Some politically-active corporations are breathing a sigh of relief following last night’s defeat of California’s Proposition 32. Although the media focused on the ballot initiative’s proposal to bar unions from using payroll deductions to collect PAC contributions, the initiative would have also had three equally far-reaching effects for corporations. First, it would have prohibited corporations from using payroll deduction to collect PAC contributions if those PACs are active in California. We previously noted this provision would have likely resulted in many federal PACs staying out of California state races entirely. Second, Proposition 32 would have banned corporate contributions to candidates and their campaign committees. For years, California has permitted direct corporate contributions to candidates. Finally, the initiative would have established a state pay-to-play rule that would have prohibited the PACs of state contractors from contributing to certain state candidates. Now that these proposed changes have been rejected by the voters, corporations can keep their focus on complying with the complexities of California’s existing campaign finance regime, rather than learning a new one.
