Ballot measures have produced a wave of ambitious progressive reforms in recent years, from legalizing marijuana to expanding voting rights to granting paid family leave. This year, corporations have become equally ambitious in fighting them ― and experts say they’re hitting new levels of audacity in doing so.
Dialysis companies, for example, have raised $53 million to fight a California proposition that would cap their profits at 15 percent. In Florida, Disney has teamed up with the Seminole tribe to make competition in the casino sector illegal. Mining companies in Alaska are working to defeat an effort to protect salmon habitats. And Coca-Cola and Pepsi are trying to persuade Washington and Oregon voters to prohibit any tax on groceries — a category that just so happens to include sodas.
“The success of minimum wage laws and soda taxes are an alarm bell for corporations that they could lose in this arena, so they’re getting in early to pre-empt them or roll them back,” said Nick Freudenberg, a professor at City University of New York who studies the impact of the private sector on policy.
A critical component of this effort, and a recent innovation in corporate lobbying, is using the mere threat of a ballot initiative to negotiate with lawmakers. In Seattle earlier this year, the city council decided to repeal the city’s “head tax” on large corporations rather than fight an Amazon- and Starbucks-backed ballot initiative reversing it. In Oregon, the governor reportedly agreed to drop a corporate-transparency initiative after Nike balked at having to disclose how much it pays in state and local taxes.
An even more extreme scenario played out in California. Since 2015, Berkeley, San Francisco, Oakland and Albany have passed soda taxes by popular vote. In preparation for this year’s election, beverage companies spent $7 million collecting signatures for a ballot initiative that would have required cities to get a two-thirds majority in order to raise any local taxes by popular vote. Lawmakers, characterizing the effort as a “ransom note,” agreed to ban cities throughout the state from passing soda taxes until 2030.
“Interest groups have become much more savvy about ballot measures, whether that means putting them on the ballot or fighting them,” said John Gastil, a professor at Penn State University who studies initiative elections. “Now that they’ve recognized the value, they’re buying measures left and right.”
Sandy Huffaker via Getty Images In Arizona, energy companies are fighting a ballot initiative that would require purchasing 50 percent of their energy from renewable sources by 2030.
Gastil pointed out that corporate-backed ballot initiatives pose a number of challenges for lawmakers and citizens, all of which seem to be intensifying in recent years.
The first is that cities, states and grassroots organizations can’t wage political campaigns at anywhere near the scale of corporations. In Washington State, for example, the initiative to prevent cities from passing “grocery taxes” has raised $8 million in support, mostly from Coca-Cola, Pepsi and Red Bull. The opposition ― a coalition of small, public health-focused NGOs ― has raised just $250, according to Ballotpedia. Similarly, in Colorado, a proposition to ban new fracking projects within 2,500 feet of occupied buildings has attracted just $718,000 in support from environmental groups and nearly $18 million in opposition from energy companies.
This imbalance can be decisive. An analysis by Public Citizen, a progressive think tank, found after the 2016 election that well-funded, corporate-backed ballot initiatives won 62 percent of the time. According to Gastil, under the current interpretation of the First Amendment, it’s nearly impossible for cities and states to limit this spending. “The only thing they can do is help the weaker campaigns get their message out,” he said.
Another challenge posed by corporate ballot initiatives is the scorched-earth public campaigns that often accompany them. During the debate over Seattle’s head tax, petition-gatherers reportedly misrepresented the law to voters, telling them that they would be forced to pay the fee as an individual. In San Luis Obispo, California, where residents are debating whether to ban fracking, the industry-backed opposition claims that the measure would cause a “complete shutdown of existing oil and gas production” — despite the measure itself specifying that existing operations will continue.
Reuters Staff / Reuters A Seattle City Council debate over the Employee Head Tax, a fee for large corporations that was repealed under threat of a ballot initiative.
All of this is perfectly legal. Ciara Torres-Spelliscy, a Stetson University professor who studies election law, points out that petition-gatherers are not under oath, so charging them with lying would be nearly impossible. Plus, in 2014 the Supreme Court affirmed the right of political campaigns to lie, arguing that government bodies cannot be tasked with separating fact from fiction. Public debate, the court said, is a better way to inform voters than regulation.
“The precedent is quite disturbing,” Torres-Spelliscy said. “If you lie about a person, he can still sue you for libel. But if you lie about a political issue, the court is not the backstop for truth.” For ballot measures, she said, this allows corporations to create astroturf organizations (The industry-funded group supporting the ban on grocery taxes in Washington is called Yes! To Affordable Groceries), mislead the public and then disband without taking a hit to their reputations. The politicians, unions and donors opposing corporate-funded initiative campaigns, on the other hand, as named actors with future elections to fight, have to stick closer to the facts.
“Ballot initiatives have been the Wild West since 1978,” Torres-Spelliscy said.
Ultimately though, corporations taking a larger role in proposing and fighting ballot initiatives may in fact be a sign of progress. John Matsusaka, a professor at the University of Southern California and the author of For the Many or the Few: The Initiative, Public Policy, and American Democracy, said that companies turn to ballot initiatives when quieter, backroom efforts aren’t working.
“It’s actually a sign of weakness,” Matsusaka said. Like the tobacco industry before them, energy and soda companies are under pressure from worsening reputations and changing consumer preferences. The recent shift to a more aggressive tone and style is a reflection that their preferred, invisible lobbying efforts aren’t working as well.
“If they’re putting their issues into the light of day,” Matsusaka said, “that means they’re losing.”