Capitol Alert

The latest on California politics and government

November 5, 2012
California officials consider civil, criminal action in mystery donation case

California regulators and attorneys said today they are seriously weighing next steps - including criminal charges - against parties involved in the $11 million contribution whose known trail leads through three different out-of-state nonprofits.

A lawyer for Americans for Responsible Leadership, the Arizona-based donor at the center of the controversy, appeared to acknowledge the possibility of future legal action in a letter he filed this morning with the state Fair Political Practices Commission.

Attorney Michael D. Bopp wrote that while new disclosures from Americans for Responsible Leadership and The Center to Protect Patient Rights may relate to state codes banning hidden intermediary contributions, the groups do not admit wrongdoing.

"While these letters relate to Cal. Gov. Code § 84302 and 2 CA ADC § 18432.5, we want to make it clear that they have been sent pursuant to a settlement agreement with the California Fair Political Practices Commission and that neither ARL nor CPPR admit any wrongdoing or that the letters are required by applicable law," Bopp wrote. "Further, ARL and CPPR reserve the right to contest any further proceedings that relate to the contributions discussed in the aforementioned letters."

Both FPPC Chairwoman Ann Ravel and state Attorney General Kamala Harris said today they are reviewing the matter to see whether further civil or criminal action is warranted. The state previously filed a lawsuit asking Americans for Responsible Leadership to submit records.

"What this committee agreed it had done is a clear violation of the state's money laundering prohibition," said Ravel, a Gov. Jerry Brown appointee.

Ravel said one civil penalty is that the recipient committee pay to the state general fund an amount equal to the contribution - in this case, $11 million. The party liable would be the Small Business Action Committee No on 30/Yes on 32.

SBAC spokeswoman Beth Miller said her group never was told that Americans for Responsible Leadership received its $11 million by way of two other nonprofits. Failing to disclose that information to a recipient committee is a potential violation of California Government Code § 84302.

SBAC immediately updated its campaign disclosure forms this morning to acknowledge contributions from The Center to Protect Patient Rights and Americans for Job Security.

"SBAC PAC had no knowledge that the contribution was from an intermediary," Miller said in a written statement. "As it does with all its donors, upon accepting the donation from Americans for Responsible Leadership SBAC PAC sent a donor advice letter explaining the organization's filing responsibilities. When SBAC PAC was informed this morning by the FPPC it amended its disclosure reports immediately."

November 5, 2012
Senate GOP leader 'cautiously optimistic' about blocking two-thirds

It's not just Democrats making a final push in the state's four competitive Senate seats.

Senate GOP leader Bob Huff hit the trail last week to boost candidates he needs to win to prevent Democrats from winning a veto-proof supermajority in the upper house.

The Diamond Bar Republican visited all four targeted races starting on Thursday, touring the 5th, 39th and 31st Senate Districts before landing at Republican Todd Zink's headquarters in the 27th Senate District today.

Huff said he's feeling good going into tomorrow's election, despite The California Republican Party's money challenges and California's new district lines, which the GOP sought unsuccessfully to have blocked by the court.

"We're actually feeling cautiously optimistic," he said.

November 5, 2012
Bill Clinton calls voters for Ami Bera in Sacramento House race

Some voters in Sacramento County are getting calls from former President Bill Clinton ahead of Tuesday's election.

The former president has recorded a robocall in support of Democratic congressional candidate Ami Bera, who is locked in a close race with GOP Rep. Dan Lungren in the suburban Sacramento 7th Congressional District. He's also featured in a call urging voters to oppose Proposition 32, a measure on campaign money fiercely opposed by unions.

Bera is one of at least 45 Democratic congressional candidates using the robocalls in the final days of the campaign, according to Roll Call newspaper. The former president also recorded calls for Jose Hernandez in the 10th Congressional District, Julia Brownley in the 26th Congressional District, Scott Peters in the 52nd Congressional District and Raul Ruiz in the 36th Congressional District.

Clinton has also campaigned alongside Democrats in California this year. He endorsed Bera and other Democrats running in competitive Northern California races during an October rally at University of California, Davis.

Click here to see the full list and listen to a recording.


Bill Clinton stumps for California Dems in tight congressional races

Dan Morain: Lungren, Bera vie for every last vote

Ad Watch: Deluge of ads at the wire

Editor note: an earlier version of this post incorrectly identified the seat Raul Ruiz is seeking.

November 5, 2012
Darrell Steinberg makes final push for CA Senate super majority

Senate President Pro Tem Darrell Steinberg is spending the final days of the campaign touring a handful of swing districts that could give his party a super majority in the upper house.

