Direct democracy through popular intiatives and referenda began a century ago as a grassroots, progressive reform aimed at circumventing corrupt legislatures and increasing civic involvement.  The long history of this reform indicates that in the whole this experiment in direct popular participation in the legislative process has been successful as an avenue for passing populist policies that maintains the favor of the public over time.  However, throughout this history there have also been attempts, sometimes successful, to manipulate the process and the electorate into passing legislation that would not garner majority support had voters possessed an accurate conception of its content and effect.  This Dispatch covers the threats to direct democracy from fraud, manipulation, and a lack of accurate information regarding ballot measures, as well as reforms that can bolster the integrity of initiative and referendum campaigns.

Direct Democracy Under Siege: Increasingly in recent years, a small group of wealthy individuals and powerful interest groups on the Right have been using deception and secrecy to push measures that undermine the interests of the vast majority of people.  Often using a menagerie of shadow organizations to hide their identity, these actors manipulate the process in multiple ways: they cloak their financial backing of ballot campaigns, they misrepresent the content and purpose of measures through misleading ballot titles and descriptions, and they commit fraud in the signature gathering process to qualify for the ballot.  At every stage the ability of voters to make a well informed choice that reflects their true positions on an issue is undermined and the ability of direct democracy to serve the citizens is diminished.

The extent of these problems grows as the money spent in support and opposition to ballot measures increases rapidly.  In 2006 the dozen most expensive campaigns generated a total of $329 million in spending.  The most expensive campaign, an a renewable energy proposal in California, saw over $150 million in spending alone.
More at: http://www.progressivestates.org/node/22079