Thread: Arizona political group dumps $11 million into California races

October 30, 2012

Court says Arizona group must provide donor information in CA election

A Sacramento Superior Court judge tentatively ruled Tuesday that an obscure Arizona nonprofit must document the source of its $11 million initiative contribution, siding with the state's Fair Political Practices Commission.

The state campaign watchdog agency and Gov. Jerry Brown have railed against Phoenix-based Americans for Responsible Leadership for cloaking its contributors, saying voters deserve to know who is behind the eight-figure check. The funds went to a business committee opposed to Brown's tax initiative, Proposition 30, and supportive of a measure restricting union dues collection, Proposition 32.

FPPC chairwoman Ann Ravel has said her agency is trying to determine whether ARL violated state campaign disclosure rules, which require a nonprofit to reveal its contributors if funds were earmarked for an initiative effort. The commission is seeking everything from donor e-mails to financial transaction records to determine if a violation took place, which would trigger further action that could lead to public disclosure.

Judge Shelleyanne W.L. Chang wrote in a tentative ruling this afternoon that the FPPC has the authority to audit a nonprofit before an election and agreed that voters "will suffer irreparable harm" because they will never know the donors they potentially have the right to know.

She also wrote that the 2010 U.S. Supreme Court decision in "Citizens United v. Federal Election Commission" was not applicable because that ruling did not address donor information. "Nothing in Citizens United prohibits this state-mandated disclosure," today's tentative ruling stated.

ARL attorneys argued that the nonprofit group does not need to disclose its donors to the state nor turn over documents requested by the FPPC. The attorneys said the FPPC had overstepped its powers, could not audit until after an election and targeted ARL despite ignoring past multimillion-dollar nonprofit contributions from the American Cancer Society and Nature Conservancy.

Both sides are scheduled to appear Wednesday afternoon in court. The FPPC has asserted that it is necessary to resolve the matter before the election because voters are already submitting ballots by mail and need to identify donors to inform their decisions.

If the court sticks with its ruling after tomorrow's hearing, the state wants ARL to provide its donor information by 4 p.m. Thursday, according to Attorney General Kamala Harris' office. It is not clear how soon after that point, if a violation is found, voters would be able to learn who contributed the $11 million.

Capitol Alert: Court says Arizona group must provide donor information in CA election

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October 31, 2012

Judge confirms ruling against mystery donor to ballot campaigns

A Sacramento Superior Court judge confirmed tonight her ruling against an obscure Arizona campaign group, saying the failure to investigate the source of its funds would cause irreparable harm to California voters.

Judge Shelleyanne W.L. Chang's final ruling ordered Phoenix-based Americans for Responsible Leadership, which donated $11 million to kill Gov. Jerry Brown's tax increase in Proposition 30 and support the campaign finance measure Prop. 32, to turn over information to state regulators on Thursday.

It's still far from certain, however, that voters will learn of the group's donors before Tuesday's election. The group said it will appeal, and it is unclear whether the courts can sort out the issues in expedited fashion or, even if they do, whether the state Fair Political Practices Commission will determine that donor disclosure is warranted..

"We are disappointed in the today's court ruling," Matt Ross, the Sacramento-based spokesman for the group's Virginia legal team, said in a prepared statement. "We have asserted all along that the FPPC does not have the authority to issue an audit in advance of the election. We continue to believe so and will appeal this case."

If the commission gets the records, it will review them, looking for whether its donors have been illegally shielded from disclosure. State law requires that donors must be identified if they gave to nonprofits with the intention of spending money on state campaigns here.

In her ruling, Chang said "irreparable harm has occurred and continues to occur as each day passes and voters continue to cast their votes without information that may influence their votes."

Attorney Jason Torchinsky, representing the Arizona group, said that the Fair Political Practices Commission's request for unredacted records including emails and bank statements, exceeds the scope of the law.

He also suggested that the commission's audit request was politically motivated.

If court sides with the state, Torchinsky said, the message conveyed will be "if your speech is unpopular, expect reprisals."

Brown has blasted the Arizona nonprofit for failing to disclose the source of its funds. Last week he compared the little-known Arizona nonprofit to people "who liked to run around in hoods." He later denied that the reference, made during a speech to the NAACP's California state conference, was to the Ku Klux Klan.

Ann Ravel, who chairs the FPPC, is a Brown appointee.

After this afternoon's hearing, Ravel denied the commission's actions were politically motivated, citing the complaint by a good-government group that sparked its push for the audit.

"It was a complaint," Ravel said. "We investigate complaints."

