SACRAMENTO, Calif. (AP) - An $11 million campaign contribution from an Arizona nonprofit that gave money to a group fighting Gov. Jerry Brown's tax initiative represents the largest case of campaign "money laundering" in state history, California's political watchdog agency charged Monday.
Americans for Responsible Leadership reported the source of its contribution to a political action committee that is active in the November election after the state Supreme Court ruled unanimously Sunday that the group must turn over its records.
But the disclosure on the eve of Election Day reveals little about the actual source of the money. It shows that ARL received the $11 million from a group called Americans for Job Security through a second intermediary, the Center to Protect Patient Rights. Both are federally registered nonprofits that are not legally required to disclose the source of their funds.
Americans for Job Security has been active in the presidential race, pouring millions of dollars into swing states for independent expenditure ads supporting GOP presidential nominee Mitt Romney and other Republican candidates, and the Center to Protect Patient Rights distributed more than $44 million to more than two dozen conservative advocacy groups during the 2010 midterm elections, according to the Center for Responsive Politics.
It reported that the group's president, Sean Nobel, is also a political operative for the billionaire brothers Charles and David H. Koch, who have given millions to conservative causes. Nobel did not immediately return messages by email and phone to his Phoenix-area number from The Associated Press on Monday.
The Arizona group did not initially disclose that it received money from those two groups, although it filed an amended state report on Monday.
"Under California law, the failure to disclose this initially was campaign money laundering," the California Fair Political Practices Commission said Monday in a news release.
California's campaign finance watchdog enforces the state's campaign finance and disclosure laws and can issue fines and penalties for noncompliance, although it refers legal violations to law enforcement agencies. The board's chairwoman, Ann Ravel, was appointed to the post by Brown.
Attorney General Kamala Harris, a Democrat, and the state's campaign finance watchdog had been seeking the donation records to determine whether Americans for Responsible Leadership is complying with state campaign disclosure laws.
Harris said the Arizona group's admission of the source of its funds, though opaque, is a first step.
"This is not going to be over on Election Day," she told the AP by telephone. "We are going to continue to take a look at this and examine the full scope of the conduct involved."
She said the U.S. Supreme Court's ruling in the so-called Citizens United case, which allowed corporations and unions to spend unlimited amounts on political speech indicated that protected political speech "is not and should not be thought of to be at the expense of disclosure."
Critics have said it created a free-for-all of spending by outside groups.
Federal law allows nonprofits to keep the identities of their donors confidential. But California regulations require donors to be identified if they give to nonprofits with the intention of spending money on state campaigns here.
It was not immediately clear whether Harris or the FPPC could force the groups that made the donation to ARL to also reveal the source of their funds.
ARL's $11 million donation went to the Small Business Action Committee PAC, which opposes Brown's tax initiative and a separate initiative that would limit unions' ability to collect money for political causes.
Americans for Responsible Leadership had initially refused to turn over documents about the source of the funds, even after the state Supreme Court ruling Sunday, saying "we still believe that the FPPC does not have the authority to take such action."
The group filed a request to halt the disclosure with the U.S. Supreme Court, but withdrew that request on Monday, according to the attorney general's office.
The group said in a letter submitting the documents to the FPPC that it was not acknowledging any wrongdoing.
Associated Press writers Hannah Dreier and Judy Lin contributed to this report.