State Elections

Published — February 5, 2015

Big business crushed ballot measures in 2014

Patrons play slot machines at the Twin River Casino, in Lincoln, R.I., in July of 2011. Rhode Island voters voted to allow the Twin River slot parlor in Lincoln to offer table games in 2012. A subsidiary of Twin River spent millions on a 2014 ballot measure to expand gaming in Colorado. Steven Senne/AP

Corporate interests pump more than $200 million into initiative fights


Feb. 5, 2015: This story has been corrected.

Anthem Inc. quickly mounted its defenses when consumer advocates pushed for a 2014 ballot initiative in California that would have made it more difficult for the nation’s third largest health insurer to raise rates.

The company, based in Indianapolis, Ind., shelled out $12.8 million to back television ads and a website that warned voters the measure would “give one politician too much power,” “create more bureaucracy” and “interfere with your treatment options.”

Anthem’s money, combined with millions from other interested parties, swamped efforts by Consumer Watchdog, the advocacy group that spent four months gathering the signatures to put Proposition 45 on the ballot. Opponents of the bill together gave more than $31.5 million — dwarfing supporters’ $2.6 million.

In November, Anthem and the other big business interests won at the polls, with nearly 59 percent of the vote.

Anthem, formerly known as WellPoint, was the second-biggest donor to groups fighting over ballot measures in the nation last year, according to a Center for Public Integrity analysis. The donors gave the money to political committees that advocated for or against the propositions. The health insurer did not respond to requests for comment.

Anthem’s victory on Proposition 45 was part of a pattern that played out across the country: Business interests poured money into ballot question fights, largely to protect their own revenue, with overwhelmingly positive results.

More than three-quarters of the $266 million given by the top 50 donors to ballot measure groups nationwide came from corporations or business trade groups, according to the analysis. They gave most of their money to defeat proposals and were almost always successful, winning 96 percent of the time.

“There’s no question that when business or corporations or entities that are affected by ballot initiatives give to the ballot initiative process, they’re not doing so out of altruism,” said Joe Tuman, a professor of political and legal communications at San Francisco State University. “They’re doing so out of rational self-interest.”

‘Spending matters’

The Center for Public Integrity collected campaign finance records filed by statewide ballot measure groups that ran ads on local broadcast, national broadcast and national cable television networks in 2014. The Center then analyzed the donations behind the groups to create the list of the top 50 contributors to ballot measure fights around the country. [More details on the methodology].

Together, those 50 mega-donors gave $266 million, nearly two-thirds of the $424 million contributed to those ballot measure campaigns in 2014.

That means that a few powerful entities dominated debates nationwide over ballot initiatives, which were originally intended to give citizens a stronger voice in government.

Most of the top donors gave to more than one ballot fight — and almost half of them helped fund battles in multiple states. A few were also generous in other 2014 elections, as well. Five of the top 50 ballot measure contributors were also among the top 50 donors to races for state-level candidates.

Some of the money paid for mailers and robo-calls, but much of it went to TV ad blitzes. In 2014, more than $190 million was spent on ballot measure ads alone.

Multinational oil companies BP, ConocoPhillips and Exxon Mobil Corp. successfully beat back a measure in Alaska that would have repealed tax breaks for the oil companies. After giving more than $3.5 million each to the “no” side, they won with nearly 53 percent of the vote.

The American Beverage Association, a trade group based in Washington, D.C., that represents beverage producers, gave more than $8.2 million to fight a Massachusetts measure that would have expanded the deposit that customers must pay when buying bottled drinks. It, too, got what it wanted when 71 percent of voters rejected the new deposit proposal.

But 2014 also proved that money only goes so far, said John Matsusaka, a professor and executive director of the Initiative and Referendum Institute at the University of Southern California.

“Spending matters. If you spend money, you are going to get some votes,” he said. But “if it’s an unpopular measure you can spend as much as you like and it’s not going to pass. It’s not a system where you can just walk in and buy laws.”

Mile High USA Inc., a subsidiary of the Rhode Island-based Twin River Casino company that owns a racetrack and off-track betting parlor in Colorado, gave more than any other ballot measure donor in the U.S. in an unsuccessful effort to expand gaming at its Arapahoe Park racetrack near Aurora, Colorado.

