List unmasks secret donors to California initiative campaigns

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This post has been corrected and updated.

A state investigation into a network of nonprofit groups that funneled $11 million into initiative campaigns in California last year has revealed the identities of dozens of previously hidden donors to the various organizations.

Those contributors include owners of the Gap Inc., for which California First Lady Anne Gust Brown was once a top executive, investor Charles Schwab and Los Angeles philanthropist Eli Broad. The groups they donated to gave money to other organizations, which gave to the campaigns.

One of the campaigns was an effort to derail a 2012 tax measure pushed by Gov. Jerry Brown -- which Broad had said he supported. The other supported a separate initiative that would have limited the power of labor unions to raise political cash.


The Fisher family, which owns the Gap, gave more than $9 million to Americans for Job Security, a Virginia-based group which eventually sent millions to an Arizona-based non-profit that ultimately wound up in a California campaign committee. Gust Brown formerly was the company’s chief administrative officer.

San Francisco investor Schwab gave more than $6.2 million to the same group. Broad gave $1 million despite his stated support for higher taxes on the wealthy.

Americans for Job Security sent $11 million to the Arizona-based Center to Protect Patient Rights, an Arizona nonprofit. From there, the same amount was sent to Americans for Responsible Leadership, another Arizona group, before landing in a single campaign committee that worked to defeat the governor’s tax measure, Proposition 30, and pass Proposition 32, a measure that would have limited the political power of labor unions. The committee failed in both efforts.

Calls to Broad, Schwab and the Fishers seeking comment were not returned.

The donation scheme was designed by California Republican fundraiser Tony Russo, who was working as a consultant to Americans for Job Security, according to documents released by the state Fair Political Practices Commission. Calls to Russo were not immediately returned.

In its findings, announced Thursday, the Fair Political Practices Commission ruled that its reading of state law found that donors to the Arizona group need not be disclosed. But in a partly redacted list released by the FPPC, some of the identities are being revealed for the first time.

In 2012, the group raised nearly $29 million from about 150 donors, most of whom are based in California, the investigation found. Much of that money was used for “issue advocacy,” but $11 million wound up in the a political committee, run by the Small Business Action Committee PAC.


Democratic political consultant Gale Kaufman, who led the No on 32 effort last year, said she was “amazed” at the lengths to which donors went to hide their identities.

“These were people who didn’t want to tell anyone they were involved in trying to pass Prop. 32,” she said. “I’m really surprised that people who should really know better were willing to be participants in this scam.”

An earlier version of the post stated state officials found the Virginia-based nonprofit group Americans for Job Security illegally moved money through three other groups into a California campaign committee. In fact, the state found the money raised by AJS did not require any disclosure of its donors. The fines were assessed against the two Arizona-based groups, Center to Protect Patient Rights and Americans for Responsible Leadership, for violating disclosure requirements.


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Twitter: @anthonyyorklat