Molly Munger donated $44.1 million to pass Proposition 38, a measure to raise taxes for public education. The initiative failed.

Multimillionaire activists, big labor unions and major corporations combined to pump more than $363 million into political fights over 11 propositions on Tuesday’s state ballot, a California Watch analysis shows.

Prop. 38 backer Molly Munger. (neontommy/flickr)

That’s about $20 in political spending for each of California’s 18.2 million registered voters.By law, state ballot initiatives are exempt from the tough donation limits that otherwise apply in California elections.

In contests over proposed tax increases, car insurance rates, criminal justice reforms and political spending by labor unions, donors with deep pockets took full advantage.

Forty-seven donors – individuals, companies and political committees – donated more than $1 million apiece on initiative campaigns, a review of campaign finance data provided by MapLight.org shows.

Seven donors each gave $11 million or more.

The unprecedented spending spree was a sign of just how far the 101-year-old California initiative process has strayed from its origins. In the beginning, initiatives were a Progressive-era reform devised to allow ordinary citizens to sidestep a legislative process controlled by monied special interests.

This year, combined spending over the two most hotly contested ballot measures – Gov. Jerry Brown’s Proposition 30, which sought a tax increase to fund public education, and Proposition 32, a conservative attempt to bar unions from making political donations – topped $195 million, with special interest donors paying much of the freight.

Here, from campaign finance data, are some winners and losers in California’s initiative battles:

The Winners

Big labor

The state’s unions went all in for their successful effort to stop Prop. 32, the anti-union measure pushed by the Lincoln Club of Orange County and other conservative groups. Unions spent more than $60 million to block it. Much of the union money went to committees also pushing Prop. 30, the successful Brown tax measure. In addition to the California Teachers Association ($32.5 million), big donations came from the Service Employees International Union ($21.6 million) and the California Labor Federation ($6 million).

A Facebook tycoon

Chris Kelly, former chief privacy officer of Facebook and an unsuccessful candidate for state attorney general in 2010, gave $2.3 million to Proposition 35, which would toughen prison sentences for human trafficking. Kelly’s donation was more than 60 percent of the measure’s total budget. It had no formal opposition and won easily.

Agroscience

Proposition 37 would have required special labels on genetically engineered food. The unsuccessful measure, pushed by the organic food industry, drew multimillion-dollar opposition from Monsanto Co. ($8.1 million) and DuPont ($5.4 million), in addition to Bayer CropScience, BASF Plant Science and Dow AgroSciences ($2 million apiece).

The police lobby

The Peace Officers Research Association of California was on the winning side of four measures Tuesday and had only one loss. The association spent $192,000 to oppose the repeal of the death penalty, Proposition 34. Proponents countered with about $8 million, but the measure failed. The group also put $1.5 million into opposing the anti-union Prop. 32, which lost; more than $150,000 to back Prop. 35, the human trafficking measure, which won; and $150,000 to support Prop. 30, Brown’s successful tax measure. The cops’ only bad bet: $100,000 to oppose Proposition 36, the measure to reform California’s three strikes law, which was enacted.

The Losers

The Mungers: The adult children of billionaire Charlie Munger, vice chairman of Warren Buffett’s Berkshire Hathaway, emerged as California’s biggest donors – and losers – of all.

Molly Munger, a Los Angeles lawyer and liberal crusader, donated $44.1 million to her Proposition 38, to raise taxes for public education. The measure lost, while Prop. 30, Brown’s competing tax measure, was enacted.

Meanwhile, Charles Munger Jr., a Stanford physics professor, donated about $36 million, most of it to defeat Brown’s Prop. 30 tax increase and to boost Prop. 32, which sought to bar labor unions from making political donations. Prop. 32 also lost.

By way of contrast, each of the Mungers outspent one of California’s best-funded political operations, the California Teachers Association. It donated $32.5 million to support Brown’s Prop. 30 and defeat Prop. 32.

Out-of-state corporations

Thomas F. Steyer, a liberal activist and managing partner of San Francisco’s Farallon Capital Management, was a big winner with his Proposition 39, the measure to collect more income taxes from multistate corporations that do business in California. Steyer donated $29.5 million of the measure’s $31.4 million budget. General Motors, Kimberly-Clark and International Paper put up $45,000 before opposition to the measure collapsed. The state will collect an estimated $1 billion more in taxes as a result.

An insurance billionaire

Mercury Insurance founder George Joseph spent more than $16 million on Proposition 33, his latest attempt to reframe the state’s auto insurance laws to allow discounts for motorists changing insurance carriers. Opponents, including the Consumer Watchdog Campaign, said the measure would weaken consumer protections in present insurance law. Opponents spent only about $276,000 on their successful campaign.

Americans for Responsible Leadership

The Arizona political committee donated $11 million to boost the failed anti-union Prop. 32 and to oppose the governor’s successful tax measure, but those might not be the only losses for the group amid allegations that it illegally laundered the money to conceal its source.

