Fair Political Practices Commission.
http://www.fppc.ca.gov/index.php?id=221 (accessed March 24, 2014).

3 Matthews, Joe , and Mark Paul. "A more Direct Democracy ." California Crack Up How
Reform Broke the Golden State and How We Can Fix It. Los Angeles: University of California
Press, 2010. 175-176.

4Jones, Bill. "Statement of Vote." Primary 98. Accessed March 30, 2014.
http://primary98.sos.ca.gov/Final/P98_SOV.pdf , pg.84

5"California Proposition 75, Permission Required to Withhold Dues for Political Purposes
(2005)." ballotpedia.
http://ballotpedia.org/California_Proposition_75,_Permission_Required_to_Withhold_Dues_for_
Political_Purposes_(2005).(Accessed March 31, 2014).

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republican-leaning political action committees, or PACs, like Californians for Paycheck
Protection or Americans For Responsible Leadership, that donate large sums of money to have
these restrictions in place. In opposition of the initiatives are democratic-leaning unions, like the
California Teachers Association or the California Labor Federation who are against them since
they would greatly effect the way they gather their resources.
Proposition 226 was on the June 1998 ballot and it would have done two things; first, it
would have established new requirements which would require all employers and labor
organizations to obtain employee's or member's permission before withholding wages or using
union dues or fees for political contributions. Employee's or member's permission would be
obtained annually using a prescribed form and it would require record keeping of all these forms.
Secondly, it would have established a provision to prohibit campaign contributions from foreign
interests for a candidate for public office. The voters did not think too highly of this proposal, as
it was rejected by the votes 53.3% to 46.7%. 6 Opponents of Proposition 226 spent over $24
million to see this measure fail and they succeeded, almost quadrupling the supporters $6.4
million. Some of the opponents included the AFL-CIO No on 226 Education Fund, California
Teamsters Public Affairs Council Issues Account, Californians to Protect Employee Rights, all of
which are union-based organizations and supporters, or PACs. The supporters, which included
Californians for Paycheck Protection and the Campaign Reform Initiative, were not prepared for
the level of opposition this proposition drew, as they were out hustled and lost this battle. 7

6 Jones, "Statement of Vote, pg.84

7 "California Proposition 226, the Paycheck Protection Initiative (1998)." Ballotpedia.

September 2, 2012. http://ballotpedia.org/California_Proposition_226,_the_
%22Paycheck_Protection%22_Initiative_(1998)

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Proposition 75 was also a similar proposition on the November 2005 election ballot that
attempted to instill some sort of paycheck protection. Prop 75, also known as the Public
Employees Right to Approve Use of Union Dues for Political Campaign Purposes Act, basically
prohibits using public employee union dues for political contributions, as stated in the name of
the act, without having an employees' prior consent. It required unions to maintain and report
member political contributions to Fair Political Practices Commission. Just like Prop. 226, there
was not enough financial contribution in support of this measure, as opposed to the opponents of
this initiative, who had donated more than $54 million versus the supporters $5.8 million, a ten
to one ratio. 8 The measure was defeated by a 53.5% to 46.5% vote. Supporters of Prop 75
included the California Republican Party, the U.S. Chamber of Commerce and was even a part of
Arnold Schwarzeneggers reform plan for California. They argued that public employee union
members should have a say in what their dues are being spent on, instead of it being forcibly
taken away and used to support a political agenda they might not like. Opponents, like Prop. 226,
were unions trying to stop this proposition, as it would greatly affect how they collect there dues.
Inside Proposition 32
To address Californias special interest groups problem, Prop 32 was made to restrict
money from special interests, like corporations and unions, to be used in Californian politics. Top
companies and unions are also big contributors in Californian politics, which only expands their
sphere of influence. According to the FPPC report, Big Money Talks, Californias top 15
spending special interest groups over the last ten years all have a combined expenditures totaling

8 California Proposition 75, Permission Required to Withhold Dues for Political Purposes
(2005)." ballotpedia.
http://ballotpedia.org/California_Proposition_75,_Permission_Required_to_Withhold_Dues_for_
Political_Purposes_(2005).(Accessed March 31, 2014).

