Exactly three weeks to the day that it put $11 million into a conservative California political action committee, an Arizona nonprofit admitted Monday that the money wasn't really theirs... but rather, was part of an elaborate effort that California officials say is a clear case of political money laundering.
In some, the news largely produced the same effect as turning down a path in a maze and finding a dead end... with no clues on where to turn next.
After a series of late Sunday night and early Monday morning negotiations, the backers of the Arizona group Americans for Responsible Leadership agreed to disclose where they had received the $11 million that went to a group trying to defeat Gov. Jerry Brown's Proposition 30 and pass a political contribution measure, Proposition 32, largely lamed at organize labor.
The source of the money, as far back as it was traced, is a national conservative group called Americans for Job Security.
A 2005 article in Texas Monthly described the group this way:
"... A shadowy Virginia-based group that the American Insurance Association helped launch in 1997 by supplying $1 million in seed money. AJS takes out attack ads against liberal and moderate candidates nationwide without disclosing its political contributions or expenditures. This track record of spending large quantities of undisclosed funds on attack ads has fostered the perception that AJS is a for-hire corporate attack dog."
The president of AJS, Stephen DeMaura, is a former New Hampshire Republican Party chair whose associates are also linked to the Karl Rove backed American Crossroads PAC.
Unlike the Arizona group -- organized as a "social welfare" 501(c)(4) under federal tax law -- AJS is a 501(c)(6) "business league" organization. "This type of organization is designed to promote the 'common business interests' of its members," says the AJS website.
But the northern Virginia group didn't just send its money to Arizona. First, it funneled the money through another not-so-transparent group, the Center to Protect Patient Rights. Its top officer, who signed a document owning up to the California scheme, is Sean Noble, a political consultant who the Los Angeles Times described as a "key operative" in the efforts of Charles and David Koch -- the billionaire brothers and conservative political kingmakers.
Noble is a former political adviser to Kirk Adams, former Arizona state house speaker and current chairman of Americans for Responsible Leadership -- the original Arizona donors to the California effort.
That linkage was apparently enough for California officials to deem the entire thing an end run around the state's campaign procedures.
It also raises some other interesting questions. For example, a Bloomberg News story last month reported that the Center to Protect Patient Rights gave money to the American Future Fund, based in Iowa. That's worth pondering because AFF gave its own $4 million donation to a related California effort in September. Until now, there were hunches -- but not much else -- to link that $4 million to the hotly debated $11 million in mystery money.
The California-based recipients, the Small Business Action Committee PAC, quickly amended its state political filings Monday morning to reflect the true source of the money. A spokeswoman says SBAC did everything it was supposed to do under state law.
Where the case goes from here depends on the California Fair Political Practices Commission, which simply pushed for donor disclosure... not enforcement action... against the Arizona group prior to the election.
Some have speculated that should the $11 million be found to be an illegal donation, state officials could order that the money -- or an equal amount (assuming the original cash was spent on TV ads and the like) -- be sent to the state treasury, which would make it money eligible to help balance the state budget.