Ariz. Nonprofit Opposing Calif. Initiative Must Reveal Donors

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November 1, 2012; Source: Businessweek

On November 6, Calif. Gov. Jerry Brown’s (D) Proposition 30, which would increase taxes on the state’s wealthiest and close some loopholes in order to help pay for education programs, will be on the California ballot. Recently, Californians have seen a campaign against Proposition 30 by the Small Business Action Committee, a group that has received donations totaling $11 million from a nonprofit organization based in Arizona.

In addition to its opposition to Proposition 30, the Small Business Action Committee is also supporting Proposition 32, which would place new restrictions on unions’ ability to use dues for political endeavors. State court Judge Shelleyanne W.L. Chang, however, has ruled that the Arizona nonprofit—Americans for Responsible Leadership—must reveal the names of its donors, thereby shining light on the out-of-state forces that are trying to influence policy via ballot initiatives in California.

Americans for Responsible Leadership (ARL) has appealed the decision and may argue that the First Amendment, the IRS tax code and the Supreme Court decision in Citizens United vs. Federal Election Commission protect the donors’ identity. But the judge in California is siding with the Fair Political Practices Commission’s (FPPC) contention that it can undertake an audit to find out whether or not it upheld state laws that seek to inform voters as to who is paying for ballot initiative campaigns; the state commission is seeking donors’ names as part of that audit process but ARL had refused to comply with the audit by supplying the names of donors.

According to the Los Angeles Times, Judge Chang found that, if no audit of the Arizona group was conducted, Californians might face “irreparable harm.” Judge Chang’s ruling also stated that although the Citizens United decision allows corporations to make unlimited donations in a campaign, it says nothing about their remaining anonymous. Gov. Brown has responded to the case, saying, “This is the biggest campaign violation ever since the FPPC became operative in 1975, and it is heartening that the FPPC is going to court.”

Americans for Responsible Leadership’s stated mission is to “promote the general welfare by educating the public on concepts that advance government accountability, transparency, ethics, and related public policy issues.” If that mission is sincere, one would imagine that Americans for Responsible Leadership would applaud an effort to reveal political donors hiding in the shadows and holding them accountable for their efforts. –Rob Meiksins