Ballot Initiatives Hijacked by Corporations

By Jeffrey Kaplan and Jeff Milchen 
March 7, 2004

Think of corporate influence peddlers and you might envision distant figures working the halls of Congress and state capitols. But more and more, they roam city halls, municipal offices and even local shopping malls attempting to snuff the growing trend of communities setting limits on corporate activities. Regardless of location, the goal of the corporate lawyers and lobbyists remains the same: to use the enormous wealth of their employers to get what they want. And they’re willing to seize the initiative — the ballot initiative, theoretically the purest form of democracy — to accomplish their goals.

California evidenced this trend on March 2 elections, when several communities faced corporate attempts to spend their way to victory on ballot initiatives.

Wal-Mart — the world’s largest corporation and soon to become the nation’s largest corporate investor in political candidates for federal offices — wasn’t pleased with a decision last year by officials in Contra Costa County (east of San Francisco Bay). The County recently joined a growing number of communities nationwide to pass laws limiting the size of enormous new “supercenters” that sell groceries as well as general merchandise. Wal-Mart used company funds to hire a corps of signature gatherers and placed an initiative on the ballot to rescind the law. In a slap in the face to its workers, Wal-Mart paid these political operatives $10 per hour — $2 more than its typical store employees. Wal-Mart’s million-dollar public relations campaign tripled spending by opponents and persuaded voters to overturn the ordinance (the company was aided by the poor construction of the law).

But big money doesn’t win every time. On the same day, voters rejected attempts by CropLife America and Pacific Lumber to translate their economic power into political victories.

CropLife, a political creation of corporations such as Monsanto, Dow and DuPont, funded a failed campaign to defeat a Mendocino County citizen initiative that would ban growing genetically manipulated crops or animals within the county. Winning 57% of votes cast, Measure H made Mendocino the first county in the nation to pass such a ban despite the industry opponents spending more than $600,000 – a county record that exceeded $54 in expenditure for each “no” vote.

Meanwhile, just north of Mendocino, executives at Pacific Lumber Company (a division of giant Maxxam Inc.) were upset with Humboldt County district attorney Paul Gallegos, who sued Pacific last year for allegedly lying about plans to log giant redwoods trees on steep slopes. Gallegos filed the suit after the logging caused extensive flooding and damage to local farmland. Pacific spent about $250,000 to run a ballot initiative to oust Gallegos from his job, but failed decisively. Even political opponents of the district attorney balked at allowing a transnational corporation to terminate a fraud case by eliminating its accuser.

But Pacific isn’t done yet — it’s emulating Nike’s failed 2003 attempt to claim a constitutional right to lie. The company has filed a countersuit claiming an obscure anti-trust provision – the “Noerr-Penington Doctrine” — effectively gives corporations the legal right to lie to government officials.

Though money doesn’t necessarily buy a win, we should question why corporations are permitted to use corporate funds to influence any democratic processes in the first place. Despite occasional setbacks, corporations have steadily seized more power over our laws and public institutions, thanks to decades of systematic efforts that have reshaped the law to fit corporate agendas rather than citizens’ interests.

Back in 1971, a corporate lawyer named Lewis Powell wrote a telling memo to the U.S. Chamber of Commerce. He asserted that big business should seek power through “careful long-range planning and implementation” and that power “must be used aggressively and with determination, without embarrassment.” Powell specified that “The judiciary may be the most important instrument for social, economic and political change.”

A month later Richard Nixon appointed Powell to the United States Supreme Court. Powell went on to write the opinion in First National Bank of Boston v. Bellotti, a 1978 decision that created a First Amendment “right” for corporations to influence ballot initiatives and other political campaigns. As one writer commented at the time in the American Bar Association Journal, the Court had constructed a “monster, like Dr. Frankenstein’s creation” that was likely to trample over democracy. The Bellottidecision is one major reason why corporations now dominate national politics and why companies like Wal-Mart can impose the will of corporate executives on communities around the country.

Undermining democracy can be lucrative for corporations but costly for the rest of us. In the case of Wal-Mart, its legendary low wages don’t impact only workers — many employees end up requiring public assistance despite having jobs, while better-paying competitors are driven out of business. According to a recent University of Southern California study, the spread of Wal-Mart supercenters in southern California could result in $1.4 billion in wage and benefit losses annually.

Citizens still win a few battles against corporate interests. But winning the larger struggle — one to determine whether it’s citizens or corporations that will control the future of our communities and country — will depend on changing the rules of engagement.

As Contra Costa county Supervisor Jon Gioia stated, it’s about local citizens having the right to make the laws in their own communities, “not Wal-Mart executives in Bentonville, Arkansas .”

Milchen directs Kaplan is an organizer of the group’s San Francisco bay area chapter (email: JLKaplan”@” to learn more) We soon will begin gathering support for a constitutional amendment to revoke corporate claims to Bill of Rights protections. 

Editor’s note: Unknown to us at the time of publication, another California community, San Marcos (near San Diego) overturned a city council decision via referendum, negating the approval of second a Wal-Mart in the city.