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more than $1 billion. Of those 15 identified groups, six are corporations, three are Indian tribes,
two are labor unions and four are business associations.9
Prop 32, known as the Stop Special Interest Money Now Act, would introduce key
reforms to California's campaign finance rules. First, it would ban the use of employee payroll
deductions for "political purposes. Political purposes include campaign contributions,
independent expenditures, and other spending to influence California voters.10 Union members
see a deduction for their dues. Currently, unions may use that money for political purposes in
addition to other activities, for example, collective bargaining, something that will not change.
This part of the measure appears to have the greatest impact on unions, since, as the legislative
analyst estimates, few corporations finance their political activities this way.11 Second, Prop 32
would prohibit corporations and unions from making direct contributions to state and local
candidates or the committees that fund them. There is already a law against this sort of
transactions on the federal level. Last but not least, the measure would make it illegal for
government contractors to contribute to elected officials who have a hand in awarding them a
contract, at least while that contract is under consideration or is in effect. This is just so money is
not exchanged for favors like a nice government contact.
Support for Prop 32
9 California Fair Political Practices Commission. "Big Money Talks ." Fair Political Practices
Commission. http://www.fppc.ca.gov/reports/Report31110.pdf (accessed March 25, 2014).

10 California Attorney General. "Proposition 32: Official Title and Summary." Proposition 32.
http://vig.cdn.sos.ca.gov/2012/general/pdf/32-title-summ-analysis.pdf (accessed March 26,
2014).

11 Ibid.

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A yes on this measure means unions and corporations could not use money deducted
from an employee's paycheck for political purposes and government contractors could not donate
money to candidates if they are up for a job. Voters believe that politicians purposely bend over
backwards in order to please unions and corporations, who donate big money into their
campaigns and their initiatives proposals. In fact, one day in February 2012, while the state
budget was being negotiated, there were 18 fundraisers in Sacramento with a $1000 minimum
ticket price.12 Occurrences like this make voters believe that there must be a reduction of the
power and influence among unions and corporations of who put their interests first. This,
however, seems to be true. 79% of campaign contributions made to Californias legislators now
come from donors who live outside their districts. 13 Voters argue that this would level the
playing field and curb special interests dominance in California. Voters also like that employers
would have to persuade their members to give voluntarily for political causes instead of just
taking their money. Prop. 32 would cut the money ties between special interests and politicians
to the full extent constitutionally allowed with no loopholes and no exceptions.
One thing we do know for sure about the financial backers of proposition 32 is that they
are Republican-leaning organizations, people, or PACs that are adamant in attacking unions
ability to raise money for their political agendas. Money for prop 32 comes mostly from
individuals, with a surprising 72.9% of the $65.5 million donated coming from single people; the

12 Los Angeles Area City Commerce. "Government And Fiscal Affairs ." LAchamber.
http://www.lachamber.com/clientuploads/government_civic_relations_council/061912_Combined
Agenda1.pdf (accessed March 25, 2014).

13 Moore, Adrian. "California Voters' Guide 2012: Proposition 32." Reason Foundation.
http://reason.org/news/show/ca-voters-guide-2012-prop-32 (accessed April 4, 2014).

