John receives payment from the man in the white hat for each ballot signature he collected. It's illegal to pay gatherers by the signature. Matt Davis

Last Wednesday, July 5, amid a sea of homeless people waiting for food from the rescue mission on W Burnside and 2nd, a series of secretive transactions went down that involved the exchange of pocketfuls of cash for hot commodities.

Gruff, destitute men and women lined up to hand over their goods to a thin, middle-aged man in a white hat who, after thorough inspection of their offerings, forked over wads of money—for most, it was a relative windfall for a few hours' worth of work.

But it wasn't drugs or weapons or stolen goods changing hands that evening—it was signature sheets for three petitions hoping to make the ballot this November. The going price for democracy: about $15 for every 20 signatures. It may not have been contraband, but it was every bit as illegal.

breaking the law

Since 2002, after rampant fraud and forgery within the initiative system, it has been illegal in Oregon for initiative campaigns to pay signature gatherers on a per-signature basis. Instead, campaigns are required to pay employees (or independent contractors) an hourly wage—regardless of how many signatures they bring in. They can set up reasonable minimums for their employees to meet, and they can use bonuses as incentives, but they cannot, under any circumstances, base wages on how many signatures are produced. This year, that law has been broken by people carrying petitions for at least three campaigns.

Standing on Burnside after getting paid, Andrew (not his real name) from Eugene described to the Mercury exactly how his temporary employer had broken the law. He was paid $15 for every two sheets he turned in—the number of hours he worked was irrelevant. He said he spent the day skating around town, offering free sodas in exchange for signatures. He told people it didn't matter if they weren't registered Oregon voters or if they'd already signed the petitions—he even boasted that he'd gathered signatures from at least 20 convicted felons. (Unlike most states, felons can legally vote and sign petitions in Oregon, but Andrew didn't know that.) He was carrying two petitions being pushed by conservatives: electing Oregon Supreme Court and Appeals Court justices by district, and either the "Taxpayer Bill of Rights" (TABOR) state spending cap, or the initiative requiring term limits for state legislators. After gathering enough signatures to buy his bus fare back to Eugene, he was only able to refer to the measures as "the Supreme Court one" and "the legislature one."

He even tried to recruit a down-and-out friend to join the scheme, telling him, "Every signature is worth something, but every two sheets is worth 15 bucks."

At 10 am the next morning, a similar, yet smaller scene unfolded outside of the Greyhound station at NW 5th and Glisan. While waiting for his contact to show up with cash, John, a self-described homeless man staying in a nearby shelter, stood next to a trashcan, counting signatures and attempting to flag down a couple more people to sign his sheets. He, too, explained that he was getting paid $15 for every two sheets, and he, too, was carrying the Supreme Court measure and the TABOR spending cap. Despite carrying two petitions supported by the state's conservatives, he offered up his opinion of George W. Bush: "I think he's an asshole." John was expecting to get about $30 for his signatures—when we asked how much time he'd worked to get those, he said it took four or five hours, equaling about $7 per hour, or less than minimum wage.

His contact showed up a few minutes later, accompanied by a man who slurred that he was going to take a dagger to someone down the street who sold him some bad rock. Again, the contact counted up the signatures and then handed over the cash [see picture, page 13]. When I identified myself as a journalist and began asking questions, all three men hurriedly continued down the block to finish the transaction.

Later that evening, though, when John went back to Burnside and 2nd to collect the cash for his last signatures—the following day was the deadline for all petitions to be turned in to the state—his employer never showed up. John, and a handful of other sheet-carrying homeless men, got stiffed.

paying for fraud

At least part of the 2002 movement to ban payment per signature was to keep this part of the democratic process out of the shadows. The idea that payment per signature contributes to fraud and forgery was used by the state when it defended the statute in 2004. If petition circulators are paid solely on quantity, they'll have incentive to do whatever it takes to get more signatures, the logic goes, including forging names and being less than truthful about the petitions they're carrying. Paying by the hour takes that incentive away.

