Who is Bankrolling the Ballot?

By Laura Strickler, CBS News Investigative Unit

This November, Arizona voters will decide whether or not to legalize medical marijuana. But the citizens' initiative did not come from the citizens of Arizona - instead the idea was funded from 2,200 miles away in Washington, D.C.

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The Marijuana Policy Project and its sister group, the Marijuana Policy Project Foundation, have funded 90 percent of the campaign to the tune of more than $570,000.

A close look at the ballot initiatives in 2010 show that citizens' initiatives today are dominated by outside special interests or rich local activists who want to influence the political process.

For example, in Missouri there's a battle underway between a 66-year-old millionaire and local city governments.

Rex Sinquefield, a former financier, has spent over $10 million of his own money to get an initiative on the ballot that would allow voters to decide whether or not to keep a 1 percent earnings tax. If voters choose to get rid of the tax it would leave a city like Kansas City with a 40 percent cut to its general fund.

Louie Wright, a firefighter and representative for the local firefighters union says his department could face a cut of $35 to $40 million if the initiative passes. He calls Sinquefield a rich "carpetbagger" and says if the current view is that money equals political speech, "then that means the person with the most money gets to speak the loudest."

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Sinquefield's spokesperson Marc Ellinger says while Sinquefield is funding the campaign, the measure can only get on the ballot if there are enough signatures. Ellinger says the campaign logged 210,000 signatures from private citizens.

"These folks are not paid to get it on the ballot and ultimately the voters will decide," Ellinger said. Like most modern day ballot initiative campaigns, Sinquefield paid a private firm over $570,000 to collect signatures on the measure.

In Seattle, Bill Gates Sr. has plowed $400,000 of his own money into an initiative that would impose an income tax on the wealthy. Amazon founder Jeff Bezos has countered with $100,000 opposing the initiative according to campaign filings.

Sinquefield and Gates appear to be motivated by their philosophy of government, not financial gain. But wealthy interests can sometimes be personal. In 2008, Alaskan financier Bob Gillam indirectly gave $1.6 million to fund a referendum - to stop a mine from being built near his fishing lodge.

There are citizens' initiatives in 24 states and while there are limits on federal campaign contributions there are no limits on contributions to ballot initiatives. In 2008, some special interests spent more on ballot initiatives than on Congressional and presidential races combined.

For example, in 2008, the National Education Association (NEA) spent $2.6 million on all federal campaigns but spent $36 million on ballot initiatives according to the National Institute on Money in State Politics.

This year the NEA's Washington DC office has joined forces with the Service Employees International Union (SEIU) to plow $2 million into Bill Gates Sr.'s effort to impose a new tax on wealthy people and reduce property taxes in Washington state.

Another D.C. special interest group is funding 99 percent of an initiative in Washington state. The American Beverage Association has spent over $16 million to overturn a temporary tax on candy and soda.

"In many cases today we are looking at a process that is vastly different than the original intent of these citizens initiatives," says Justine Sarver, Executive Director of the left leaning Ballot Initiative Strategy Center, "Now we see in many instances large corporations are influencing the process for profit."

In California, a campaign bankrolled by Texas oil companies is trying to delay the implementation of tougher clean air standards passed by the California legislature. Almost three-quarters of the funding for the campaign comes from out of state sources according to campaign documents.

Citizens initiatives were originally started in the early 1900s as a way for citizens to circumvent legislatures that were dominated by special interests.