Tag Archives: Prop 32

PAC at the heart of Dark Money Scandal Shuts Down

PAC received $11 million of anonymous money for Prop 30 and Prop 32.

by Brian Leubitz

It turns out that everything comes around in the end.

The political arm of the Small Business Action Committee (SBAC) filed official termination papers on Monday, six months after agreeing to hand over $300,000 in campaign cash to state officials for accepting what turned out to be the largest anonymous donation to a political effort in California history. (KQED / John Myers)

If you don’t remember exactly what happened, check the dark money tag. Long story short, a few payments, totaling over $10 million, were dropped into the SBAC accounts right before the November 2012 election to fight for Prop 32 (unions) and against Prop 30 (Brown’s tax measure). Common Cause filed a complaint, and the FPPC eventually came down with the biggest fine ever.

Now, the fine would have worked out just fine if those meddling good government types hadn’t gotten in the way of the profligate spending right before the election. That fine is just another cost of buying an election, if you have that kind of money. But, in the end, the problem was that the money played directly into the campaign message that the Prop 32 opponents (including me) had been stating for the past 6 months. While the SBAC was able to spend a lot of money right before the election, it could be argued that the earned media was just as valuable for the other side.

Closing down a PAC isn’t really that big of a deal, because it isn’t hard to open another one. If Joel Fox or his compatriots have any big plans, there is no doubt that a similar group will be up and running in a few days. Nonetheless, it does mark something of a turning of the page on the 2012 election.

Dark Money Details: Props 30,32, and the future of secret cash

Charles Schwab with Mayor Gavin Newsom$10 million disappears in right-wing money laundering operation

by Brian Leubitz

How go those Gap jeans you are wearing today? And your Charles Schwab account is growing, I’m sure. And, of course, you totally bought Eli Broad’s support of Gov. Brown’s tax measure, right?

Well, welcome to the world of dark money, a bizarro land where people get to say and do very different things. Reports released by state investigators show a complex money laundering scheme involving several shady right-wing money movers and organizations, all to help hide the donors of about $25 million intended to fight against Gov. Brown’s tax measure, Prop 30, and for the anti-labor measure, Prop 32. While many of the names will be unfamiliar, some of them are pretty much household names. But these are people that don’t really want the attention, they just want to get their way. Because they are rich and that is what happens.

So, a pair of Republican consultants, Tony Russo and Jeff Miller, went about laundering the money through a vast network of Koch brother connected organizations in order to hide the true source of the money. Just to be clear, there is a word for that here in California: illegal.

The Fisher family, of the clothing firm Gap Inc., contributed more than $9 million. San Francisco investor Charles Schwab gave $6.4 million, and Los Angeles philanthropist Eli Broad sent $1 million.

The money went to a Virginia nonprofit that would use it to pay for the ad blitz and be allowed to keep the contributors secret. Nonprofits, unlike political action committees, are not required to identify their donors under federal law. … But things went from bad to worse. Although Russo handed over $25 million, only about $15 million ended up back in California. And when the money surfaced, it sparked an investigation by state authorities, who last month levied $16 million in penalties against the Arizona group and three others.(LA Times

Somewhere along the line, Sean Noble, a Koch-affiliated operative, decided that he actually wasn’t into sending the last $10 million back to California through their little washing machine. The attention had gotten to be too much. The fact that Russo claims he still doesn’t know what happens to that cash is something of a funny post script.

But the real fight is over the large penalty handed down to the Small Business Action Committee(SBAC), the California PAC that spent the money attacking Prop 30 and supporting Prop 32. The FPPC levied a “disgorgement” penalty that requires the group to pay to the state an amount of money equal to the dark money that they accepted. Of course, the SBAC is fighting the fine, and the result of that fight could mean a lot for how ballot measures are run over the next few years.

Perhaps if voters had easy access to more information, they could simply vote against any initiative campaign that was using the shady money. But in the real world, cash is still king.  If the fine is upheld, dark money could stall at the state border. If it is overturned, expect the secretive cash to become an even bigger (yet still overwhelmingly shady) tool in initiative campaigns.

Photo credit: Mayor Gavin Newsom on Flickr. Mayor Newsom (a prominent supporter of Prop 30) appeared with Charles Schwab at the opening of the Charles Schwab flagship space in San Francisco.

