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October 25, 2012

Editorial: FPPC must unravel $11 million mystery

In a campaign sullied by shadow money, the California Fair Political Practices Commission is seeking to unveil hidden donors. In the process, the FPPC is heading into an area where the Internal Revenue Service has failed to tread.

We applaud the effort.

FPPC Chairwoman Ann Ravel and FPPC lawyers are preparing to sue in a step that could force an Arizona nonprofit corporation to disclose the identities of contributors who provided the $11 million that the nonprofit dumped into California campaigns last week.

No one questions the right of Americans for Responsible Leadership and its donors to spend their money to promote the deceptive Proposition 32. But Ravel, long a critic of secretive contributions, seeks to force the donors out of the shadows, so the public can better evaluate their propaganda.

Nonprofit corporations long have tried to influence California elections as they cloak donors' identities. But because of the size of its donation, Americans for Responsible Leadership is especially brazen, though not particularly wise.

Its $11 million helps puts the lie to the claim that Proposition 32 would improve the campaign finance system. The initiative would do nothing to enhance disclosure, but rather is aimed at crippling unions' ability to raise money.

The California Political Reform Act was perhaps the strongest law of its type in 1974 when voters approved it. The world has changed. If a shell corporation can hide identities of donors who give $11 million, the law must be updated.

The IRS is failing the public by allowing nonprofits to benefit from their tax-exempt status as they spend freely on elections. As the IRS dawdles, the FPPC is confronting the issue, for the public good.

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