Tag Archives: FPPC

FPPC Levies Record Fines Against Dark Money Groups

by Steve Smith, California Labor Federation

California’s Fair Political Practices Commission today sent a strong message to shadowy out-of-state special-interest groups and donors trying to influence our state’s elections by levying record fines for contributions to committees that supported Prop 32 and opposed Prop 30.

According to the Sacramento Bee:

In a campaign finance case watched around the country, California’s political watchdog has levied a $1 million fine against two non-profit groups for inappropriately laundering money during last year’s ballot initiative wars.

The Fair Political Practices Commission announced the settlement with the Center to Protect Patient Rights and Americans for Responsible Leadership, two groups based in Arizona that the FPPC describes as part of a network operated by the conservative Koch brothers.

The commission also sent letters to two California committees demanding they pay the state general fund more than $15 million they received from groups that didn’t properly report the source of their funds.

These groups used every dirty trick in the book to try to hoodwink voters into passing the pernicious Prop 32, a measure which would have silenced workers, and defeat Prop 30, the tax measure to fund our schools. Ultimately, they failed because voters saw through the façade.

Reaction was swift from union leaders to this landmark settlement.

California Labor Federation Leader Art Pulaski:

With today’s record fine, California sent a strong message to shadowy special-interest groups that we won’t tolerate illicit campaign donations that undermine our democracy. We applaud Fair Political Practices Commission (FPPC) Chair Ann Ravel for aggressively pursuing this investigation and holding these out-of-state dark-money groups accountable for violating California law.

California Professional Firefighters President and Alliance for a Better California Chair Lou Paulson expressed outrage that the California-based Small Business Action Committee (SBAC) was the lynchpin for the illegal effort. SBAC was ordered by the FPPC to repay the $11 million it received from the out-of-state front groups.

The FPPC action offers final proof of an open secret: Corporate California is using dark money to try to game California’s election process. It’s clear there was a calculated effort by California political operatives to hide the involvement of California interests in the Prop. 30 and 32 campaigns. We’re appalled that the SBAC would be the conduit for this money-laundering scheme.

SEIU California President Laphonza Butler also applauded today’s action, yet noted more needs to be done to shed light on these dark money groups that try to rig elections in California.

With the identity of the secret donors still unknown, it’s clear that our campaign finance laws contain loopholes that allow shadowy front groups to deceive voters by hiding the source of campaign dollars. We call on legislators to strengthen campaign finance laws to prevent billionaires and corporate titans like the Koch brothers from using shadowy front groups to buy California elections.


FPPC Passes Internet Regulations

Longtime pending reform moves ahead, enforcement still far from clear

by Brian Leubitz

The FPPC has been looking at regulating “bloggers” and social media for a while now. For a good review of some of their early discussions, see Julia Rosen’s post from their 2010 hearing on the subject. But yesterday they passed the new regulations:

Bloggers and others who are paid to post political messages online are subject to new disclosure rules under regulations the Fair Political Practices Commission approved Thursday.

Campaign committees will now have to report who they pay to post “favorable or unfavorable” content on blogs, social media or online videos on their campaign finance statements, and report the name of the website where the content appears.

“The purpose overall is to let the public know that they can go compare what the campaign is paying for to what is showing up online,” said FPPC attorney Heather Rowan.(SacBee)

I don’t doubt that the FPPC’s heart is in the right place, but as Steven Maviglio points out, the system is unworkable from any number of levels. And as former Schwarzenegger aide Rob Stutzman is quoted in the Bee, the system creates regulatory road blocks without actually helping voters discern what is paid for communication.

Now, I should also point out that I am occasionally paid by campaigns, but I’ve been using disclosures on each and every post associated with those campaigns. Not to be too self-congratulatory here, but I think it is just the right thing to do. However, these regulations don’t require that, but rather require reporting to the FPPC. That could be useful if somebody follows up on those FPPC forms in some database, but there are certainly no guarantees of clarity.

Furthermore, the devil is in the details. The current regulation leaves a lot of room for interpretation. How will campaign employees twitter accounts be regulated? How will they manage enforcement of occasionally pseudonymous or anonymous internet postings? And are these regulations constitutional under the Supreme Court’s (rather extreme) First Amendment jurisprudence?

Those questions will likely be answered during the next campaign cycle or two. The risk is that by the time those questions are answered, a whole new set will have taken their place.

