A Get-Rich-Quick Story

Introduction

Howard Rich’s decision to bankroll more than a half-dozen takings initiatives west of the Mississippi remains something of a mystery: How and why did the wealthy New Yorker decide to spend millions of dollars backing ballot measures in Arizona, Idaho, and other Western states?

In California, at least, the story can now be told. He was invited in.

Kevin Spillane of Sacramento-based Protect Our Homes Coalition, which got Proposition 90 on the ballot, says that California Assemblywoman Mimi Walters, a Republican from Orange County who serves as the organization’s honorary chair, asked Rich to contribute to the initiative drive after legislation she authored died in committee earlier this year.

“When her legislation failed, she approached Howie Rich about providing seed money for the initiative campaign,” Spillane said in an interview with the Center for Public Integrity. “He helped to do that by generating money, raising money from different sources to help get it qualified on the ballot.” Organizations that Rich heads or finances have so far come through with more than $3.3 million.

Neither Rich nor Walters responded to the Center’s repeated requests for interviews.

Walters’s unsuccessful legislation was a response to the U.S. Supreme Court’s decision last year in Kelo v. City of New London, which held that government could condemn private property and turn it over to private interests for the public good. Her legislation would have prohibited local governments, school districts, and commissions from using eminent domain in this way.

Proposition 90 would not only limit the use of eminent domain but also require property owners to be compensated for regulations that could diminish the value of their land. Still, Spillane argues, the dire warnings about the proposed constitutional amendment are nothing more than hyperbole. “Our biggest obstacle is, frankly, voter confusion and misinformation,” he says.

“[Proposition 90] is prospective, and so all existing laws, regulations, and ordinances that are in effect on Election Day are not impacted by the initiative,” Spillane says. “And it even goes further in that it provides that you can amend many of those existing laws, regulations, or ordinances as long as those are part of furthering the original purpose of those laws and regulations.”

How might this play out in real life? Spillane offers the following hypothetical example:

“One has an existing property. Let’s say it’s zoned for two houses per acre. The local government downzones, so it’s one house per acre. That is a devaluation of the property, and that owner would be entitled to compensation. If the property is currently zoned for one house per acre and the owner would like to have it rezoned for two houses per acre and the local government rejects that— that is not grounds for takings because, frankly, he bought it knowing what it was zoned for.”

Michael Berger, a lawyer in Los Angeles who represents landowners and developers in eminent-domain disputes, says Proposition 90 would simply require government authorities to decide whether they want a regulation badly enough to compensate an affected property owner. “If you don’t want to pay for it,” Berger says, “remove the restriction.”