Lawmakers try to curb anonymous political donations in California

SACRAMENTO — State lawmakers are moving to curb anonymous political donations in California after a national election in which nonprofit groups secretly poured hundreds of millions of dollars into campaigns.

Legislators have proposed greater disclosure by donors, higher fines for violations and new powers for officials to investigate suspicious contributions to certain groups. Other measures would boost disclosure requirements for political advertising and campaign websites.

The moves were prompted largely by an Arizona group’s $11-million donation this year to a California campaign committee, which used the money to oppose Gov. Jerry Brown’s tax-hike measure and support another ballot initiative that was intended to curb unions’ political fundraising.

State election officials sued the Arizona group to determine the identities of the contributors — only to discover that the money had come from two other nonprofits, which under federal law are not required to reveal their donors. State law requires groups to identify only donors who gave money specifically for political purposes.

Ann Ravel, chairwoman of the Fair Political Practices Commission, said new legislation is necessary to update the Political Reform Act, the Watergate-era law that governs campaign finance in the state.

Amendments to the 1974 law require a two-thirds vote. It is unclear whether California Democrats, who now wield historic supermajorities in both houses of the Legislature, will use their newfound powers to make the proposed changes.

State Sens. Leland Yee (D-San Francisco) and Ted Lieu (D-Torrance) have introduced legislation, SB 3, to close the state loophole for nonprofits. Their bill would require nonprofits that give at least $100,000 to a political campaign over the course of a year to release the names of the donors behind the contribution.

“Laundering money through nonprofits in an attempt to avoid transparency is fundamentally undemocratic,” Yee said. “Our democracy should not be bought and sold in shady backroom deals.”

The rise of so-called dark money is a byproduct of the U.S. Supreme Court’s 2010 ruling in Citizens United vs. Federal Election Commission, which lifted the ban on direct political expenditures by corporations. That triggered a surge of election activity by groups incorporated under the tax code’s section 501(c)4 as social welfare organizations, which are allowed to engage in issue advocacy.

Advocates for more campaign finance reporting said they have been pushing lawmakers for years to tighten California’s disclosure rules, which are already among the strongest in the nation.

“It took $11 million to get their attention,” said Phillip Ung, a policy advocate at Common Cause, which filed the original complaint about the Arizona donation. “Campaign strategists are constantly adapting their strategies to sneak as much money into campaigns from secret donors as possible, and the law needs to keep up with those strategists.”

Assemblyman Roger Dickinson (D-Sacramento) has legislation, AB 45, to prevent what he called last-minute “money bombs” in elections. It would require nonprofits participating in a political campaign to identify any donors giving at least $50,000 six months before an election.

“This is the kind of information voters and the public need to have before they cast their votes,” Dickinson said.

The bill would also empower the state’s political watchdog to seek injunctions against nonprofits to compel disclosure.

Other proposals target political advertising.

State Sens. Mark Leno (D-San Francisco) and Jerry Hill (D-San Mateo) have introduced SB 52, which would require the top three funders of political ads to be identified in the spots and on the campaign’s website.

Another bill, SB 26 by state Sen. Louis Correa (D-Santa Ana), would increase the size of the disclosure notice on slate mailers, which are paid advertisements for candidates and ballot measures, telling voters who prepared and promoted the fliers.

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Times staff writer Chris Megerian contributed to this report.