The Fundamentals of a Fraud: Proposition 32 Explained

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October 18, 2012 in Labor & Economy, Politics & Government

In 1894, in Le Lys Rouge, Anatole France wrote, “The law, in its majestic equality, forbids the rich and the poor alike to sleep under bridges, to beg in the streets and to steal bread.”

Over time, this phrase, (probably along with “Let them eat cake”), has become the enduring expression of those things that sound like equality but, in ignoring differences in station, circumstance or means, become absurd, because, in reality, they would only be applied to one of the two groups allegedly being treated in equal fashion.

Such is the case with Prop. 32. This proposition would bar contributions of funds for “political purposes” (further defined below) only if those funds were collected through payroll deductions. The measure is crafted to look as though it is limiting the ability of both unions and corporations to make campaign contributions to candidates or measures, but, in truth, it would place a far greater burden on unions, because they, and not corporations, aggregate their funds through payroll deductions.

What Is The Current Law on Campaign Finance?

Prop. 32 is an amendment to California’s campaign finance and disclosure laws and has no effect on federal candidates or officials.  In addition, some local governments have campaign finance and disclosure requirements for their local candidates, ballot measures, etc.

Currently, the amount that individuals, groups and businesses may give to a state candidate or a committee that gives money directly to a state candidate is limited.  For example, in 2012, an individual, group or business can give up to $3,900 to a candidate for a legislative office and the donor must be identified.

In addition, “independent expenditures” (I.E.) can be used to support or oppose a candidate or ballot measure, so long as the committee doing the campaign does not coordinate with the candidate’s campaign.  For example, an independent expenditure committee could urge you to vote for me or against me and I might not have any knowledge of what they’re doing. Currently, there is no limit on the amount individuals, groups and businesses may give to an independent expenditure campaign but the amounts spent by the I.E. are reported.

Finally, groups and businesses may communicate directly with their members, employees, or shareholders, asking them to support or oppose someone or some measure, without limits, and no reporting is required.

All of these sorts of expenditures would be barred in Prop. 32 only if the funds supporting them were collected by payroll deduction.

Prop. 32 Limits Political Expenditures From Payroll Deductions 

This is the provision in the proposal that creates the major inequality.  Currently, employers are allowed or required to withhold money from an employee’s paycheck under limited circumstances, such as Social Security, income taxes, medical plans and charitable deductions authorized by the employee.  In addition, about two and a half million California workers either pay dues or an amount called a “fair share” fee (paid by non-union members who are benefiting from a collective bargaining agreement) to unions.  In many cases, employers automatically deduct these dues and fees from employees’ paychecks and pass them on to the union.

A number of unions use a portion of these dues and fees for political contributions and independent expenditures or to communicate about political races with their members. Non-members who pay fair share fees are allowed to opt out of this portion.

For the most part, corporations and businesses do not deduct money from their employees’ payroll to pay for political expenditures, but, rather, donate to candidates through political action committees and other means out of their profit or other corporate funds.  Prop. 32 bans only the use of monies collected by payroll deduction, the primary way unions, but not others, aggregate political money, from being used for all “political purposes”, including direct contributions to candidates or measures, independent expenditure committees, member communications related to campaigns or other expenditures meant to influence voters.

Prop. 32 Bans Both Corporations and Unions From Making Direct Contributions 

In addition, under the Proposition, no matter how the funds were collected or aggregated, neither unions nor corporations will be able to make any political contributions directly to a candidate or to a committee that passes the money through to a candidate.  Nothing in the proposition, however, affects the ability of any of these entities to affect elections through independent expenditures, providing the funds don’t come from payroll deductions.

And Also Bans Government Contractors from Giving to Those Who Contract

Finally, Prop. 32 bars government contractors, including public sector labor unions, from contributing to elected officials who affect their contracts from the time the contract is being considered to the date the contract expires. Most likely, for public sector unions, this time period would be relatively perpetual.  The measure does not seem to limit contributions to electeds by an entity negotiating for zoning waivers, or projects that might benefit the entity but not involve direct contractual payments.

Sheila Kuehl, a former member of the California Assembly and Senate, is a Regents’ Professor at the School of Public Affairs, Graduate School of Public Policy at UCLA. Her post is part of a series examining 2012 California ballot measures that appears on the author’s blog. It is reposted with permission.

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