The Center for Public Integrity

Howard Rich, who heads three organizations that are underwriting the multimillion-dollar drive to pass takings initiatives — Americans for Limited Government, the Fund for Democracy, and the Club for Growth State Action — may be best known as the founder and president of U.S. Term Limits. Rich rarely talks with the news media and has not yet responded to the Center for Public Integrity’s requests for an interview. But Ray Ring, the Northern Rockies editor of High Country News, a nonprofit newspaper that says it “reports on the West’s natural resources, public lands, and changing communities,” managed to catch up with Rich for a conversation.

In his story, Ring recounts the challenge of landing the interview:

Rich was not easy to find. He has an unlisted phone number, and his Fund for Democracy has no Web site and is not listed as a business entity in the New York secretary of state’s database. When I found him and explained that I’d tracked all his donations to the campaign, he said, “You’ve done your homework.”

Listen to Ring’s interview with Rich, Rich, reproduced here with the permission of High Country News.

A limited-government group chaired by New York real estate investor Howard Rich has put another $1 million into the drive to pass California’s Proposition 90, raising the total of Rich-connected contributions to the “Yes on 90” campaign to more than $3.3 million.

Of the four takings initiatives on state ballots this fall, Proposition 90 has become the focal point of Rich’s property-rights efforts. The $1 million contribution on September 18 to the Protect Our Homes Coalition, which is pushing the measure, came from Chicago-based Americans for Limited Government, which says it wants to “stop eminent-domain abuse once and for all,” and also “stop the government from devaluing property in other ways.”

The Protect Our Homes Coalition’s Web site points to a survey of 1,879 likely California voters by Datamar, Inc., released on September 18, that found that 61.3 percent of respondents supported Proposition 90, 24 percent opposed it, and 14.7 percent were undecided. Respondents were told only that the measure “will prohibit state and local governments from condemning private property for other private uses.”

Opponents point to a survey of 762 likely voters by Field Research Corporation, released on August 2. In the Field Poll, 46 percent of the respondent said they planned to vote for Proposition 90, 31 percent said they planned to vote against it, and 23 percent said they were undecided. Respondents were given a more thorough description of the measure’s regulatory-takings and eminent-domain provisions.

Californians Against the Taxpayer Trap, which opposes Proposition 90, notes that, as of October 3, at least 11 newspapers in the state, including The San Diego Union-Tribune, The Sacramento Bee, and the San Jose Mercury News, had gone on record against the initiative in editorials.

In the four states with takings initiatives on their ballots this November 7 — Arizona, California, Idaho, and Washington — proponents reported having raised more than $5.7 million through September 21.

Organizations led by Howard Rich, a New York real estate investor, have contributed nearly $4.9 million of that amount, or about 85 percent of the total.

Rich’s organizations also bankrolled drives to put takings initiatives on the ballots in three other states: Nevada and Oklahoma, where state supreme courts found the measures to violate single-subject requirements for ballot initiatives, and Missouri, where the secretary of state refused to certify the initiative on the ground that the petitions submitted lacked valid signatures.

In the eight states, proponents reported a total of more than $8.7 million in contributions — about 88 percent of which came from organizations backed by Rich.

The Rich-backed groups include:

• Americans for Limited Government
• Club for Growth State Action
• Fund for Democracy
• U.S. Term Limits
• America At Its Best
• Montanans in Action

Rich heads Americans for Limited Government, Club for Growth State Action, Fund for Democracy, and U.S. Term Limits. Public records show that America At Its Best, in Kalispell, Montana, received a total of more than $2.4 million from Americans for Limited Government and the Fund for Democracy this year. While Montanans in Action has not disclosed its donors, Rich has acknowledged giving the organization nearly $200,000 this year.

In November 2004, more than 1.7 million Oregonians voted on an initiative known as Measure 37, which supporters said would ensure that property owners in the state were “fairly compensated” when a government regulation reduced the value of their land.

