Secretive out-of-state group pushes bill that makes it harder to get a voter initiative on the ballot

Supporters say they’re trying to weaken the influence of dark money in Utah.

(Rick Egan | Tribune file photo) Sierra Holmes signs a tax referendum petition, during an event to meet the legislators that represent the west side of Salt Lake City, and sign the Utah Tax Referendum petition at West High School, Thursday, Jan. 9, 2020.

This legislative session, supporters of a bill tightening the rules for ballot initiatives stressed that the measure would protect Utah from the influence of outside interests, which have previously dumped money into signature-gathering campaigns on medical cannabis and Medicaid expansion.

What some state lawmakers might not have realized was that this very piece of legislation was itself promoted by a shadowy, out-of-state group called the Foundation for Government Accountability (FGA). And while ballot initiative campaigns at least have to disclose their donors, the public has no idea which wealthy benefactors might have helped the FGA advance its political agenda in Utah, said Spencer Stokes, a state lobbyist and the co-owner of a signature-gathering firm.

“If you’re wanting to know the darkest of dark money,” Stokes said in an interview, “this piece of legislation was just that.”

So although the bill’s purported goal is transparency, he argues it’s really aimed at undermining the public’s ability to circumvent the Legislature and pass laws by a popular vote, a power that Utahns have exercised with great success in recent years on issues ranging from Medicaid expansion to independent redistricting.

The bill’s sponsor, freshman Rep. Jordan Teuscher, said he isn’t trying to make initiatives or referendum efforts harder in Utah and developed the proposal after hearing from constituents who reported feeling deceived into signing a petition.

His legislation, he said, would simply help people distinguish between a neighbor who’s volunteering to walk around with a clipboard and a professional signature gatherer who’s receiving money from an outside interest group.

And he argues there’s no conflict between these transparency goals and the Foundation for Government Accountability’s support for the bill. The group’s representatives joined him during a legislative committee hearing on HB136, Teuscher noted, and both of them publicly identified their relationship with the organization.

“There’s full transparency,” the South Jordan Republican said in an interview. “Those same checks and balances should be in place for the citizen lawmaking processes, too.”

Dave Owen, one of the lobbyists who accompanied Teuscher to the hearing, did not list FGA or its political organization as a client on his disclosure forms this year but said the omission was an oversight and that he would be correcting it.

Teuscher’s bill, which passed the Legislature last week on the final day of the session and awaits the governor’s review, would forbid signature-gathering companies from paying their employees by the number of names they collect and instructs them to use hourly rates instead — a change that Stokes said will make it much more difficult to get initiatives onto the ballot.

Hourly employees who receive the same rate regardless of how many valid signatures they collect don’t have the same motivation as the workers who are paid by the name, he said.

“It’s the difference between a person who’s hustling and running between doors because they want to get to as many doors as possible and a person who saunters up to the door,” said Stokes, whose business partner indicated that signature gatherers sometimes receive up to $10 per name.

The legislation, HB136, would also require workers to wear a badge that identifies them as a paid signature gatherer, discloses who’s funding the effort and features a unique identification number that people can use to report deceptive or pushy behavior. The lieutenant governor or county clerks would have to post information about each ballot initiative on their website and include directions about how signatories can remove their names from the petition, under the bill.

Tanner Leatham, founder and owner of Gather, the firm that Stokes co-owns, predicts these new mandates will create additional hurdles for enacting new laws by initiative and striking down unpopular laws by referendum, although it won’t eliminate these efforts entirely.

“It’s definitely still possible,” he said. “It’s a little more expensive, and a little more of a headache.”

(Trent Nelson | Tribune file photo) Signed tax referendum petitions at the Salt Lake County Clerk's Office in Salt Lake City on Tuesday, Jan. 21, 2020.

Putting an issue up for a statewide vote is already challenging and requires gathering signatures from at least 8% of the state’s active voters and meeting that same 8% target in 26 of 29 state Senate districts. Despite that, Utahns have turned to ballot measures in recent years to force landmark policy shifts: In 2018 alone, they legalized medical marijuana with Proposition 2, opened up Medicaid to more people with Proposition 3 and created an independent redistricting commission with Proposition 4.

Each of these popular issues had repeatedly been rejected by lawmakers over the years.

And in early 2020, a bipartisan grassroots group ran a whirlwind referendum campaign that compelled the Legislature to retreat from an unpopular tax reform package that included a grocery tax hike.

That doesn’t mean the people’s power is absolute. The Legislature ended up drastically altering all three of the citizen initiatives that passed in 2018, and Leatham said he doesn’t understand why lawmakers seem so concerned about ballot measures when they’re demonstrably able to rewrite them.

He also finds it “ironic” that HB136′s restrictions on initiatives and referenda don’t apply to petitions to put candidates on the ballot. That includes legislative candidates.

Teuscher said he didn’t include candidate signature gathering in his bill in part because he hasn’t heard from constituents who felt lied to when signing one of these petitions. But there were constituents who said a signature gatherer presented misleading information when convincing them to endorse initiatives on Medicaid expansion or medical cannabis, he said.

He’d already had the idea for legislation on initiatives in November when he attended an FGA event in Park City, where he heard that ballot initiatives on Medicaid expansion and other issues are a leading cause of spending growth in state budgets across the nation.

The Florida-based nonprofit seeks to restrict access to public assistance programs such as food stamps and discourages states from expanding Medicaid under the Affordable Care Act, the Center for Public Integrity has reported. It draws financial support from conservative foundations and wealthy individuals who don’t have to disclose their identities and spends those funds on lobbyists, prewritten bills and hosting public officials at its conferences in Florida, according to the Center for Public Integrity.

In 2018, the group took in more than $9 million, its tax records show.

Owen, a lobbyist for FGA’s political action arm, said the organization has worked on reforming the initiative process elsewhere and presented Teuscher with a “menu” of options based on ideas other states have embraced or considered. While Teuscher said FGA didn’t directly write any of the bill’s language, representatives of the group did agree to speak in support of HB136 during the legislative session.

Testifying before a legislative committee, Owen told lawmakers that HB136 was an “anti-hijacking bill” that would curtail the power of out-of-state money in Utah politics and make sure rural areas have a voice in setting statewide policies. Owen pointed to Utah’s 2018 Medicaid expansion initiative as evidence that Utah’s urban and suburban voters can overrule other areas of the state.

“It can be argued that Salt Lake County imposed Medicaid expansion on the 25 other counties that rejected it,” he said. “This is the power of outside dark money and the imbalance of direct democracy between urban and more rural.”

(Twenty counties voted against Proposition 3, while the initiative was supported by Salt Lake County and eight other counties, some of them rural.)

Karina Brown, one of the initial sponsors of Proposition 3, said that if Utah legislators were truly worried about money in politics, they would take a look at the state’s campaign finance laws, which place no limit on political contributions. And, like Stokes, she said lawmakers should be thinking about the way FGA is using its resources to sway state policies.

“I’m concerned about the money behind the organization that is fighting against helping people and compassionate policies that voters approve of,” she said in an interview.

(Francisco Kjolseth | Tribune file photo) Utah faith leaders gather at the Cathedral of the Madeleine in Salt Lake City on Wed. Oct. 3, 2018, to make a joint statement in support of Prop 3, which expanded Medicaid in Utah after years of refusal by lawmakers to act.

Owen contends that FGA is primarily a think tank that spreads ideas and information, in contrast with the groups that spend big money on advertising and promoting initiatives on Medicaid and medical marijuana.

“To compare that with what we do is silly,” he said.

In speaking about HB136, FGA representatives have also argued that eliminating per-signature payments would take away the incentive for workers to forge petition signatures.

That does happen from time to time during signature-gathering for initiatives and candidates, said Justin Lee, the state’s elections director. But this type of misconduct isn’t widespread, and it’s generally easy to catch, he said, adding that his office notifies the signature gathering company in these cases and sometimes refers the situation to law enforcement for investigation or prosecution.

Both Owen and Teuscher said they respect the constitutional right of voters to run ballot measures, and the state lawmaker said that he even worked with initiative organizers to refine his proposal.

Based on feedback from leaders in past initiatives, Teuscher’s proposal would delete a requirement that signature gatherers must carry around a hard copy of an initiative or referendum, instead allowing them to offer a digital version for prospective signatories to read. The current paper copy requirement is what derailed last year’s effort to stop the controversial Olympia Hills development, with referendum organizers in that case estimating it would cost them more than $1 million just to print off the packets.

Though she opposes prohibiting per-signature payment, Brown said she does appreciate the parts of Teuscher’s bill that promote transparency. But bill supporters’ descriptions of deceptive signature gathering don’t line up with her experience from working on Proposition 3, she said.

The signature gatherers she watched didn’t pressure people into signing a petition and did their best to answer any questions, she said. Many people added their names enthusiastically, without the need for convincing, she said.

“People would say, ‘Why wouldn’t we want this on the ballot?’” Brown said. “’Why wouldn’t we want to be compassionate to our fellow Utahns?’”