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California Investigation Follows Trail of 'Dark Money' Across US

Out of state secret donors skirt the rules on California ballot initiatives

Jacob Chamberlain, staff writer

(Photo: Tracy O via Flickr / Creative Commons License)

The state of California has ramped up an investigation into the source of an $11 million money trail that was covertly used to fund two separate state referendum campaign drives ahead of last year's ballot, with strong implications that the Koch Brothers are behind the scheme, the Huffington Post reports Monday.

California's Fair Political Practices Commission has issued a dozen new financial record subpoenas to individuals and organizations who they suspect funneled money to the Small Business Action Committee, a California superPAC, through a series of out of state "dark money" groups who shield their donors' names.

In a report requested by the Commission, the superPAC only revealed that the money used in the campaigns came from an Arizona "dark money" non-profit called Americans for Responsible Leadership. The commission then took Americans for Responsible Leadership to the California Supreme Court.

Only then was it revealed that ARL also received their funds indirectly—through yet another out of state dark money group, Americans for Job Security in Virginia.

But the money trail does not end there. As the Huffington Post reports, AJS had channeled the funds from a group called the Center to Protect Patient Rights, which is run by Sean Noble, a well-known Koch operative.

"The involvement of Noble’s group in the California funding chain seems representative of the role it has played in the last two elections," the Huffington Post reports. "Since its creation in 2009, the center has been a conservative cash conduit with very deep pockets. During the 2010 elections, it funneled almost $55 million to two-dozen other dark money outfits, including the American Future Fund, Americans for Tax Reform and Americans for Job Security."

One of the campaigns which utilized the money in question was aimed at blocking a tax increase backed by Gov. Jerry Brown (D). The other aimed to curb union spending on elections.

California law requires that contributors to state initiative campaigns be publicly disclosed.

The Post adds:

Investigators are reviewing how these nonprofit groups were used to shield the identities of donors and attempting to trace the original funding sources. [...]

California’s decision to follow this murky million-dollar money trail is one of several recent legal actions around the country aimed at increasing transparency and curbing potential abuses of so-called dark money by politically active, tax-exempt groups known as 501(c)(4) social welfare organizations. [...]

Read the rest of the Huffington Post report here.


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