Outside Money Flowing Into Anaheim Council Districts Campaign

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A statewide nonprofit with a mission to help elect candidates of color has made significant contributions to the campaign aimed at passing a November ballot measure that would change Anaheim’s electoral system from an at-large format to district elections.

The campaign has attracted more than $231,000 as of the most recent public filing dated Sept. 19. The total includes a $45,000 donation from San Francisco-based PowerPAC.org as well as contributions from the locally based Orange County Communities Organized for Responsible Development, which organizes and advocates on behalf of underserved communities.

Leaders with both groups say they support district elections because it is seen as helping minority Latino and working-class candidates get elected to Anaheim’s city council, which currently is all white and mostly affluent.

But blogger Matthew Cunningham, whose views mirror the Anaheim Chamber of Commerce and other establishment interests, characterizes the support as progressive “dark money.”

Dark money is a term that has come into vogue to describe the unprecedented amounts of outside money that have flowed into campaigns in the wake of the U.S. Supreme Court’s 2010 Citizens United decision, which gave corporations, labor unions and other well-heeled interests power to spend unlimited amounts of cash on political campaigning.

In a typical dark money campaign, these groups donate huge sums to nonprofits that are generally not required to reveal their donors. The nonprofits then funnel that money to independent expenditure committees that aren’t bound by campaign contribution limits. At the federal level, they’re known as super PACs.

Most of the criticism regarding dark money has been leveled at supporters of conservative causes like George W. Bush campaign consultant Karl Rove and the billionaire Koch brothers.

Cunningham is claiming that the council-districts campaign shows that liberal groups are playing the dark money game as well.

“Two things jump out beside the $101,100 in contributions,” Cunningham wrote in an Aug. 5 blog post about the campaign’s early donation reports. “93% of that total is the ‘dark money’ hated by the progressives running this campaign and not a penny of it comes from Anaheim – most is from Northern California.”

But a campaign finance expert says Cunningham is going too far in his comparisons and that the funding by PowerPac.org and OCCORD is more transparent than the money flowing from the super PACs.

“If you can trace whose donating, it’s not traditional dark money,” said Larry Noble, Of Counsel to the Washington, D.C.-based Campaign Legal Center and the former general counsel for the Federal Elections Commission.

And it is possible to trace the funding of the council-districts campaign if one is willing to follow the money back one or two steps from the final donations.

However, Noble did question why the PowerPAC.org funding took such a circuitous route when it could have been contributed directly to the campaign.

In May, the nonprofit donated $65,000 to a committee it controls — PowerPAC.org Voter Fund, A Sponsored Committee of PowerPAC.org – which then donated $45,000 to the Committee for District Elections, Sponsored by One Anaheim.

According to public disclosure forms filed with the California Secretary of State and the group’s president, the original source of most of the May donations is Susan Sandler – the daughter of billionaire philanthropists Herbert Sandler and the late Marion Sandler.

The Sandlers had also funded progressive groups like Human Rights Watch and the American Civil Liberties Union, according to Bloomberg News

PowerPAC.org President Andy Wong said that the organization listed Sandler as an intermediary contributor on their public filings, as required by law when the contribution is designated to support a specific campaign. The PowerPAC.org committee contribution to the district elections campaign came from Sandler, he confirmed.

Wong also said it was insulting on another level to call the PowerPAC.org contribution “dark money” given that the nonprofit’s goal is get candidates of color elected.

“Referring to an organization of color as putting in dark money is really kind of irritating,” Wong said.

Meanwhile, Eric Altman, the district elections campaign spokesman who is also OCCORD’s former executive director, said that nonprofit’s contribution can’t be considered dark money because the donors are disclosed on the group’s website. And he said the campaign follows all disclosure rules.

Altman also pointed out that Cunningham listed two OCCORD donors in his blog post criticizing the campaign’s opaqueness.

“In 2012 alone, UNITE-HERE funded OCCORD to the tune of $66,000 (OCCORD also received $2,500 from the Nurses Association of Canada),” Cunningham wrote.

Said Altman: “I don’t think it’s that big of a mystery here.”

Cunningham said he couldn’t find the Sandler donation when he looked at PowerPAC.org’s public filings. And he said OCCORD’s funding isn’t always clear because filings statements on the website don’t show exactly how much donors have given, and the latest sources likely won’t be revealed until after the election.

Cunningham said he has had to “reverse engineer” the funding sources for OCCORD by doing things like scouring the federal Department of Labor’s database on unions’ expenditures. The average voter won’t go to those lengths to figure it out, he said.

It’s experiences like Cunningham’s that that lead Noble to conclude that donations from nonprofits to campaigns are only “slightly more illuminated than true dark money” when the nonprofits disclose their donors.

Though Noble did credit OCCORD for disclosing more than it was required to under the law.

The larger point of his blog post, Cunningham said, was that a progressive cause is relying on large amounts of outside money to achieve its aims, something that liberals often cry foul about when criticizing the campaign finance system.

“To date, it’s all from unions, progressive political organizations from outside Anaheim, outside the region, or even outside the state,” Cunningham said. “If this is something that Anahiem residents really want… why is all the financial support for this coming from political interest groups outside of Anaheim?”

Ironically, Cunningham’s blog has also faced questions about the true source of its funding. Cunningham has been a paid consultant to the Anaheim Chamber — which is seen as representing the interests of the city’s tourism industry and the council majority – but the chamber and Cunningham deny that the group is funding the blog.

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.

And at the local level, a true dark money campaign in Irvine helped Republican candidates unseat the former Democratic City Council majority. In 2012, a Virginia-based nonprofit funneled $200,000 to a statewide PAC that spent tens of thousands of dollars on attack mailers against then council leader Larry Agran.

The original source of the contributions hasn’t been identified. And former Democratic Party of Orange County Chairman Frank Barbaro has filed a complaint with the sate’s campaign finance watchdog alleging that the nonprofit broke election laws when it funneled money to the statewide PAC.

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

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