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Donation by Ariz. group called 'money laundering'

Associated Press Modified: November 5, 2012 at 7:31 pm •  Published: November 5, 2012

In a news release following receipt of the letter, the commission said the group's failure to initially disclose the two donors was campaign money laundering.

"This is the largest contribution ever disclosed as campaign money laundering in California history," it said.

The watchdog agency enforces the state's campaign finance and disclosure laws and can issue fines and penalties for noncompliance, although it refers legal violations to law enforcement agencies. The board's chairwoman, Ann Ravel, was appointed by Brown.

Harris, a Democrat, said the Arizona group's admission of the source of its funds, though opaque, is a first step.

"We are going to continue to take a look at this and examine the full scope of the conduct involved," she said.

She said the U.S. Supreme Court's ruling in the so-called Citizens United case, which allowed corporations and unions to spend unlimited amounts on political ads, indicated that protected political speech "is not and should not be thought of to be at the expense of disclosure."

ARL's $11 million donation went to the Small Business Action Committee PAC, which opposes Brown's tax initiative and a separate initiative that would limit unions' ability to collect money for political causes. Because the funds are mingled with other contributions to the Small Business Action Committee, it is not clear how much of the money went to support each of the group's positions on Tuesday's initiatives.

Three Phoenix-area men are listed on documents as directors of Americans for Responsible Leadership, which was formed last year: Steven Nickolas, president of Silver Sky Capital; Robert Graham, president of RG Capital Investors; and Eric Wnuck, an unsuccessful Arizona congressional candidate in 2010.

The group also has given more than $1.5 million to oppose two initiatives on the Arizona ballot, one that would raise the statewide sales tax to provide more money for schools and another that would modify the state's primary election system.

In California, the FPPC sought to perform an audit after California Common Cause filed a complaint. Kathay Feng, president of Common Cause, said the precedent set by the case "is a victory for voters and democracy."

"Though it shouldn't take weeks of legal suits, California voters now have the information they need to make informed choices on Nov. 6," she said in a statement.

During a brief appearance in Los Angeles Monday, Brown did not directly mention the Arizona group but urged activists to knock on undecided voters' doors and make phone calls to overcome the influence of shadowy money in politics.

"We've been up against a lot of money power — money power not only from California but from secret organizations throughout California, throughout America, that want to come and influence voters," he said at a get-out-the-vote rally in a Hispanic neighborhood in the city's San Fernando Valley.


Associated Press writers Michael R. Blood in Los Angeles and Hannah Dreier and Judy Lin in Sacramento contributed to this report.