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Keep secret Arizona money out of California politics

A California PAC that opposes Prop. 30 and supports Prop. 32 received $11 million from an Arizona nonprofit. But who really gave the money?

George Skelton

Capitol Journal

October 25, 2012

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SACRAMENTO — Let's see. Maybe: "Money Launderers for Campaign Finance Reform." No, that probably wouldn't sell.

Could try: "Tax Exempt Fat Cats Against Higher Taxes for School Kids." Nope. That one doesn't have the right ring, either.

There's always: "California Reformers Against Special Interests and Higher Taxes." That's more traditional and has much better voter appeal.

INTERACTIVE: California propositions guide

This is all facetious, of course, sort of.

The real name is the Small Business Action Committee PAC, No on 30/Yes on 32. Citizens for Reforming Sacramento.

I especially chuckle at that last part. Reforming with laundered money.

You may have gotten a campaign flier or two in the mail from this outfit. Like all political junk mail — from the right or the left — it should be immediately tossed. They're pretty much all full of distortions and lies, designed to tell you whatever public-opinion surveys indicate would capture your vote.

The Small Business Action Committee PAC — which gets its money much less from small businesses than gazillionaires — picked up $11 million last week from an obscure Arizona nonprofit, non-taxable group called Americans for Responsible Leadership.

Who finances this organization? Nobody seems to know, at least in California. And, as of this writing, the people advocating responsible leadership were refusing to identify their donors.

"The problem," says Republican analyst Tony Quinn, a former member of the watchdog Fair Political Practices Commission, is that "unless we know where the money came from people are free to allege it came from anywhere, including Al Qaeda or the ayatollahs in Iran."

That's a little far-fetched. But maybe Mexican drug lords, for all we know.

The $11 million apparently is the largest anonymous political donation in the history of California.

Here's what happened: The so-called Americans for Responsible Leadership gave the secret money to the Small Business Action Committee PAC, headed by longtime anti-tax activist Joel Fox.

Fox is spending the money on opposing Proposition 30 and supporting Prop. 32. Some of the funds have been shuffled off to the anti-30 Californians for Reforms and Jobs. Not Taxes.

Love those names.

Prop. 30 is Gov. Jerry Brown's measure to temporarily raise upper-income and sales taxes to help schools and balance the budget. Prop. 32 is billed as an initiative to "stop special interest money" but in reality would cripple just one special interest: labor, both public and private sector.

"It's complete money laundering," said Brown, referring to the $11-million donation.

Responded Fox in his blog "Fox & Hounds:" A "desperate and politically motivated attack."

Well, yes. No argument about that. We are nearing the climax of the political season.

Fox probably wouldn't have accepted the secret money if not for the overwhelming desire — shared by all political strategists — to triumph on election day.

For political pros, it's like the immortal Green Bay Packers coach Vince Lombardi often said: "Winning isn't everything, it's the only thing." (Actually, UCLA coach Red Sanders said it first.)

So why doesn't Fox just disclose the individual donors of the eye-popping $11 million?

It's not his place, says his spokeswoman, Beth Miller. The small business committee "has disclosed all of its donors according to law." The donor of the $11 million was the Arizona group.

And Fox, Miller insists, didn't ask who the individual Arizona donors were. Why not? "He doesn't have to know," she says.

There's a dispute about whether the Arizona group must disclose its money sources. Miller says it doesn't have to.

But Ann Ravel, chairwoman of the Fair Political Practices Commission, says that if the donors knew the money was earmarked for a state election campaign, they were required to identify themselves. If it had been for a federal campaign, they wouldn't have.

The Arizona donors could claim they didn't know their $11 million was going to be spent on politics, but that wouldn't pass the laugh test. The money certainly wasn't meant for the homeless or for Lakers tickets.

"We think it's a circumvention" of the law, Ravel told me. "This is patently outrageous.

"When so much money is being spent to influence an election in California from outside of California — but even if it's not outside the state — the voters have a right to know who is behind the effort.

"Knowing who is supporting messages can tell voters a lot about whether or not they should support the message. They can get a voting cue."

Common Cause of California, a true reform group, formally requested the FPPC to unmask the Arizona donors. And Ravel told me she intends to try.

Fox, defending the secrecy in his blog, tried to equate the hidden Arizona contributors with "the out-of-state Lance Armstrong Foundation which gave $1.5 million in undisclosed donations" to Prop. 29, the June primary measure that would have increased the cigarette tax to pay for cancer research.

But that argument doesn't wash. The name Lance Armstrong told voters plenty about the source of the donation. The tag Americans for Responsible Leadership tells them nothing.

Contributors often try to hide their identity because they could be an embarrassment to the campaign they're trying to help bankroll.

Or they're afraid of retaliation by the opposite side — maybe even a governor. Tough. That's politics. As Harry Truman famously said, "If you can't stand the heat, get out of the kitchen."

One more old quote: "Sunshine is the best disinfectant" — the late Supreme Court Justice Louis Brandeis.

The sun should shine on this $11 million or it ought to be buried back in Arizona.

george.skelton@latimes.com