SACRAMENTO -- Common Cause of California on Friday called on the state's political watchdog to order a secret out-of-state group to reveal its donors after it dropped $11 million into a ballot measure campaign.
Arizona-based Americans for Responsible Leadership created a storm earlier this week with a contribution to the Small Business Action Committee that was the single largest undisclosed donation in California history.
The group is running campaigns in favor of Proposition 32, the initiative to curb unions' ability to collect dues for political purposes, and against Proposition 30, Gov. Jerry Brown's tax-hike initiative.
"Eleven million dollars doesn't just drop out of the sky -- this doesn't pass the laugh test that suddenly this level of money appears in California from an organization with no track record here, without the knowledge of the donors who put that money into the organization," said Derek Cressman, Common Cause's regional director.
Under Internal Revenue Service rules, the Arizona group is not required to reveal its donors because of its status as a nonprofit 501(c)(4) social welfare organization. Americans for Responsible Leadership declares on its Facebook page that it "seeks to promote the general welfare by educating the public on concepts that advance government accountability, transparency, ethics, and related public policy issues."
But Common Cause insists that the Fair Political Practices Commission has the authority to demand the names of those who are behind the donation, subpoena bank records and compel testimony from those involved. The FPPC approved rules last spring that require a nonprofit organization making contributions to California candidates or ballot measures to identify its donors if the donors knew or should have known their money would be used for a political purpose.
"This is the first real test of this rule," said Phillip Ung, a lobbyist for Common Cause. "Can the FPPC turn this around in time to get testimony and documents? Our hope is they will be able to use the tools and the power available to them to get it done in a quick turnaround so voters can know who's behind these funds."
Calls to a number listed on the website of Americans for Responsible Leadership, as well as to a law firm that represents it, went unanswered Friday.
Ann Ravel, the chairwoman of the FPPC, said the issue of anonymous donors "is a major concern for us, and yes, we take it seriously. We think this is one of the most important issues in elections today and we think it needs to be dealt with."
She said that the new FPPC rule presumes that certain committees and their donors know a contribution is being made for political purposes "and we expect them to be disclosed." If it's determined that the donor is circumventing the law, she said, she will seek injunctive relief immediately.
While the Small Business Action Committee has spent most of its money -- $4.8 million of $5.5 million -- on Proposition 32, on Friday it sent $2.9 million to its No on 30 campaign account, eliciting an angry response from Gov. Jerry Brown.
"California students are being hit by a money bomb tossed at them by a shadowy out-of-state Super PAC," Brown said in a statement. "Crossing the Arizona border and spending $11 million of secret money to hurt California students is an extreme act. We're going to draw a line in California. We're going to stand and fight in defense of our schools."
The law firm for Americans for Responsible Leadership is run by Jill Holtzman Vogel, a Republican legislator in Virginia and chief counsel for the Republican National Committee.
It shares office space with Republican strategist Karl Rove, whose American Crossroads has poured hundreds of millions of dollars into campaigns this year. It also has done work with groups affiliated with David and Charles Koch, the conservative oil magnate brothers, who have also combined to wield influence on elections around the country with hundreds of millions of dollars in contributions.
"We think it's clear as day that this is money that knows what it's doing, that was given for a specific purpose that is part of a national agenda aimed at reducing taxes and weakening labor unions," Cressman said.
Before its $11-million donation, the largest donation given by Americans for Responsible Leadership was $500,000 donated last month for an Arizona ballot measure.
"This strongly suggests that this contribution was only made possible or even plausible because of a large infusion of money from an outside donor," Ung said. "This organization has never shown it has these types of resources to give. It was created primarily ... to advocate for issues in Arizona and then suddenly it takes interest in two ballot measures in Sacramento to the tune of $11 million."