FPPC Complaint: Secret Irvine Political Donations Were Illegal

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Former Orange County Democratic Party Chairman Frank Barbaro has filed a complaint with the state’s campaign watchdog alleging that an East Coast nonprofit broke election laws when it funneled $200,000 from secret donors to help Republicans unseat the Democratic majority on the Irvine City Council, The Orange County Register reported.

For several years, Democrats held the council majority in Irvine, a rare blue stronghold in the county’s mostly red political landscape.

But Republicans seized the Irvine council last year when Larry Agran, the former council majority leader and longtime powerbroker, failed in his mayoral contest against Republican Steven Choi.

Weighing heavily in the Republican success were large, anonymous campaign donations by deep-pocketed groups from outside the county, an unprecedented and controversial campaign strategy in Irvine’s local races.

A Voice of OC article last year first detailed the money flow: The Virginia-based nonprofit Citizens in Charge made a $200,000 donation to the statewide committee California Term Limits PAC. The money was spent mostly on mailers that attacked Agran, while supporting Choi and Republican council candidates.

The California Fair Political Practices Commission has made clear that machinations to hide the identities of major political contributors won’t be tolerated. In a major ruling last October, the watchdog levied a record $16 million in fines against political groups that laundered anonymous donations toward defeating statewide ballot measures.

Campaign finance activities targeted in the FPPC ruling resemble the opaque financial relationship between Citizens in Charge and California Term Limits PAC, which was controlled by Orange County-based Jon Fleischman, whose FlashReport blog is influential among conservatives statewide.

FPPC officials are investigating Barbaro’s 600-page complaint, according to the Register, but the newspaper’s independent review concluded that election laws were apparently broken.

From the article:

Out-of-state nonprofits such as Citizens in Charge are not required to disclose donors under California law unless they make more than a single political contribution over a four-year period or if the donor to the nonprofit knows — or requests — how the money is to be spent in a political campaign.

When separate nonprofits are controlled by the same individuals, “the contributions of those entities shall be aggregated,” according to California election law. In other words, multiple groups run by the same people can’t make multiple political contributions in the state without disclosing their donors.

In addition to being president of Citizens in Charge, Jacob is president of separate nonprofits called Citizens in Charge Foundation and the Liberty Initiative Fund. All three share several common board members. And all three contributed to California campaigns in 2012:

• The Liberty Initiative Fund gave $100,000 to Californians for Term Limits, the principal campaign against the Proposition 28 term-limits reform on the June ballot. Fleischman served as co-chairman and spokesman for the group.

• Citizens in Charge Foundation sponsored a poll on Prop. 28, which the FPPC complaint says is campaign spending in support of Californians for Term Limits.

• Citizens in Charge — separate from the Citizens in Charge Foundation — gave $200,000 to California Term Limits PAC — which is separate from Californians for Term Limits.

That nonprofit “stacking” is one of the violations alleged in the complaint being investigated by the FPPC. Another is that Fleischman and Jacob conspired to funnel money from hidden donors into the Irvine races. Additionally, tax filings by a nonprofit called U.S. Term Limits show a $100,000 contribution to Liberty Initiative Fund, which would run afoul of state law governing intermediary donors if the money were earmarked for Prop. 28.

Not long after Prop. 28 was approved by voters, Fleischman and Jacob met on a trip paid for by California Term Limits, according to campaign disclosures. On Aug. 1, 2012, Fleischman formed California Term Limits PAC. On Sept. 5, the new PAC received $200,000 from Citizens in Charge and on Sept. 11 it began spending that money on the Irvine mayor and council races.

Although that spending comes closely on the heels of receiving the money, Fleischman said he did not know how he was going to spend it until he received it. He said Jacob, who he’s known for more than a decade and who is a longtime advocate of term limits and citizen initiatives, encouraged him to establish a permanent political action committee to continue the fight for term limits after the Prop. 28 battle.

Fleischman said he didn’t discuss possible uses for the money with Jacob before he got it.

Please contact Adam Elmahrek directly at aelmahrek@voiceofoc.org and follow him on Twitter: twitter.com/adamelmahrek.

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