California Voters Reject Curb on Union Political Power

California voters rejected a ballot initiative that would have weakened the political power of unions in the most populous U.S. state.

Proposition 32 would have prohibited donations to political campaigns with funds derived from payroll deductions, such as union dues. The measure was losing 55.5 percent to 44.5 percent, with 82 percent of the ballots counted, according to the Associated Press.

It was the third time such a measure has failed in the state since 1998.

Organized labor spent heavily to defeat the proposal, raising more than $75 million, according to MapLight, a nonpartisan research organization based in Berkeley, California. Proponents, including Charles Munger Jr., the son of Berkshire Hathaway Inc. (BRK/A)’s vice chairman, and an Arizona nonprofit that fought to keep its donors secret, poured $60.5 million into their effort.

The supporters argued that the measure would bring campaign finance reform to a state where money from special-interest groups can influence the ballot. They included language in the initiative that said corporations, too, couldn’t use payroll deductions on political spending.

Opponents argued that since most corporations don’t use payroll deduction for campaign donations, the measure really would only affect only unions and would allow corporations unchecked spending for their own political gains.

Former California Governor Arnold Schwarzenegger pushed a similar proposal in 2005 that was defeated after heavy union spending against it. Governor Pete Wilson similarly lost in his push for such an initiative in 1998.

To contact the reporters on this story: Michael B. Marois in Sacramento at mmarois@bloomberg.net;

To contact the editor responsible for this story: Stephen Merelman at smerelman@bloomberg.net

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