Now, investigators are probing how the campaign cash moved to California from a Virginia-based nonprofit, Americans for Job Security, via a third political committee, the Center to Protect Patient Rights. An official with that committee, Sean Noble, is a Republican strategist with reported ties to Charles and David Koch, Kansas-based GOP megadonors.

California Attorney General Kamala Harris has vowed to continue investigating the affair.

Lance Williams is a senior investigative reporter focusing on money and politics for California Watch and the Center for Investigative Reporting.

Through the studio glass: Michael Krasny hosts KQED's daily call-in show "Forum."

Here at KQED, we take elections pretty seriously. It’s a time when our mission of educating the public comes to a head — the messages coming from the campaigns are unrelenting and taken as a whole can present a confusing picture. So helping you cast an informed vote is our aim.

That was the philosophy behind our state proposition guide. Some people, however, prefer listening to reading. For those folks we present a complete archive of Forum’s 2012 state proposition shows. Some are an hour long, some are half an hour, but all present views from both sides and include community input we received via calls, emails, Facebook and Twitter. So sit back, turn up your speakers, and take a listen…

Prop. 30: Gov. Brown’s Tax Increase for Education, Public Safety

Prop. 31: Revises the State Budget Process

Prop. 32: Campaign Finance Reform or an Attack on Unions?

Prop. 33: Changes to Auto Insurance

Prop. 34: The Death Penalty in California

Prop. 35: Ban on Human Trafficking and Sex Slavery

Prop. 36: Should Three Strikes Be Changed?

Prop. 37: The Fight Over GMO Labeling

Prop. 38: Molly Munger’s Tax Initiative for Education

Prop 39: How We Tax Multi-State Businesses

Please note: Forum did not produce a show on Proposition 40. You can find more information on that here.

Here’s an ad in favor of Prop. 37:

And here’s a commercial from the “No on 37″ campaign:

Edited transcript from Scott Shafer’s conversation with John Myers:

SCOTT SHAFER: So, John Myers, how is the pro-Proposition 37 campaign working?

JOHN MYERS: The early campaign polling was very much in favor of Prop. 37, somewhere in the magnitude of 60 + percent of those polled said they would vote for the measure. But the polling has come down some, at least in part from the massive onslaught of ads — from the opposition side, from the “No on 37″ side — they have knocked down some of that support. But again, the bottom line that Californians seem to think about is: “I want to know what a genetically modified food is when I go to the grocery store.” Of course it’s a little bit more complicated than that, which is part of the discussion.

SCOTT SHAFER: And as you mentioned, the “No” side has outraised proponents on Prop. 37 by something like seven to one. Where’s the money coming from on each side?

JOHN MYERS: On the “Yes” side, the money clearly was coming from organic food producers, natural food producers, they’re the ones who helped get it on the ballot. They’re the ones running the campaign. They don’t have a tremendous amount of money, but they have made their presence known. The “No on 37″ side, I like to call “big food,” and you can look at every large food manufacturer in the United States and you probably can see their money in the “No” campaign. You’re seeing a lot of their ads both on television and on the internet.

SCOTT SHAFER: And they have raised at least $34 million. What are the basic messages of their campaign?

JOHN MYERS: Their message is simply that Prop. 37 is more complicated than it really seems. They call it the “deceptive food labeling act.” What Prop. 37 essentially says is you’ve got to label these foods that are genetically engineered but you also have to label foods that have genetically engineered components.

SCOTT SHAFER: Let’s move to Proposition 32. It would prohibit political contributions from unions or corporations — but specifically unions which use payroll deductions from their members.

Here’s a “Yes on 32″ ad:

SCOTT SHAFER: The central provision there is it’s an even-handed measure — cuts the power of unions and corporations equally. How accurate is that?

JOHN MYERS: The language of Prop. 32 absolutely says it treats corporations and unions the same. The reality is that unions only get their money in California — for California politics, from one place — from these deductions from paychecks of their members. Corporations play politics, and they give political money many other ways.

This is a measure that would impact unions substantially more in the political arena than it would corporations. We’ve fought a similar fight here twice before in California, in 1998 and 2005. Both had ballot measures that would have limited this paycheck deduction process that unions use. In those measures, it would have said unions would have to get permission from their members. This measure, Prop. 32, says, “It doesn’t matter. You can’t do it.” Only voluntary contributions, no more of these automatic deductions from paychecks to use the money for politics. And that is a big, big fight for unions, and that’s why unions have spent so much against it.

SCOTT SHAFER: $40 million and counting. And there was some controversy this week about an $11 million contribution to the “Yes on 32″ campaign, can you sort that out for us?

JOHN MYERS: We’re still trying to sort out where that money came from. The $11 million came from an Arizona-based Political Action Committee, and why it raised red flags is that this PAC – as near as we can tell from all our research — has never played in California before — which has led the unions and the “No on 32″ people and perhaps some campaign finance watchers to conclude that perhaps there is a back door here around campaign rules.