Some Necessary Reform, More Needed

FPPC looks to clean up the initiative gathering money bonanza

by Brian Leubitz

It was rule-making week over at the FPPC, and they served up a few rules of note. Starting with something on the initiative front:

The people who pay for petition drives in support of statewide ballot measures can no longer hide their identity, thanks to a regulation adopted by the state’s Fair Political Practices Commission on Thursday.(SDUT)

Anybody who drops more than $100K on signature gathering, which won’t really get you too far these days, must now report.

On another front, political committees that send out emails must now identify themselves. It seems shocking that this wasn’t the case before, but apparently a few tricksters sent out an email last cycle signed only as “The Hardy Boys” and “Nancy Drew”. Cute.

There is still much work to be done on initiative reform. For most folks who sign the form, the last thing they are going to think to do is look at Cal-Access to see who is paying the gatherers. But, baby steps forward are better than no steps.

Political bloggers should reveal funding

Jamie CourtWednesday, the California Fair Political Practices Commission takes up the question of whether political bloggers should have to disclose who pays them to blog in political campaigns. Sacramento’s consultant establishment, both on the left and the right, has been hiding behind free speech protections to propagandize and cut the legs out from under credentialed authorities on behalf of any interest group.

Because voters increasingly rely on information online, paid blogger-based attacks that masquerade as real journalism are one of the biggest rackets in Sacramento.

Journalists get fired for lying. Tax-exempt nonprofit groups can have their tax status revoked if they lie and propagandize. They are subject to disclosure requirements by the IRS, the state Fair Political Practices Commission and the U.S. attorney general. Political bloggers, on the other hand, can get paid to blog lies and are accountable to no one.

How does the paid-blogger racket work? A consumer group like mine finds itself in the crosshairs of a powerful industry. For example, this summer we qualified a ballot measure to regulate health, home and auto insurance rates that will be on the 2014 ballot. This fall, we successfully defeated Proposition 33, the $17.5 million campaign by one insurance company billionaire to deregulate auto insurance.

We were outspent 70 to 1 on the Prop. 33 fight, but we had a strong online voice and large lists of supporters. Our enemies know that our credibility as a consumer group is our main asset. So suddenly a new group was created to “watch” Consumer Watchdog by a Democratic Sacramento political blogger and consultant, Steve Maviglio.

He misstated facts about our funding on his blog and on his new website, made an expensive online video that showed a fake picture of our founder’s house to claim it was a mansion, and took out advertising on Google, YouTube and elsewhere around the Web. He claimed no one paid him for any of that work or advertising, but that he simply had a grudge. Remarkably, the day after the election, when voters rejected Prop. 33, the Google ads were no longer running.

Maviglio was joined in his online assault by a couple of Republican consultants and bloggers. None would disclose who, if anyone, paid them. A California Watch story noted an attack by “Republican consultant Rob Stutzman, who is working with an opposition research firm but wouldn’t say who is paying for the effort.” Republican blogger Jon Fleischman wrote an attack blog without bothering to check the facts, then forwarded it to our founder saying: “Thinking about you this holiday season. Happy Hanukah.” Very journalistic.

Who regulates Maviglio, Stutzman and Fleischman, or requires that they disclose their funding? That is the subject of the FPPC deliberations.

Not surprisingly, Maviglio and Fleischman are the most vociferous opponents of any changes to the status quo.

What should be done?

  • Political bloggers should be required to comport themselves with the ethics of journalists if they are claiming First Amendment protection. Bloggers on political issues in California should be required to disclose financial conflicts of interest or face sanctions by the FPPC and public prosecution. “Paid for” political disclosures are cumbersome for bloggers and websites but requiring simple disclosure of payments made by entities involved in political issues in the context of content is no more than we ask of journalists.
  • Legal loopholes allow monied interests to pay unlimited amounts to bloggers for attacks on their opponents. These payments are never disclosed so long as the bloggers don’t expressively advocate how to vote on the ballot measure. Bloggers should be required to disclose such payments.
  • Advertising on a blogger’s website paid for by an interest group with a dog in a political fight should be disclosed. This is one way to compensate someone voicing an opinion without disclosing it.

The good news about the new media is that anyone can create their own media outlet. The bad news is that without regulation it will be harder than ever to decipher whose opinions and voices we are hearing online.


Jamie Court is President of Consumer Watchdog and a director of the Consumer Watchdog Campaign

Originally published in the San Francisco Chronicle on November 14, 2012

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.

FPPC Wants to Regulate Social Media

To be fair, I think few are surprised by the discussion about regulating social media.  But, before we get too deep into it, at this point we are talking about the tools that are used by candidates and campaigns, rather than ordinary citizens (or not so ordinary bloggers).  

