Money in Politics: Follow the $11-Million Money Trail

moneypoliticsShortly before Election Day last November, an out-of-state nonprofit organization made an $11 million contribution to a California ballot measure committee that clearly violated California law.

This is what happened…

• A 501(c)(6) non-profit trade association called Americans for Job Security, based in Alexandria, Virginia, gave a contribution to the 501(c)(4) social welfare non-profit, the Center to Protect Patient Rights, based in Phoenix, Arizona.
• The Center to Protect Patient Rights then gave a contribution to Americans for Responsible Leadership (ARL) also out of Phoenix, Arizona.
• ARL then gave $11 million to California-based Small Business Action Committee Political Action Committee (SBAC-PAC).
•SBAC-PAC funneled this money into two California Ballot Measures during the 2012 General Election – “No” on Proposition 30, the initiative to raise sales and income taxes on the wealthy and “Yes” on Proposition 32, which would stop labor unions from using payroll deductions to collect PAC funds from their members.The effort was not successful.  Prop 30 passed and Prop 32 was defeated.

This $11-million “money bomb” occurred very close to Election Day and since non-profits are not required to disclose their donors, voters did not have the information  on who was responsible for

providing funding to the propositions.  Only after the Fair Political Practices Commission (FPPC) and California Attorney General Kamala Harris investigated a complaint, was the SBAC-PAC forced to disclose the contributor.  But it happened on just the day before the election.

Since 2010, when the United States Supreme Court decided in favor of the plaintiffs in Citizens United vs. Federal Election Commission, non-profit organizations have been set up to collect unlimited contributions from corporations and unions because they are not required to disclose who their donors are.  These funds are then used to fund candidates and ballot measures.   And it’s happening at the local, state, and national levels.

What We’re Doing

The League of Women Voters of California is leading California’s campaign for contribution disclosure laws.  The League is supporting a “package” of bills, including SB 2 (Lieu) and SB 3 (Yee), the Sunshine in Campaigns Act.  These bills address three broad areas:

End the “dark money” loophole:  Prevent the use of nonprofits and Super PACs to hide the real sources of campaign funds.

 

Enforce the rules:  Strictly enforce all campaign regulations with adequate penalties.

 

Improve filings and disclosure:  Make it easy for campaigns to make their reports—with online filing and schedules more like federal reporting schedules.

 

Barb Singleton, Action Team member

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