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Campaign Finance Fight Could Shape 'Dark Money's' Future In California

Nov 1, 2013

A "No on Prop 32" TV ad paid for by the Small Business Action Committee in the Fall 2012 campaign.
Credit YouTube/Small Business Action Committee

California’s Fair Political Practices Commission is trying to collect $15 million in penalties from two political action committees that accepted “dark money” contributions last year.  The PACs won’t pay, saying they’ve done nothing wrong.  Ben Adler reports from Sacramento that in this dispute, there’s a lot at stake.

The illegal donations last fall paid for ads like this from the Small Business Action Committee:

Yes on 32 TV ad: “Sacramento doesn’t work for our family.  Instead, it works for the big unions and corporations.”

Last month, the FPPC settled a year-long legal battle by announcing two non-profit organizations will pay the state $500,000 each.  But Phillip Ung with the public interest group Common Cause says even that record campaign finance penalty is chump change to the Koch Brothers – the conservative donors connected to the non-profits.

Ung: “I doubt they will have trouble coming up with a million dollars or half a million dollars to pay up this fine.  That’s why they settled at that amount, because I think they know that they can get away with it.”

What the FPPC really wants is to prevent future “dark money” donations.  To ensure that, a second penalty called “disgorgement” requires the PACs to forward every “dark” dollar they received to the state. That’s $15 million.

Winuk: “If you accept a contribution and it turns out that you didn’t get the true source, regardless of whether or not you knew or didn’t know, you have to give it up.”

In other words, says the FPPC’s Gary Winuk, the next time a PAC gets a mysterious donation, it should send it back.

Winuk: “If you suspect that you’re receiving a contribution and you don’t know the true source, you do so at your peril.”

Not fair, says Beth Miller with the Small Business Action Committee.  She points out that even the FPPC says her PAC did nothing wrong.

Miller: “Why should the innocent party have to be fearful of accepting contributions solely because –even if they do everything right, they may be penalized?”

Success in the FPPC’s disgorgement effort could make it a lot harder for similar donations in the future.  Failure could reopen the “dark money” floodgates.