Ken Leighton 5 p.m., Jan. 24
Possible money laundering charges for groups hiding source of $11M funneled to California PAC
Contributions went through 4 PACs, were used to fight Prop 30 and promote Prop 32
On the eve of the election, an Arizona group that provided $11 million in funding for an in-state organization backing the Proposition 32 measure to limit unions’ ability to collect political contributions through member payroll deductions and opposing Governor Jerry Brown’s Proposition 30 tax increase responded to an inquiry from the California Fair Political Practices Commission by admitting that it was just a front group to conceal the true source of the funds, which also passed through at least two other entities before arriving in California to be spent. The Commission says that failure to disclose the true source of the funds constitutes money laundering.
The money arrived in the coffers of the Small Business Action Committee by way of Americans for Responsible Leadership, a Phoenix, AZ based group. But that group was provided the money to pass on by the Center to Protect Patient Rights, also in Phoenix. The Center’s funding was further traced back to Americans for Job Security, an outfit located in Alexandria, VA described by the nonpartisan Center for Responsive Politics as “pro-Republican,” “pro-business,” and “established to directly counter labor's influence.”
Daniel Newman, the co-founder and president of Maplight, which describes itself as “a nonpartisan research organization that tracks money’s influence on politics,” spoke with the Reader regarding the recent development.
“In fact, they still are anonymous,” he says of the original donors that provided the Small Business Action Committee with the funds in question, “despite the action that the state has taken so far.”
Although the recent disclosures have done more to cloud the waters than point fingers, Newman expects the Fair Political Practices Commission and state Attorney General to pursue “vigorous enforcement” of campaign disclosure and money laundering law.
“It’s my hope that they will pursue criminal penalties and not just fines, because obviously this group has money to spend,” said Newman. “Fines alone are not going to be a deterrent to future violators.”
More like this:
- What’s laundered and what’s dark political money? — Feb. 26, 2014
- Fair Political Practices Commission goes after Americans for Job Security PAC — Oct. 25, 2013
- Look Out for that Loophole — Oct. 10, 2012
- Community/Labor forum blasts Prop 32 — Aug. 18, 2012
- Bill Calls for Increased Disclosure on Political Advertising — Jan. 31, 2012