Election 2012
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Political contributions more difficult to trace after key U.S. Supreme Court decisions

Published: Tuesday, Nov. 6, 2012 - 12:00 am | Page 1A
Last Modified: Tuesday, Nov. 6, 2012 - 12:26 am

For weeks, state campaign regulators were determined to sleuth out the donors behind an $11 million contribution that landed in the middle of California's initiative wars last month.

The money came from conservative Arizona nonprofit Americans for Responsible Leadership, and neither the group's name nor its paperwork shed light on its benefactors.

Facing a California Supreme Court order, the group finally disclosed the source Monday: two other out-of-state nonprofits whose individual financiers remain just as murky.

The ARL contribution, believed to be the largest anonymous donation in a California statewide election, is just one example of the vast growth in faceless political giving nationwide.

Groups have contributed an estimated $213 million of untraceable donations this general election season in congressional and presidential contests, according to the Washington, D.C.-based Sunlight Foundation.

"Dark money has exploded in this election," said Lee Drutman, a Sunlight Foundation senior fellow. "Historically, we haven't seen this kind of secretive money since the Watergate era. It's been about a 40-year cycle, and we're back to being worse than where we started."

Under California rules, a nonprofit must disclose its donors if its money is earmarked for a particular initiative. The Fair Political Practices Commission sued Americans for Responsible Leadership to access records that might show whether the group violated disclosure law.

That two-week legal tug of war culminated Monday in the group releasing new layers of detail: the $11 million came from Virginia-based Americans for Job Security after going through a separate Arizona nonprofit known as the Center to Protect Patient Rights.

The FPPC accused the nonprofits of money laundering to hide donors from California voters, and Attorney General Kamala Harris said the state would continue to investigate the transactions. Funds ultimately went to a business committee opposed to Gov. Jerry Brown's tax initiative, Proposition 30, and supporting a measure to restrict union dues collection, Proposition 32.

Neither the Center to Protect Patient Rights nor Americans for Job Security responded to phone calls or emails Monday. Both have funded campaigns elsewhere against Democratic congressional candidates and President Barack Obama without disclosing their donors.

Although it could not be confirmed Monday, the Center to Protect Patient Rights and its director, Sean Noble, have been connected to billionaire conservative activists David H. Koch and Charles G. Koch in the past.

Koch spokeswoman Melissa Cohlmia said in a statement, "Contrary to some media reports, Koch Industries, Charles Koch and David Koch have not provided any financial support in favor of Proposition 32 and are not involved in this issue." She added the Kochs were not involved in Brown's Proposition 30.

But she did not specifically address whether the Kochs have ties to the Center to Protect Patient Rights.

The Sunlight Foundation estimates that undisclosed Republican spending outweighs Democratic spending by roughly a 4-to-1 margin. Money is flowing through nonprofits that declare themselves organizations that promote "social welfare," as well as super PACs that can avoid disclosure between Oct. 18 and Election Day.

Campaign finance experts believe this state of affairs will exist for years to come.

Drutman pointed to two major U.S. Supreme Court campaign finance decisions that changed the landscape – Federal Election Commission v. Wisconsin Right to Life in 2007 and Citizens United v. Federal Election Commission in 2010. The decisions, he said, empowered corporations and nonprofits to spend without limits and lifted restrictions on how they communicate with voters.

"I think we're going to increasingly see this kind of shell game of nonprofits trying to influence ballot initiatives," said Jessica Levinson, a professor at Loyola Law School who formerly tracked campaign finance at the Center for Governmental Studies.

"But I also think we're going to see much more legislation trying to promote disclosure and transparency," Levinson added. "And there will be more court cases."

California has seen occasional attempts by donors to shield their identity before, though not like this year. Conservative activist Ward Connerly settled with the FPPC after his nonprofit funded a 2003 initiative to ban government collection of racial data but did not disclose its contributors.

This campaign season, the U.S. Chamber of Commerce spent $431,000 on television ads in late summer criticizing California government, perceived as a soft message against Gov. Jerry Brown's Proposition 30. The group was not required to disclose its donors.

Iowa-based American Future Fund gave $4 million in September, without naming its donors, to back Proposition 32, the initiative restricting collection of union dues. Arizona-based Americans for Responsible Leadership wrote its $11 million check in October.

While Drutman's data show the two biggest players that don't disclose donors are GOP-backing nonprofits Crossroads GPS and the U.S. Chamber of Commerce, the Democrat-friendly League of Conservation Voters ranks sixth.

The Chamber of Commerce and League of Conservation Voters have played on opposite sides in the 7th Congressional District race between GOP Rep. Dan Lungren and Democratic challenger Ami Bera.

Rob Stutzman, a Lungren consultant, said left-leaning nonprofits shouldn't get a pass because of long-standing associations with environmental or social causes.

Attorneys for Americans for Responsible Leadership made the same argument last month, asking why state regulators had not sued the American Cancer Society or Nature Conservancy for making political contributions in past campaigns.

"The concern is about equity in the scrutiny of groups on the left and groups on the right," Stutzman said. "Unions spend money they compulsively take from people's paychecks."

© Copyright The Sacramento Bee. All rights reserved.

Read more articles by Kevin Yamamura



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