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Corporations spend big to defeat ballot measures

Corporations spend big to defeat ballot measures
© Hill illustration

Corporations and business groups spent hundreds of millions in this week’s midterm elections to defeat ballot measures that would have harmed their bottom lines.

Groups supporting or opposing ballot measures in states across the country spent at least $1.1 billion in 2018, according to data from the online political database Ballotpedia.

Many of the measures that drew the most spending came from business and labor groups fighting over issues that did not dominate candidate campaigns. Of the 48 measures that attracted more than $5 million in combined spending, the side with more money won 42.

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In the 10 most expensive races, the side that spent the most won every time.

“Money won all the races,” said Josh Altic, who oversees research into ballot measures for Ballotpedia.

In California, labor groups sponsored a ballot measure that would have limited the amount of money kidney dialysis clinics could have charged their patients or insurance companies to 115 percent of the cost of their services. The Service Employees International Union’s United Healthcare Workers West pumped about $18 million into the campaign backing the initiative.

But several dialysis companies pumped more than $100 million into a campaign to oppose the measure. DaVita, the country’s largest dialysis company, poured $67 million into the opposition campaign; a rival, Fresenius Medical Care North America, added $34 million.

California voters sided with the dialysis companies and rejected the measure by 62 percent to 38 percent.

California voters also rejected Proposition 10, a measure that would have allowed local governments to impose rent controls. Supporters led by the AIDS Healthcare Foundation spent about $24 million, while property management companies and the California Association of Realtors spent a combined $74 million in opposition.

Gale Kaufman, a Democratic strategist who works on ballot measures in California, said voters found many of the ballot measures confusing. And confused voters tend to vote against measures they do not understand.

“More special interests paid for initiatives with no broad appeal than normal,” Kaufman said. “Corporations didn’t win everything. But they did win most.”

Nevada voters on Tuesday shot down a proposal to break up the state’s energy monopoly in a battle that pitted two of the nation’s best-known billionaires against each other. 

Las Vegas Sands, the casino conglomerate owned by Sheldon Adelson, contributed about two-thirds of the $33 million spent in support of Question 3, while NV Energy, a firm owned by Warren Buffett’s Berkshire Hathaway, spent $62 million to oppose it. The two sides spent so much money that they made the Las Vegas media market the most expensive in the country in the final weeks before Election Day. 

Voters turned down the initiative by a 2-to-1 margin.

Two other energy-centric measures both went down in the face of heavy spending from industry groups. 

In Washington, energy companies including BP America and Phillips 66 spent a combined $31 million to defeat a carbon tax measure, about twice what environmental groups such as The Nature Conservancy and billionaires Bill Gates and Michael Bloomberg contributed to support it.

And Arizona voters decided against a measure that would have required electric utilities to generate more power from renewable sources. The billionaire hedge fund manager Tom Steyer spent more than $22 million backing the proposition, while Pinnacle West, the parent company of the state’s largest electric utility, spent more than $30 million against it.

In Florida, two big special interest groups used the ballot initiative process to protect their own bottom lines. Disney spent $20 million and the Seminole Tribe of Florida spent $24 million backing an amendment to the state constitution that would make it harder for other casino operators to open new gambling facilities.

Disney makes millions on visits to its Florida theme parks, while the Seminole Tribe owns the Hard Rock chain of casinos. The new measure, which voters approved by a nearly 3-to-1 margin, effectively walls off its two supporters from new competition.

Voters in several states backed expanding Medicaid on Tuesday, but not in Montana, where supporters wanted to pay for an extension of the existing Medicaid expansion law by raising sales taxes on cigarettes by $2 a pack. The tobacco company Altria dropped $17 million in opposition to the measure, which failed 47 percent to 53 percent.

“Big Tobacco did everything possible to defeat that measure,” said Chris Melody Fields Figueredo, who heads the progressive Ballot Initiative Strategy Center.

Even Alaska, one of the smallest states by population, saw big spending from corporate groups. Oil and gold mining companies poured more than $10 million into the state opposing a ballot measure that would have created new protections for salmon habitat; the measure failed by a 27-point margin.

The very notion of a citizen-driven ballot initiative came about in Western states, in the early part of the 20th Century, as a way for voters to limit the political power of corporations, especially those in the timber and railroad industries. 

For decades, voters in Western states used the initiative process as a check on those mega-industries, which held sway over beholden state legislators. In more recent years, some corporations used initiatives to change state law on their own behalf. Now, some corporations are being forced to play defense on citizen-backed initiatives, and others are using the ballot initiative to pressure competitors.

“We are continuing to see this effort by corporations to flood money to defeat these ballot measures,” Fields Figueredo said. “As the people continue to use this tool, those that oppose progress are going to attempt to defeat these measures.”