There are some wiggle areas in California campaign finance laws that allow donors to remain hidden as long as they only play one time in these big donations. There’s a belief that it comes from conservative groups. There are a lot of conservative groups that want to see 32 passed because they think it would negate the power of unions in California.

Here’s a “No on 32″ commercial:

SCOTT SHAFER: It is funded, as they suggest in that ad, by big corporations and Super PACs. Is that right?

JOHN MYERS: The “Yes on 32″ campaign, it’s hard to see any big corporation money in it right now. The vast majority of the money has come from these Political Action Committees from outside California that we’ve had trouble tracking the donors. It definitely affects one side of the playing field more. I think it is suspect, though, for the “No on 32″ Campaign to say it’s going to impact the middle class. There’s another ad that says it will give corporations power to raise your taxes and things like that. Let’s get back to reality. In California, the only way to raise taxes in the state legislature is a two-thirds super-majority vote that requires Republicans and Republicans have never wanted to vote for tax increases. But it would shift the political power in the state.

One other thing – Prop 32 includes this language that says corporations and unions can no longer give contributions to candidate committees. And what that effectively would do, if you had money for unions, would push all that money to these outside expenditure groups, these are like Super PACs on the national level, that we’ve had in California for awhile where they can spend money in unlimited amounts. It would re-route the money and that is a fair point that the “No on 32″ campaign has been making.

Learn More:

Prop. 32 Ban on Political Donations Heavily Weighted Against Labor

Prop. 37: Are GMO Labels a Scarlet Letter? 

The Arizona group that dumped $11 million into California’s ballot measure melee this week is led by a Republican activist who calls labor unions “the parasite that is killing our jobs.”

Americans for Responsible Leadership was formed last year by three Arizona businessmen, including Graham. The other directors are Eric Wnuck, who ran an unsuccessful campaign in the Republican primary in a 2010 congressional race, and Steve Nickolas, a bottled water entrepreneur. 

“These are not household names even to politicos like me,” said longtime Arizona political analyst Michael O’Neil. “This is not the political A-team.”

O’Neil added: “It sounds like they are a front organization, and the real question is where do they get their money from.”

The group is organized as a nonprofit organization that doesn’t have to disclose its donors. The group’s directors did not respond to requests for comment.

Beth Miller, spokeswoman for the Small Business Action Committee, which received the $11 million donation, said the committee does not know who funds the group.

“You’ll have to ask them as to where their funding is coming from,” she said.

Americans for Responsible Leadership has also injected money into two of Arizona’s ballot measures this year. It gave $500,000 to oppose a 1-cent sales tax for education funding. And it spent $75,000 to oppose a measure that would create an open primary system where voters could vote for candidates of any party and the top two vote-getters would advance to the general election. California has a similar top-two system that voters approved in 2010.

“Outside special interest groups are trying to take away our freedoms,” Graham said in a video opposing the top-two initiative. “Do you want California politics in Arizona? … I don’t want Arizona to have to deal with the same mess California is in.”

Graham, who has a wealth management company in Scottsdale, is running to lead his state’s Republican Party with a pledge to “respect the grassroots conservatives and Tea Party members who have infused our Party with energy and recommitment to conservative ideals.”

Graham also ran an unsuccessful campaign in the 2010 Republican gubernatorial primary, as a relative unknown. He has a company called Freak Show Racing. And he is the author of “Job Killers,” a book about “How Labor Unions are Destroying American Jobs and the Economy.”

“Striking labor unions out of the business model is imperative to the economic success of today’s ever-changing marketplace,” he said in a video promoting the book. “Then, and only then, will we truly be able to free ourselves of the parasite that is killing our jobs.”

Labor unions in California are pouring tens of millions of dollars into the same state ballot measures that Americans for Responsible Leadership is targeting – but on the opposite side.

The California Teachers Association and the Service Employees International Union combined gave $16.5 million to Prop. 30, the governor’s tax increase, according to campaign finance tracker MapLight.org. The two labor giants also gave $32 million to defeat Prop. 32.

Unions have much at stake. While Prop. 32 prohibits both labor and corporations from using payroll deductions for political purposes, critics say it would disproportionately hit unions, which commonly use member dues to finance robust political operations.

A new report by public policy group California Common Sense found that labor unions fund far more independent expenditures in state political races than other sectors.

Special interests can spend unlimited money on political ads if they are independent of candidate campaigns, and such expenditures have shot up over the past 12 years. Since 2000, unions spent $90 million in this way, compared with $27.7 million by the business sector, according to the report.

Businesses, however, tend to outspend unions when it comes to direct candidate contributions, said report co-author Mike Polyakov.

“I think the influence that money generally and independent expenditures specifically have on our political system is something that should cause concern to the public,” Polyakov said.

Will Evans is an investigative journalist for California Watch.

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: