Proposed initiative targets ‘dark money’

Millions of dollars of so-called “dark money” that poured into California’s November 2012 elections has prompted a ballot initiative that would require nonprofits to disclose donations for political activities.

The state’s elections officer on Tuesday cleared the way for the measure’s backers, led by organized labor, to circulate petitions for signatures of registered voters. The proposal needs the signatures of 504,760 voters to qualify for the November ballot. The deadline to submit the signatures to election officials is July 10.

“This is labor’s backup if the Legislature doesn’t deal with the problem,” said Lance Olson, a Sacramento-based attorney who handles major political cases for Democrats and their allies. Legislation with disclosure provisions currently are being considered in the Legislature, which is controlled by Democrats in both houses.

The proposed initiative would require a nonprofit organization to disclose its donors of $1,000 or more if it spends more than $50,000 a year on political activities. It also requires some nonprofits to disclose their donors of $10,000 or more if the nonprofit spends $400,000 per legislative session or $75,000 per calendar year on lobbying, or “on communications that identify but do not advocate for or against a candidate,” according to the official summary by the state attorney general.

It also requires “communications that are distributed urging recipients to contact government officials, for purpose of influencing governmental action, to identify the two largest donors of $50,000 or more funding the distribution.”

The proposed initiative stems from the 2012 case in which an Arizona-based nonprofit, Americans for Responsible Leadership, made a record $11 million in contributions to a California political group 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.

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.” State officials said that group directed at least two contributions – the $11 million donation and a $4.08 million contribution – that weren’t adequately reported.

Both nonprofits reached a civil settlement with the state’s political campaign enforcers that included a $1 million payment.