FPPC: ‘Worst ever’ violations in 2013

A  year-end report of California’s campaign law enforcer includes hundreds of violations, ranging from failure to report donations to money laundering to the infusion of millions of dollars in stealth cash to influence measures on the 2012 ballot.

The 16-page annual report by the Fair Political Practices Commission’s Enforcement Division said violations involving two categories — political campaigns and lobbying — “were at the highest level ever in 2013” and that “conflict of interest prosecutions continued at record high levels.”

The report, which can be viewed here, said 257 cases resulted in prosecutions approved by the commission, while 854 cases closed with proven violations.

The commission also reported that 597 cases resulted in warning letters.

The most glaring violation involved an Arizona-based nonprofit, Americans for Responsible Leadership, which made a record $11 million contribution to a California political group, the California Small Business Action Committee, to support Proposition 32, an initiative that would have made it harder for labor unions to raise money for political purposes. The Arizona group also sought the defeat of Proposition 30, a measure backed by Gov. Brown to temporarily raise income and sales taxes to help balance the budget.

This “dark money” saga was concluded in September when ARL and the CPPR reached a record civil settlement with the FPPC for $1,000,000.”

Proposition 30 was approved, Proposition 32 was rejected.

The FPPC and the state attorney general’s office also found that a group called the Center to Protect Patient Rights (CPPR) was “the key nonprofit” established by conservative political activists Charles and David Koch, who created a “dark money network of nonprofit corporations.” 

The CPPR was “actually the source of two major contributions that were not properly reported.” The first was “a $4.08 million contribution to the California Future Fund (CFF), made through the American Future Fund (AFF) as an intermediary on Sept. 11, 2012. The second was the $11 million contribution made to SBAC through ARL as an intermediary on Oct. 15, 2012. This “dark money” saga was concluded in September when ARL and the CPPR reached a record civil settlement with the FPPC for $1,000,000.”

The case resulted in the largest penalty ever levied by the FPPC, a $1 million fine against two Arizona-based groups, the Center to Protect Patient Rights and Americans for Responsible Leadership.

Although cleared of any wrongdoing by the FPPC, the FPPC sought disgorgement of the $11 million from the Small Business Action Committee PAC, which recently settled with the state and paid $300,000 to put the matter behind them. 

SBAC maintains the disgorgement law is unconstitutional and obscure, but decided to settle rather than spend what could be hundreds of thousands of dollars to fight the judgement in court.

In other cases:

–A committee controlled by San Jose Mayor Chuck Reed made a $100,000 donation to an independent expenditure committee supporting a candidate for the San Jose City Council, “in violation of the Act’s important prohibition against candidates raising funds, and then circumventing contribution limits by illegally moving those funds to independent expenditure committees.” The FPPC found that Reed had violated the state’s campaign laws by making the donation.

–The FPPC, responding to a request from San Bernardino supervisors and given authority by the Legislature, served as advisor and enforcer of “the San Bernardino County local elections. The FPPC in partnership with San Bernardino has agreed to, for the first time in a State or local election, pro- actively perform pre-election audits of all competitive campaign committees to ensure disclosure to the public and compliance with the rules.” The move followed reports of local election irregularities.

–Three partners of the Sacramento-based public policy consulting firm California Strategies — Jason Kinney, Rusty Areias, and Winston Hickox — and the company were fined $40,500 for failing to register as lobbyists, a violation of the Political Reform Act, which “requires individuals and firms actively seeking to influence the legislature or administrative results to register as a lobbyist/lobbying firm, maintain detailed records of their activities, and file quarterly reports with the Secretary of State.”
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Ed’s Note: Recasts and corrects 9th graf to show that SBAC did nothing wrong.