First of the Dark Money Donors Becomes Clear

Money laundered from engineering trade group to a campaign against Prop 30 and for Prop 32

by Brian Leubitz

This was bound to happen at some point, the first of the donors to the so-called “Small Business Action Committee” that supported Prop 32 and opposed Prop 30 has been outed by reports.

An engineering trade organization that advocates for privatizing government work has been tied to the group behind the $11 million dark money donation that prompted a legal showdown in California last fall.

The $400,000 that can now be traced back to a group called the American Council of Engineering Companies in California (ACEC-CA) may not be the biggest of disclosures, but when it comes to dark money in politics, any transparency at all is a revelation.

Campaign finance reports released last week in California show that the Sacramento, Calif.-based ACEC-CA wrote two checks to the conservative group Americans for Job Security in 2012, one in July for $150,000 and one in September for $250,000, which were described in disclosures to California’s Secretary of State as intended for “issue advocacy.”(TPM)

Now, the biggest checks were still written by a man we know all too well, Charles T. Munger, the son of Warren Buffet’s business partner. But, we may yet learn a few more names about who else laundered a bit of cash to support Prop 32’s anti-labor agenda.

FPPC Reveals “Money laundering” – Real Source of Secret $11 Million

Koch Brothers affiliated SuperPACs behind donation

by Brian Leubitz

When the American Future Fund contributed $4 million to a committee supporting Prop 32 and opposing Prop 30, voters knew the money was connected, in some vague sense, to the Koch Brothers. That group at least had some history to look back upon, and while the relationship wasn’t perfectly clear, the Koch connections were there.

However, when an $11 million check floated down from a hitherto obscure group, “Americans for Responsible Leadership,” (ARL) the source was a complete mystery. The group also was in a fight against Top 2 primaries, and some of the board had GOP connections. But, the source of the money was far from clear.  The Fair Political Practices Commission, California’s campaign finance regulator, sued for information on where the money came from.  ARL fought like the dickens, even taking the court to the United States Supreme Court before reluctantly handing over the information this morning.

And here’s what we have: 2 more “non-profits”

The state’s campaign watchdog agency accused an Arizona nonprofit of “money laundering” to donate $11 million this month and announced that two other nonprofits – Americans for Job Security and The Center to Protect Patient Rights – routed the money.(SacBee CapAlert)

Needless to say, FPPC Chair Ann Ravel was none too impressed with this development and called the arrangement money laundering. Here’s an FPPC quote about it:

“Under California law, the failure to disclose this initially was campaign money laundering. At $11 million, this is the largest contribution ever disclosed as campaign money laundering in California history.”

But just who are these groups anyway? Well, OpenSecrets has a pretty nice writeup about the Center for Patient Rights:

And if its donors are unknown, so is much else about CPPR. According to its own 2010 tax return, which was filed last November, it is run by Sean Noble, who is listed as its director, president and executive director. Noble describes himself on his Twitter account as a “PR/Political consultant, conservative strategist/operative, former GOP Hill chief of staff, blogger, proud father, fighting for liberty.” Noble was chief-of-staff to former Republican Rep. John Shadegg of Arizona, for whom he worked for 13 years, and since then has worked as a political consultant and in public relations. …

Noble did not return our calls seeking comment. But in a piece last year, Politico described Noble as a “Koch operative,” referring to the wealthy conservative brothers from Koch Industries who have been instrumental in funding a conservative network of groups. … (OpenSecrets)

And guess who received over $11 million in support from CPPR in the 2010 cycle? Why, none other than the American Future Fund. And everything comes back around. Quite the campaign finance merry-go-round in support of a measure that purports to be campaign finance reform.

However, as leading good government groups, like the League of Women Voters and Common Cause have said, Prop 32 is not real political reform. And so instead, strange money continues to flow to fight for a deceptive measure, and against a measure that is vitally important to our schools. Layer after layer…

Note: Brian Leubitz, the editor of this blog, works for the No on 32 campaign. Please like the campaign on facebook or follow on twitter.

It’s GOTV Time!

No on 32 GOTVA friendly reminder

by Brian Leubitz

It is that time of the year, GOTV weekend. With some very important ballot measures and local candidate races on the ballot, we have to make sure that the Republicans don’t win a few just because our voters didn’t show up. That means getting everybody to vote by Tuesday.

