Why California’s Biggest Corporations and Wealthiest Individuals are Rallying Behind Proposition 14

Proposition 14 has received financial support from corporations and business trade associations like the BNSF Railway Company, California Chamber of Commerce, Hewlett-Packard Company, National Semiconductor Corp., and Pacific Life Insurance Company

In his well-documented essay, “The Politics of Reform in Municipal Government in the Progressive Era,” Samuel P. Hays was perhaps one of the first historians to expose the fact the early 20th century “Progressive Movement” to “reform” local city governments was largely:

an attempt by upper-class, advanced professional, and large business groups to take formal political power from the previously dominant lower- and middle-class elements so that they might advance their own conceptions of desirable public policy.

Using Pittsburgh, Pennsylvania as the focus of his case study, Hays cited biographical data pointing out many leading “reformers” in that town “included a large segment of businessmen; 52 percent were bankers and corporation officials or their wives” and “among them were”:

the presidents of fourteen large banks and officials of Westinghouse, Pittsburgh Plate Glass, U.S. Steel and its component parts … the H.J. Heinz Company, and the Pittsburgh Coal Company, as well as officials of the Pennsylvania Railroad …

According to Hays, these “reformers” not only were frustrated that Pittsburgh’s “ward system of government” served “local and particularistic interests,” but they believed it was too democratic: it enabled  “lower- and middle class groups” to dominate “city affairs.”

In their view,  the “city’s welfare would be best achieved if the business community controlled city government.” But to coax a skeptical public to swallow “reforms” that would, in essence, limit their political power, they masqueraded them as being a way to expand “popular government.”
One “reform” adopted was abolishing Pittsburgh’s “ward system of government” and replacing it with “city-wide representation.” (i.e., “at-large elections”) Such a scheme gave candidates financed by the “business community” an edge in elections over their less well-heeled opponents.
And as Hays observed, the shift to “city-wide representation” allowed “business and professional men” to win a sizable majority of seats on the Pittsburgh city council, removing from power “lower- and middle class groups” that controlled that body under the “ward system.”
A similar scheme is being played out in California where backers of Proposition 14, the “open primary initiative,” claim it will “reduce the influence of special interests” and  “reform Sacramento” by “opening up our elections,” giving more voters a “voice” in the primaries.
But beneath all of this flowery, populist rhetoric about expanding “popular government” is an interesting paradox: practically all of the money being raised to finance efforts to win passage of Prop 14 are coming from California’s biggest corporations and wealthiest individuals.
According to records available at the California Secretary of State website, some prominent rich people who have given large sums of money to the pro-Prop 14 forces are:
* Governor Arnold Schwarzenegger, movie actor and businessman. His “California Dream Team” ballot measure committee has contributed $2 million.
* Reed Hastings, co-founder and CEO of Netflix, Inc., one of the largest online DVD rental services in the United States. He’s chipped in about $257,328.40.
* Eli Broad, the founder of SunAmerica Inc. and KB Home. He’s given $100,000 to support the cause. Forbes magazine estimates his net worth at $5.4 billion.
Other contributors read like a Who’s Who of California’s biggest corporations and business trade associations: BNSF Railway Company, California Chamber of Commerce, Hewlett-Packard Company, National Semiconductor Corp., Pacific Life Insurance Company, and Shea Homes.
The California Business Roundtable gave about $25,000. Although a paltry sum, this group wields enormous power: members include Anthem Blue Cross, AT&T, Bank of America, Boeing Company, Chevron, Edison International, PG&E, State Farm, and Wells Fargo Bank.
So what accounts for this paradox? Why are California’s biggest corporations and wealthiest individuals–who incidently represent a very tiny handful of the electorate–contributing millions of dollars to support the passage of a ballot initiative that supposedly will expand democracy?

The reality is, Prop 14 isn’t what it claims to be. Not only will it drastically limit “voter choice,”  but it will alter the structure of the electoral system in such a way that it will give big business interests and the wealthy an upper hand on the kinds of candidates that get elected to public office.

In their view, the reason why the California state legislature is “dysfunctional” is because the “closed primary” is too democratic: it enables “lower- and middle class groups” in both the Democratic and Republican party primaries to dominate the candidate selection process.

For example, in major party primaries, candidates likely to win the nomination are those who are responsive to coalitions of organized constituencies such as trade unions, homeowners, seniors, environmentalists, attorneys, anti-tax activists, and small businesspeople.

When candidates win the party primary and eventually get elected to public office, they are expected to help out the “lower- and middle class groups” who put them in power; when they do so, they sometimes favor or oppose bills that put them at odds with big business interests.

Prop 14 will eliminate the “closed primary,” weakening the influence “lower- and middle class groups” have over the candidate selection process. Big business interests believe “opening up” the primary will dilute the strength of these “special interests” and help get “pro-business” candidates elected.

Under Prop 14, an “open primary” is going to function almost like a general election. This will make it more expensive to run for public office. Only candidates who raise lots of cash are likely to win both. This gives wealthy candidates or those backed by big business interests a clear advantage.

And unless a candidate earns more than 50% of the tally in the primary, only the top-two vote getters will move on to the general election. Given the way many legislative districts have been gerrymandered, that means only two Democrats or two Republicans will be on the ballot in most races.

If an overwhelming majority of voters profoundly dislike the two “choices” available to them, then they’re just plain out of luck. Prop 14 explicitly bans write-in candidacies and is set up to ensure that no “third party” candidates will ever end up qualifying for the ballot in any general election.

So what is Prop 14? It is basically a scheme by California’s biggest business interests and the wealthy to disenfranchise millions of California voters by limiting  their “choices” to only casting ballots for candidates who are rich or are wholly dependent on financial support from corporations.

Much like the “reformers” in early 20th century Pittsburgh, these corporate interests are trying to grab power from “lower- and middle class groups’ who wield influence in the “closed primary” and tighten their stranglehold over an electoral system that is already deeply flawed.

Most dictionaries define plutocracy as being a government of the rich, for the rich, and by the rich. Although I’m usually the first to point out the fact politicians of the Democratic and Republican parties are beholden to the wealthy, Prop 14 will only serve to make matters much worse.


For purposes of disclosure, the author of the missive is the Green Party Candidate for U.S. Senate in California.

About Duane Roberts