California hammers Sean Noble’s ‘Kochtopus’ dark money organizations

Posted by AzBlueMeanie:

California's political watchdog, the Fair Political Practices Commission, has ordered "Kochtopus" front groups in Arizona that laundered campaign donations for two California political committees last year to forfeit the money to the state, and imposed fines totalling $1 million. Arizona GOP political consultant Sean Noble was the "Kochtopus" bag man for the Phoenix based Center to Protect Patient Rights, and is at the center of this political corruption.

The Los Angeles Times reports, Big penalties but limited disclosure in secret campaign donor case:

California political campaign committees that received money from a
secretive network of conservative nonprofits last year, including $11
million from an obscure Arizona group, face hefty penalties from state
regulators  . . . The penalties are equivalent to the amount of political donations that California officials say was not properly disclosed.

The Small Business Action Committee, which fought Gov. Jerry Browns
tax-hike plan and supported a separate ballot measure aimed at reducing
unions' political power, is being ordered to pay $11 million to the
state.

A second committee, the
California Future Fund for Free Markets, that backed the anti-union
measure faces a $4.08-million penalty.

Both committees received money routed through the Arizona-based
Center to Protect Patient Rights, a nonprofit with ties to billionaire
Republican donors Charles and David Koch.

State law says campaign committees that receive "laundered" political
funds need to forfeit the money to the state. The penalties, totaling
$15 million, can still be contested.

State officials say they have also reached a settlement with the two
Arizona nonprofits — the Center to Protect Patient Rights and Americans
for Responsible Leadership — involved in the $11-million donation
received by the Small Business Action Committee.

The settlement requires the organizations to pay a combined fine of
$1 million, but it does not mandate the release of donors' identities, a
setback for California officials who have tried to require increased
disclosure.

“The Commission today recognized that [Center to Protect Patient Rights]
acted in ‘good faith’ and that there was absolutely no intent to
violate campaign reporting rules. Also, the California Attorney General
conducted a complete and thorough investigation and agreed that the
conduct was unintentional and inadvertent,” said Malcolm Segal, attorney
for the organization, in a statement released Thursday.

* * *

According to the settlement, a California political consultant was
raising money in 2012 to fight higher taxes from Proposition 30 and
support reducing unions' political power through Proposition 32. The
consultant offered donors two options — contribute directly to the
Small Business Action Committee and have their identities disclosed, or
give money to Americans for Job Security, a trade association in
Virginia, and keep their identities secret.

The money sent to Virginia was handled carefully to avoid triggering
disclosure requirements in California. When Americans for Job Security
sent money to the Center to Protect Patient Rights in Arizona, there
were no stipulations on how the money would be used, according to the
settlement.

The money then changed hands before reaching California. It was sent
to Americans for Responsible Leadership, then soon re-routed to the
Small Business Action Committee.

The Center to Protect Patient Rights also provided $4 million to the
American Future Fund in Iowa, which then passed off the money to the
California Future Fund for Free Markets.

These transfers improperly circumvented disclosure rules in
California, "depriving the public of the knowledge of the initial
source" of the money, according to the settlement.

Despite the terms of the settlement not requiring disclosure of the secret donors — which would be the most effective deterrent to this kind of political corruption — the legal proceedings did reveal a partial list of the campaign donors. List unmasks secret donors to California initiative campaigns:

A state investigation into a network of nonprofit groups that
funneled $11 million into initiative campaigns in California last year
has revealed the identities of dozens of previously hidden donors to the
various organizations.

Those contributors include owners of the Gap Inc., for which California First Lady Anne Gust Brown was once a top executive, investor Charles Schwab and Los Angeles philanthropist Eli Broad. The groups they donated to gave money to other organizations, which gave to the campaigns.

One of the campaigns was an
effort to derail a 2012 tax measure pushed by Gov. Jerry Brown — which
Broad had said he supported. The other supported a separate initiative
that would have limited the power of labor unions to raise political
cash.

The Fisher family, which owns the Gap, gave more than $9 million to
Americans for Job Security, a Virginia-based group which eventually sent
millions to an Arizona-based non-profit that ultimately wound up in a
California campaign committee. Gust Brown formerly was the company’s
chief administrative officer.

San Francisco investor Schwab gave more than $6.2 million to the same group. Broad gave $1 million despite his stated support for higher taxes on the wealthy.

Americans for Job Security sent $11 million to the Arizona-based
Center to Protect Patient Rights, an Arizona nonprofit. From there, the same amount was sent to Americans for Responsible Leadership, another
Arizona group, before landing in a single campaign committee that worked
to defeat the governor’s tax measure, Proposition 30, and pass
Proposition 32, a measure that would have limited the political power of
labor unions. The committee failed in both efforts.