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other 27.1% coming from organizations.14 This shows that individual donors tend to favor the
GOP. These Republican-leaning donators included, but were not limited to, Charles T. Munger,
Jr., Citizens for California Reform, Americans For Responsible Leadership, National Federation
of Independent Business, American Future Fund, Jerry Perenchico, William Oberndorf and Small
Business Action Committee. According to a CQ MoneyLine study, more than 100,000 salaried
workers authorized their employers to withdraw a total of more than $70 million from their
paychecks through June.15 This is what corporations are trying to have unions do, except that a
unions only revenue is made through collecting dues from its members, while corporations have
the benefit of using their profits to finance their political agenda.
Top Contributors
The top donator was Charles T. Munger, Jr., giving 36 million dollars in support
of proposition 32. That is 59.6% of the 65.5 million donated all together.16 Charles Munger Jr. is
a wealthy Stanford physicist, who is one of eight children of Charles Munger, the billionaire vice
chairman of financial holding company Berkshire Hathaway. Politically, he is a Republican of
the moderate persuasion. Charles Munger Jr. has donated $21.9 million to the Small Business
Action Committee, which opposed Proposition 32. It prevents an organization with power over
an employee, whether it be a corporation or a union, from taking money automatically out of an
14 "Prop. 32: Political Contributions." Funding Prop 32 Political Contributions.
http://votersedge.org/california/ballot-measures/2012/november/prop-32/funding?
jurisdictions=28%2C1%2C28-upper-ca#.Uz9BLtxH1FI (accessed April 4, 2014).

15 "PACs Collect Millions From Workers Paychecks." Roll Call.

http://www.rollcall.com/issues/56_41/-50973-1.html (accessed April 4, 2014).

16 Prop. 32: Political Contributions.

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employees wages to pursue politics the employee doesnt support, said Charles Munger, Jr. of
proposition 32.17
The second largest donor of proposition 32 was Americans For Responsible Leadership,
which is an Arizona-based 501(c)(4) organization that donated $11 million in support of prop 32.
If you are asking yourself why an Arizona-based super PAC is funding a California initiative, it
is because at least 25% of the money raised for prop 32 came from out of state organizations
from Arizona and Iowa. 18 Its mission statement is "seeks to promote the general welfare by
educating the public on concepts that advance government accountability, transparency, ethics,
and related public policy issues.19 ARL has come under fire from the FPPC for being involved
in a "money laundering scheme. It turns out that ARL had received almost all its revenues,
97.6% to be exact, from a single organization linked to billionaire conservatives Charles and
David Koch, the Center to Protect Patient Rights.20 This meant that the Center to Protect Patient
Rights practically owned ARL and all its actions which, for obvious reasons is not allowed.
Opponents of Proposition 32

17 Vekshin, Alison. "Munger Siblings Spend $54 Million to Sway California Vote."
Bloomberg.com. http://www.bloomberg.com/news/2012-10-12/munger-siblings-spend-54million-to-sway-california-vote.html (accessed April 4, 2014).

18 Prop. 32: Political Contributions.

19 "About Us." ARL National. http://arl-national.org/sample-page/ (accessed April 4, 2014).

20 Novak, Viveca. "News & Analysis." Americans for Responsible Leadership Wholly Funded by
Koch-Linked Group. http://www.opensecrets.org/news/2013/12/americans-for-responsibleleadership-wholly-funded-by-koch-linked-group.html (accessed April 4, 2014).

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In general, the major unions oppose the measure as it greatly effects every single one of
them and just like the other two times they were well prepared to put this initiative down. They
argue that it does not take money out of politics since it does nothing about the amount of
spending by super PACs and other independent committees. The proposition doesn't actually talk
about how it would affect the thousands of big businesses like investment firms, hedge funds, or
insurance companies, all of whom play a major part in donating to California political
campaigns. Opponents argue that it only ties down the unions political influence, leaving
powerful and big corporations in swaying all of the politicians, since corporate interests will
continue to have the same level of funding and unions will see their political power diminished.
This unfairly targets unions, since hardly any corporations use payroll deductions for political
contributions. Opponents also say that it will cost California $1 million annually to implement
and enforce it.21The top donors to the No on 32 campaign include California Teachers
Association, California State Council of Service Employees, and California Professional
Firefighters.
The major financial backers to proposition 32 were the California Teachers Association,
Service Employees International Union, California Labor Federation, American Federation of
State County and Municipal Employees, and the Democratic State Central Committee of
California. The opponents, like the other two times, were able to out-raise the supporting side by
more than $14 million raising a total of seven $75.1 million.
California Teachers Association

21 "Political contributions by payroll reduction." Official title and summary.

http://vig.cdn.sos.ca.gov/2012/general/pdf/32-title-summ-analysis.pdf (accessed April 2, 2014).

