Debt Consolidation

National Resource Center for State & Local Campaign Finance Reform

Posted on: June 11, 2008
Written by: UWSA Staff
A Center for Governmental Studies Project
10951 West Pico Blvd., Suite 206 * Los Angeles, CA 90064
Tel: (310) 470-6590

Question: What will be the impact of the California Political Reform Initiative on large and small labor unions?

Conclusion

While the CPR initiative will significantly reduce the amount of money any entity, including labor unions, may contribute to candidate campaigns, labor unions will find themselves in a comparatively stronger position to influence candidate campaigns, since corporations and other entities which have traditionally given far more to candidates will be bound by the same contribution limits. Moreover, labor unions that receive donations of $50 or less per member will be able to make candidate contributions at levels twice as high as most other entities, and such labor union contributions do not count towards the limit on non-individual contributions which candidates may receive. The involvement of labor unions or any other groups in local candidate elections will not count against the limit on total contributions to all state candidates. Low contribution ceilings mean that small contributions from individual union members may become more important to candidates.

All other union activities not associated with candidate campaigns, such as educational drives and issue campaigns, as well as any internal communications for or against candidates, are exempt from the limitations of this initiative.

Analysis

1. Level the Playing Field.

Typically, corporations and businesses contribute to California state candidates an aggregate amount more than labor unions by a ratio of at least 6-to-1. The largest labor union contributor is the California Teachers Association (CTA), which usually ranks among the Top Ten in the state. However, business interests contribute substantially more to candidates than even the teachers union. For example, when Senator Robb Hurtt's business interests are aggregated, Hurtt's businesses alone contributed to candidates an amount nearly double that of the CTA. Few other labor unions provide comparable funding to state candidates.

Labor unions clearly are being out-gunned by business in the political process, and unions face even further erosion in political clout as many of the primary beneficiaries of union contributions are members of the minority party in the state assembly.

Strict contribution ceilings, as those offered in the CPR initiative, will dramatically reduce the flow of money into politics from business, labor unions, associations and individuals, and help level the playing field among these contributor bases.

2. Small Contributor Political Committees.

Many labor unions fit the definition of small contributor committees--political committees of at least 100 members that receive donations from members of $50 or less per year. Small contributor committees are given special status in the initiative. These committees may contribute two times the applicable limit prescribed for other groups, such as business PACs; and, unlike other PACs, they are exempt from the aggregate limit on contributions from non-individuals.

3. Power of the Small Contributor.

In the current setting of unlimited contributions to candidates, the "fat cat" contributor is key to the success of any campaign. Small contributions from individuals, which amount only to about 13% of legislative campaign coffers, mean very little to most candidate campaigns. It is the large contributions that determine election outcomes. Both the candidates and the public realize this fact of politics today. As a result, individuals, including union members, are not inclined to contribute to campaigns; after all, a $25 contribution has no bearing on most candidate campaigns.

The CPR initiative is likely to change all that. By placing low ceilings on contributions that candidates may accept, the premium on small contributions increases exponentially. If the largest contribution a candidate may accept is $250, suddenly the $25 contribution will be much appreciated. The pocketbook of individuals of moderate means will become the key to the success of any campaign. For a union, that could mean heightened political influence of its members--as well as a greater reason for individual members to get involved in campaigns.

4. Individual Membership Contributions.

Bundling of contributions, in which a single entity gathers together the contributions from many other individuals and presents them as a package to candidates, is expressly forbidden by the initiative. This activity has been particularly favored by lobbyists or corporate officers who can collect a large number of individual contributions from their clients or employees and personally present the accumulated amount to a candidate. It is a practice that has also been used by membership organizations, such as labor unions and environmental groups, but with much less frequency. The intention of "bundling" is to enhance the influence of the lobbyist or officer with the candidate.

Labor unions and other groups would remain free under the terms of the initiative to ask their members individually to contribute to specific candidates. A labor union, for example, could distribute addressed envelopes to members and request that each member make a contribution to targeted candidates on their own accord. Groups with dedicated memberships would fare substantially better under such a system than corporations or organizations with less willing participants. Thus, once the California Teachers Association, for example, reached its limit on contributions to a candidate, the Association could appeal to its members to make individual contributions to the candidate.

5. Contributions in Local Races.

Groups and individuals are limited to making no more than a total of $25,000 in contributions to all state candidates. Contributions to local candidates, however, such as school board and city council candidates, do not count against the overall $25,000 state candidate limit. This provision was specifically included in part to allow union committees to continue playing an active role in community politics, where many labor issues are at stake, regardless of the activities of the state organization.

6. Internal Communications.

Contributions to, and expenditures for, internal communications among a labor union's membership are exempt from any of the limitations in the CPR initiative. Unions would remain free to encourage its members to vote for or against candidates or issues without counting the costs of the internal communications against contribution or expenditure limits.

7. Non-Candidate Union Activities.

All other union activities that do not directly affect candidates are also exempt from the contribution and expenditure limitations in the initiative. Unions could accept unlimited funds from any source and use these funds to make unlimited expenditures for educational drives, issue campaigns, ballot measure campaigns, and any other routine union activity not involving candidate campaigns.

In summary, the California Political Reform initiative is expected to slash the amount of money in California's campaigns by more than half. But the contribution and expenditure limitations in this initiative will not be disadvantageous to the role of labor unions in the political process.