Political Money Monitor #17: May 29, 1998

*** California Primary Special ***When California voters cast their ballots in their state primary on Tuesday, June 2, they will decide the fate of Proposition 226, the “paycheck protection” ballot initiative. If passed, Proposition 226 (also known as the “Campaign Reform Initiative”) will require employers and labor union leaders to get permission from workers before using automatic paycheck deductions to fund state and local political activity. It will also prohibit foreign contributions from being used to fund state and local political activity.
Contents* Unions Spend Big Bucks to Defeat Paycheck Protection
* Document Outlines “Mutually Advantageous Relationship” Between AFL-CIO and United Way
* Proposition 226 Ahead in Latest Poll
* Reaching Out and Touching Voters — Often
* Personal Attacks Gets Ads Cancelled 

Unions Spend Big Bucks to Defeat Paycheck Protection; Opposition Campaign Expenditures Beat Supporters By 9 to 1 MarginFinancial disclosure reports submitted to the California Secretary of State’s office by the campaigns both for and against Proposition 226 show opponents of the paycheck protection ballot initiative have outspent supporters by a margin of more than 9 to 1.

Opponents of Proposition 226, comprised mainly of labor unions that see the initiative as a threat to their continued use of mandatory union dues for political activity, reported spending $19.3 million so far. Supporters of Proposition 226, on the other hand, reported expenditures of only $2.1 million.

Much of the money paying for the opposition campaign came from the political accounts of labor unions at the state and national level – some even coming from special dues assessments earmarked specifically for the campaign. Ironically, should Proposition 226 pass, unions will be required to ask permission before making any future assessments for political spending.

Document Outlines “Mutually Advantageous Relationship” Between AFL-CIO and United Way; Union Controls Selection of Charity’s EmployeesA “legislative analysis” by the United Way of America (UWA) warning that passage of Proposition 226 would harm the charity’s ability to raise money was retracted when its accuracy was questioned and the UWA’s former president called it a “thinly veiled campaign document.” While UWA officials blamed the report on inexperienced staffers working “without review or authorization by the UWA Board of Governors,” a recently discovered memo reveals a close relationship between the UWA and the AFL-CIO – a chief Proposition 226 opponent.

A 1974 “Memorandum of Understanding Between and United Way of America and the AFL-CIO” details an arrangement that guarantees the union influence within the UWA in exchange for fundraising assistance. The memorandum says at least two AFL-CIO members “will be represented on the Executive Committee of the UWA” as well as in “officer positions.” In addition, the AFL-CIO will nominate the Director of the UWA Labor Participation Department. At least six AFL-CIO-selected staffers will also work under that director.

In return, the memorandum says “the UWA and the AFL-CIO Community Service Department will cooperate to encourage . . . voluntary participation of workers in fundraising drives for the United Way through payroll deduction” and a “continuing review of employee fundraising methods.”

While the UWA has since stated it has “no organization position” on Proposition 226, UWA beneficiaries like the American Heart Association and American Cancer Society have come out against the initiatives for the very same reasons stated in the retracted UWA report.

Campaign Finance Factoids
Proposition 226 Ahead in Latest PollIn the closing days of the campaign, supporters of paycheck protection still hold a 14-point lead over the opposition. A Los Angeles Times Poll released on May 23 found support for the Proposition 226 ballot initiative leading by 51% to 37%.

Personal Attacks Gets Ads CancelledProposition 226 opponents are spending most of their money on television advertising. Earlier this month, however, 23 stations refused to air one opposition ad because of its personal attack on two initiative supporters. Warned that allegations made against Proposition 226 advocates Grover Norquist and J. Patrick Rooney could require the stations to provide them with free air time to respond, the stations instead elected to pull the ads from the air. References to Norquist and Rooney were deleted from replacement ads.


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