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With the passage of Proposition 98 in 1988 requires a minimum percentage of the state
budget to be spent on K-12 education. Therefore prop 98 guarantees an annual increase in
education in the California budget. Californians are split on most issues but one thing that can all
gather around is the value of a good education. The California Teachers Association is the union
that represents educators in Californias public schools and colleges. Their 325,000+ members
not only make them strong, they make them the states largest professional employee
organization. And, as the largest affiliate in the 3.2 million-member National Education
Association, their voice is also heard as far away as Washington, DC. The California Teachers
Association was the top donor that supported proposition 32, donating more than $21 million
which was more than 28% of the total 75.1 million donated.22 The CTA not only defeated this
measure, but also had a hand in defeating 1998s prop 226 and 2005s prop 75. In fact, the CTA
spent $12 million opposing Proposition 75 and more than $50 million to defeat three ballot
measures on the 2005 election ballot.23 They are serious when it comes too messing with them
and they make it clear that any type of opposition toward them will be meet with a mountain of
money.
Outcome of Proposition 32
Proposition 32 was defeated by a 56.6% to 43.4% margin.24 Both supporters and
opponents of prop 32 filed lawsuits seeking to change the way the ballot appeared to voters. So

22 "Prop. 32: Political Contributions." Funding Prop 32 Political Contributions.

http://votersedge.org/california/ballot-measures/2012/november/prop-32/funding?
jurisdictions=28%2C1%2C28-upper-ca#.Uz9BLtxH1FI (accessed April 4, 2014).

23 California Fair Political Practices Commission. "Big Money Talks ." Fair Political Practices
Commission. http://www.fppc.ca.gov/reports/Report31110.pdf (accessed March 25, 2014).

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prop 32 joins an exclusive group of past paycheck protection reforms that have failed to see the
light of day. If the pattern occurs again, in my mind, their will be another similar initiative that
tries to prohibit unions some collecting dues for political purposes automatically. As long as the
donors and backers keep supplying the money, attempts to stop union power will continue and
supporters of unions will more likely protect their influence.
What Should Happen: My Opinion
There are many reforms we can implement in order to solve the problem that
Proposition 32 wanted to change. The problem we need to ask ourselves is, How do we stop
special interest groups from influencing government officials into doing what they want instead
of the people they were elected to represent?. First of all, lets set unrealistic goals aside to best
solve this problem. Of course, the best way to stop the special interests from influencing the
government is to stop taking their money. But I can see that the sums of the money they throw at
you can be very tempting, almost like a sirens call, it cant be helped. There is also no one
stopping the special interests from just bankrolling somebody else like an opponent who is
willing to work with them as opposed to against them. There must be real legislation passed if
anything can be done about special interest influence over the democratic process.
I think that Proposition 32 was on its way to being a good law, except it did not go far
enough in deterring corporations and unions alike from getting involved in California political
processes. It was very wordy and very deceptive to those who actually read the official summary
and title of Prop 32. All people want is for politicians to be interested in what the voters want and
less interested in what unions and large corporations are lobbying for. The following would be
24 "California Proposition 32, the Paycheck Protection" Initiative. Ballotpedia .
http://ballotpedia.org/California_Proposition_32,_the_%22Paycheck_Protection
%22_Initiative_(2012) (accessed April 3, 2014).

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my version of Prop 32. First, both corporations and unions will have strict restrictions into the
amount of money they donate into a ballot initiative or a candidate running for public office. If I
had my way, I would end the anonymity of political action committees, or super PACs as they
are referred to, as they often get in the way of full disclosure. If someone wanted to donate
money to a cause, they should not be afraid to display it to the public, if they are nervous about
people finding out then they probably should not be doing that type of transaction. Corporations
and unions should be able to have a saying into what becomes law, just like anyone else, as it
may affect them as well, but due to the amount of money they pour into the political system, it
would be best if there were better disclosure laws in place to end the secrecy. The blame does not
just fall on the corporations and unions, it also lies within the people that take their money. I
would improve the FPPC and raise the fines and penalties for anyone caught doing wrongdoings.
This would be my solution for special interest influences on the California political system.

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Works Cited
"About Us." ARL National. http://arl-national.org/sample-page/ (accessed April 4, 2014).
State of California. "About the Political Reform Act." Fair Political Practices Commission.
http://www.fppc.ca.gov/index.php?id=221 (accessed March 24, 2014).
California Fair Political Practices Commission. "Big Money Talks ." Fair Political Practices
Commission. http://www.fppc.ca.gov/reports/Report31110.pdf (accessed March 25,
2014).
National Institute on Money in State Politics. "California ." State Overviews.
http://www.followthemoney.org/database/state_overview.phtml?s=CA&y=2012
(accessed March 31, 2014).
"California Proposition 226, the "Paycheck Protection" Initiative (1998)." ballotpedia.
http://ballotpedia.org/California_Proposition_226,_the_%22Paycheck_Protection
%22_Initiative_(1998) (accessed April 3, 2014).
"California Proposition 32, the "Paycheck Protection" Initiative." Ballotpedia .
http://ballotpedia.org/California_Proposition_32,_the_%22Paycheck_Protection
%22_Initiative_(2012) (accessed April 3, 2014).
"California Proposition 75, Permission Required to Withhold Dues for Political Purposes
(2005)." ballotpedia.

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http://ballotpedia.org/California_Proposition_75,_Permission_Required_to_Withhold_D
ues_for_Political_Purposes_(2005) (accessed March 31, 2014).
Los Angeles Area City Commerce. "Government And Fiscal Affairs ." LAchamber.
http://www.lachamber.com/clientuploads/government_civic_relations_council/061912_
CombinedAgenda1.pdf (accessed March 25, 2014).
Jones, Bill . "Statement of Vote." Primary 98. http://primary98.sos.ca.gov/Final/P98_SOV.pdf
(accessed March 30, 2014).
Matthews, Joe , and Mark Paul. "A more Direct Democracy ." In california crack up how reform
broke the golden state and how we can fix it. Los Angeles: University of California
Press, 2010. 175-176.
Moore, Adrian. "California Voters' Guide 2012: Proposition 32." Reason Foundation.
http://reason.org/news/show/ca-voters-guide-2012-prop-32 (accessed April 4, 2014).
Nelson, Eliot. "HUFFPOST HILL - OCTOBER 25TH, 2010." The Huffington Post.
http://www.huffingtonpost.com/2010/10/25/huffpost-hill-october-25t_n_773783.html
(accessed April 4, 2014).
Novak, Viveca. "News & Analysis." Americans for Responsible Leadership Wholly Funded by
Koch-Linked Group. http://www.opensecrets.org/news/2013/12/americans-forresponsible-leadership-wholly-funded-by-koch-linked-group.html (accessed April 4,
2014).
"PACs Collect Millions From Workers Paychecks." Roll Call.
http://www.rollcall.com/issues/56_41/-50973-1.html (accessed April 4, 2014).

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"Political contributions by payroll reduction." Official title and summary.

http://vig.cdn.sos.ca.gov/2012/general/pdf/32-title-summ-analysis.pdf (accessed April 2,
2014).
"Prop. 32: Political Contributions." Funding Prop 32 Political Contributions.
http://votersedge.org/california/ballot-measures/2012/november/prop-32/funding?
jurisdictions=28%2C1%2C28-upper-ca#.Uz9BLtxH1FI (accessed April 4, 2014).
California ATTORNEY GENERAL. "Proposition 32: OFFICIAL TITLE AND SUMMARY."
Proposition 32. http://vig.cdn.sos.ca.gov/2012/general/pdf/32-title-summ-analysis.pdf
(accessed March 26, 2014).
Vekshin, Alison. "Munger Siblings Spend $54 Million to Sway California Vote."
Bloomberg.com. http://www.bloomberg.com/news/2012-10-12/munger-siblings-spend54-million-to-sway-california-vote.html (accessed April 4, 2014).