Money Laundering Charge over $11 Million thru Arizona for Prop 32 Proves Why to Vote NO on 32!

Money laundering graphic

A new record in large contributions — and in unintended irony!

Prop 32 is the initiative that revives the old “Paycheck Protection” scams that would prevent collecting any money from payroll deductions for political purposes.  Note that individual workers can already opt out of having their dues used for political purposes under current law, so the actual  purpose of this initiative is simply to tilt the playing field towards corporations.  While Prop 32 is being sold to voters as something that would take money out of politics, using examples of big corporate donations, it would almost entirely affect unions and not corporations.  It’s a power grab, plain and simple — and the corporations are putting a lot of money behind it.

Most notorious among those funds has been an $11 million contribution that came from a PAC in Arizona — which is weird, give that this is a California initiative.  By going through another state, those funding the initiative were betting that their identities wouldn’t have to be revealed before election day, ripping the mask off of the corporations and conservative interests who so badly want this bill.

This morning, they lost that bet!

The California Fair Political Practices Commission (“FPPC”) has released this statement regarding the $11 million contribution that came out of an Arizona PAC to support California’s Prop 32, which would drastically cut back union contributions to politic action while leaving corporate contributions — like this very one — largely untouched.

Americans for Responsible Leadership, the Arizona non-profit corporation that made an anonymous $11 million donation to a California campaign committee, today sent a letter declaring itself to be the intermediary and not the true source of the contribution. It identified the true source of the contribution as Americans for Job Security, through a second intermediary, The Center to Protect Patient Rights. 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.”

Tremendous credit goes to the bulldogs at the FPPC and the wisdom of the California Supreme Court in making sure that voters get this information before election day — even though some who voted “Yes on 32” in early voting may now regret being bamboozled by criminals.

So, who are these desperados who laundered their money through Arizona?

The Center to Protect Patient Rights is located in Arizona — and they’ve pulled this kind of thing before with support for conservative causes.  As a SuperPAC, they won’t release the names of their donors.  From the Open Secrets article at the above link:

A secretive, well-funded group whose name gives the misleading impression that it is solely concerned about health care gave more than $44 million in 2010 to other tax-exempt groups, many of which spent millions on TV ads attacking Democrats running for the House and Senate and have begun spending for the same purpose this year.

None of the groups — including eight of the most politically active nonprofits in 2010 — disclose their donors, and the role of the Center to Protect Patients’ Rights (CPPR) in funding them has not previously been reported.

Based in Arizona, CPPR provided large grants to a cluster of well-known conservative organizations that operate under section 501(c)(4) of the tax code, which classifies them as “social welfare” groups and allows them to keep their funding sources from public view. Politics is not supposed to be their primary purpose, although critics say many of the organizations have stretched the rules too far.

Americans for Job Security is another shadowy conservative group that shields its donors.  From Wikipedia:

Americans for Job Security (AJS) is a Virginia-based 501(c)(6) group that describes as “a pro-Republican, pro-business organization” headed by David Carney.[1] The American Insurance Association launched the group with $1 million in seed funding in 1997. AJS runs “issue ads” that attack liberal and moderate candidates nationwide, but is not required to disclose its political contributions or expenditures.[2]

Complaints have been filed with the FEC stating that AJS should lose its 501(c)(6) status, which is reserved for “business leagues and trade associations” rather than groups that seek to influence elections. [5][6]

According to the organization’s own website, “For more than ten years Americans for Job Security (AJS) has been at the forefront of an explosion of the marketplace of ideas. During this time AJS has put forth a pro-growth, pro-jobs message to the American people. From the beginning our message has been a simple one: free markets and pro-paycheck public policy are fundamental to building a strong economy and creating more and better paying jobs.”[7]

Americans for Job Security avoids disclosure by reporting all its revenue as membership dues, although DeMaura claims there is no set membership fee and that members are not required to pay annually, which is why no dues were collected in 2007.

So, both groups are using their money from donors whose identities are undisclosed to meddle in California lawmaking without being subject to California rules.  And they want you to vote for Prop 32 to give their contributions MORE comparative power!

A vote against Prop 32 is a vote to save democracy — and a vote for Prop 32 is a vote to sacrifice it on the altar of Corporate America, which will be able to use its power to do whatever it wishes through the California initiative process.  Don’t be a sucker, be a patriot — vote NO on 32!

About Greg Diamond

Somewhat verbose attorney, semi-retired due to disability, residing in northwest Brea. Occasionally runs for office against bad people who would otherwise go unopposed. Got 45% of the vote against Bob Huff for State Senate in 2012; Josh Newman then won the seat in 2016. In 2014 became the first attorney to challenge OCDA Tony Rackauckas since 2002; Todd Spitzer then won that seat in 2018. Every time he's run against some rotten incumbent, the *next* person to challenge them wins! He's OK with that. Corrupt party hacks hate him. He's OK with that too. He does advise some local campaigns informally and (so far) without compensation. (If that last bit changes, he will declare the interest.)