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Identity of donors to conservative group sought

Citing a new state regulation, activists ask authorities to reveal who contributed $11 million to an organization campaigning on two California ballot measures.

October 19, 2012|By Chris Megerian, Los Angeles Times
  • Derek Cressman of Common Cause points out the groups his organization says are connected to an $11-million contribution made by an Arizona-based nonprofit to fight Proposition 30 and support Proposition 32.
Derek Cressman of Common Cause points out the groups his organization says… (Rich Pedroncelli / Associated…)

SACRAMENTO — An $11-million donation to a California campaign fund could become a test of whether secret political donors can be forced to reveal themselves.

Seizing on a new state regulation, activists have asked authorities to unmask those behind the large donation, made this week by an Arizona nonprofit to a conservative group campaigning on two California ballot measures.

Implemented in May, the regulation requires that campaign donors moving money through such nonprofits be identified. Common Cause filed a complaint with the state Friday alleging that the Arizona group is flouting the regulation, one of the first of its kind in the country.

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Phil Ung, a policy advocate at Common Cause, said the rule was created to shed light on exactly this kind of anonymous contribution.

"If it doesn't apply to this situation, they need to go back to the drawing board," he said.

The issue of secret contributions in elections has loomed large for years. Corporations and wealthy individuals routinely give millions to nonprofits that are permitted under federal law to keep the donors' identities confidential. The nonprofits then send the money to political campaigns.

California authorities say those giving money to state campaigns should be identified if their original contributions were made with political intent.

The Small Business Action Committee, the group that received the $11 million, said it has followed all the rules and on Friday called the activists' complaint a "politically motivated charge without one shred of evidence."

The committee is fighting Gov. Jerry Brown's tax-hike proposal and supporting a measure to curb unions' influence by preventing them from using paycheck deductions for political purposes. Common Cause opposes the paycheck measure and has not taken a position on the tax plan.

The Small Business Action Committee has not said how it will spend the money. With less than three weeks until election day, such a large influx of cash could have a big impact on either campaign.

Brown, speaking to business leaders in Burbank on Friday, said he was up against "shadowy forces" in his campaign to temporarily raise sales and upper income taxes to avoid billions of dollars in cuts to public schools.

"Take your mask off," he challenged the anonymous donors. "Let voters see who you are."

Ann Ravel, chairwoman of the Fair Political Practices Commission, California's campaign finance watchdog, said officials will review Common Cause's complaint before deciding whether to open an investigation. It is unclear whether any investigation could be completed by election day.

"It is definitely a matter that we take very seriously," said Ravel, a Brown appointee.

Little information has trickled out about the Arizona group, Americans for Responsible Leadership, which was formed last year. A spokeswoman for one of the directors, a Republican seeking to lead the state party in Arizona, said he was out of the country and not available for comment.

The group has given less than $600,000 in political contributions in its home state, according to campaign filings, while pumping almost 20 times that amount into California. Ung called that a red flag.

"It's exactly what it looks like," he said. "It's money laundering."

Joel Fox, president of the Small Business Action Committee, said he did not know where the money came from. He said the Arizona group contacted a committee supporter to talk about a donation.

"We went online and checked them out," he said. "They seemed like a legitimate group."

chris.megerian@latimes.com

Times staff writer Mark Kellam in Burbank contributed to this report.

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