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Mapping the Money and PR Behind Prop 23

Posted: 10/27/10 02:07 AM ET

Proposition 23, called the "California Jobs Initiative" by its proponents and the "Dirty Energy Prop" by opponents, has become a lightning rod of debate about the clean energy and air future of not just California, but of the nation. The proposition would suspend implementing California's landmark greenhouse emission reduction law AB 32 (Global Warming Solutions Act) until unemployment in California reaches 5.5 percent for four consecutive quarters.

In addition to being the subject of nearly daily op-ed battles, Proposition 23 has been drawing big money from both advocates and opponents. An Oil Change International project called Prop23.DirtyEnergyMoney.com features an interactive chart that shows where the money behind Prop 23 has come from and what the relationships are between donors.

2010-10-27-prop23Network.png

Of course, it is not uncommon for large amounts of money to flow into political action committees in order to influence the outcome of elections. What is different about California's Prop 23 is the overwhelming support it has received from out-of-state corporations and foundations. The vast majority of donations--approximately 70%--have been from outside California. Compare this with the No on Prop 23 campaign, where 70% of the money is from within California. Furthermore, at least 92% of contributions being pumped into California's Proposition 23 are from energy companies that would be regulated by the energy and climate legislation they are trying to overturn.

Much of the early money was used to collect signatures to get Proposition 23 on the ballot in the first place, run ads, and to fund research trying to convince the public that clean energy would cost jobs. One such report often cited is an economic study released by the Pacific Research Institute (PRI). It is heavily cited as a source by Wall Street Journal, Investor's Business Daily, and most recently in Monday's SF Examiner, to make the Prop 23 case that energy efficiency and implementation of AB32 will cost California jobs and that passing Prop 23 would create half a million jobs by 2012. However, when citing the reports of PRI, what is left unreported is that PRI has received hundreds of thousands of dollars both from the Koch family foundation, ExxonMobil, and Pfizer, many of the same interests that are behind Prop 23. In addition, the Yes on Prop 23 campaign paid Pacific Research Institute $40,000 in September and in turn they are citing the resulting reports.

More to the point, the logic and conclusions of the PRI report have been called into question by many economists, and over 100 economists signed an open letter expressing their strong support of the policies created under AB 32 that will "stimulate innovation and efficiency," "help the state become a technological leader in the global marketplace," "improve our energy security, create new business opportunities and more jobs," and "provide immediate benefits to the health and welfare of residents by reducing local pollutants."

Two of the public relations firms chosen to help run the Prop 23 campaign are Goddard Claussen West and Woodward & McDowell. Goddard Claussen is the firm that helped with California's 1994 Proposition 187 to prohibit undocumented immigrants from using health care, education, and other social services, an initiative that was later struck down by a federal court as unconstitutional. The agency is also famous for crafting the so-called "Harry and Louise" commercial for insurance lobbyists in 1993-1994 to help defeat health care reform under Clinton. Both Goddard Claussen and Woodward & McDowell have received several hundred thousand dollars each for consultation and media.

Funding for collecting signatures to get Prop 23 on the ballot began as early as February and by March Texas-based oil companies Valero and Tesoro had given $2 million. As is well-known, the oil and gas industries have been the primary funders of the campaign, contributing nearly $10 million. The top donors to the Prop 23 campaign so far have been Flint Hills Resources, a subsidiary of Koch Industries ($1 million), Valero Oil ($5 ½ million), Tesoro Oil (over $2 million), and Ohio-based Marathon Petroleum ($500,000).

Coal companies have given more modest amounts and other non-oil industries combined have donated over half a million. In addition, a who's-who of gas, oil, and coal industry and other interest groups such as the National Petrochemical & Refiners Association (NPRA) have donated over $100,000 on behalf of its members. The NPRA claims over 450 members including DuPont, Chevron, ExxonMobil, BP Chemicals, ConocoPhillips, Honeywell Corporation, and Shell Chemical. The NPRA is also on record supporting the Gasoline for America's Security Act of 2005 as well as opposing the reauthorization of the Toxic Substance Control Act of 1976 and the recent decision of the EPA to allow a higher ethanol content (E15) in gas for late-model vehicles.

One mega donor that raised some eyebrows is the Adam Smith Foundation (498,000), a Missouri-based conservative advocacy group. It is still a mystery as to who fronted the money to the group, which only raised a few thousands dollars last year. Registered as a 501(c)4, it isn't required to disclose that information. The out-of-state donations have prompted two Californian Congressmen to ask US Attorney General Eric Holder to investigate the contribution as a possible violation of the foundation's tax status.

The American Coalition for Clean Coal Energy (ACCCE), whose members include Peabody Energy and Caterpillar, gave a modest $5000. Individual member contributions to ACCCE are undisclosed, but one member Murray Energy gave $30,000 directly to the Yes on Prop 23 campaign. Murray Energy Corporation claims to be the largest privately owned coal company in America and CEO Robert E. Murray is an outspoken critic of the scientific consensus on climate change.

Other lesser-known industry groups supporting Prop 23 with a few thousand dollars each include the CAN Manufactures Institute, the Lumber Association of California and Nevada, and the California Dump Truck Owners Association. Agricultural interests have also been contributing to promote Prop 23, including California Dairies, California Citrus Mutual PAC, and J.G. Boswell Company ($26,250), one of the largest privately owned farms in the world.

While the campaign has benefited mostly from large infusions of cash, there are plenty of smaller donors as well. An early but modest contributor was Roger W. Cohen, former manager of Strategic Planning and Programs for Exxon Mobil. Cohen is a known climate science denier, giving presentations to institutes and colleges. Another small donor is Ron Nelthorpe, who is on record as saying that he donated in support of Prop 23 because he doesn't believe in the "hocus pocus about going green."

The filing deadline for contributions was October 21, but campaigns continue to receive contributions. After a couple weeks of relative campaign donation silence, Tesoro and Valero kicked in big with last-minute contributions of $1.5 million on Friday.

Many across the nation are watching the battle of Prop 23.

On one side are oil, gas, coal producers, suppliers, and service-providers along with a handful of agriculture interests. On the no side are a wide range of groups, including Democrats (including Jerry Brown and President Obama), Republicans (including Schwarzenegger), Greens (including Laura Wells), health experts, consumer groups, business leaders like Bill Gates, Silicon Valley clean energy investors & hedge fund managers, environmental organizations like the Sierra Club, Nature Conservancy, Natural Resources Defense Council, seniors groups, city councils, mayors, public safety officers, teachers, students, many churches, and regular citizens all across California.

How Californians vote next week on Prop 23 will be a test of the public's support for a clean energy economy as well as test of patience for the manipulation of its political process by out-of-state interests.

 

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