In the news

The Sacramento Bee
Matt Kawahara

Democratic lawmakers took aim Monday at corporate political spending after businesses poured millions of dollars into measures on the California primary ballot.

Assemblyman Pedro Nava, D-Santa Barbara, and Sen. Mark Leno, D-San Francisco, introduced bills that would limit where companies can obtain money to fund their political agendas.
Leading up to last week's primary, Pacific Gas and Electric Co. spent more than $46 million in support of Proposition 16, while Mercury Insurance backed Proposition 17 with $16 million.

Both measures failed by slim margins. Proposition 16 would have shielded PG&E from competition by requiring that public utilities obtain a two-thirds vote before they could expand. Proposition 17 would have allowed insurance customers to take their loyalty discounts with them to a new carrier.

"Corporations shouldn't be able to use the corporate treasury as a war chest," said Pedro Morillas, consumer advocate for the California Public Interest Research Group, which is sponsoring Nava's legislation.

The bill, AB 919, would require corporations to deliver an annual report to shareholders detailing the company's political activities and expenditures.

Shareholders would be able to opt out of having their money used for those expenditures and would be reimbursed with a dividend.

The bill defines political spending as money invested in supporting or opposing candidates or ballot measures, Nava said. It does not include spending for lobbying.
It applies to shareholders who are residents of California and corporations that either are based in or operate in the state, Nava said.

A similar bill was introduced in 2006 but failed in the Assembly.
Even though Propositions 16 and 17 were rejected by voters, Nava said money is often still "the big determinant" in political races.

To illustrate that point, environmental organizations joined Nava at a news conference Monday to back his bill. They are supporting AB 919 in anticipation of a November fight over a ballot measure to suspend AB 32, the state's landmark climate change law.

The California Jobs Initiative, as the ballot measure is known, is financially backed by Texas oil giant Valero Energy Corp. Opponents of AB 919 say that the bill is simply "unnecessary" because corporate contributions are already made public in required filings with the state. Shareholders can simply sell their stock if they disagree with the corporation's political agenda, said a letter from the California Chamber of Commerce.

David Fogarty, spokesman for the California Jobs Initiative, said Nava's news conference Monday appeared to be a "diversionary tactic." Suspending AB 32, he said, "will help save thousands of jobs and avoid billions in higher energy costs."

Leno's legislation would specifically prohibit PG&E from using ratepayer funds in future political campaigns.

PG&E, though, is committed to making sure that its political contributions are funded by shareholders and not ratepayers, spokeswoman Cynthia Pollard said in an e-mail response.

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