Mile High gave $19.8 million to a “yes” campaign, which worked out to $9.84 per ballot cast in Colorado. Mile High’s corporate clout was countered not by citizens, but by a group of competing casinos in the state that together gave nearly $16.3 million to defeat the measure. Mile High promised that much of the newfound gambling revenue would go to a state education fund: “By permitting limited gaming at Arapahoe Park, 68 will provide millions to our schools each year,” said one backer in an ad. But voters were not swayed: 70 percent of them voted against the amendment.

In another expensive, uphill fight, Wal-Mart gave $3.6 million to an effort to pass a measure in North Dakota that would have let the company open pharmacies in the state, a haven for small, pharmacist-owned drug stores. Wal-Mart also lost, though its opponents raised a fraction of what the big-box retailer gave.

Giving big on defense

Within the top 50 donors, business interests fighting to defeat ballot measures were more successful in 2014 than those whose money was directed at trying to pass initiatives. Companies such as MGM Resorts International and Monsanto gave heavily to fight proposals that would have hurt their profits.

MGM, which is building an $800 million casino in Springfield, Massachusetts, helped pay for TV ads that warned voters the state would lose thousands of jobs if it nixed its gambling law in a November ballot question. “If Question 3 passes, we’ll lose it all — as simple as that,” said a man dressed as a construction worker in one ad. “We’re asking people to vote no on 3 so we can keep the jobs.”

For MGM, the investment of nearly $5.4 million to fight Question 3 paid off — voters rejected the initiative.

That fits with what political experts know about ballot measures: They’re easier to defeat than to pass.

“It’s easier to defend the status quo, often,” said Daniel Smith, a University of Florida professor who has studied ballot measures for two decades. “The onus is on the proponents to articulate why a measure needs to be passed by the people. People know what the status quo is, and you can raise doubts about whether you’re going to be better off under this proposed change.”

Some companies made successful “no” arguments across more than one state. Agricultural giant Monsanto gave $10.7 million to fight ballot questions in Colorado and Oregon that would have required genetically modified foods to be specially labeled. The company is the largest producer of genetically modified seeds in the world.

“We fully support the idea of providing information to consumers to help them make choices about foods as long as the information [on the labels] being provided to consumers is accurate, science based and does not mislead,” said Monsanto spokeswoman Charla Lord in an email. “What we are not supportive of is a state-by-state patchwork of labeling laws.”

Supporters of labeling, many of them natural food companies, raised nearly $1 million in Colorado and nearly $6.5 million in Oregon, but it wasn’t enough. Monsanto and its food-industry allies raised more than $16 million in Colorado and $20 million in Oregon, winning the ballot contests with 65 percent and just over 50 percent of the vote, respectively.

Giving money to ballot measure fights has become the norm for companies seeking to defend their profits, said Justine Sarver, executive director of the progressive Ballot Initiative Strategy Center.

“Ballot measures were originally created as a check on corporate influence in state legislatures,” Sarver said. “Today, corporations use the process to pad their bottom line.”

And business groups are continuing to fight for their profits at the polls. For example, plastics companies in California are already gearing up for a referendum battle over the state’s ban on single-use plastic bags.

The companies have already given millions to back a referendum repealing the ban, delaying its implementation and allowing the companies to continue raking in profits until the vote.

“If you spend money, you are going to get some votes. If it’s an unpopular measure you can spend as much as you like and it’s not going to pass. It’s not a system where you can just walk in and buy laws.”

John Matsusaka, professor and executive director of the Initiative and Referendum Institute at the University of Southern California

Billionaires and ballot questions

In addition to corporate giants, several wealthy individuals, including former New York Mayor Michael Bloomberg, used their vast stores of cash in an effort to influence state and local laws. Their new prominence in the ballot measure scene has surprised experts.

“That’s become a big issue now,” Matsusaka said. “It seems like there’s a lot of them these days.”

Bloomberg and Texas billionaire John Arnold each gave more than $2 million to groups supporting electoral reform in Oregon. The proposal would have reshaped the state’s elections into contests between the top two primary vote-getters rather than representatives from mainstream political parties. (Arnold and his wife are co-founders of the Laura and John Arnold Foundation, a donor to the Center for Public Integrity.)

But Oregon voters were skeptical of the political designs of those two outsiders, because Bloomberg has also promoted gun control and Arnold has backed pension reforms. Sixty-eight percent of Oregon voters rejected the idea, even though the pro-reform side gave more than status-quo supporters by a nearly 5-to-1 ratio.