Four years after Measure 26 (M26) passed (by a two-to-one margin), it appears that little has changed, except that payment-per-signature operations have been pushed slightly underground. The secretary of state's office has done little to investigate M26 violations or enforce the statute's provisions, although there is now an ongoing investigation into numerous campaigns, spurred by the original backers of the law.

Even if the state was enforcing Measure 26, though, it's unclear if the liability for violations would reach the chief petitioners. If you wanted to devise a system in which chief petitioners would be protected by layers of deniability from what their signature gatherers were actually doing on the street, you couldn't do better than the system Oregon already has. Many initiative campaigns, including the ones listed above, hire their petitioning work out to firms like the California-based Arno Political Consultants, which had the contract for the term limits and TABOR petitions, or local firm Democracy Direct, which was hired to run the districting of judges petition. These companies will then frequently hire the work out to subcontractors, who in turn hire the work out to sub-subcontractors. By the time these petitions hit the streets, it's difficult to determine who is working for whom.

Case in point, the man who was paying John and Andrew: The Mercury attempted to track him down to find out where his money came from, but to no avail—he disappeared each time before we could corner him.

Don McIntire, the head of the Taxpayer Association of Oregon and a chief petitioner on the TABOR initiative, said his campaign isn't liable for the way his signatures are gathered. In fact, he told the Mercury, the campaign made Arno sign an agreement promising they wouldn't pay per signature—which means that anything that happens after that is out of his hands. "If someone is the chief petitioner, they aren't the grand ruler of everything," McIntire said. "I have no way of knowing" what happens on the streets.

On the other hand, the original backers of Measure 26 have filed a complaint with the secretary of state's office, asking McIntire to hold the chief petitioners accountable for the flagrant on-the-street violations of the law. McIntire refused to comment on the mounting evidence, saying the violations and the idea that he should be liable is "a construct of left-wing union shills."

Further, he deflected questions to Arno, which, by Friday, had stopped answering its phones. (For the record, Arno's employee manual shows a pay rate that is very clearly based on the number of signatures brought in—$10 for 4-8 signatures per hour, up to $64 for 46-50 signatures per hour.)

rescuing the reform

The state's lack of enforcement of Measure 26 has another major impact—making it more difficult for legitimate petitioning firms to stay afloat. Companies like Portland-based Democracy Resources, for example, have taken a massive hit this year. Other firms "poached" workers from the company, and their bottom line is damaged because Democracy Resources spends money for training, paying managers to supervise employees, and maintaining hourly payroll records. Plus, "petition fatigue" has turned voters away from the process all together, making it more difficult to find enough people willing to sign a petition. And if people are already wary of signature gatherers, sending an army of homeless people into downtown with petitions isn't going to help the cause.

"When voters hear about fraud, they get turned off from the whole process," says Ted Blaszak, owner of Democracy Resources. "The most frustrating thing is that it's just not hard to follow the law and treat your staff with respect."

The irony is that payment per signature—at least the way it played out on the streets last week—will only lead to lower validity rates for those campaigns.

The next two years will likely see a fight over the initiative system in Oregon. Reformers are pushing the state to actively enforce M26, conceivably making it more difficult for campaigns to get measures on the ballot. At the same time, embattled initiative veteran Bill Sizemore and Tim Trickey (the owner of Democracy Direct) have filed a series of initiative petitions for 2008 that would lower the bar—including a repeal of Measure 26's ban on payment per signature. Considering the overwhelming majority of votes M26 received, and the fact that many in Oregon are simply fed up with the flood of initiatives the state's seen in recent years, that may be a hard sell.

On the other hand, Arno Political Consultants has declared that it won't be back in Oregon again any time soon. The company is accustomed to paying per signature in every other state it works in and, as it turns out, it's simply too expensive for Arno to follow the law in Oregon.

With additional reporting by Matt Davis and Amy Jenniges. For continuing updates on this story, hit