Unmasked $11 Million Mystery Political Donor Group Is No Mystery to Critics but Its Members Are

Tuesday, November 06, 2012

An Arizona group that dumped $11 million at the last minute into conservative election efforts in California finally fessed up to where it got the money: a group associated with former President George W. Bush adviser Karl Rove via a group supported by the right-wing billionaire Koch brothers.

Fair Political Practices Commission Chairwoman Ann Ravel and Governor Jerry Brown called the multiple transactions illegal money laundering, but further legal actions, if any, will have to wait until after the election. The names of the actual original donors are still unknown.

The donation targeted Brown's Proposition 30 tax hike for defeat and supported the anti-union Proposition 32. It was the largest out-of-state donation from one independent non-profit to another with the aim of influencing an election.

State officials sought to trace the source of the donation when it first surfaced three weeks ago, 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 had indicated that transparency would provide all the necessary regulation of campaign contributions, which it associated with free speech.

The feverish effort to reveal the money's true donors culminated in an order from the California Supreme Court on Sunday and capitulation by the Phoenix-based Americans for Responsible Leadership, which had funneled the money to the Small Business Action Committee for distribution to the political campaigns.

Americans for Responsible Leadership, a 501(c)4 nonprofit advocacy organization, said on Monday that it received the money from the Center to Protect Patient Rights, which received the money from Americans for Job Security (AJS).

Public Citizen calls 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.”

The Center to Protect Patient Rights is run by Sean Noble, a longtime political operative of David and Charles Koch. Americans for Job Security is a 501(c)(6) trade association established in 1997 that is allowed to intervene in political campaigns so long as that is not its principal activity. The Washington Post wrote in 2010 that the group “spends the vast majority of its budget on television and radio ads before elections.”

Political money laundering is a misdemeanor, but conspiracy to do it is a felony.

“This money is so dirty it had to be laundered five times -- and it still stinks,” Governor Brown said.

-Ken Broder


To Learn More:

California Political Watchdog Names Secret $11 Million Campaign Contributors, Claims They Were “Money Laundering” (by Steven Harmon, Bay Area News Group)

True Source of $11M Contribution Revealed (by Marisa Lagos, San Francisco Chronicle)

Ruling Sets up IRS as Overseer of Groups' Gifts to Campaigns (by T.W. Farnam, Washington Post)

California Watchdog Only Half-Way to Bottom of Arizona Donation (by Peter Henderson, Reuters)

Americans for Job Security (The Center for Media and Democracy's SourceWatch)

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