Proposals ignite war in California

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It could be one of the biggest political scrapes of the year, involving $125 million in ad spending, unions, pharmaceutical giants and presidential image-makers. But it doesn't involve a single candidate.

It is the fight over several controversial propositions in the California special election, called for Nov. 8 by Gov. Arnold Schwarzenegger.

The governor's stated aim is to reform California's budget, education system and to redistrict the state. But perhaps the biggest marketing battle is erupting over Proposition 79 and Proposition 78, which focus on pharmaceutical companies.

Consumer groups and unions are pushing Prop 79, which requires drugmakers to provide discounted prescriptions to the poor and middle-class or face being dropped as a provider to state Medicaid-like drug programs.

In the drive to win support for the proposition, the Alliance for a Better California-a coalition representing teachers, firefighters, nurses and health-care workers-has hired Joe Trippi, the campaign manager behind ex-Vermont Gov. Howard Dean's run at the presidency, to launch a grassroots, viral Internet campaign.

Big Pharma

But that effort will have to overcome spending from Big Pharma-which is drawing on a war chest of over $75 million-and Mr. Schwarzenegger, who support the rival Prop 78, which creates a voluntary system of drug discounts but doesn't penalize companies that don't participate.

The fight will also pit Mr. Trippi against Issue & Image, an Alexandria, Va., firm headed by John Donovan-but partly owned by Mr. Trippi's former partners in the Dean campaign, Steve McMahon and Mark Squier-which is producing ads favoring the drug-industry proposal. (Mr. Trippi also used to own part of Issue & Image, but severed that relationship as part of his split from what was Trippi McMahon Squier after the Dean campaign.)

The drug industry in mid-August launched two TV ads suggesting that Prop 79 would create "a costly new bureaucracy" that could limit patients' access to drugs while Prop 78 would provide discount medicine "without red tape or restrictions." Its Web site is at callrxnow.org.

Frank Schubert, principal at Schubert Public Affairs, also working on the proposal, said the pharma companies got "dragged into the fight" and chose to offer their own alternative, rather than to just fight against something.

Opponents won't have similar money, but have tapped AKP Media & Message, headed by David Axelrod, another Democratic presidential image maker, as well as Mr. Trippi. A spokeswoman for the Alliance said the group will also mount a major grassroots effort. "You have Arnold and there is a lot of energy to get involved [against] him," said Mr. Trippi. "It's David and Goliath, competing initiatives and somebody is telling the truth. We can get some energy from that."

The Alliance last week launched BetterCA.org, and Mr. Trippi said he expects to unleash viral messages including ads and pass-along animation to build the kind of online community created in the Dean campaign.

"Certainly them having millions of dollars to do TV is formidable but that's one of the same realities that formed the Dean campaign and forced us to be innovators on the Web. We are again being forced to innovate to drive a message," he said.

Several other initiatives are also drawing heavy spending. One, Proposition 75 and dubbed "paycheck protection," would make it more difficult for unions to spend on politics, requiring annual consent from members for political contributions. A second, Proposition 74, would make it easier to fire teachers in their first five years.

Union groups have raised nearly $50 million to fight these two proposals and have been running ads against them, including one suggesting the governor is leading the state in the wrong direction.

The California Recovery Team, which is supporting the propositions, has yet to start fall advertising but has hired Sipple Strategic Communications, the firm headed by Don Sipple, who did advertising for Sen. Bob Dole's presidential campaign. He expects ads to launch late this month.

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