Calls to Broad, Schwab and the Fishers seeking comment were not returned.

The donation scheme was designed by California Republican fundraiser
Tony Russo, who was working as a consultant to Americans for Job
Security, according to documents released by the state Fair Political
Practices Commission. Calls to Russo were not immediately returned.

In its findings, announced Thursday, the Fair Political Practices
Commission ruled that its reading of state law found that donors to the
Arizona group need not be disclosed. But in a partly redacted list
released by the FPPC, some of the identities are being revealed for the
first time.

* * *

Democratic political consultant Gale Kaufman, who led the No on 32
effort last year, said she was “amazed” at the lengths to which donors
went to hide their identities.

“These were people who didn’t want to tell anyone they were involved
in trying to pass Prop. 32,” she said. “I’m really surprised that people
who should really know better were willing to be participants in this
scam.”

So how did the Arizona Capitol Times (subscription required) report this story? Arizona “dark money’’ groups face combined $1 million in fines:

California’s Fair Political Practices
Commission has reached a settlement with two so-called “dark money”
groups in Arizona that will see them pay a combined $1 million in fines.

After Phoenix-based Americans for
Responsible Leadership contributed $11 million to two ballot measure
campaign committees in California, the CFPP launched an investigation of
the money’s origin. After the California Supreme Court ordered ARL to
comply with a California law requiring disclosure of where the money
came from, it was revealed that the source was The Center to Protect
Patient Rights, another Phoenix nonprofit.

The California commission characterized the contributions as “campaign money laundering.”

ARL was founded in 2011 by Robert Graham, who is now the chairman of
the Arizona Republican Party. In September 2012, former Arizona House
Speaker Kirk Adams replaced Graham as ARL’s president. CPPR is led by
Republican political consultant Sean Noble, who has strong ties to both
Graham and Adams.

The settlement is the conclusion of a nearly year-long investigation
by the Fair Political Practices Commission. The agreement calls for ARL
and CPPR to each pay a $500,000 fine, and does not require CPPR to
disclose where its money came from.

The settlement concludes that ARL and CPPR both acted “in good
faith,” and made mistakes that were “either inadvertent, or at worst,
negligent.”

Under California law, the groups were facing as much as a combined $33 million in fines.

Noble and CPPR have been linked to the wealthy Koch brothers and
their fundraising network. The nonprofit, which does not have to
disclose its donors, has raised more than $200 million since 2009.
Virtually all of that money has then been sent to other groups, which
have used it to influence elections.

Adams said the settlement represents a victory for ARL and free speech.

“After a year of anonymous sources leaking [information] about
possible criminal charges, and after throwing around terms like ‘money
laundering’ and that sort of garbage, this is what the case amounts to: a
technical error that was made in good faith,” he said.

Riiiiiight, A "techical error" that resulted in the forfeiture of $15 million to the state of California and $1 million in fines. Also partial disclosure of the secret donors who hide in the shadows like cockroaches.

Arizona needs to enact its own version of California's Fair Political Practices Commission and require strict transparency and disclosure of all campaign contributions in real-time. The concept of secret or anonymous donors in political activities is contrary to a healthy democracy. As Justice Louis Brandeis said, "sunlight is said to be the best of disinfectants." Shine a bright light on these cockroaches hiding in the shadows.

The hub of "Kochtopus" organizations opertating in the state of Maricopa that have been allowed to engage in political corruption without fear of the feckless GOP-friendly political media in Arizona has to come to an end.

UPDATE: Paul Blumenthal at the Huffington Post has more on the list of donors. Gap Clothing Chain Founders Were Behind California 'Dark Money' Campaign:

Members of the Fisher family, founders of the Gap clothing chain, plowed
more than $8 million into a dark money campaign in California's 2012
elections, partially redacted documents show.

* * *

Those documents also show that Charles Schwab, founder of Charles
Schwab Corp., donated $6.4 million through Americans for Job Security.
Philanthropist Eli Broad, who publicly backed Brown's tax increase
proposition, made a $500,000 contribution, according to the documents.
Las Vegas Sands Corp. CEO Sheldon Adelson and his wife gave a combined
$500,000. Crossroads GPS, the dark money nonprofit founded by Karl Rove,
chipped in $2 million.

Requests for comment from Broad, Schwab and the Fisher family were not immediately returned. The Center for Responsive Politics uncovered the names of more big donors
in the redacted documents, including Walmart's Greg Penner, Public
Storage founder B. Wayne Hughes and the American Council of Engineering
Companies of California, among others.