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Group seeks audit of $11M donation by Ariz. group

Posted: October 19, 2012 7:00 p.m.
Updated: October 19, 2012 7:00 p.m.

Derek Cressman, of Common Cause, gestures at a chart that the organization believes shows groups tied to an $11 million contribution made by a Arizona-based nonprofit to California initiative campaigns.

SACRAMENTO, Calif. (AP) — A good-government group asked California's campaign finance watchdog Friday to investigate the donors behind an $11 million political contribution from a nonprofit based in Arizona, as Gov. Jerry Brown called on its donors to "show their faces."

The contribution was received this week by the Small Business Action Committee PAC, an Orange County-based political action committee that is active in California's November election. It is campaigning against Brown's tax initiative and in favor of an initiative to erode union power.

California Common Cause called the donation from the Phoenix-based Americans for Responsible Leadership possibly the largest "secret political donation in California history."

"It does not pass the laugh test ... $11 million in secret money is a new phenomenon for us in California," said Derek Cressman of Common Cause.

The group filed a complaint with the California Fair Political Practices Commission, asking it to investigate under a new campaign finance law that requires groups to disclose the source of money that will be used for political activity. The commission has 14 days to decide whether to investigate, said Gary Winuk, the commission's chief of enforcement.

Messages left for the three Phoenix-area men listed on documents as directors of Americans for Responsible Leadership were not immediately returned Friday. The documents name the directors as 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 campaign for Brown's tax initiative, Proposition 30, called on the donors to reveal themselves to Californians.

"Crossing the Arizona border and spending $11 million of secret money to hurt California students is an extreme act," Brown said in a statement, referring to the $6 billion in automatic budget cuts that could hit California schools and colleges if his initiative fails.

Beth Miller, a spokeswoman for the Small Business Action Committee, said the allegations by Common Cause are "a politically motivated charge without one shred of evidence."

She said as a registered nonprofit organization, the Arizona group is not required to disclose the source of its money, just as other nonprofits are not required to divulge theirs, such as the American Cancer Society, which gave millions of dollars to support a failed initiative in June that sought to raise cigarette taxes.

"I don't know where Americans for Responsible Leadership gets their money, but in much the same way that those nonprofit organizations get their money, it's the same situation," Miller said.

Americans for Responsible Leadership failed to file an annual report that was due in July and is listed as not-in-good-standing with the Arizona Corporation Commission, according to the agency's website.

Campaign finance reports filed with the Arizona secretary of state's office show the nonprofit has given $500,000 to opponents of an Arizona initiative for a permanent sales tax increase and $450,000 to opponents of a separate initiative for a top-two primary election system.


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