The California Democratic Party has a great Battleground California tool that will help you find your closest volunteer location or let you make calls from home. The No on 32 also has a No on 32 Volunteer page with listings for lots of events.

Let’s bring this home! We have to make sure California votes YES on 30 and NO on 32!Note: Brian Leubitz, the editor of this blog, works for the No on 32 campaign. Please like the campaign on facebook or follow on twitter. Statements are his own.

Stop Billionaires From Buying the Vote


We have just one week to beat the insurance billionaires trying to buy this election.

We plastered these posters around the streets of San Francisco and Los Angeles to expose these deceptive billionaire propositions. Can you help us make sure more voters know?

Please post our new posters on Facebook today. Don’t use Facebook? Share the posters directly from our website here.

Our grassroots campaign against Prop 33 has just a few hundred thousand dollars to compete with the $16.4 million spent by insurance billionaire George Joseph, chairman of Mercury Insurance.

PhotobucketAnd last week, Charlie Munger Jr., the heir to the Berkshire Hathaway fortune including GEICO Insurance, sank another $13 million – for a total $35 million – into the campaign for Prop 32.

Prop 32 will take away workers’ voices in Sacramento but preserve the power of big corporations and wealthy individuals – like Munger and Joseph – to spend unlimited amounts in elections. Prop 33 will deregulate auto insurance and allow insurance companies to raise rates on good drivers just because they decide to stop driving for awhile.

We’ve got just 7 days left to expose these billionaires and stop them from buying the election.

Please share our posters on Facebook, or find the posters on our website and email your friends.

Your voice can beat the money spent by these insurance billionaires, but only if you help us spread the word. Tell your friends to vote No on Props 32 and 33 today!

New Video for Prop 32: A Billionaire’s Guide to California

Funny video reveals some very worrisome outcomes

This chap is pretty chatty for a SuperPac Billionaire, bue he does like to hide now and again. However, from his tweets and this new video, he’s spilling some serious beans. And guess what, we should trust him and his big business friends, they know what is best for us!

Note: Brian Leubitz, the editor of this blog, works for the No on 32 campaign. Please like the campaign on facebook or follow on twitter.

An Open Letter to The Insurance Billionaires Behind Props 32 & 33

No On 32 and 33

In an open letter today, the California Nurses Association and Consumer Watchdog challenged the billionaire financiers of Propositions 32 and 33 to a public, televised debate.

Will Charles Munger Jr. and George Joseph defend the measures attacking working people that they’ve spent $39 million promoting? Or will they continue to hide in the shadows behind their PR flacks and deceptive TV advertising?


October 24, 2012

Mr. Charles Munger Jr. and Mr. George Joseph:

Gentlemen, the California Nurses Association and Consumer Watchdog invite you, the primary financial sponsors of Propositions 32 and 33, to join us for a public debate on the merits and adverse consequences of these measures and the impact they will have on all Californians.

We call for a debate that would be hosted by a journalist of mutual agreement in a televised forum at your earliest convenience.

There’s more…

To date, Californians have heard a great deal about the reputed benefits of Propositions 32 and 33, but only from one-­‐sided political ads that hardly provide a fair or complete picture.

As the biggest financial contributors to these initiatives, for which you have already contributed a combined $39 million, your silence on these measures, which will have far-­‐reaching effects on all Californians, does a great disservice to the public.

If the initiatives you have so lavishly financed really will achieve the promises you claim in your advertisements, you should welcome the opportunity to stand up in public and defend them. We call on you to do so now.

As you no doubt know, our organizations sharply disagree with both the content of these initiatives, and the misleading way in which you have promoted them.

Proposition 32 is a misleading measure which claims to be legitimate campaign finance reform, but has been exposed as anything but that by virtually every newspaper in California. It would exempt corporate interests, shadowy super PACS, and the super wealthy like both of you while silencing the voices of nurses, consumer advocates, and others who would challenge your views.

