> <http://abcnews.go.com/Politics/TheNote/story?id=156238>
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<http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2005/05/03/MNG4ECJ4UB1.DTL>
Secret donors behind union-dues initiative Labor proponents suspect governor and big business - Christian Berthelsen, Chronicle Staff Writer Tuesday, May 3, 2005
Sacramento -- A voter initiative aimed at weakening the political clout of public employee unions is moving toward the ballot, even as the identities of the measure's financial backers remain virtually unknown.
The ballot measure committee pushing the proposal, the Coalition for Employee Rights, has received nearly all of its funding from one source, a group called the Small Business Action Committee. That group, which gave four donations totaling $330,000 -- including one for $200,000 alone -- does not have to disclose who its donors are until late July, long after the measure will have qualified for the ballot.
The initiative would prohibit state and local government employers from withholding union deductions from a worker's paycheck if the money is used for political donations. Its backers say there is a disconnect between the political leanings of union members and the way union leaders deploy dues for political purposes.
Public employee unions are among the largest financial donors to Democratic campaigns in California. Of all the ballot measures being circulated for a possible special election later this year, the so-called paycheck protection measure is the biggest threat to Democrats' power.
The Coalition for Employee Rights finished collecting signatures for the measure last week and plans to begin submitting them to the secretary of state for verification beginning today. If the measure qualifies, it will appear on the ballot in the next election.
The measure's opponents believe the initiative is being pushed by corporate interests and Gov. Arnold Schwarzenegger and point to connections between the governor's political advisers and the committees that are backing the measure.
"What we really want is disclosure, who's funding it," said Lance Olson, a top lawyer for Democrats who are opposing the measure. "That's what we want to know."
The most recent records available show that last year the Small Business Action Committee received nearly all its funding from major corporations and executives, including $50,000 from sub-prime lender Ameriquest and former Gap Inc. Chairman Donald Fisher, $45,000 from cigarette-maker Philip Morris, and $10,000 from PG&E Corp.
Because it was formed to champion a ballot measure, the Coalition for Employee Rights has had to file timely reports detailing the donations it has received. But the primary source of those donations, the Small Business Action Committee, only has to report its donations twice a year because it was not formed primarily as a ballot committee.
The governor's aides have consistently denied any connection to the initiative. Still, Lewis Uhler, leader of the Coalition for Employee Rights, said in an interview that a political group affiliated with Schwarzenegger, Citizens to Save California, has been "encouraging some people to make contributions" to his cause. He dismissed concerns that the financing of his group is too opaque.
"I'm not sure that's particularly relevant," he said.
Uhler declined comment on whether the structure of the funding arrangement was designed to shield the identities of the donors.
Joel Fox, who was a paid adviser to Schwarzenegger during the recall, is a central figure in the union dues initiative. He is a co-chair of both Citizens to Save California, which is championing the governor's ballot proposals, and the Coalition for Employee Rights. He is also the chair of the Small Business Action Committee -- the group that has provided most of the funding for the initiative.
Fox has been out of the country and could not be reached for comment. Jeff Flint, a spokesman for the Small Business Action Committee, said there was no agreement in place to channel donations to the small-business group so they could then be contributed to the union initiative, noting that would be illegal. He also dismissed questions about who is providing its funding.
"We'll report as we're required by law," he said. "So I don't think that's a concern."
Uhler said Fox's involvement in the effort lent it credibility so the coalition was able to persuade the signature-gathering company to delay payment on nearly $285,000 it is owed until after the measure qualifies.
"The fact that Joel Fox has been involved in this provides a level of confidence that was satisfactory to these petition gatherers as businessmen," Uhler said. "It's just that simple."
Critics said the arrangement is highly unusual because signature- gathering companies usually demand payment as the signatures are collected, and that it was yet another way for the ballot measure committee to obfuscate its finances. A telephone call seeking comment from the signature-gathering company, National Petition Management of Rancho Cordova (Sacramento County), was not returned.
Senate leader Don Perata, D-Oakland, said he believes Schwarzenegger could "stop it if he wanted to," in reference to the initiative.
The union-backed group opposing the measure, Alliance for a Better California, has filed two complaints with the Fair Political Practices Commission saying the measure's backers are circumventing laws requiring them to disclose who their contributors are. And Assemblyman Mark Leno, D-San Francisco, is carrying legislation that would impose a 15-day window for the commission to act on such complaints; there is currently no time limit.
Public employee union members staged a protest at the Capitol on Monday, with dozens wearing tape over their mouths to symbolize how the initiative would cut short their political speech. Brian Rice, a 44-year-old firefighter from Sacramento, said of the governor: "He's realized, when you can't beat us, you may as well silence us."
Both sides say the proposal is not being used as a bargaining chip toward compromises on Schwarzenegger's other proposals to restrict state spending, link teacher pay to student achievement, and change the way legislative boundaries are drawn. And Perata said it would be "a kind of naive approach" for Republicans to use the measure as a bargaining tool.
Chronicle staff writer Lynda Gledhill contributed to this report.E-mail Christian Berthelsen at cberthelsen at sfchronicle.com -- "We are what we compute" [Duncan Foley]