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Anonymous political donation sets up legal battle

October 19, 2012 |  1:28 pm

Yes on 30, No on 32

Activists are pressuring California's campaign finance watchdog to investigate an $11-million donation from an Arizona political group, providing the first major test for new disclosure rules on donations from nonprofits.

Common Cause, a nonpartisan organization seeking government transparency, filed the complaint on Friday with the Fair Political Practices Commission.

The controversy began earlier this week when the Arizona group, Americans for Responsible Leadership, gave $11 million to the Small Business Action Committee, which is fighting Gov. Jerry Brown's tax-hike campaign and supporting a ballot measure that would limit unions' political clout.

“We believe it’s the single largest secret contribution ever to be dropped in California’s proposition fights," said Phillip Ung of Common Cause.

Beth Miller, a spokeswoman for the Small Business Action Committee, called the complaint an “outrageous lie" and said the committee has complied with all regulations.

"This is a politically motivated charge without one shred of evidence," she said.

The Fair Political Practices Commission adopted new rules earlier this year requiring nonprofits to disclose their donors if the money was provided for political purposes in California. Ann Ravel, the commission's chairwoman, said officials will review the complaint.

Very little information has trickled out about Americans for Responsible Leadership. A message left at the group's office was not returned. A spokeswoman for one of the directors, a Republican seeking to lead the state party in Arizona, said he was not available for comment. Its website is geared mostly toward Arizona politics, where it's opposing a sales tax hike and a top-two primary system like the one recently adopted by California.

However, the group has given less than $550,000 in political contributions in its home state, according to campaign filings there, while dumping 20 times that in California. 

That's a red flag for Ung and Common Cause.

“It’s exactly what it looks like. It’s money laundering," he said. "They’re laundering campaign funds.”

Joel Fox, president of the Small Business Action Committee, said he did not know where the money came from. He said the group reached out to a committee supporter to talk about a donation.

"We said we’ll check them out," he said. "We went online and checked them out. They seemed like a legitimate group."

ALSO:

Arizona political group dumps $11 million into California races

Labor groups express concern about California budget initiative

Labor's big-money focus on Prop. 32 may hurt chances of Prop. 30

-- Chris Megerian in Sacramento
twitter.com/chrismegerian

Photo: A man in Los Angeles hands out signs at a rally to support Gov. Jerry Brown's proposed tax hikes, Proposition 30, and oppose a measure to reduce union influence, Proposition 32. Credit: Reed Saxon / Associated Press
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