The measure passed, winning nearly 61 percent of the vote. Nearly two years later, more than 2,400 claims for compensation — asking for more than $5.6 billion in all — have been filed with the Oregon Department of Land Conservation and Development, and hundreds more have been filed with counties. Waivers of land-use rules are routinely granted. And there are fears of large-scale residential and commercial development in areas that have been protected for decades.

“[In Oregon] 170,000 acres are subject to claims for [waivers] or compensation,” says Bob Stacey, the executive director of 1000 Friends of Oregon, an anti-sprawl organization that opposed Measure 37. While a few individual homes have been built as a result of such claims, he says, there have been no major developments because of a provision that precludes the transfer of a waiver from one landowner to another.

“You can expect intensive litigation on that point, a lot of hard lawyering to try to get around that transfer problem,” Stacey says. If the litigation is successful, he says, it could pave the way for “massive developments in rural neighborhoods affecting working family farmers, bizarre things like a pumice mine in a national monument, a waste dump next to vineyard land. These are unthinkable things, but people are thinking them, planning them, and suing government to do them.”

Opponents of Proposition 2, Idaho’s eminent-domain and takings initiative, have launched a grass-roots drive to defeat what they brand a “deceptive, bait-and-switch measure,” a spokesman for the newly formed Neighbors Protecting Idaho says.

The organization, which filed the necessary papers with the state on September 21, is “pulling together constituencies that don’t normally work together on most issues,” including farmers, ranchers, and environmentalists, according to Justin Hayes, its media director. Its message, he says, is that Idaho “is a very attractive place for people to live and businesses to come to. If Proposition 2 were passed, that would be thrown out the window.”

Proposition 2 — like initiatives in Arizona, California, and Washington — would require governments to compensate property owners for regulations that diminish the value of their land. As of September 21, records show, contributions in support of the measure totaled $337,050. All but $50 of this came from organizations led by or connected to Howard Rich, a wealthy New York real estate investor and libertarian activist.

Hayes, noting that Idahoans are “fiercely independent,” suggests that Rich’s money will be the initiative’s downfall. “We don’t like being told what to do by out-of-state millionaires,” he says, “and I don’t think that will play well here.”

Rich has not responded to the Center for Public Integrity’s requests for an interview.

Proponents of California’s Proposition 90 have poured more than $3.7 million into the campaign to pass it — far surpassing the amounts raised to put takings initiatives on the ballots in other states this November. But the second-best-financed such campaign — the $2.3 million-plus drive to put a takings initiative on the ballot in Missouri — never made it to the finish line.

Missourians in Charge filed its proposed constitutional amendment, the Protect Our Homes Initiative, with the state on February 8. The proposal addressed both eminent-domain and regulatory-takings issues.

Reports filed with the Missouri Ethics Commission show that the organization spent more than $2.3 million to push its Protect Our Homes Initiative and another proposed constitutional amendment aimed at limiting state spending.

On May 26, Missouri Secretary of State Robin Carnahan announced that the petitions for both measures failed to “meet certain statutory requirements necessary for processing and placement on the November 2006 ballot.”

After a circuit court judge rejected a challenge to Carnahan’s ruling and the Missouri Supreme Court sent the case to an appellate court, Missourians in Charge dropped its appeals.

The Missouri effort was bankrolled almost entirely by organizations run by or connected to Howard Rich, a wealthy New York real estate investor and libertarian activist.

Rich has not responded to the Center for Public Integrity’s requests for an interview.

In 2004, proponents and opponents of Oregon’s Measure 37, the takings initiative that ultimately became law with 61 percent of the vote, loosed a barrage of television and radio ads on an electorate whose attention was also focused on the presidential election and several other ballot initiatives covering issues ranging from medical marijuana to same-sex unions.

