Arizona nonprofit must turn over records, judge orders

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A state judge on Wednesday ordered an Arizona nonprofit to hand over a wide range of records involving its $11-million donation to California political campaigns, a victory for the state’s campaign finance watchdog.

The Fair Political Practices Commission is trying to unmask the donors behind the Arizona group, and the case is being watched as a test of California regulations intended to prevent campaign contributors from anonymously routing money through nonprofits.


‘This is a moment of truth for our campaign disclosure laws,’ said Derek Cressman of Common Cause, an activist group that filed a complaint against the Arizona nonprofit.

The legal wrangling is not over, however, and it’s unclear if the names of donors could become public before the election next week. State authorities want the records, including email and financial statements, by Thursday afternoon, but the Arizona nonprofit is expected to appeal the order.

Plus, if authorities get the records they want, they will still need to conduct an audit to determine whether the group is improperly shielding donors’ identities.

The Arizona nonprofit, Americans for Responsible Leadership, gave the $11 million to the conservative Small Business Action Committee. The committee is fighting Gov. Jerry Brown’s tax hike plan, Proposition 30, and supporting a separate measure to curb unions’ political influence, Proposition 32.

The donation has become one of the most controversial issues in this year’s campaigns, placing California in the midst of a nationwide debate over disclosing political donors using secretive nonprofits.

Federal law allows nonprofits to keep the identities of their donors confidential. But California regulations say donors must be identified if they gave to nonprofits with the intention of spending money on state campaigns here.


If the Arizona group has violated disclosure rules, ‘the court finds that irreparable harm has occurred and continues to occur as each day passes and voters continue to cast their votes without information that may influence their votes,’ wrote Superior Court Judge Shelleyanne W. L. Chang in her Wednesday order.

The Arizona group insists it is following all the laws and has a 1st Amendment right to keep its donors secret. Its lawyer, Jason Torchinsky, said in court Wednesday that the nonprofit is being unfairly targeted by state authorities, showing that ‘if your speech is unpopular, expect reprisals and immediate government action.’

Gary Winuk, chief of enforcement at the Fair Political Practices Commission, denied that the audit was politically motivated.

‘Our only agenda is to make sure the public has information to make their own informed decisions,’ he said.


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-- Chris Megerian in Sacramento

Authorities racing the clock to identify Arizona donors