No matter how they cast ballots today, voters on both sides of the aisle should be alarmed at the amount of opaque money that is bankrolling television advertising for and against candidates and ballot measures, at nearly all levels of government.
Thanks to decisions by the U.S. Supreme Court and other courts, it is easier than ever for deep-pocketed interests to anonymously influence an election, with no limits on spending and no way for citizens to know the source of the money.
The latest example is here in California, where the Fair Political Practices Commission has partially unmasked a mystery contribution by an Arizona-based nonprofit. The group, Americans for Responsible Leadership, contributed $11 million in October to campaign groups opposing Gov. Jerry Brown's tax initiative, Proposition 30, and supporting an initiative to restrict the use of union dues for political activity, Proposition 32.
FPPC officials went to California's highest court to force disclosure of the source of the money, and on Sunday, in a 7-0 vote, the California Supreme Court gave Americans for Responsible Leadership an hour to identify its donors. ARL initially resisted, seeking a stay from the U.S. Supreme Court, but relented Monday morning after reaching a settlement with the FPPC.
As it turns out, the money contributed to ARL came from another pair of shadowy groups Americans for Job Security, a 501(c)(6) business group with a mailing address in Alexandria, Va., and the Center to Protect Patient Rights, a 501(c)(4) based in Phoenix. Ann Ravel, chair of the Federal Political Practices Commission, correctly described the donations as "money laundering," suggesting that Americans for Responsible Leadership could face criminal sanctions.
"Under California law, the failure to disclose this initially was campaign money laundering," the FPPC said in a press release. "At $11 million, this is the largest contribution ever disclosed as campaign money laundering in California history."
Which groups or individuals are the ultimate source of the funding? The obvious answer seems to be Charles and David H. Koch, oil billionaires who have ties to both groups that provided the $11 million to Americans for Responsible Leadership.
As the Los Angeles Times reported in May, the Center to Protect Patient Rights is run by Sean Noble, a Phoenix-based GOP consultant who is "a key operative in the Kochs' political activities." One of the center's original directors, Heather Higgins, is chairwoman of the Independent Women's Forum, which has received funding from a Koch-controlled foundation.
So far, conservatives such as the Koch brothers have been the most brazen in exploiting court rulings and lax enforcement to shovel mystery money into the political process. But that could easily change in the next election cycle. It will be only a matter of time before all sides of the political spectrum start laundering their contributions through groups such as Americans for Responsible Leadership. Without more transparency, you might even see foreign donors, such as a Hugo Chávez or a Mexican drug cartel, attempting to swing an election.
The Internal Revenue Service has authority over 501(c)(4) groups and other nonprofits. The IRS needs to grow fangs and become a much more aggressive watchdog of groups that potentially are abusing their tax-exempt status. Until then, we will have to rely on state regulators, such as the FPPC, which this week has provided a public service.