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Corporations Pump Money Into Ballot Campaigns


SACRAMENTO — With the election only 10 days away, corporate interests fearing higher taxes and stricter regulation have poured $45 million into campaigns to defeat several ballot measures and to promote proposals of their own to change state law.

Reports filed with the secretary of state on Friday show that oil, timber, agriculture and alcoholic beverage industries have far outspent the advocates of tougher environmental rules and increased liquor taxes.

The industries argue that they are fighting for their lives and that they have no choice but to spend vast amounts to protect their interests.

"When the very survival of your industry is at stake, there is no greater priority," said David Fogarty, a spokesman for the campaign to defeat Proposition 130 and enact its rival measure, Proposition 138. He said forestry interests have invested heavily in the effort because the so-called "Forests Forever" initiative, Proposition 130, would devastate their businesses and destroy their livelihoods.

But those who find themselves battling big industry argue that the companies and trade groups are simply trying to protect their own narrow interests and that their real aim is to discourage future initiatives that might threaten them.

Said Leo McElroy, a media adviser to Proposition 134, the "nickel-a-drink" initiative, and other campaigns: "It's an attempt to try to defuse this wave of citizen initiative activism. If they can up the ante and manage to defeat a number of initiatives, they feel they can cool down this kind of initiative fever that's running in California."

Whatever the motive, required campaign disclosure reports show that California continues to be a battlefield for ballot measures, where the major weapon is cash.

In the first 20 days of this month, for example, opponents of Proposition 128, the so-called "Big Green" environmental initiative, collected $4.2 million--more than $200,000 a day in contributions. That included $270,000 from Chevron USA, which has now contributed $800,000 to defeat the measure. The total contributions in the effort to defeat the measure now total more than $9 million.

In contrast, the groups supporting the sweeping environmental initiative raised $1.2 million in the Oct. 1-20 reporting period.

As the Nov. 6 election approaches, most of the money spent in the various initiative campaigns will be used in a massive onslaught of television advertising likely to leave viewers baffled over what interests are paying for the ads and confused over the real purposes of the ballot measures.

The records show, for example, that liquor and tobacco interests are contributing heavily to Proposition 136, a measure that would virtually immunize the two industries from increases in the special excise taxes on their products. If the measure passes, such tax increases would require a two-thirds vote of the people and could be no higher than 1% of the value of the item.

The initiative would also wipe out a steep "nickel-a-drink" tax increase contained in another measure on the ballot, Proposition 134.

During the Oct. 1-20 reporting period, the liquor and tobacco companies and trade groups raised almost $3 million seeking to pass Proposition 136--bringing the total collected for the year to $7.7 million. The largest single contribution reported was $1 million from the Beer Institute in Washington.

Because television and radio commercials promoting Proposition 136 do not identify the liquor industry as the major source of the measure's funds, opponents charge that advertising and the measure itself are fraudulent.

"The Proposition 136 campaign is hiding the fact that their funding comes from the liquor industry," said Lenny Goldberg, director of the opposition campaign.

The liquor industry has also led a campaign that has raised $10.2 million through Oct. 20 in an effort to defeat the nickel-a-drink initiative, campaign reports show.

In the battle of initiatives, the timber industry has raised more than $10 million in its effort to defeat Proposition 130, a forest protection measure, and to promote its own less stringent counter-initiative, Proposition 138. Among the biggest contributors to the timber industry campaign fund is industry giant Louisiana-Pacific Corp. with $1.6 million.

Proponents of Proposition 130 have been able to raise more than $4 million this month alone, almost all of it from two wealthy contributors--investor Harold Arbit and Disney Co. President Frank Wells.

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