Proposition 33 reverses a 24-­‐year-­‐old consumer protection that prohibits auto insurance companies from charging drivers more for car insurance just because they didn’t drive previously or otherwise had a break in coverage. Opposed by Consumers Union, Consumer Watchdog and nearly every newspaper editorial board in California, Proposition 33 allows insurance companies to penalize good drivers who did nothing wrong other than not drive and not buy insurance. Nonetheless television advertising running statewide falsely claims Proposition 33 “rewards responsible consumers.”

We know that more and more Californians are appalled at the specter of billionaires and multi-­‐millionaires corrupting our political process and would like to hear answers from those spending so much in this campaign. First and foremost, they would ask: Are the $22.9 million and $16.4 million checks you have written for Propositions 32 and 33, respectively, aimed at anything more than buying the vote for personal and political gain?

It’s time for you to step out of the shadows. The voters deserve to see and hear from the people responsible for Props 32 and 33, rather than the same old sound bites from the deceptive advertising your millions pay for.

Voters need to look you in the eye to gauge your sincerity, and judge your motives. The voters being bombarded with your advertising spin now deserve no less.

We look forward to hearing from you.


DeAnn McEwen, RN

Co-­‐president, California Nurses Association

Jamie Court

President, Consumer Watchdog

Joe Matthews: $11Mil Dumbest Donation Ever

Calls out Yes on 32/No on 30 “Small Business Action Committee” for hypocrisy

by Brian Leubitz

 Share on FacebookJoe Mathews
You may have already heard the news about the $11,000,000 donation from the “Americans for Responsible Leadership,” a group that refuses to discloses its contributors. In fact, last week we posted about the Sacramento Bee calling out both the group that gave and received the anonymous cash.

However, Joe Mathews, a noted California political journalist and analyst, points out how the secretive money puts the lie to the notion that Proposition 32 is about campaign finance reform.

Seriously, do you remember a more counterproductive donation than this one? In this case, the $11 million is being given in such a way that it destroys whatever chances Prop 32, the measure that anonymous donors are supposedly supporting, might have had of passing.

Prop 32 is being sold as campaign finance reform. An anonymous donation steps on that message; the huge, overwhelmingly negative publicity the donation has drawn to 32 has to be worth more than the $11 million. And in a larger sense, the donation exposes the core of what’s wrong with Prop 32 and other attempts at what is sometimes called “Paycheck Protection” as a way to blunt union power. … Instead, they are giving and accepting an anonymous donation, an act that will confirm the worst stereotypes about critics of public employee unions. If the backers of Prop 32 want true political reform, and less domination by public employee unions, they should give the $11 million back. Right away.(emphasis added, Fox and Hounds Daily)

As Mr. Mathews states, the secretive $11,000,000 tells a lot more about what Prop 32 really is. It is a measure to silence working Californians, while allowing for the proliferation of secretive SuperPACs like the “Americans for Responsible Leadership.”

Read the full column at  Fox and Hounds Daily.

Note: Brian Leubitz, the editor of this blog, works for the No on 32 campaign. Please like the campaign on facebook or follow on twitter.

George Skelton Takes Prop 32 to Task, Calls 32 an “insult to voters’ intelligence”

Noted LA Times columnist calls out the phony political reform

by Brian Leubitz

George Skelton has seen most of the smarmier side of California politics. And when he calls something out for being phony, you should at least take notice. However, in the case of Prop 32, he’s gone further:

Even a cursory look at Prop. 32 shows that it’s about a covey of special interests from the right attacking a rival interest on the left, organized labor.

If backers had turned their initiative into an honest debate about curtailing labor muscle – specifically the influence of public employee unions – they would have deserved more serious consideration.

But by deciding to phony it up – crafting what they perceived to be the best marketing pitch based on public opinion surveys – they’ve created a laugher and an insult to the voters’ intelligence.(LA Times)

Of course, this is nothing all that new. What he is saying is the same thing that the League of Women Voters and Common Cause have been saying: this is not real political reform. It is a thin veneer with a whole other set of goals beneath. While Prop 32 would silence working Californians, like teachers, cops, nurses and firefighters, it would only empower the real special interests to spend unlimited and unregulated sums on their own favored politicians and measures.

As Mr. Skelton put it, “Prop. 32 is a self-serving sham.”

Note: Brian Leubitz, the editor of this blog, works for the No on 32 campaign. Please like the campaign on facebook or follow on twitter.