California cracks down on ‘dark money’

September 23, 2015

The California Fair Political Practices Commission (FPPC) has adopted a regulation that will restrict “dark money” from flowing into state elections from elsewhere in the country. [Mother Jones]

Dark money is a term that references donations to political campaigns in which the original donor is not disclosed. California campaign finance regulations previously required groups that spend money on a state election to reveal their donors.

But, the law did not specify that the rule applied to out-of-state and national donor groups, in addition to ones based in California. Last week, the FPPC amended the regulation to make that clarification.

The rule change was prompted by a 2012 case in which groups tied Charles and David Koch, who are known as the Koch brothers, to out-of-state groups that paid a combined $1 million in fines to California. An FPPC investigation determined the two out-of-state groups participated in a scheme in which more than $24 million were funneled into campaigns for and against a pair of California ballot initiatives.

The dark money groups tied to the Koch brothers were opposing Governor Jerry Brown’s 2012 tax increase measure and were supporting an initiative that would have restricted political influence of unions.

State investigators found that Virgina-based Americans for Job Security routed the money to the Arizona-based Center to Protect Patient’s Rights, which then passed it on to two more groups. Those groups sent the money to at least two California groups which spent the funds on the initiative campaigns.

The Arizona-based group was one of the two fined by the FPPC. Both groups acknowledged they failed to properly disclose donors.

The dark money did not successfully sway either of the votes. Brown’s tax measure passed, and the initiative on curtailing the influence of unions failed.