Democrats need to win two of four competitive Senate districts Tuesday to capture a two-thirds majority for the first time in more than 40 years. A super majority could allow Democrats in the upper house to approve tax increases and override vetoes without GOP votes. Assembly Democrats are not expected to hit two-thirds this year.

Steinberg was in Modesto Sunday for a campaign rally for Democratic Assemblywoman Cathleen Galgiani, who is competing against GOP Assemblyman Bill Berryhill in the Stockton-based 5th Senate District.

Steinberg, who campaigned with Sen. Fran Pavley in the 27th Senate District last weekend, has stops planned in two other swing seats today.

Spokesman Rhys Williams said the Sacramento Democrat will do an event with Assemblyman Marty Block in San Diego's 39th Senate District and campaign with Richard Roth in Riverside's 31st Senate District today. He'll also join Gov. Jerry Brown in Los Angeles to promote Proposition 30.

Senate GOP leader Bob Huff has also been campaigning in the competitive seats since last week. Read more about his schedule here.


California Democrats bid for two-thirds control of state Senate

Stealth group of corporations funds pro-GOP campaign in Senate races

Editor's note: This post was updated at 1 p.m. with information about Senator Huff's schedule.

November 5, 2012
Road map of contributions in Arizona nonprofit case

The actual donors behind the $11 million that landed in California's initiative battles last month remain a mystery, but two more layers became known Monday when the Arizona nonprofit in question revealed two other opaque nonprofits that routed the money its way.

Based on letters and campaign finance records, the money trail went like this:

On or before Oct. 15: Alexandria, Va.-based Americans for Job Security gave $11 million to Phoenix-based The Center to Protect Patient Rights.

Oct. 12 and Oct. 15: The Center to Protect Patient Rights served as an "intermediary" and gave $11 million to Phoenix-based Americans for Responsible Leadership.

Oct. 15: Americans for Responsible Leadership gave $11 million to the Small Business Action Committee PAC No on 30/Yes on 32.

November 5, 2012
FPPC says Arizona nonprofit laundered money to CA campaign

The state's campaign watchdog agency accused an Arizona nonprofit today of "money laundering" to donate $11 million this month and announced that two other nonprofits - Americans for Job Security and The Center to Protect Patient Rights - routed the money.

The Americans for Job Security is a nonprofit "business league" that does not have to disclose its donors. The group has run millions of dollars in ads against President Barack Obama.

The Center to Protect Patient Rights also does not have to disclose its donors as a 501(c)4. The Center for Responsive Politics reported the group has spent millions of dollars attacking Democratic congressional candidates this year and in 2010.

The Fair Political Practices Commission said in a release this morning that Americans for Responsible Leadership "sent a letter declaring itself to be the intermediary and not the true source of the contribution."

"Under California law, the failure to disclose this initially was campaign money laundering," FPPC wrote. "At $11 million, this is the largest contribution ever disclosed as campaign money laundering in California history."

Americans for Responsible Leadership donated last month toward a business committee opposing Brown's tax initiative, Proposition 30, and supporting a measure restricting union dues collection, Proposition 32. ARL attorneys argued that the FPPC was targeting the group because it opposed the governor's initiative.

Matt Ross, spokesman for Americans for Responsible Leadership, said in a prepared statement, "After late night discussions, Americans for Responsible Leadership and the FPPC reached a settlement. The Commission has received specific documents it requested."

Although it could not be confirmed, the Center to Protect Patient Rights has been connected to Kansas-based Koch Industries, whose owners, David H. Koch and Charles G. Koch, are conservative advocates.

In a September interview with Bee columnist Dan Morain, Center to Protect Patient Rights president Sean Noble offered little explanation about where its money comes from.

"Our goal is to promote freedom, and we support groups that do the same," said Noble, who once worked as chief of staff to an Arizona congressman and as a lobbyist opposing the federal health care overhaul. "It's very straightforward. There is nothing to expand upon."

Asked about reported ties to the Center to Protect Patient Rights, Koch Companies Public Sector spokeswoman Melissa Cohlmia said in an email, "Contrary to some media reports, Koch Industries, Charles Koch, and David Koch have not provided any financial support in favor of Proposition 32 and are not involved in this issue."

Asked further about Proposition 30, Cohlmia said, "Same goes for Prop 30 - no financial support and no involvement."

Attorney General Kamala Harris said by phone this morning that her office must still review whether there are any civil or criminal violations related to money laundering, though it is not pursuing any as of yet. Harris' office has represented the FPPC in its suit against Americans for Responsible Leadership.

"Whether it's the Koch brothers or Karl Rove, this was a brazen attempt to launder money through out-of-state shell organizations, and for the sole purpose of hiding it from the voters in California," Harris said.