Politicians’ tweets and status updates should be held to the same standards as paid advertising that voters see on television, hear on radio or find in their mailboxes, California’s campaign watchdog agency says in a report being released Monday. …

{FPPC Chairman Dan Schnur} said California’s 36-year-old Political Reform Act needs rewriting to keep up with the times.

“Our goal here is to meet the new challenges of 21st Century technology,” Schnur said. “There’s no way that the authors of the act could have anticipated that these of types of communicating a campaign message would ever exist.” (SF Chronicle)

In the changing new media landscape, we do need new rules for disclosure.  When campaigns are using these new tools, it is often difficult to know what rules apply at any given time apply.  The default example here is of course the 140 character tweet, where disclosure would look crazy.  But, should the campaign’s twitter account page carry some disclosure? That seems a legitimate question.

But there are other examples. Take the problem of GoogleAds.  If you go searching for any marginally controversial political subject, you’ll find some ads on both sides.  Some will let you know by the URL or other device where they are coming from. Others will not be as clear, say an organization highlighting a news article that favors a candidate.  Do we require that ad to disclose its funding?  The advertiser is dealing with very limited space, and most disclosures would cannibalize the whole ad. So where is the line? How do we allow these tools to be used without confusing voters and letting spending get out of control?

These are not simple questions, and no simple answers will be arriving. Perhaps the FPPC works with some of these companies to facilitate disclosure, but the important point that should be taken away from this discussion is that the FPPC needs to get more nimble.  

In 2006, Twitter was barely a concept. And who knows what will be all the rage in 2014. But, we can’t keep having this conversation every year.  Let’s ensure disclosure, but be very careful to avoid crushing the tools.

FPPC contemplating further regulating the Internet

This morning I had the opportunity to speak in front of the FPPC subcommittee on the Political Reform Act and Internet political activity as they contemplate potentially further regulating disclosure and reporting requirements for the Internet.  Also appearing on the “political consultants” panel with me were Steve Maviglio, and Bryan Merica from ID Media and Fox & Hounds Daily.  The goo-goo groups followed us, Kim Alexander, California Voter Foundation, Derek Cressman, Common Cause, Tiffany Mok, ACLU and Barbara O’Connor, Sacramento State University.

Ironically, the Internet subcommittee hearing was not broadcast on the web, though you could listen to it on a 1-800 number.  And of course there was no wifi in the room.

The FPPC subcommittee members are concerned about voters not knowing who is paying for both advertising and content on the web.  At the same time, they were pretty clear that they did not want to stifle political communication and see the Internet as a great for Democracy.

Much of the discussion focused on disclosure of the committees/candidates responsible for advertising and email communication.  Just about everyone agreed that disclosure was conceptually a good thing, but I and others made the point that a one size fits all policy will not work.  For example, one could have a committee name so long that it would take up the whole character limit on a Google search ad.  Or setting a rule that the disclosure language must take up 5% of the space on a image ad like Florida recently did would make it illegible at places like Calitics.  Our standard ads here are 150×200 pixels. Nobody could read text that took up 5% of that space.

It does make sense on the other hand to require disclosure of the candidate/committee on the landing page (the page where people are redirected to upon clicking the link).  There will be plenty of room to put the name on those pages.  Full credit to Bob Brigham for the idea, but one could link the FPPC number right to the Secretary of State page for that entity, which discloses the contributors and expenditures data.

There was also some discussion about the difficulty in regulating disclosure on sites like Facebook/Twitter.  They are constantly changing their design and interface.  It might be possible now to post the committee name now on the front page of a Fan page, but we may not have that functionality a year from now.  The basic point is that the Internet and these sites in particular are evolving at such a fast rate that it may be impossible to set up detailed requirements that are not quickly outdated.

A great deal of time was spent on sockpuppets and paid shills who are not disclosing that they are being hired to blog by a campaign.  The subcommittee members seemed inclined to require that bloggers disclose if they are being paid to blog.  Even I did not argue too strongly against that.  While we are pretty good at self-policing, it is not a perfect system.  All of us editors here at Calitics voluntarily disclose who we are being paid by if it is relevant to the posting.  Steve Maviglio in particular welcomed this idea.  Derek Cressman suggested that one alternative might be simply more detailed reporting to the state about what individuals are being hired to do.

