Not-for-Profit Reveals Groups Behind $11M Campaign Donation

The Americans for Responsible Leadership -- an Arizona-based not-for-profit â€" has disclosed the names of two other not-for-profits behind an $11 million donation to a group opposing Proposition 30, a compromise tax hike plan developed by Gov. Jerry Brown (D) and supporters of the "Millionaires Tax," the Sacramento Bee's "Capitol Alert" reports (Yamamura, "Capitol Alert," Sacramento Bee, 11/5).

Background on Lawsuit

In October, the state Fair Political Practices Commission filed a lawsuit to determine whether ARL illegally concealed the identity of donors who gave money to the Small Business Action Committee, which opposes Prop. 30. SBAC also supports Proposition 32, a campaign finance measure.

State regulations say that not-for-profits cannot conceal donors' identities if their contributions go toward state campaigns.

ARL filed a 14-page brief arguing that the U.S. Supreme Court's decision in Citizens United v. Federal Election Commission, a campaign free speech lawsuit, shows "the indisputable notion that non-profit corporations have constitutional rights."

The group argued that FPPC does not have authority to audit the communications between donors and the not-for-profit until after the election and that the agency did not consult its commissioner before asking for the information.

Judge's Decision

After a hearing held last Wednesday, Sacramento Superior Court Judge Shelleyanne W.L. Chang ordered ARL to disclose the donor information, saying that "irreparable harm has occurred and continues to occur as each day passes and voters continue to cast their votes without information that may influence their votes."

On Thursday, ARL appealed the order, blocking the state from obtaining the transaction records during legal review.

State Supreme Court Ruling

On Sunday, the California Supreme Court ordered ARL to disclose the information.

ARL said it would coordinate with FPPC to comply with the court's order but also filed a letter outlining its plans to continue appealing the case, including asking the U.S. Supreme Court to examine the lawsuit (California Healthline, 11/5).

Details of ARL's Disclosure

According to an FPPC release, the other two not-for-profits behind the donation were:

• Americans for Job Security; and
• The Center to Protect Patient Rights.

AJS is a not-for-profit "business league" that is not required to disclose its donors ("Capitol Alert," Sacramento Bee, 11/5).

CPPR is a 501c(4) and also is not required to disclose its donors (Winter, USA Today, 11/5).

ARL Comment

In a prepared statement, Matt Ross -- ARL spokesperson -- said "After late night discussions, [ARL] and the FPPC reached a settlement. The Commission has received specific documents it requested."

FPPC Comments

According to FPPC, ARL sent a letter on Monday "declaring itself to be the intermediary and not the true source of the contribution." The group said, "Under California law, the failure to disclose this initially was campaign money laundering."

FPPC added, "At $11 million, this is the largest contribution ever disclosed as campaign money laundering in California history" ("Capitol Alert," Sacramento Bee, 11/5).

Ann Ravel -- chair of FPPC -- said that although the disclosure is a victory, California residents still will not know where the money originated by the time they vote in the election.

She said, "While we did not get a lot of information about the individual human donors, ultimately we hope that we will be able to obtain that. This is not the end of the road" (Henderson, Reuters, 10/5).

AG Comments

On Monday, State Attorney General Kamala Harris (D) said that her office still must decide if there are any civil or criminal violations related to the donation ("Capitol Alert," Sacramento Bee, 11/5).

Broadcast Coverage

On Monday, Capital Public Radio's "KXJZ News" reported on ARL’s disclosure (Quinton, "KXJZ News," Capital Public Radio, 11/5).