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Requiring PG&E et al to obtain two thirds approval from shareholders

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POSTED June 16, 2010 2:44 a.m.
Big corporations may one day want to thank PG&E for helping throw a roadblock in their never-ending battle to manipulate California government through the initiative process.

PG&E’s blatant failed $47 million attempt earlier this month to amend the state constitution to protect their monopoly via Proposition 16 that would have imposed a two thirds vote threshold for any public agency to try and offer lower power costs is triggering fallout.

Some of that fallout is in the form of a law proposed by Assemblyman Pedro Nava that would require corporations undertaking any form of political expenditures to first secure a two thirds approval of its shareholders. It also provides a mechanism for shareholders who don’t support the political objectives of whatever campaign a corporation is investing in to get the pro-rated per share of such expenditures sent to them instead.

Don’t be shocked to see PG&E intensely lobby to block such a requirement from getting adopted into law. PG&E would have a tough time doing any of its shenanigans via attempts to influence the political process as it is a safe bet most shareholders would take the money and run.

Equally important is that the proposed law may actually counter a decision of the United States Supreme Court that gave corporations essentially the same rights as individuals to make unlimited campaign donations.

It is part of a slowly growing trend to grant corporations virtually the same protections as individual citizens.

Firms such as BP can enjoy many of the same rights as individuals yet they don’t pay the same price as individuals do serious breaches of our laws.

There were 11 men who died when the Deepwater Horizon oil drilling platform exploded. Should BP be found guilty of criminal negligence, it will face fines - that’s it. No one in the executive suite will be going on trial and facing prison time even if they applied pressure to put profits ahead of safety. Yet that same executive suite has been given the same rights as individuals when it comes to political spending.

Essentially corporations are being given preferred citizenship status. What else would you call getting the perks and not having to assume the same consequences of reckless behavior that individuals must assume in our society?

It would be insane, of course, to try and criminally prosecute corporate leadership for deaths their companies cause through negligence or outright indifference.

That is why Nava’s bill makes sense. It is the fist step in restoring reality to Wall Street.

Contrary to popular belief, most of the publicly traded corporations on the big board don’t have the majority of their stock owned by “corporations.” Instead they are mutual funds, investment plans for individuals and retirement accounts that buy huge chunks of stock.

The little people who own much of Wall Street never have a say.

Even though most of the investments in corporate America are managed by investment firms, there are enough individuals who directly monitor their own stocks that it would be a fairly laborious process for corporations to try to make political expenditures in California by first getting a two thirds approval of their shareholders.

First, they’d have to notify the shareholders and give them a reasonable time to respond. That in itself would slow down the corporate political steam roller. They also would have a rough time with some of their large investors such as the California Public Employees Retirement System that actually have a conscience when it comes to investing.

Second, it would be difficult to hide political undertakings by corporations if all shareholders must be apprised of them and say “yea” or “nay”.

Of course, PG&E could have avoided such fallout had they simply let a couple of jurisdictions proceed with taking over retail electrical service and then falling flat on their face by providing even worse service or else send rates higher than what PG&E charges as Peter Darbee & Company contends would happen.

But then again, PG&E probably knows that is too big of a risk for them to take given the track record of publicly owned power being less expensive than for-profit monopolies.

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