The California Fair Political Practices Commission released a statement Monday morning saying the Arizona-based Americans for Responsible Leadership violated California law by engaging in “campaign money laundering.”
As the Los Angeles Times reports:
In a stunning reversal, an obscure Arizona nonprofit at the center of a legal battle over secret political contributions released on Monday morning the identity of its contributors, which it had been fighting tooth and nail to keep secret.
But the disclosure did little to shed light on who was behind the $11-million donation to a California campaign fund. The Arizona group, Americans for Responsible Leadership, identified its contributors only as other nonprofits.
The money was passed from Americans for Job Security to the Center to Protect Patient Rights to Americans for Responsible Leadership, according to state authorities. From there, the money was sent to a California campaign committee fighting Gov. Jerry Brown’s tax-hike plan, Proposition 30, and pushing a separate ballot measure to curb unions’ political influence, Proposition 32.
This morning on KQED’s Forum, host Michael Krasny talked to KPCC reporter Julie Small, who has been following this issue since the donation was first made. An edited transcript of their conversation follows:
Michael Krasny: We now know who is behind the $11 million contribution by an Arizona non-profit to influence California ballot measures. What do we know about this mysterious donor? Will we finally be able to name names here?
Julie Small, KPCC: We’re able to name names of more mysterious organizations. Americans for Responsible Leadership says it’s the intermediary, not the source of the contribution, and the source is (another organization) Americans for Job Security. What we know about that organization is that it’s run by Stephen DeMaura, the former director of the New Hampshire State Republican Committee. Americans for Job Security is based in Alexandria, Virginia. I think every journalist on the state elections beat is now trying to find out more about that organization. Americans for Job Security passed the money through another group called the Center to Protect Patients’ Rights—all we know about that right now is that they have a P.O. Box in Phoenix, Arizona. We believe that they’re tied to the Koch brothers.
Michael Krasny: That was initially going to be my question — there’s been a lot of talk about the Koch brothers here, as well as the GOP, but this is really, under California law, money laundering, isn’t it?
Julie Small: Yes, that’s what the Fair Political Practices Commission Chair Ann Ravel says — this is money laundering. The Arizona group essentially used other organizations to move money and to hide the source of the money. They Fair Political Practices Commission says they’re not going to stop here. What they’ve gotten this morning is just this little bit of information: they didn’t get an audit; they didn’t get to see the records yet. They’re going to be looking at this more closely, but they decided that the priority for them was to get voters some information right away, before voters cast their ballots — those who haven’t cast ballots yet, that is.
Michael Krasny: Can you give us a little background on how the FPPC managed to get this information released, the legal wrangling behind it?
Julie Small: They sued to get the information. They wanted the information just for an initial audit. Under California law, if somebody donates money to a California campaign knowingly — knowing it’s going to a California campaign — they have to disclose their name. But Americans for Responsible Leadership said, “Well, no, these donors — that doesn’t apply to them.”
The Fair Political Practices Commission sued them in Sacramento Superior Court. The Sacramento Superior Court ruled in favor of the California elections officials. The other side appealed the ruling, which put the ruling was on hold. So then the Fair Political Practices Commission turned to the California Supreme Court.
In a rather extraordinary move, the Supreme Court looked at the issue over the weekend and issued a ruling on Sunday that said “Americans for Responsible Leadership, turn over the information.” And it went on even into the wee hours of the night last night because the Arizona group said they wanted to appeal to the U.S. Supreme Court to override the California Supreme Court. But then late in the night, they made a settlement and agreed to turn over the names of the donors, but not all the details about the donation.
Michael Krasny: Yes, we thought we weren’t going to find out anything until after the election, so this is really a major breaking story. I guess my final question for you is: in the light of this $11 million and its sources — the largest contribution ever disclosed in California’s history — where do we go from here?
Julie Small: I think that the Fair Political Practices Commission says we need to strengthen these laws. You know, it was very close, it really looked like it wasn’t, as you say, going to happen before the election. Even when someone violates these disclosure laws in California, the fines are very small — perhaps $7,000 per violation. And there seem to be a lot of ways people can avoid disclosures. So I think we’ll be seeing in the legislature next year some efforts to make our laws — which are some of the strongest campaign disclosure laws in the nation — even stronger.
Michael Krasny: Julie Small, KPCC, thank you for joining us.
In the statement from the FPPC, Ann Ravel, its chair, said, “The persistence and hard work of the FPPC has won a significant and lasting victory for transparency in the political process. We will continue in this matter and all others to ensure that the people of California know who is funding political activity in this State.”
This post was updated to include a transcript from a discussion on KQED’s Forum.
Listen to Michael Krasny’s discussion with Julie Small, KPCC: