The Techno-Geek Takeover of California Politics
By Roy Ulrich
Ron Unz, former Republican gubernatorial candidate and author of the anti-bilingual education initiative in 1998, has filed a comprehensive and voluminous campaign finance initiative for the March 2000 ballot.
Wealthy venture capitalist Tim Draper is drafting a voucher initiative for the same ballot.
Al Shugart, the former CEO of Seagate Technology, has drafted an initiative that would allow California voters to punch "none of the above" if none of the listed candidates for state office appealed to them.
What all three news items share in common is that these three men - Unz, Draper, and Shugart - all hail from the recently-politicized Silicon Valley. And all three men share a deeply conservative political ideology which they hope to spread via the ballot box. But more on that later.
Before 1996, most entrepreneurs and venture capitalists from this region of the state prided themselves on being apolitical, blissfully unconcerned with such banal matters. But a San Diego lawyer named Bill Lerach and the aforementioned Mr. Shugart changed all that. Mr. Lerach is a pioneer in the field of shareholder class action litigation. When the stock of a company unexpectedly falls over a short period of time, Mr. Lerach has a nasty habit of suing the principals of the corporation, claiming that they may have dumped the stock in anticipation of the drop in valuation.
In a period of just a very few years, Bill Lerach's firm sued Al Shugart and other executives at Seagate Technology three times. Shugart settled one case for $9 million. Needless to say, bad blood developed between the two. Shugart was determined to exact revenge.
In 1995, Congress passed the Private Securities Litigation Reform Act over President Clinton's veto. The law made it easier for publicly-held corporations to defend themselves in federal court against shareholder derivative actions when the price of their securities failed to live up to rosy projections. But Mr. Shugart and his friends knew that the avenue was open for Mr. Lerach to move his practice into California courts. Shugart fired the first volley in June of 1996 with Proposition 201. This measure would have required the losing party to pay the winning side's attorneys fees in class action lawsuits filed by stockholders in California courts. The measure was defeated at the polls.
Lerach then moved from defense to offense. He countered with Proposition 211, which appeared on the November ballot the same year. Had it passed, this initiative would have made it easier to file shareholder lawsuits in California courts by broadening the definition of securities fraud. On election day, Proposition 211 went down by a whopping 3-1 margin.
Since 1996, things have never been the same for these previously non-politicized techno-geeks. No longer was staying out of politics a viable option. Out of the election battles of 1996 came Technical Network ("TechNet" for short), a political action committee comprised of roughly 100 Silicon Valley executives.
One of its first battles was a planned ballot initiative for November 1998 to remove the cap on the number of charter schools in California. This effort was led by Reed Hastings, a one-time teacher who struck it rich in the software industry. He and TechNet joined forces against the state teachers' union, which had long battled an expansion of the number of charter schools Realizing that Mr. Hastings and his friends meant business with their $15 million war-chest, the California Teachers Association beat a hasty retreat and wisely agreed to a compromise on the issue. Editorials throughout the state unanimously praised the way this dispute was resolved
Still, doubts remain. I have a knee-jerk reaction to what I would call political free-lancing. There is something quite undemocratic about conservative white men from one area of the state using their vast private wealth in hopes of shaping public policy in pursuing a largely private agenda via the initiative process.
I still believe in the tooth fairy, or in this case, a political process that bubbles from the bottom up. I dream of a time when grass-roots volunteers - not paid signature gatherers -comb the state in search of voters who will sign petitions for popular ballot measures. I dream of a time when the actual campaign will be waged in town halls and other public forums throughout the state and not in dueling 30-second TV ads.
But a splash of cold water on my face awakens me quickly. My dream is far from the real world of California politics. On the contrary, the initiative industry is a big business run by highly-paid political and media consultants. (For example, spending for and against the aforementioned Proposition 211 surpassed $45 million.) And the sad fact is that this situation isn't likely to change anytime soon.
Just as important, that same system provides a unique tool for demagogues intent on engaging in wedge politics to divide Californians along racial and ethnic lines. Need we be reminded of Propositions 187 and 209? And next year, we will get a chance to vote on "The Defense of Marriage Act" (as in heterosexual unions) whose dagger is aimed at the homosexual community.
Yes, there is such a thing as too much "direct democracy."
The writer is founder and President of the Institute for the Study of the Public Sector, a Washington-based think tank.