Capitol Alert: Judge confirms ruling against mystery donor to ballot campaigns

11/1/2012 1:47:00 PM Judge rules Arizona group playing politics in California must reveal donor names

An Arizona-based group trying to affect ballot measures in California has no constitutional right to hide its donors, a judge in that state ruled Wednesday. Judge Shelleyanne Chang rejected arguments by attorneys for Americans for Responsible Leadership that producing the list for a California regulatory board would violate both its First Amendment rights as well as those of those who gave to the group with the understanding that their names would not be made public. Chang acknowledged that last year's U.S. Supreme Court ruling in the Citizens United case does permit outside groups to try to influence elections. But she said nothing in that ruling prevents the government from requiring that the sources of the cash be disclosed. The decision most immediately affect the $11 million that the organization, headed by former Arizona House Speaker Kirk Adams, donated to try to kill Proposition 30, a proposal by California Gov. Jerry Brown to impose a temporary tax hike on those earning more than $250,000 a year, along with a quarter-cent sales tax increase. Americans for Responsible Leadership also is helping to fund Proposition 32 to ban corporate and labor donations to candidates. California law empowers the state's Fair Political Practices Commission to audit the books of those who try to influence campaigns and, if appropriate, make public the names of donors. But a donor list also could finally shed some light on who is behind the $750,000 that Americans for Responsible Leadership has put into the campaign to kill Arizona's Proposition 204 to impose a permanent one-cent surcharge on the state sales tax, largely to fund education. That's because Arizona, has no disclosure laws similar to those in California.. The same organization has pumped another $415,000 into the bid to defeat Proposition 121. That measure would create an open primary system where all candidates run against each other for nomination and the top two face off in the general election regardless of party affiliation. Whether any of that will be available to voters in Arizona or California before Tuesday's election, however, remains unclear. "We have asserted all along that the FPPC does not have the authority to issue an audit in advance of the election,' said Matt Ross, spokesman for Americans for Responsible Leadership and its legal team. "We continue to believe so and will appeal this case.' That appeal could delay the organization turning over its books. Even once California regulators get the donor list, it could take some time for them to review it and determine whether what Americans for Responsible Leadership is doing fits within the disclosure statutes. But Chang, in her order, said it's necessary to start the audit process -- and soon. "Without the FPPC's audit and review of appropriate records, potential disclosure of information prior to the general election critical to the public in deciding how to vote for Proposition 30 and 32 may not be made,' she wrote. And Change said that if the audit determines Americans for Responsible Leadership has violated disclosure requirements, "irreparable harm has occurred and continues to occur as each day passes and voters continue to cast their votes without information that may influence their votes.' The legal fight has the support of California Attorney General Kamala Harris. "We are, together with the FPPC, committed to getting to the truth, and getting it now,' she said in a prepared statement. The latest documents on file with the Arizona Corporation Commission show Adams, who was speaker of the state House before an unsuccessful bid earlier this year for Congress, is listed as president. Other directors include Robert Graham, who owns Scottsdale-based RG Capital, an investment firm. He also is running to be chairman of the Arizona Republican Party. Also on the list are Eric Wnuck, another unsuccessful Republican congressional candidate, and Steve Nickolas whose web site says he is involved in the bottled beverage industry. Both list Scottsdale addresses. Judge rules Arizona group playing politics in California must reveal donor names - Camp Verde Bugle - Camp Verde, Arizona

November 4, 2012

California Supreme Court orders nonprofit to face audit

The California Supreme Court this afternoon ordered an obscure Arizona nonprofit to submit donation records immediately to state regulators related to an $11 million contribution the group gave in October.

The state's highest court issued its unanimous 7-0 decision at 3 p.m. after a telephone conference and gave Phoenix-based Americans for Responsible Leadership until 4 p.m. to comply.

The state Fair Political Practices Commission had asked the Supreme Court to force ARL to turn over e-mails and transactions data behind the donation, whose specific donors the group has never disclosed.

The group gave $11 million to a business campaign committee established to oppose Gov. Jerry Brown's tax initiative, Proposition 30, and support a measure that would restrict union dues collection, Proposition 32.

The FPPC wants to review the information to determine before Tuesday's election whether ARL violated state rules requiring nonprofits to disclose donors if their money was earmarked for a specific initiative. If the FPPC finds a violation, it remains to be seen whether there is enough time to invoke administrative or legal procedures that would force ARL to disclose its donors by Tuesday.

ARL is directed by lesser-known Arizona GOP activists, and the group hired attorneys from a Virginia-based law firm with longstanding Republican National Committee ties.

Capitol Alert: California Supreme Court orders nonprofit to face audit

November 5, 2012

FPPC expects to reveal Arizona nonprofit donors today

The state's campaign watchdog agency expects to reveal today the names of donors behind an obscure Arizona nonprofit's $11 million contribution after the group reversed course and dropped its last-minute request with the U.S. Supreme Court.

Twenty-three hours before polls open Tuesday, the Fair Political Practices Commission expects to receive the donor names at 8 a.m. today, said FPPC Chairwoman Ann Ravel. She said the agency will make those names public.

Americans for Responsible Leadership agreed to turn over the names without submitting transaction records as the group faced a Sunday demand for information from the California Supreme Court. The FPPC asked the state's high court to force ARL to submit documents that would help determine whether the group violated campaign disclosure rules.

"The voters of California have achieved an important right to know who is funding politics in our state," Ravel said in an e-mail. "The hard work and persistence of the FPPC for transparency will not stop."
ARL said late Sunday it would ask the U.S. Supreme Court to block the California order, but the group withdrew its request early today. Ravel, a Gov. Jerry Brown appointee, said the FPPC still intends to investigate whether the group violated state rules.


The nonprofit donated last month toward a business committee opposing Brown's tax initiative, Proposition 30, and supporting a measure restricting union dues collection, Proposition 32. ARL attorneys argued that the FPPC was targeting the group because it opposed the governor's initiative.

Capitol Alert: FPPC expects to reveal Arizona nonprofit donors today

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