FPPC Chair Ann Ravel, heading to Washington soon as a newly-appointed member of the Federal Election Commission (FEC), announced fines of $500,000 each for two non-profits involved in the convoluted plan that targeted Governor Jerry Brown's Proposition 30 tax hike for defeat and supported the anti-union Proposition 32 with $11 million in last-minute campaign donations.
The saga began when 150 rich California donors, seeking anonymity, contributed $29 million to Virginia-based Americans for Job Security (AJS). Public Citizencalls AJS a “sham front group that would be better called Corporations Influencing Elections . . . masquerading as a non-profit to conceal its funders and the scope of its electioneering activities.”
Some of that anonymity was stripped away when a poorly-redacted document, released by the FPPC, identified some of the contributors. The Los Angeles Times figured out that Fisher family members, owners of the GAP, contributed $9 million, and the Huffington Post said Charles Schwab, founder of Charles Schwab Corp., ponied up $6.4 million. Anne Gust Brown, the governor’s wife, used to be a top GAP executive.
Additional contributors included: Eli Broad, a public supporter of Prop. 30, who gave either $500,000 or $1 million, depending on your source; billionaire Sheldon Adelson and his wife, $500,000; Karl Rove’s Crossroads GPS, $2 million; Greg Penner of Walmart, $500,000; and Margaret Bloomfield of Baron Real Estate Fund, $500,000.
Americans for Responsible Leadership said it would pay its $500,000 fine, but ARL President Kirk Adams, a former Arizona lawmaker, called the fine a vindication for his group after top Democratic California officials last year made “outlandish claims of money laundering, criminal violations.” He said ARL actions were inadvertent violations of disclosure laws.
Last November, Governor Brown said, “This money is so dirty it had to be laundered five times—and it still stinks.”
State officials sought to trace the source of the donation when it first surfaced weeks before the election, but were thwarted by election laws inspired by the U.S. Supreme Court's 2010 Citizens United decision that unleashed virtually uncontrolled financing of political campaigns. At the time of its decision, the high court indicated that transparency would provide all the necessary regulation of campaign contributions, which it associated with free speech.
The FPPC told American Future Fund and Small Business Action Committee on Thursday that they have to forfeit the improperly-deployed money to the state.
But that might not happen.
Steve Churchwell, an attorney for Small Business Action Committee, said the group won’t pay the $11 million because the law applies only to candidate elections and not ballot initiatives and the organization hasn’t been found in violation of any campaign finance laws. Oh, and they spent all the money on the election.
Ravel and the FPPC touted the fines as a victory for electoral transparency. But the largest fines in the state’s history pale compared to the amount spent, and disclosure laws prevented the agency from overtly revealing the names of all the donors.
All this unfolds against a backdrop of a looming U.S. Supreme Court decision that is being called by some Citizens United 2.0. The case of McCutcheon v. Federal Election Commission seeks to remove the $123,200 cap that one person may contribute during a two-year election cycle to federal candidates, political parties and committees.