Dan Morain: Can California unmask mystery donors?

10/24/2012 12:00 AM

10/30/2012 8:25 AM

California Common Cause filed a complaint with the FPPC demanding that a hitherto obscure Arizona nonprofit corporation disclose the donors who gave $11 million.

Situations change in politics. What's OK one day isn't the next. So it is with the issue of campaign finance disclosure.

Ann Ravel, the California Fair Political Practices Commission chairwoman, intends to seek clarity by compelling nonprofit corporations that donate huge sums to state campaigns to disclose sources of their money, at least in some circumstances.

The law might be on Ravel's side, or not. And as she proceeds, Ravel can expect opposition from the left and right, though for now she is being encouraged by the left, and the person who appointed her, Gov. Jerry Brown.

California Common Cause filed a complaint last week with the FPPC demanding that a hitherto obscure Arizona nonprofit corporation, Americans for Responsible Leadership, disclose donors who gave the $11 million that the nonprofit contributed to a campaign operation called Small Business Action Committee.

Its name notwithstanding, Small Business Action Committee, run by a veteran California political operative, Joel Fox, raises huge sums from big business and rich people. This year, it's opposing Brown's tax initiative, Proposition 30, and promoting Proposition 32, which would restrict organized labor's ability to raise campaign money.

"It's complete money laundering," Brown said over the weekend.

In an interview, Ravel said FPPC attorneys sent a letter to the group's Virginia law firm demanding details about the donation. If the firm doesn't respond by today, the FPPC will file a suit to compel disclosure.

Ravel believes the California Political Reform Act, created by a 1974 initiative that Brown sponsored, requires that such social welfare corporations disclose their donors if the contributors know their money will be used for a particular campaign.

"This amount of money? You can't tell me that they don't know," Ravel said.

If the source of the money is murky, the motivation is not. Robert Graham, a Phoenix investment adviser, is a director of Americans for Responsible Leadership, and has written a book titled "Job Killers," an attack on organized labor.

In a video promoting the book, he calls labor "parasitic" and says unions "suck the life blood" fro business, drive up taxes and are "destroying American jobs." Given such views, it's no shock that he would support an initiative aimed at wrecking unions.

Beth Miller, spokeswoman for the Small Business Action Committee campaign effort, defended Americans for Responsible Leadership's lack of disclosure.

"They are within the law," she said. That's tough duty. But situations change.

A few years ago, Miller was spokeswoman for two California secretaries of state, Bill Jones and Bruce McPherson, who advocated greater disclosure of campaign money. Miller said she still supports disclosure but argued that some donors cloak their identities for fear of retribution.

Perhaps she is right. Maybe people who have the wherewithal to donate $1 million or $11 million would quake in fear if Jerry Brown said mean things about them. Maybe a guy who writes a book denouncing labor would fret that unions would become angry if it were known that he donated to the Yes on 32 campaign.

Or maybe the donors are controversial, and know that if their identities became public, they'd damage the campaign they seek to help.

There are examples on the left and right of nonprofits that give campaign money without naming their donors. In 2010, nonprofits on the right and left donated hundreds of thousands of dollars for and against Proposition 23, the initiative to roll back AB 32, the 2006 state law that seeks to reduce greenhouse gas emissions.

Outrage tends to be situational. When the left is skewered, good-government types squawk. When the right is a target, the outrage is muted. Once in a rare while, someone tosses a curve.

In 2008, a lawyer in Missouri created a nonprofit corporation and used it to funnel $175,000 to a campaign committee established by Sacramento political veterans to promote an initiative that could have helped Republicans control the White House by changing how California allocates its 55 electoral votes.

Incensed that the lawyer tried to hide the donor's identity, the Californians abandoned the campaign.

"I am not willing to proceed under such circumstances," Tom Hiltachk, the Sacramento lawyer who set up the initiative committee, told me at the time. "Therefore, I am resigning my role in this campaign."

Fast forward to now. Hiltachk helped write Proposition 32, one of the measures that is benefiting from Americans for Responsible Leadership's $11 million. There are differences. Hiltachk said he doesn't represent Small Business Action Committee, which took the $11 million. Fair enough.

Another difference is magnitude. A $175,000 donation was significant in 2008. The situation has changed. In Campaign 2012, it's a drop in the bucket. Unless Ravel is able to compel greater disclosure, what we are seeing now will be eclipsed in 2014.

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