(Bloomberg) -- It took less than 90 days for the oil and gas lobby to blow up one of Gavin Newsom’s major achievements.
The California governor signed a bill to great fanfare in September to block new oil and gas wells within 3,200 feet of homes, schools and hospitals, cementing an effort that took decades for environmentalists to push through against business and union interests.
But that’s when the California Independent Petroleum Association went to work. Representing 300 oil and gas producers, the organization quickly raised $21 million to recruit people to collect signatures — at shopping malls, farmers’ markets and grocery stores — and get enough support to put the issue to voters.
The petitioners obtained 687,058 valid names, surpassing the threshold needed to put Senate Bill 1137 to a referendum in 2024 and placing Newsom’s new law on hold. The price tag for the industry: about $20 per signature.
Now that effort is sparking backlash, not only from Newsom, a Democrat who slammed “greedy” oil companies, but from lawmakers in Sacramento. Isaac Bryan, a recently elected member of the California Assembly, is trying to make it harder for groups to use referendums to repeal laws that they dislike.
Bryan this year introduced Assembly Bill 421 to end the practice of paying petitioners per signature — referred within political circles as “bounty hunting.” His bill would require political campaigns to obtain 5% of all signatures from unpaid volunteers or via alternative means, such as through workers paid a hourly wage or as independent contractors.
The bill is now in the Senate after clearing a hurdle in the Assembly last week. Lawmakers have until the end of August to make changes and pass the bill before it would be sent to the governor for final approval. Democrats have a supermajority in both chambers.
“We want to move away from the pay per-signature model and move to something that doesn’t create incentives to lie to people to get signatures,” said Bryan, a Democrat who represents an area of Los Angeles. Referendums have “become a tool for concentrated, well-funded interests to undo legislation.”
The debate reflects broader political tension in California, where for decades voters have used ballot measures to circumvent lawmakers and directly shape policy around everything from taxes to homelessness and education.
In recent years the process has become significantly about money. In last year’s election, funders contributed about $750 million to either support or oppose seven measures in California — roughly double the spending on ballot initiatives in all other states combined. That included two measures rejected by voters to legalize sports betting, which were the most expensive initiatives in history at more than $500 million.
“The amount of money spent in California is off the charts compared to other states,” said John Matsusaka, a professor of business economics at the University of Southern California. “And we should care about the money, but ultimately, it’s the voters who decide.”
The bill’s supporters say the root of the problem is the influence of powerful interest groups who can buy their way onto the ballot. California is home to more billionaires than any other state and many big companies, creating outsized wealth that can be wielded to influence how the world’s fifth-biggest economy functions.
But opponents argue referendums are a vital check on the power of the government and warn that changing the current pay model — even in a minor way — could substantially increase campaign spending.
Michael Arno, founder of Arno Political Consultants, a firm with four decades of experience in petitioning services, said an hourly pay model could result in costs that are two to three times higher.
A per-signature rate is more efficient because it incentivizes petitioners to collect only valid signatures and reduces duplicate or invalid ones, Arno said. “I can pay someone for a full eight-hour day and I can fire them the next day, but I just lost a lot of money,” he said. “Whereas on a per-signature basis, I’m only paying for what that person collects.”
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Bryan’s bill focuses on state referendums, which are votes to overturn existing laws.
Michael Bloomberg, the majority owner of Bloomberg LP, the parent company of Bloomberg News, helped fund the campaign in California to uphold the law banning the sale of flavored tobacco products last year.
There are also ballot initiatives to create or change laws, such as Uber Technologies Inc. and Lyft Inc.’s successful $200 million bid to exempt ride-hailing apps from a California labor law in 2020. And there are recall votes to remove elected officials from office, such as the failed attempt to oust Newsom in 2021.
Environmentalists who support Bryan’s bill say reform is needed due to the deceptive tactics used by campaigns to gather support. They advocated for the oil-drilling law to protect an estimated 3 million Californians, largely in low-income communities, who live near the wells and are exposed to harmful pollution.
“The cost of doing business for the oil industry is being paid with the health and well-being of people and the climate,” said Cesar Aguirre, an environmental justice advocate.
Rock Zierman, chief executive officer of the oil and gas group CIPA, said it’s wrong for legislators to significantly reform a process that’s constitutionally protected. Donors to the association’s Stop the Energy Shutdown referendum bid included Sentinel Peak Resources California and Signal Hill Petroleum Inc.
“If legislators feel confident, they shouldn’t be afraid of a referendum and of the voters of California having a direct say over their actions,” Zierman said in an interview.
Even if Bryan’s bill gets enough support in the legislature, Newsom could veto it as he has done twice before with similar legislation, saying paying per signature is one of the most “economical” methods to qualify for the ballot.
“The governor will evaluate this bill on its merits if it reaches his desk,” said Daniel Villaseñor, a spokesperson for Newsom.
Bryan doesn’t see it that way. “I’m just so disgusted,” he said. “Too many people have been organizing for too long to have all of that work undone by a process that was meant and designed for the people, not by special interests.”
--With assistance from Romy Varghese.
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