Ballot Initiatives for a Profit? Bay State Activists Urge Reform

Question 1 would limit corporate funding of referendum questions

IN 24 states of the union, voters have the power to help lower property taxes, limit the terms of elected officials, and ban smoking in public places. But a growing number of activists complain that this ballot-initiative process increasingly has been taken over by big money.

Since the early 1900s, when many states amended their constitutions to allow referendums, the grass-roots character of ballot initiatives has changed. In the 1992 state elections in Massachusetts, for example, tobacco companies spent $8 million to fight a tobacco tax initiative and plastic and paper manufacturers spent $6.8 million to fight an initiative that required recyclable packaging. Of the two ballot items, the tobacco tax passed, but proponents of both ballot questions say a corporate advertising blitz helped swing many voters against them in the final days of the campaign.

This fall, a coalition of state environmental and election-reform groups has sponsored Question 1, which would limit the ability of corporations to support or fight initiatives on the state's ballot.

Matt Wilson, a coalition spokesman, says that the large amounts of money that corporations can raise tends to skew the political process. ``When we go out to raise money and gather signatures, it's one citizen at a time. When they [corporations] go out, it's one multinational at a time.

``Corporations have special privileges through tax codes and limited liability to give them the ability to create jobs,'' Mr. Wilson adds. ``But they have exploited these rights to affect the political process. If companies can't get their way in the legislature, they take it to the ballot where there is no spending limit'' for campaigns.

If Question 1 passes, groups in the state that finance ballot campaigns must meet the following criteria. They must:

* Be formed for the purpose of promoting political ideas.

* Have no shareholders and conduct no commercial activity.

* Receive no more than 1 percent of their funding from corporate sources.

Question 1 would bring the laws over the funding of ballot initiatives in line with laws that restrict direct corporate funding for candidates. Corporations would be allowed to set up a segregated political fund and solicit money from employees and shareholders to support a ballot question.

For Fred Hoskins, spokesman for the pro-business Committee for Free Speech and Equity, Question 1 presents legal problems.

``Fundamentally, it is a free-speech issue,'' he says. ``If an initiative calls for the shutdown of a Boston Edison [power] plant, Boston Edison has an obligation and a right to defend itself. You wouldn't expect the CEO to take a collection from employees and shareholders to send a lawyer to protect the company's interests.''

Mr. Hoskins, whose group has begun a statewide radio-advertising campaign to fight Question 1, calls the initiative ``illogical,'' because ``it discriminates on business form.'' It would allow an accounting firm that is formed as a partnership to fund initiatives, but would restrict such activity for an accounting firm that was created as a corporation. And Question 1 would restrict many nonprofit groups such as churches and philanthropic organizations from funding ballot campaigns because they are not political organizations.

Activists point to several initiatives around the country that they say are driven more by business than public interests. This year in Oregon, for example, an initiative would allow the state's denture-makers to bypass the state's dentists and sell directly to the public. In Massachusetts, the construction industry is backing a ballot question that requires gas-tax revenues be spent on roads and mass transit. And in California, tobacco giant Phillip Morris is hoping that a $2-million campaign will persuade voters to override local antismoking ordinances with a statewide rule that allows smok-ing sections in restaurants again.

Other states have attempted to alter campaign funding for ballot issues, most notably in California, where a state bill recently failed to reach a vote before the Assembly adjourned this summer. Thus, many states will be watching the fate of Question 1.

Diane MacEachern, author of ``Enough Is Enough: The Hellraiser's Guide to Community Activism,'' says it is the amount of money spent and not corporate involvement in politics that corrupts the system. ``If corporations are really advocates of free speech, why not put a cap on funding - the most that you could spend is what the least-funded group can spend - then establish a forum where the issues can be discussed?'' she asks.