Proponents of Measure 37 argued that it would protect Oregonians’ homes and land from an overzealous government bent on using legal loopholes to take away their property and on abusing regulations to fine them for reasonable land use. The “Yes on 37” ads were bankrolled by the Family Farm Preservation PAC, in support of Oregonians in Action, the chief pro-37 group.

Perhaps the most memorable of the “Yes” commercials featured Matt and Amy Roloff, two Oregon family farmers who have since become nationally known as the stars of The Learning Channel reality show, “Little People, Big World,” which describes itself as “the most in-depth television documentation of the lives of little people.” Measure 37 was needed, the Roloffs said, to protect “our home, our property, and our right to farm.”

Opponents of Measure 37 argued that it would create more red tape, lead to an unfair system in which land-use and environmental regulations would apply to some and not others, and would result in higher taxes. Their ads were paid for by the No on 37, Take a Closer Look Committee, which led the unsuccessful campaign against the measure.

“Yes on 37” Television Ad 1

A voice reads text, as it scrolls on the screen over images of a farm.

With just over a month remaining before voters go to the polls, a Montana District Court’s ruling has thrown into question whether Initiative 154, a takings measure, will be on the ballot November 7.

The Montana Secretary of State describes the measure as a “citizen initiative to amend Montana law to require governments to waive regulations that reduce property values unless they compensate owners, and prohibiting takings intended to transfer property to private parties.”

In a strongly worded ruling, Judge Dirk M. Sandefur of the Montana Eighth Judicial District Court (Cascade County) cited a “pervasive pattern and practice of fraud and procedural non-compliance” attributable to those who collected the required signatures to put the initiative on the ballot. In the same order, Sandefur also threw out Constitutional Initiatives 97 (a proposed constitutional amendment to limit state spending) and 98 (a proposed constitutional amendment to establish a voter recall for state court justices and judges).

The challenge — brought by three political committees, each opposed to one of the three initiatives — alleged that professional signature collectors who had been hired for all three efforts misled voters and failed to follow Montana law regarding the collection of ballot signatures.

Proponents of the measures have appealed to the Montana Supreme Court, which has requested that all briefs in the matter be filed by October 3. Should it reverse the lower court’s ruling, Montanans should be prepared for a fast and furious campaign by both sides.

Two months before Election Day, the Nevada Supreme Court ordered the “regulatory takings” portions of Question 2 to be stripped from the ballot initiative that will go before voters.

In its September 8 decision in Nevadans for the Protection of Property Rights v. Heller*, the court held that the initiative, which also aims to restrict the use of eminent domain, violated a state law that requires such measures to deal with a single subject. As a result, Nevada voters who go to the polls on November 7 will not pass judgment on a proposal to give property owners the right to seek compensation for any regulatory action that diminishes the value of their land.

The decision allows some of the provisions that deal with eminent domain to go before voters, although two of the court’s seven justices argued in a partial dissent that the entire measure should be thrown off the ballot. Under Nevada law, the proposed constitutional amendment, as modified, must receive a majority of votes in November and again in 2008 to be enacted.

The anti-takings forces can try to get their issue on the ballot again in 2008, but the soonest it could be enacted would be 2010.

Read the opinion

Read the dissents

A legal challenge to Proposition 207, the Private Property Rights Protection Act, was dismissed by the Arizona Supreme Court on August 31. The measure, if approved by voters on November 7, would restrict the government’s use of its eminent-domain power and require compensation for regulatory takings.

The lawsuit — brought by a coalition led by the League of Arizona Cities and Towns — argued that Proposition 207 doesn’t comply with a state law requiring that it identify a funding source.

Superior Court Judge Paul J. McMurdie, whose ruling the high court upheld, previously found that the plaintiffs had shown substantial evidence that the compensation-triggering provisions of the takings initiative were in violation of the funding-source requirement. But he held that the issue didn’t warrant removing the initiative from the ballot and that any challenge on that ground would have to come after the election. The Supreme Court will issue its opinion at a later date.