Gavin Newsom recall effort faces ‘dark money’ complaint over alleged hidden donors
The former chair of the Federal Election Commission on Monday filed a complaint against a major contributor to the campaign to recall Democratic California Gov. Gavin Newsom, alleging that a “shell company” was being used to hide the identities of its donors.
The complaint by Ann Ravel, which was filed with the state attorney general’s office and Fair Political Practices Commission, is focused on a $500,000 contribution to Rescue California, one of the campaign organizations supporting the recall effort. The donation was made by Irvine-based Prov. 3:9 LLC.
Ravel said that “dark money” contributions, so called because the identities of the donors are not revealed, are not allowed in California because state law requires the true sources of campaign donations to be publicly disclosed. Ravel urged the state agencies to immediately launch investigations and to use their subpoena power to determine the identities of the donors.
“The entity appears to be nothing more than a shell company being used to evade disclosure of the person or persons funding the recall contribution,” Ravel said in the complaint. “But the people of California are entitled to know who is trying to force a costly special recall election that could cost $80 [million to] $100 million just months before the primary elections for the same office. Such a dark money scheme is antithetical to a functioning democracy and in violation of the State’s comprehensive campaign finance laws.”
Ravel, a Democrat who ran unsuccessfully last year for the state Senate, said she opposes the recall effort against Newsom and decided to file the complaint on her own accord.
Anne Hyde Dunsmore, a spokeswoman for Rescue California, said Ravel’s complaint is a transparent effort by Newsom supporters to suppress contributions to the recall campaign.
“It’s clearly a partisan stab,” Dunsmore said. “The big message to me is that they are taking us seriously now.”
State business records show Prov. 3:9 LLC described as a firm that provides “consulting services.”
Thomas Liu, who described himself as the “responsible officer” for Prov. 3:9 LLC, said it was his decision to make the contribution to Rescue California. He said the “single member” of the firm was John Kruger, but did not say whether Kruger was the sole source of funds for Prov. 3:9 LLC.
Liu said that he abided by all state campaign disclosure laws, and that Prov. 3:9 LLC has funded charitable works in the past. Liu said both he and Kruger objected to the COVID-19-related restrictions that Newsom placed on religious institutions during the pandemic.
“Both Mr. Kruger and I believe that the Governor’s Executive actions prohibiting religious assembly and worship violated the constitutional rights of Californians to congregate and worship. This view was recently supported by the United States Supreme Court,” Liu said in an email Tuesday. “For this reason, Prov 3:9 has exercised its right to contribute to the recall effort and help allow Californians to have a voice on this.”
Liu, a certified public accountant from Irvine, did not provide further information on Kruger. However, tax records show that Liu has helped prepare filings for the Orange County-based Kruger Family Foundation, which lists John E. Kruger of Huntington Beach as its chief executive.
State campaign finance records show that John E. Kruger of Orange County contributed $100,000 to the California Republican Party in 2020 through one of his business interests. Kruger in 2016 donated $50,000 to Parents and Teachers for Student Success, an education reform group, and another $100,000 to a political organization supporting the 2014 campaign of Marshall Tuck, who was running for state superintendent of schools. Tuck, who lost the race, is a major advocate for charter schools in California and was opposed by teachers unions.
Kruger could not be reached for comment.
Before President Obama appointed Ravel to the Federal Election Commission, she served as chair of California’s Fair Political Practices Commission and in 2012 spearheaded a widespread investigation into the use of dark money in the state. In that case, regulators found $15 million in political contributions funneled through multiple organizations in an effort to defeat a statewide tax increase ballot measure and pass a measure designed to limit the political power of public employee unions. Both campaigns ultimately lost on election day.
In each case, the contributions were reported on California campaign finance documents as coming from the nonprofits themselves without listing the original donors. Only a portion of the donor list was revealed, and investigators believed the money came from sources located both in and outside the state. The state imposed a record $16 million in penalties on secretive political groups that funneled money into initiative campaigns in 2012.
Only one California governor has faced a recall: Gray Davis in 2003. But as Californians reel from a sharp rise in COVID-19 cases and a gloomy economy, some have taken aim at Newsom over his administration’s restrictions, which have closed businesses, implemented overnight curfews and limited family and faith gatherings.
For the recall election to be called, proponents must collect valid signatures from California registered voters equal to 12% of the total ballots cast in the most recent gubernatorial election — in this case, the endorsement of some 1.5 million voters. Organizers of the campaign say they have collected close to 1 million signatures but only about half that number have been reported as having been received by elections officials and still have to be verified.
The recall got a major endorsement Sunday from former San Diego Mayor Kevin Faulconer, a Republican, who announced Monday that he was creating a gubernatorial exploratory committee.
Faulconer, in posts on Facebook and Twitter, said he signed the recall petition because of widespread homelessness in California, along with the exodus of jobs from the state and massive delays in state unemployment assistance being issued while Newsom has been governor.
Times staff writer John Myers contributed to this report.
Start your day right
Sign up for Essential California for news, features and recommendations from the L.A. Times and beyond in your inbox six days a week.
You may occasionally receive promotional content from the Los Angeles Times.