PG&E’s $50 Million Sucker Bet


Posted on 28 May 2010

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By Peter Schrag

Fans of the California initiative process insist that while money may be important in getting a measure on the ballot, it plays only a minor role, or maybe none, in getting it passed. In next week’s election, the Pacific Gas and Electric Co. is wagering close to $50 million on Proposition 16 that they’re wildly wrong.

Chances are that it will be a winning bet – that the money that the company is spending on its carpet-bombing campaign will overwhelm both reason and the long list of local governments, community organizations and civic leaders who stand against it.

The chances are particularly good since the only real candidate contests for top job jobs in this primary – the contests for U.S. senator and governor -- are among Republicans, meaning that the turnout of Democrats, liberals and moderates is likely to be even lower than usual.

PG&E describes its measure as the “Taxpayers Right to Vote Act.” It’s premised on a now-classic theme. “Politicians throughout the state,” goes one Proposition 16 refrain, “want to spend over $2.5 billion in public funds for government-run electricity.” What that alludes to is the attempt in a few places to create municipal utility districts to compete with private utilities to supply power to their communities. But the ad implies that the pols are spending it on themselves.

What should give PG&E’s game away is that Proposition 16 would require not just a vote of the affected residents before a municipal utility can be established or before an existing one can expand its service into a new area, or before a community organization could buy power and distribute it to an aggregation of customers. It would require a two-thirds vote – in effect granting veto power to whatever minority is disaffected enough to reject anything with the name “public” or “municipal” on it. It would be a near-guarantee that the private utilities will enjoy their monopoly forever.

PG&E, the sole sponsor of Proposition 16, is obviously counting on a combination of anti-politics, anti-government conservatism and voter gullibility to pass its measure. At the top of its list of endorsing organizations, some of them groups like the Bay Area Council, of which PG&E itself is a contributing member, is something calling itself Coalition for Green Jobs. Its spokesman, Scott Wetch, says it represents a group of craft unions working on green energy. But it has no website, no published list of member groups and, when I asked whether there was a board that had voted for the endorsement, was told that was none of my business.   

It’s now nearly a century since Californians, reacting to the political influence of the “octopus” of the Southern Pacific Railroad and other corporate monopolies voted to write the initiative, referendum and recall into the state’s constitution. As those amendments were passed in 1911, the New York Times warned that “when the machine managers get familiar with the working of the new method, they will work it for their own ends far more readily than they work the present method.” As Proposition 16 is likely to demonstrate, no prediction could have been more prescient.

American advocates of the process like to cozy up to the Swiss initiative system from which the U.S. system was partially derived. They attempted to do it again last week at a bi-national forum in San Francisco on direct democracy that was itself a warm-up for a larger four-day “Global Forum on Modern Direct Democracy and U.S. Conference on Initiative and Referendum” scheduled for the end of July.

But, tellingly, no two systems could be more different. Direct democracy in Switzerland is closely integrated with the regular governmental process, both locally and nationally, not competitive with it; referendum elections, which take place several times a year and deal with only a few issues, are separate from candidate elections. The Swiss process is also much slower and more deliberative than ours; deep-pocket private campaign money and commercial campaign organizations play little role in it; there’s nothing like what some people here call “the initiative industrial complex.” Most important, it’s part of a political and demographic culture far different from ours.

It’s hardly a secret that California voters have far more trust in the initiative process than they do in their elected leaders. But as Ted Lascher of Sacramento State University points out, trust in government is lower in states that have the initiative process than in those that don’t. The more familiar people become with the initiative process, the less they trust elected government.

All of which seems to suggest that, as conducted here, initiative campaigns, because they trade so relentlessly on themes of distrust, reinforce alienation of voters not just from government but from the commonweal generally.  That’s what PG&E is doing with Proposition 16 and what so many other political campaigns do as well.

The Swiss at last week’s forum argued eloquently that as national sovereignty in Europe gives way to the broader European Community, direct democracy becomes an increasingly important instrument in connecting citizens to the EU governmental institutions that run ever more of their lives.

But that’s not the case here – certainly not yet – and as Proposition 16 demonstrates, the real beneficiaries may increasingly become the corporations and other private concentrations of power that have turned the process to the enhancement of their own powers. Along the way they not only eviscerate the authority of elected governments but contribute to the hostility and distrust that become the foundation of yet more deterioration of, and constraint on, the governments on which we must ultimately depend.

Maybe P.T. Barnum never said “there’s a sucker born every minute,” but a lot of the people running our political campaigns must hope for it every hour.     

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Peter Schrag, whose exclusive weekly column appears every Monday in the California Progress Report, is the former editorial page editor and columnist of the Sacramento Bee. He is the author of Paradise Lost: California’s Experience, America’s Future and California: America’s High Stakes Experiment. His new book, Not Fit for Our Society: Immigration and Nativism in America is now on sale. To reach Peter, email him at petersch@sonic.net.

Thanks Peter. Excellent piece, as always. For more information on Prop 16 check out our (Consumer Federation of California) section exposing it on our website. Here's our summary of this corporate power grab: http://consumercal.live.radicaldesigns.org/article.php?id=1219

And here's the page I created with all kinds of links to more info: http://consumercal.live.radicaldesigns.org/section.php?id=45