A money shuffle to avoid donor disclosure
Last fall, a team of Republican consultants sought to run ads in California about two ballot initiatives. To avoid disclosing the identities of the donors, consultants set in motion a series of money swaps and transfers through a network of politically active nonprofit groups. Last month, the state’s Fair Political Practices Commission and attorney’s general office levied a record $1 million in fines against two of the groups involved. Here’s how money was shifted. Read related article.
Tony Russo and Jeff Miller, GOP consultants in Sacramento, raised $74 million for the "California Comeback" plan, a campaign to oppose Prop. 30 and support Prop. 32.
$29 million came from about 150 donors to finance issue ads, which do not require donor disclosure. Russo and Miller sent those donations to the Virginia-based nonprofit Americans for Job Security, led by Stephen DeMaura, to run the TV spots.
Because of slow fundraising, the ad campaign did not start in the summer of 2012, as originally planned. DeMaura was concerned that if ads ran too close to Election Day, they could be considered political expenditures under law, forcing the group to report its backers. Russo asked Sean Noble, a political consultant who runs the Center to Protect Patient Rights, if he could find money to send to California. AJS then transferred $25 million to CPPR.
CPPR then dispersed funds to the nonprofits American Future Fund in Iowa and Americans for Responsible Leadership in Arizona.
Those groups made donations to two political action committees engaged in the initiative campaigns in California, effectively hiding the original donors.
About $10 million of the money that AJS gave to CPPR never made it back to California. It is unclear where it ended up.
SOURCE: California Fair Political Practices Commission; staff reports. GRAPHIC: Cristina Rivero and Matea Gold - The Washington Post.