At issue is whether Americans for Responsible Leadership violated state law by accepting donations earmarked for specific campaign purposes in California. The group instead sent a letter to the FPPC saying they had no contributors who had specified that their funds be used in state campaigns.

But Ann Ravel, FPCC Chair, says that is not the issue. “The standard of trust is not whether or not (money) was earmarked, but if those contributors knew or should have known the money would have come to a campaign in California.” 

The FPPC expects a quick decision by the court. It says the November 6th election is drawing near.

The FPPC is the state agency charged with upholding California’s Political Reform Act which includes reporting requirements about the disclosure of donors supporting or opposing state ballot measures.

Ed Kinchley with San Francisco SEIU Chapter 1021 is working the phone bank to encourage members to vote no on Prop. 32. (Photo: Rachel Dornhelm)

I’m looking squarely at the Capitol building in Sacramento. The grass is manicured and green — the building sparkling white. But to Jake Suski, special interest money in politics keeps the Capitol anything but clean.

“Lawmakers — particularly during legislative seasons — host just a number of fundraisers. I think one day during this August they had 17 different fundraisers in one day,” he tells me.

Suski is the spokesman for Proposition 32. The measure’s backers say they simply want to get rid of special interest money in the Capitol. “Corporate lobbyists ask for their little pet projects to be passed and tell them which bills they don’t like,” Suski says, “and union lobbyists do the same thing on their little pet projects.”

Suski says Prop. 32 would accomplish its goal it in three steps.

1.  Banning unions and corporations from giving directly to politicians
2.  Prohibiting government contractors from political giving
3.  Making it illegal to deduct money from paychecks to use in political campaigns

It’s that last provision that has some people crying foul, in particular labor leaders across the state.

Baker says banning paycheck withholding — called “dues check-off” — for political spending will skew the playing field in favor of business.

“That doesn’t apply to corporations,” Baker says, “because corporations don’t get their political money from dues check-off of their employees. They get it from their profits.”

There are a few instances of companies using funds from paycheck withholding to donate to political action committees, or PACs. Still, the majority of corporate money used in politics comes from executives and company treasuries. Baker, who works for the city of San Francisco, says if Prop. 32 passes, he wouldn’t be surprised to see a proposition next year to eliminate collective bargaining like the one Wisconsin Gov. Scott Walker famously pushed through. (That law is now being heard by a federal appeals court after a lower court struck it down earlier this month.)

“So this year they take away our political power,” he says, “next year they really put the bullet through our heads and kill the unions.”

Because it threatens to cut off labor’s primary political fundraising source, unions are pulling out all the stops. They’ve put up over $40 million to fight Prop. 32 — that’s almost five times as much as proponents have donated.

In fact, corporations don’t seem too concerned about Prop. 32’s provision banning corporate giving;  most businesses aren’t donating to fight it and the state Chamber of Commerce has come out as neutral. Why? The elephant in the room — or, to be fair, the elephant and the donkey in the room — is indirect political spending.

Prop. 32 doesn’t prevent independent expenditures to political campaigns, by what are increasingly known as Super PACs. Super PACs became a big factor in elections beginning two years ago, after the Supreme Court’s Citizens United decision. That ruling allows unlimited political spending by groups provided they are independent of campaigns. So anyone who has the money can pay for political advertising on their own, with no limits.

The largest single expenditure for Prop. 32 — $4 million — is by a Super PAC out of Iowa with ties to the conservative billionaire Koch brothers. Yes on 32 spokesman Suski says he knew nothing about that support ahead of time, but that it’s welcome in the face of so much special-interest cash — meaning donations from labor.

“At the end of the day the Supreme Court has decided to protect ballot spending and issue advocacy,” Suski points out. “They also protect independent expenditures, whether from corporations or unions. So there is always going to be that unlimited spending on issue advocacy until the Supreme Court or the federal government changes that.”

But Eric McGhee with the nonpartisan Public Policy Institute of California says Prop. 32 doesn’t affect parties equally. For instance, wealthy individuals aren’t touched by the law.

“Corporations may be hampered some,” McGhee says. “But by and large, their status quo doesn’t change a lot. But I think it does change the status quo for unions quite a bit, because the deductions from paychecks is a very important way unions raise money.”

Those supporting the proposition include the state Republican Party, a group called Democrats for Education Reform and the state chapter of the National Federation of Independent Business.

On the opposing side are the League of Women Voters, Common Cause and the state Democratic Party. Many newspapers around the state have also run editorials calling Prop 32 deceptive. They’re not necessarily endorsing spending by organized labor, but they do say Prop. 32 would create an uneven political playing field.

Listen to Rachel Dornhelm’s story from The California Report: