California Restrictions on Corporate Donations to Political Campaigns (2010)

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A California Restrictions on Corporate Donations to Political Campaigns Initiative (09-0087, 09-0088) did not qualify for the November 2, 2010 ballot in California as an initiated state statute.

On November 19, 2009, Lance H. Olson of the law firm Olson, Hagel & Fishburn filed two requests with the Office of the California Attorney General for official ballot titles for two different but related initiatives. He calls one measure, 09-0087, the "Corporate Political Accountability Act." The other measure, 09-0088, according to the language Olson filed, is called a "Prohibition on Corporate Campaign Contributions and Expenditures."

The two initiatives were given identical ballot titles on January 15, 2010. The petition drive circulation deadline for both measures was June 14, 2010.

09-0087

Ballot title

The ballot title for 09-0087 is:

Imposes Political Contribution and Expenditure Restrictions on Corporations. Initiative Statute.

Summary

The official ballot summary is:

"Prohibits corporations or other business entities as defined from making contributions or expenditures for political activities except with shareholders’ prior informed consent. Limits total funding for approved political activities to proportion of shareholder votes favoring proposed funding. Defines "political activities" to include contributions or expenditures related to candidates, ballot measures, issue advocacy, political parties, committees, voter registration, or any other political or legislative causes. Imposes criminal penalties for violations against persons expending, consenting to, or receiving prohibited contributions or expenditures. Requires detailed reporting to shareholders."

Fiscal impact

The fiscal estimate provided by the California Legislative Analyst's Office says, "State enforcement costs potentially totaling a few hundred thousand dollars annually, partially offset by increased fine revenues."

Purpose

According to the language filed with election officials, the motivations for the proposed initiative are:

(a) Corporations make significant political contributions and expenditures to support and oppose California candidates, political parties and political causes. Decisions to use corporate funds for political contributions and expenditures are usually made by corporate boards and executives, rather than shareholders.

(b) Corporations acting through their boards and executives are obligated to conduct business for the best interests of their owners, the shareholders. Corporate boards and executives that use corporation funds to support and oppose political candidates, parties and causes in California opposed by their shareholders are not acting for the best interests of the shareholders.

(c) Historically, shareholders have not had a way to know, or to influence, the political activities of corporations they own. Shareholders and the public have a right to know how corporations are spending their funds to make political contributions or expenditures benefiting California candidates, political parties, and political causes.

(d) Corporations should be accountable to their shareholders prior to making political contributions or expenditures. Requiring the express approval of a corporation's shareholders prior to making political contributions or expenditures will establish necessary accountability.

( e) California political candidates, parties and causes should not accept corporate contributions and expenditures that do not have the support and approval of the owners of the corporation, the shareholders.

09-0088

Ballot title

The ballot title for 09-0088 is:

Imposes Political Contribution and Expenditure Restrictions on Corporations. Initiative Statute.

Summary

The official ballot summary is:

"Prohibits corporations or other business entities as defined from making contributions or expenditures related to any elective office, ballot measure, or for issue advocacy, unless approved by resolution of the shareholders. Requires that authorizing resolutions specify the recipient, amount, and purpose of the contribution or expenditure, and time period the authorization is valid. Prohibits corporate officers and directors from consenting to prohibited contributions. Prohibits candidates, political committees, and persons from knowingly receiving prohibited contributions or expenditures."

Fiscal impact

The fiscal estimate provided by the California Legislative Analyst's Office says, "State enforcement costs potentially totaling a few hundred thousand dollars annually, partially offset by increased fine revenues."

Findings and declaration

A "finding and declarations" section attached to the proposed initiative says:

The People of California find and declare that:
Corporations make political contributions and expenditures without the approval of the stockholders and owners of the corporations.
Corporations should be accountable to their stockholders and owners prior to making political contributions and expenditures.
Requiring the express approval of the stockholders and owners prior to making political contributions and expenditures will establish necessary accountability.

External links