An Arizona-based nonprofit disclosed Monday that it laundered $11 million from pro-Republican groups and sent it to a campaign committee in California that's fighting a proposed tax increase designed to support public education.

Phoenix-based Americans for Responsible Leadership (ARL) didn't give up their donor list without a fight, however: after an official complaint by advocacy group Common Cause triggered an investigation by the California Fair Political Practices Commission (FPPC), ARL appealed their case all the way up to the California Supreme Court. They lost that case this weekend, then opted to turn over the requested information rather than fight it all the way to the U.S. Supreme Court.

"They were attempting to hide the true source of their funds, which makes it harder for California voters to evaluate the ads that they're seeing paid for by these funds," Derek Cressman, vice president at Common Cause, told Raw Story on Monday.

However, instead of revealing the true source of the money, ARL disclosed Monday that it acted as an intermediary for the $11 million, which came by way of two other pro-Republican groups: The Center to Protect Patient Rights and Americans for Job Security.

"Under California law, the failure to disclose this initially was campaign money laundering," the FPPC said in an advisory. "At $11 million, this is the largest contribution ever disclosed as campaign money laundering in California history."

The beneficiary of the money, a California-based super PAC called the Small Business Action Committee, is pushing back against Prop. 30, which would levy a quarter of a cent sales tax increase and raise rates on the wealthiest Californians to support public education and prevent tuition hikes at state universities. The group is also supporting Prop. 32, which would ban unions and corporations from contributing to campaign committees in the state, which critics say would tilt the scales of influence toward conservative nonprofits.

"We still haven't gotten to the bottom of the original corporations or individuals behind the funds," Cressman said. "There's clear ties to corporate interests and various players in the Republican Party, but we think there needs to be an ongoing investigation so we can get to the actual donors themselves."

The FPPC hasn't announced any penalty for Americans for Responsible Leadership yet, but they could impose substantial fines for willful violation of California's campaign finance laws. On the other hand, "they used this term, 'money laundering,' and there are federal statutes against money laundering that may have criminal penalties," Cressman added. "It is possible that the attorney general or Department of Justice could get involved, but I can't confirm that."

Neither ARL nor the FPPC responded to requests for comment.

"California voters now know that this is a group that had something to hide and went to great lengths to illegally conceal who their donors were," Cressman concluded. "So, that's a pretty good reason to be skeptical of what they're saying, even though we don't yet know where their funds came from."


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