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October 28, 2012

Stuart Leavenworth: Big money again seeks to hijack a California election

I've been trying to imagine what Thanksgiving might look like at the Munger household this year, a few weeks after two members of this family help plunge California into another financial crisis.

I've been trying to imagine what Thanksgiving might look like at the Munger household this year, a few weeks after two members of this family help plunge California into another financial crisis.

Undoubtedly, it will be a lavish affair, with a Nebraska turkey, cornbread stuffing and a cheerful table centerpiece of Jerry Brown's head impaled on a stick.

In the next room, a television set will be on, but the Mungers will ask the maid to turn it off. Otherwise they might hear news coverage of the riots erupting at University of California campuses, where students are protesting another tuition increase.

"Molly, can you pass the gravy?" asks Charles T. Munger Jr. to his half sister.

As you can imagine, the Mungers have a lot of gravy.

The Mungers, as you may know, made their money in investments, most famously when Charles T. Munger Sr. became a partner of Warren Buffett in Berkshire Hathaway.

Two of Munger's offspring, Molly and Charles T. Munger Jr., have since decided to use that inherited wealth to become players in California politics.

So far, Molly Munger has spent nearly $33 million to promote Proposition 38, a tax initiative she wrote to boost funding for public schools. Because Proposition 38 competes with Gov. Brown's tax initiative to plug budget deficits, Molly Munger has also spent $11 million in a separate campaign to kill that initiative, Proposition 30, and help her own.

If this were a professional wrestling match, the Mungers would be the equivalent of Ax and Smash, two of the most feared tag-team wrestlers ever.

Not content to let Molly mash Jerry Brown's head into the mat, Charles Jr. is delivering the final body blows. A Stanford physicist, he has invested $35 million to defeat Proposition 30 and help pass Proposition 32, which would limit the ability of labor unions to influence elections. About $13 million of that money came just last week.

It is hard to figure out the motivation of the Mungers, particularly the younger Charles. He's been described as a moderate Republican and a reformer, and his successful support of independent redistricting and the top-two primary certainly fit that bill.

Yet by leading the fight against Proposition 30, Munger is positioning the state for yet another set of cuts to K-12 schools and public universities.

How does he square that? Munger himself was the beneficiary of the UC system, having graduated from Berkeley in 1987 with a Ph.D. in atomic physics. He attended Berkeley back when it was relatively cheap. Does he feel comfortable knowing that Proposition 30's failure will inevitably lead to higher tuition at UC schools, denying some students the kind of education that helped him in his career?

I've never met Charles Jr., but I have met Molly Munger, and there is no doubt about her intentions. A civil rights lawyer, Molly Munger sincerely and passionately cares about public education. She is appalled by the decline of California's schools and sees her Proposition 38 as a once-in-a-lifetime chance to restore them to some semblance of their past glory.

If hers were the lone tax initiative on the ballot, I'd vote for it, and I suspect that many other education supporters would, too. But there is no getting around the cancellation effort of Proposition 38. If it were to get more votes than Proposition 30, then the governor's tax initiative would be nullified, even if it received a majority of votes. And since Proposition 38's tax receipts wouldn't be realized until 2013, legislative leaders say they'd have no choice but to enact trigger cuts to balance the budget, with the hardest cuts falling on education.

The Mungers, of course, are a symptom of a larger problem – the unrestrained influence of campaign spending by millionaires, corporations and other special interests.

Helped by U.S. Supreme Court rulings defending campaign spending as "speech," independent expenditure campaigns are rewriting the political map – and not just in national races but in contests as low-profile as those for the California Assembly. Charles Munger Jr.'s Spirit of Democracy committee, for instance, has spent $778,000 to elect Republican Peter Tateishi in his Assembly District 8 race against Democrat Ken Cooley. If that trend continues, we could soon see six-figure contributions for candidates running for a parks district.

I will give Charles Jr. some credit, however. At least his contributions are transparent. Slipshod election laws and weak enforcement by the Internal Revenue Service allow nonprofit groups to pour money into campaigns and keep the source of those funds secret. That's why California is suing to find out the donors behind an $11 million contribution this month from an Arizona group, Americans for Responsible Leadership, to a California committee opposing Proposition 30 and supporting Proposition 32.

Even if the Fair Political Practices Commission prevails in unmasking the donors, it seems increasingly certain that big money will kill Brown's initiative on Nov. 6.

California will again be thrown into fiscal crisis, yet at some Thanksgiving tables, there will be families who will weather it better than the rest of us.

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