The FPPC staff recommended that independent bloggers be treated just like journalists.  The commissioners were a bit hesitant about doing so, and suggested perhaps creating a separate category.  But I and others argued that the lines are so blurred these days between who is a blogger and journalist that it did not make sense.  Given the decimation of the Sacramento press corps, it is more important than ever that we encourage journalism and blogging, rather than pass further regulation.  

I also gave them the example from the other week of a traditional media outlet getting Rep. Jerry McNerney’s position on the health care reform bill incorrect.  It was blogger Dave Dayen who was the one who picked up the phone, called the office and got the correct information published.  Now was he a journalist who was blogging his work, or was he a blogger acting like a journalist?  How does one draw the line?

No specifics were discussed with regards to independent bloggers, but don’t be surprised to see them pick this up again at a future date.  Speaking of dates, next week they will be holding a similar hearing in Los Angeles with FEC commissioner Ellen L. Weintraub on the schedule.  She will be talking about how the FEC has been tackling these same issues.

The commissioners were looking for advice on what we as practitioners were looking for from them: regulation or advisory letters.  Given the speed of innovation, it certainly makes more sense for guidance than regulation with fines as punishment.  The commission doesn’t exactly move at warp speed, so don’t expect to see anything out of them for some time.  All in all it was a very good open discussion and while I believe we further complexified the situation for them, it illuminated the issues they have to take in to consideration as they contemplate taking action.

Thursday Open Thread

Links?  I’ll show you some links!

• The latest Don Perata story concerned money he took from his own ballot campaign account into his legal defense fund.  He’s entitled to do that for the time being, but the Fair Political Practices Commission is considering new rules to strengthen the campaign finance laws around these kinds of accounts.  I think “abolished” might be a good way to go for these slush funds.

• Supervisor Mark Ridley-Thomas has a pretty cool tribute to Martin Luther King on his website today, on the occasion of his 80th birthday.  Eight elected officials in LA County answer the question, “What is the significance of this year’s Martin Luther King Day to you?”

• New Rep. Duncan Hunter, following in the legacy of his father, is whining about potential Guantanamo detainees behind held temporarily at Camp Pendleton.  He claims their presence would “distract” the Marines there.  Considering these detainees have been held in what amounts to a concentration camp and tortured, I think “distraction” is but a small price to pay.

• On yesterday’s SCHIP vote, which passed resoundingly in the House, Hunter joined most California Republicans in voting against medical care for children.  Only Mary Bono Mack defied her Republican counterparts.

• The CBP blog thinks we should look at enterprise zone programs as a good place to start cutting the budget.  A new study by the PPIC claims they are completely ineffective.  I’m all for eliminating useless tax breaks.

• There is a Los Angeles municipal election on March 3, and the only race worth following is a crowded contest for Jack Weiss’ old city council seat.  Six candidates (including progressive former Assemblyman Paul Koretz) all raised roughly the same amount of money in the last quarter.

• This is a pretty big ruling for environmentalists, as an Australian firm has bowed to pressure and scrapped their plans for an LNG terminal off of Santa Monica Bay.

• And then there’s the story about the California man who tried to sell his 14 year-old daughter into marriage for cash, beer and meat, and then attempted to have the groom arrested when he wouldn’t pay up.  Hey, I didn’t know that the dowry was back in fashion!

Prop 8 Supporters Launch Attack on Campaign Finance Disclosure Laws

In a remarkable column in yesterday’s Wall Street Journal right-wingers John Lott and Bradley Smith use the backlash against Prop 8 donors to suggest an end to campaign finance disclosure laws. They cite some of the more well-known examples of voter accountability for Prop 8 backers – Marjorie Christofferson, the Cinemark movie theater chain – to argue that campaign donations should be treated like a secret ballot:

How would you like elections without secret ballots? To most people, this would be absurd.

We have secret balloting for obvious reasons. Politics frequently generates hot tempers. People can put up yard signs or wear political buttons if they want. But not everyone feels comfortable making his or her positions public — many worry that their choice might offend or anger someone else. They fear losing their jobs or facing boycotts of their businesses.

And yet the mandatory public disclosure of financial donations to political campaigns in almost every state and at the federal level renders people’s fears and vulnerability all too real. Proposition 8 — California’s recently passed constitutional amendment to outlaw gay marriage by ensuring that marriage in that state remains between a man and a woman — is a dramatic case in point. Its passage has generated retaliation against those who supported it, once their financial support was made public and put online.

