YOU ARE HERE: LAT HomeCollections


Utilities, Others Fight Rate-Cutting Measure

Several environmental groups are among opponents; backers call well-funded No on 9 campaign 'checkbook politics.'


When Robert Rubio needed $150 so his Rio Hondo Boys and Girls Club in Bell Gardens could have a game booth at a local carnival, he knew he could ask Southern California Edison. An executive with Edison is on the Rio Hondo board of directors, and the big utility had been a steady supporter over the years.

And when Shirley Melendez needed transportation for the homeless and low-income children helped by the Door of Hope Community Center in East Los Angeles, she asked Edison for one of its old vans. Melendez was overjoyed when the utility company came up with a plain-looking 10-year-old vehicle with 156,000 miles on it.

"We were lucky to get it," Melendez said, still pleased two years later with the gift.

It is common for utilities and other major corporations to spread their wealth in support of the community, and to build goodwill along the way. But this year such donations--and other, more unusual payments--are raising eyebrows as the multimillion-dollar campaign over the ballot measure heads into its final weeks.

Proposition 9 calls for a 20% cut in electricity rates for private utility customers and an end to surcharges levied on ratepayers to pay for costly nuclear power plants.

Rubio and Melendez are among more than 75 opponents of Proposition 9 who have financial ties to the utilities fighting the initiative.

In addition to small grants to community groups, Edison has paid tens of thousands of dollars to environmental groups, a former state treasurer and a former consumer reporter--all of whom have taken strong public stands against Proposition 9.

The strategy causes particularly acute problems for sponsors of Proposition 9, who have little money to spread their message and must contend with California utilities' deep pockets.

"Everybody owes Southern California Edison, and Edison is calling in all its chits," said Harvey Rosenfield, a coauthor of Proposition 9, complaining about what he calls the "checkbook politics" of Edison and the other private California utilities.

Not so, say Melendez and Rubio, unlikely voices in the high-profile initiative campaign.

"I just went on what I felt was right," declared Melendez, who said her support for the No on 9 Committee is her first active involvement in an initiative campaign. "I am a Christian. Nobody is buying me. No one is telling me what to say. I did some investigating and decided on my own to oppose Proposition 9."

Rubio says his opposition sprang from presentations against Proposition 9 that he heard at local Rotary and Chamber of Commerce meetings.

Ex-State Treasurer Defends Commercial

Former state Treasurer Thomas Hayes taped a television ad for the No on 9 campaign after his Sacramento securities and consulting firm received $104,000 for a study of the proposition. Opponents questioned his objectivity.

"We got paid for the study. We don't work for free," said Hayes, who insisted that his reputation was too valuable to risk for one study. He said he made an independent decision to make the No on 9 commercial because "it's a bad initiative."

Much the same position was taken by David Horowitz, a former consumer reporter with KNBC and KCBS in Los Angeles, who signed the ballot argument against the measure and has been speaking out against it. Horowitz's firm, Fight Back Inc., received $106,000 from the No on 9 campaign after he started working against the initiative.

"If I can support an issue I feel passionately about and get paid for it, all the better," said Horowitz, who produced a half-hour infomercial for the anti-Proposition 9 campaign.

But paying outside experts or prominent third-party spokesmen is moving initiative campaigns in "a dangerous direction," said Bruce Cain, associate director of the Institute of Government Studies at UC Berkeley.

The problem, he said, is that voters put a large amount of trust in such people, particularly when they are trying to sort through a complex issue like Proposition 9.

He cited the ad featuring former treasurer Hayes.

"It poses him as kind of a dispassionate former official giving his judgment about Proposition 9. The fact that he is getting paid has at least the appearance of compromising his integrity, if not the reality," Cain said. "You begin to think: Is he saying this because he believes it or because he was paid for it?"

Allan Zaremberg, head of the No on 9 campaign and president of the California Chamber of Commerce, said Hayes and other members of his firm brought unrivaled expertise to the study. Contributing to the study were Russell Gould, former California finance director, and Steve Spears, former deputy state treasurer.

"We went out and hired Tom Hayes as someone who is a financial expert on this and then asked him to tell voters what he found. I don't see a problem," he said.

Of course, not everyone who opposes the measure has received money from the utilities or their campaign committee.

Los Angeles Times Articles