Brown, who has kept up constant criticism of the Arizona donation for weeks, is campaigning for his initiative throughout the state today. Ace Smith, whose company, SCN Strategies, is running Brown's campaign, said on Twitter that the FPPC had unraveled a "truly evil money laundering scheme."

Editor's note: Updated throughout the morning to include comments from Harris, Ross, Smith and a Koch spokeswoman.

November 5, 2012
FPPC expects to reveal Arizona nonprofit donors today

The state's campaign watchdog agency expects to reveal today the names of donors behind an obscure Arizona nonprofit's $11 million contribution after the group reversed course and dropped its last-minute request with the U.S. Supreme Court.

Twenty-three hours before polls open Tuesday, the Fair Political Practices Commission expects to receive the donor names at 8 a.m. today, said FPPC Chairwoman Ann Ravel. She said the agency will make those names public.

Americans for Responsible Leadership agreed to turn over the names without submitting transaction records as the group faced a Sunday demand for information from the California Supreme Court. The FPPC asked the state's high court to force ARL to submit documents that would help determine whether the group violated campaign disclosure rules.

"The voters of California have achieved an important right to know who is funding politics in our state," Ravel said in an e-mail. "The hard work and persistence of the FPPC for transparency will not stop."

ARL said late Sunday it would ask the U.S. Supreme Court to block the California order, but the group withdrew its request early today. Ravel, a Gov. Jerry Brown appointee, said the FPPC still intends to investigate whether the group violated state rules.

The nonprofit donated last month toward a business committee opposing Brown's tax initiative, Proposition 30, and supporting a measure restricting union dues collection, Proposition 32. ARL attorneys argued that the FPPC was targeting the group because it opposed the governor's initiative.

November 5, 2012
Dan Walters Daily: Registration surge could help Jerry Brown

VIDEO: Dan says a surge in voter registration among young Democrats could help Gov. Jerry Brown and Proposition 30 on Tuesday.

Have a question you'd like Dan to answer? Post it on our Facebook page.

See other Dan Walters Daily clips here.

November 5, 2012
AM Alert: It's T minus one day until Election Day

VIDEO: Dan Walters says that the last-minute surge in voter registrations -- skewed toward young Democrats -- could help Gov. Jerry Brown and his Proposition 30.

If California's elementary, middle school and high school students were the state's only voters, only two of the 11 propositions on Tuesday's ballot would fail: Proposition 32 on campaign finance, and Proposition 34 to abolish the death penalty, though the latter just barely.

That tally comes from this year's statewide mock election, which Secretary of State Debra Bowen and State Superintendent of Public Instruction Tom Torlakson announced last week. More than 250,000 students from 674 schools, including several in Sacramento, took part.

Other mock election results have Democrat Barack Obama winning in a landslide over Republican Mitt Romney, 69 percent to 23 percent, and Democrat Dianne Feinstein beating Republican Elizabeth Emken by a large margin as well, 66 percent to 34 percent.

The squeaker was Proposition 40, the redistricting referendum, which garnered only 50.16 percent of the youngsters' votes. Learn more at this link, where you can find full results and a list of participating schools.

California's real polls, of course, open Tuesday at 7 a.m. and close at 8 p.m. The Secretary of State's Office will start providing unofficial election results at after the polls close and county elections officials begin to report their numbers.

In the case of nail-biters, a bit of patience may be in order. Counties have until Dec. 7 to complete their official canvass and certify final results to the Secretary of State's Office, which then has until Dec. 14 to compile and report the results.

NEW GIG: Senate Rules Committee aide Juan Carlos Torres has a new title: vice president of government relations at the California Medical Association. Most recently the committee's chief deputy director of appointments, Torres has also served as chief of staff to former Assemblyman Hector De La Torre and to then Assembly Majority Leader Marco Antonio Firebaugh. He also worked for then-Sen. Hilda Solis, now labor secretary, starting in 1996.

CAKE AND CANDLES: Assemblyman Ricardo Lara, D-Bell Gardens, turns 38 today.


Capitol Alert Staff

Jeremy White Jeremy B. White covers California politics and edits Capitol Alert's mobile Insider Edition. Twitter: @capitolalert

Amy Chance Amy Chance is political editor for The Sacramento Bee. Twitter: @Amy_Chance

Dan Smith Dan Smith is Capitol bureau chief for The Sacramento Bee.

Christopher Cadelago Christopher Cadelago covers California politics and health care. Twitter: @ccadelago

Micaela Massimino Micaela Massimino edits Capitol Alert.

Laurel Rosenhall Laurel Rosenhall covers the Legislature, the lobbying community and higher education. Twitter: @LaurelRosenhall

David Siders David Siders covers the Brown administration. Twitter: @davidsiders

Dan Walters Dan Walters is a columnist for The Sacramento Bee. Twitter: @WaltersBee

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