This column could only be written in light of persistent media efforts to paint Yes on 8 donors as victims. By erasing the true victims – 18,000 same sex couples and the innumerable other couples who wished to follow them to full equality – folks like Steve Lopez have constructed a situation where the far right can use those supposed victims as a battering ram against campaign finance disclosure rules they’ve long opposed.

Lott’s and Smith’s argument is pernicious. They argue that mandatory disclosure limits freedom of speech and of political action, that anonymous donations have protected groups like the NAACP (from government harassment, not public accountability, as the columnists neatly ignore), and that public pressure to disclose donors will accomplish what regulations currently provide (yeah right).

This is not just a wingnut attempt to protect their wealthy allies. It’s an effort to lay the groundwork to undermine California’s disclosure laws in the event we return to the ballot to repeal Prop 8 in the near future. Without disclosure rules, it is highly likely that we will see much larger sums of money donated to the anti-gay cause.

Even before the post-election backlash unfolded, many wealthy donors and companies refrained from donating to the Yes on 8 campaign for fear of alienating customers and Californians. If these rules are relaxed then companies that rely on same sex marriage supporters for their profits could take that money, give it to the haters, without the public knowing or being able to take their business elsewhere. It could provide their side with a significant financial advantage over ours in a future ballot campaign.

That is likely the reason behind this op-ed. Sure, they buried it on the day after Christmas, but you can be assured it’s not the last we’ll hear of this argument. We would do well to prep our own response – that the public’s right to know is sacrosanct, that if the right wants money to be equated with speech that implies disclosure, and that this is nothing but an end run around our laws to allow corporations to dominate our elections.

FPPC Complaint Against Perez Campaign for 80th AD: Determination Due Friday

The Desert Sun and its online edition, mydesert.com, detailed the California Fair Political Practices Commission complaint against the Perez campaign for the 80th Assembly District for unfair practices during the California Democratic Party convention in San Jose.  For the entire article, refer to FPPC Complaint Alleges Candidate Skirting Campaign Advertising Disclosure.

The California Fair Political Practices Commission confirmed today that someone filed a complaint against 80th Assembly District Democratic candidate Manuel Perez accusing him of failing to disclose who paid for his campaign advertising.

The complaint was filed against the Coachella School Board trustee April 4.

“It’s obvious some people want to manipulate rules and don’t want to follow them,” said Greg Rodriguez, who filed the complaint. “I think everybody needs to be scrutinized by the rules they follow.”

More below the flip…

Rodriguez is a Greg Pettis for 80th Assembly District supporter, a candidate for the Palm Springs Unified School District board, and a Sen. Hillary Clinton delegate to the Democratic National Convention in Denver later this summer.  Pettis, a Cathedral City Councilman and former-Mayor Pro-tem, is the leading candidate and leading fundraiser of the four Democratic contenders for the 80th AD.

According to The Desert Sun,

Perez says he’s complied with the law.

“It’s one thing or another,” he said. “We’ve got more important things to do like walk the streets and talk to voters.”

Apparently one of the more important things that the Perez campaign has to do is voter intimidation in the Coachella Valley.  Perez’ Campaign Director, Amalia Deaztlan, was reported to intimidate one of Pettis’ Latino supporters and endorsers at the Democrats of the Desert Annual Banquet on Saturday, April 5, 2008, harshly pinching him in a manner usually applied by Latino adults to recalcitrant children, telling him after he refused to switch his allegiance from Pettis to Perez, “You are no longer one of us!”  In addition, Perez supporters have attempted to intimidate Pettis bloggers and diarists with threats and accusations.

Created with a ballot initiative in 1974, The Fair Political Practices Commission was created in a 1974 ballot initiative to investigate campaign violations of the Political Reform Act and imposes administrative penalties.

The FPPC will notify Rodriguez in writing by Friday whether the department will investigate or not, said Roman Porter, a department spokesman. Porter would not speculate on the merits of the complaint.

“One advantage of having a formal complaint signed under penalty of perjury is to reduce frivolous complaints,” he said.

State law requires disclosure on campaign advertising when advocating for or against a candidate or ballot measure.

Perez supporters created and distributed fliers advertising the Perez candidacy at the CDP convention in order to attempt to revoke the party endorsement of Pettis for the 80th AD which he obtained with over 70% of the Democratic Club votes at the Moreno Valley confab.  Perez supporters created the advertisements without any FPPC-required denotations as required for the mass production of campaign materials.  Perez supporters to date have not reported exactly how many fliers were created for distribution.  Under FPPC regulations, mass-produced advertisements are often regulated when created in numbers of 200 or greater.