Consumers and Prop 89

Consumer Federation of California Endorses Prop 89; Group Cites Corrosive Role of Big Business Money in Politics

The Consumer Federation of California ( http://www.consumercal.org ) endorsed Proposition 89 (the "Clean Money" Initiative), citing the increasingly corrosive role corporate campaign contributions play in shaping public policy - benefiting the narrow interests of big business to the detriment of consumers.

CFC's Executive Director Richard Holober stated, "All too often, consumer protection legislation is defeated in Sacramento by politicians who are beholden to the big business interests that bankroll their electoral campaigns. Proposition 89 would help reduce the influence of corporate campaign contributions on elected officials. It will help to decrease the use of the ballot initiative as a vehicle for big business to enact legislation, and help restore the initiative to its original purpose as an expression of the people's will."

The "Clean Money" system of public financing of elections is similar to those already adopted in Maine and Arizona. The proposed initiative would allow candidates who garner a substantial number of small contributions and agree not to accept PAC money, to receive full public financing of their campaign. States that have adopted the "Clean Money" system have seen lower overall campaign spending, candidates freed from around the clock fundraising, and increased voter turnout.

In supporting Prop 89, CFC cited two recent examples in which corporate contributions played a clear role in defeating consumer protection laws overwhelmingly supported by the public. In one such case, the telecommunication industry contributed in excess of $300,000 to the ten members of the Assembly Utilities and Commerce Committee (Source: CA Secretary of State Website). Despite the support of 87 percent of California voters, the committee killed telephone consumer protection legislation (SB 1068, AB 2622) that would have restored the right to cancel a new cell phone contract without being subjected to outrageous cancellation fees.

Similarly, during an 18-month period in 2001 and 2002, banks, insurers and other industry opponents of financial privacy legislation contributed $8.8 million to state politicians, resulting in the killing of SB 773 (Source: San Francisco Chronicle, September 7, 2002). Corporate contributions defeated financial privacy legislation that enjoyed the support of 90 percent of California voters.

The Consumer Federation of California is a nonprofit organization, established in 1960, that advocates for consumer protection laws and regulations.