Capitol Alert: Jerry Brown accuses anti-tax group of illegal money laundering

SAN FRANCISCO - Gov. Jerry Brown on Saturday accused opponents of his Nov. 6 ballot measure to raise taxes of illegal money laundering, saying the committee that accepted an $11 million donation from an out-of-state group is shielding the identities of its donors because it is ashamed of them.

"I think it's crucial to find out about this stuff, and I think the law of California is violated in this respect: A committee, when it gets money, particularly of $11 million, has a duty to understand where it comes from," Brown told reporters after speaking to members of the California Teachers Association at a campaign event here. "Is this money from a foreign source? That's illegal. Is it money from terrorists? That's illegal. Or what? So, in order to assure yourself that everything is up and up, you've got to find out where it is."

Brown's remarks came after an Arizona-based group, Americans for Responsible Leadership, donated $11 million this week to the Small Business Action Committee PAC, which opposes Brown's tax measure, Proposition 30, and supports a controversial campaign finance measure, Proposition 32.

"It's complete money laundering," the Democratic governor said. "Money laundering is when you take something that you're ashamed of or you want to hide, and you put some Clorox on it, or you scrub it, or you wash it, and it comes out looking like something else. And this looks like some leadership committee going to some small business committee. In truth, they're neither leaders nor are they small business. It's major financial interests and powerful, powerful corporations and personalities that have the ability to move $11 million at will."

Beth Miller, a spokeswoman for the Small Business Action Committee, said Brown's accusations are without merit and constitute a "politically motivated attack." She said the Arizona group, like other entities, is entitled to donate to the campaign.

"Perhaps he doesn't like the fact that we have additional resources to get our message out about why we think that voters should vote 'No' on 30 and 'Yes' on Prop. 32," Miller said. "Pointing the finger and making baseless accusations is not going to further the political debate about whether these measures are worthwhile."

Non-profit organizations under California law are allowed to shield the identities of their donors as long as money contributed by those donors is not earmarked for a specific campaign. Nevertheless, the government watchdog group California Common Cause asked the state's Fair Political Practices Commission to investigate the Arizona group and its $11 million contribution, citing new campaign disclosure rules that it said apply to the donation.

Common Cause suggested Americans for Responsible Leadership is part of a broader effort with ties to conservative political activists such as Charles and David Koch and Republican strategist Karl Rove.

Miller said she does not know the identities of the donors to Americans for Responsible Leadership but that there is "not a shred of evidence to suggest" that any of those donors had a specific California campaign in mind when they contributed.

Brown was incredulous.

"Are they saying they didn't solicit it?" he said. "I believe the small business committee knows who it is and they're hiding that fact, and I call them to come out from under the bushes there, and if they don't, I feel rather confident that the FPPC will be doing its duties since it just propounded a rule that requires exactly what I said."

The appearance was Brown's fourth public campaign event in five days, with the campaign intensifying less than three weeks before Election Day. He is scheduled to speak at two Bay Area churches on Sunday.

"I'm going to do a little preaching," he said.