Genteel extortion cancels three ballot measures

California Penal Code Section 518 defines extortion as “the obtaining of property or other consideration from another, with his or her consent, or the obtaining of an official act of a public officer, induced by a wrongful use of force or fear, or under color of official right.”

Do something that meets that definition and you can land in prison for quite a few years, which raises interesting questions about what happened in the state Capitol last week.

Sponsors of three highly controversial ballot measures dropped them after backroom negotiations with legislators. As CALmatters.org political writer Laurel Rosenhall explained:

“The soda industry won a new law that places a 13-year ban on new soda taxes—a concession it extracted after qualifying a ballot initiative that would have raised the threshold for passing all local taxes.

“Tech companies breathed a sigh of relief with passage of a new law that expands some internet privacy safeguards but allows them to keep lobbying to change it—because they feared voters would approve a qualified ballot initiative that would have gone further, and been harder to undo in the future.

“Lead paint companies, accepting a promise from legislative leaders to continue negotiations, withdrew their initiative designed to get them out of hundreds of millions of dollars in liability that courts have slapped on them for knowingly selling a toxic product.”

Many legislators were clearly unhappy about being compelled to vote for substitute measures, especially the one barring new taxes on soft drinks, and some called it extortion.

It wasn’t extortion in the criminal sense, of course. But using leverage to gain something that otherwise would be unobtainable is not uncommon.

One example: Labor unions threatening to tie up construction projects with California Environmental Quality Act lawsuits unless developers agree to use unionized labor.

Another: Business firms threatening to shift jobs to another state or nation unless they are granted tax breaks or some other form of public subsidy.

What happened last week was possible because of a four-year-old law allowing sponsors of initiative measures to withdraw them after they had qualified for the ballot. Previously, once enough signatures for a measure were submitted, it had to be placed on the ballot.

The theory of the law is that it gives the Legislature opportunities to pass compromises that negate the need for expensive ballot-measure campaigns. However, in practice it allows an interest group to propose something so onerous that it compels rival groups and their legislative allies to do whatever is necessary to block the ballot measure.

While blocking new soda taxes was the primary goal of one measure’s sponsors, it would have crippled the ability of local governments to pass any new taxes by requiring two-thirds approval by voters. Local officials, who have dozens of tax proposals pending this year—particularly sales taxes to cover cities’ rapidly rising pension costs—pressured the Legislature to do whatever necessary to get the measure off the ballot.

The Legislature itself created the mechanism for this genteel extortion, and it now sets a template for future issues. It’ll be especially useful to business interests as they confront a very liberal Legislature and Gavin Newsom, the likely next governor, who has laid out a very liberal agenda.

It once again validates an adage that when you change the rules of a game, you change the potential outcome, and that’s especially true of political game rules that purport to be reforms.