Las Vegas casino mogul Sheldon Adelson, a generous GOP donor, gave $5.5 million to defeat Amendment 2, a measure that would have allowed medical marijuana in Florida. Fueled by Adelson’s money, marijuana opponents spent an estimated $5.1 million on TV ads, compared to supporters’ $2.1 million. The pot measure lost.

But two individual givers managed to change laws through ballot measures. California tech magnate Henry Nicholas gave nearly $4.3 million to pass a law in Illinois giving more rights to crime victims. Nicholas, a vocal advocate of crime victims’ rights ever since his sister, Marsy, was murdered in 1983, started his crusade for “Marsy’s law” in California and has since taken it to other states. The law to provide restitution and notification about court proceedings to crime victims passed in Illinois with 78 percent of the vote and essentially no opposition.

Rex Sinquefield, a former financial executive and now prolific political donor in Missouri, gave $2.9 million to pass the Show-Me state’s Amendment 10, which gives the Republican-led legislature more control over the budget. Observers viewed this as a shot at Democratic Gov. Jay Nixon.

“It’s not shocking that he would support a measure that adds to the institutional strength of a Republican-dominated legislature at the expense of a Democratic governor who he’s spent tens of thousands of dollars to defeat,” said Jeff Smith, a Missouri politics expert at New York City’s New School.

Healthy-sized giving

Among the top contributing business sectors, one outranked them all: Health care groups gave nearly $88 million in 2014, almost entirely in California. Casino companies were a close second, giving nearly $60 million across the nation.

The Golden State is known as the Wild West of ballot initiatives, with a long history of opponents and supporters spending eye-popping sums with far-reaching consequences. In 2014, two initiatives attracted considerable cash. Propositions 45, on insurance rate approval, and 46, which would have raised the state’s cap on medical malpractice damages and forced doctors to be drug tested, faced more than $90 million worth of opposition from insurers, hospitals and doctors.

Anthem’s crusade against Proposition 45 was aided by other health industry organizations also willing to give millions. Kaiser Foundation Health Plan, another of California’s largest health insurance plans, gave $12.4 million to defeat both 45 and Proposition 46.

Medical malpractice insurers Norcal Mutual Insurance Company, The Doctors Company and the Cooperative of American Physicians each gave more than $10 million to fight the health measures in California.

The Proposition 46 opponents framed the measure as the darling of trial lawyers, who indeed backed it and argued that it would have protected patients by reducing preventable medical errors.

“Before you vote, remember the risks about Prop. 46,” said one ad paid for by the insurers. “The trial lawyers wrote it to serve themselves, not the rest of us, mixing three unrelated provisions together to hide what Prop. 46 actually does — allow the trial lawyers to make millions, for more medical lawsuits and higher jury awards, while Californians pay when our healthcare costs skyrocket. That’s the true story.”

Hal Dasinger, a spokesman for The Doctors Company, noted the election results showed voters agreed with his company’s position: “Proposition 46 was bad for patients, bad for physicians, bad for local and state government budgets, and opposed by an unprecedented, broad list of groups.”

Giving tens of millions of dollars to ballot measure contests was worth the investment for the health care companies, according to Wendell Potter, a former insurance executive-turned-whistleblower who writes an opinion column about health care for the Center for Public Integrity.

“These insurers have enormous amounts of money,” he said. “The largest companies make billions of dollars in profits every year. They have the money to spend, and they’re quite willing to spend it to prevent any legislation or regulation that they have reason to believe might in some way cost them money or have a negative impact on profitability.”

But in 2016, the health care industry, along with its money, will take on a harder task in California: trying to pass a measure, rather than defeat one.

The California Hospital Association is sponsoring an initiative to make permanent a program to attract more federal dollars for low-income patients’ care. The hospital group plans to round up allies and spend big, if necessary, in yet another ballot measure showdown.

“It could be 20 million. It could be 40 million. It could be more than that,” said Jan Emerson-Shea, the group’s spokeswoman. “Our decision will be based on: ‘What do we have to do to win this measure?’ If there is opposition we have to fight off, then the price tag will be higher.”

Correction, Feb. 5, 2015, 3:35 p.m.: An earlier version of this story reported an incorrect total for Wal-Mart’s contribution to a state ballot measure committee in North Dakota. The company actually contributed $3.6 million. Because of that error, the total amount contributed to ballot measure campaigns overall, as well as by the top 50 donors, were incorrect. The correct figures are $424 million and $266 million respectively.

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