We saw a lot of news stories last year surrounding the $11 million dollar contribution that was made from an Arizona-based non-profit to the Small Business Action Committee here in California last year. This contribution was made during a period of time when SBAC was heavily funding independent efforts to defeat Prop. 30 and to pass Prop. 32 (with no success, I might add, unfortunately). Prop. 30 was the measure to increase the state’s sales tax rate, and Prop. 32, if passed, would have taken away the ability of public employee unions to collect dues through payroll deductions. Apparently the funds sent to the SBAC by this Arizona non-profit were sent to that entity by two other non-profits. Under federal laws, 501c4 non-profit organizations are not required to publicly report their donors. Left-of-center groups like Common Cause (who hate the idea that there is money in politics, except for when they agree on the cause for which it is being spent) took issue with this large contribution, arguing that these groups must have been acting as some sort of “pass through” for California donors who wanted to maintain some anonymity in their giving.
With all of the zeal of Lois Lerner at the Internal Revenue Service jumping on a Tea Party organization, the state’s Fair Political Practices Commission immediately leaped on this — as did, apparently, Attorney General Kamela Harris. After all, these non-profit entities apparently are associated with the libertarian Koch Brothers (who both in the list of top ten wealthiest people in American do to their success in industry) — and the Koch brothers are hating and reviled by the left and progressives because they uphold values such as liberty and freedom, and think that growth in government is problematic.
Today the Fair Political Practices Commission is holding a press conference (as I write this) to announce a settlement has been reached in their case of trying to determine if heinous wrong-doing had been committed. Guess what? There’s no there there. Which is to say that I am told that underneath the banner headline of a seven-figure settlement (the media is reporting that it will be at or around $1 million) is going to be a finding of an “inadvertent technical violation” and that, in fact, these committees who are being gouged-via-fine actually acted in good faith.
So I guess the million dollar question (literally) is why would these non-profits agree to a big payout like if they really didn’t do much of anything wrong? From my perspective, that answer is obvious. What do you think happens when the Attorney General of the State of California and the FPPC release a legion of investigators and attorneys? Everyone on the receiving end of all of this scrutiny, whether a wrong-doing was committed or not, have to retain lawyers and devote significant time and financial resources into dealing with the matter — and endure an assault of negative media attention. While it may sound noble to say that groups under such a barrage from the government should “stick it out” and fight until they are exonerated — that doesn’t really work in the real world. In the business world, you say to yourself — we could spends millions of dollars and countless days, weeks or even years trying to resolve this issue, or we can just “make it go away” by writing a check. I can only imagine the impact on a group’s fundraising when they are barraged with negative press… Not to mention the fact that when accusations get made like this, you end up trying to disprove a negative, which is problematic. I have not spoken with anyone from these groups, but I have no doubt that their motivation to arrive at a settlement was for exactly this reason.
I wonder how many Tea Party and conservative groups folded in the face of unfair IRS targeting because of the compliance costs associated with being unfairly targeted?
There is an ironic hypocrisy out there on the part of the left. While they talk about the importance of free speech, these kinds of efforts are really intended to curb the political speech of their adversaries. And they have no qualms about creating boat-loads of regulations knowing full well that because they control the system (which is most certainly the case here in California) they can totally target those offenders who consistently oppose their progressive agenda.
There is no doubt in my mind that the “minor detail” of this fine being drastically out of proportion with any actual violation of law or regulation will be dismissed by left wing groups and most in the main stream media, who will want to forward the narrative that only the guilty pay a fine. When in reality the story here is that no one is safe from the power of big government when those pulling the strings decide to focus on you.
House Oversight Committee Chairman Rep. Darrell Issa held hearings on the IRS scandal...
In Congress, the House Oversight Committee has lead the charge on bringing the IRS scandal into the public eye through hearings — they’ve even used their subpoena power to force IRS officials, like Lerner, to come forward. Ultimately the President himself had to apologize for the inappropriate actions of the IRS, and Lerner was fired. Unfortunately, here in California, the fox guards the hen house. Don’t look for the State Senate or the State Assembly to open up hearings on the tactics used by state government to extract a settlement out of these non-profits who, relative to the fine, didn’t do much of anything wrong.
Ann Ravel, the current Chairman of the FPPC, is imminently departing her post to accept her new position as a Commissioner for the Federal Elections Commission. Lord knows what mischief she will create around the country. If this situation is anecdotal, she will be a full employment act for lawyers around the country as she thumps on political groups like a game of, “whack a mole.”
This entire episode will have a chilling effect on political speech. And it should serve as a cautionary tale to all.
As a post-script, as I was finishing up this column — I received the official press release from the FPPC. You don’t get very far into it before the Koch Brothers are mentioned by name — it’s in the first sentence. Shocking.