Shadowy Group Contributes to Proposition that Warns of Special Interest Influence

Friday, October 19, 2012

A secretive, conservative Phoenix-based special interest group just dropped $11 million into campaigns opposing Governor Jerry Brown’s Proposition 30 and supporting the anti-union Proposition 32 that bills itself as anti-special interest.

The Americans for Responsible Leadership (ARL) contributed the money to the Small Business Action Committee, a group that has divided its efforts between the two propositions. Brown’s measure would raise income taxes for the wealthy and sales taxes, while Prop. 32 would curb unions’ ability to use membership dues for political campaigns.

Prop. 32 is officially called “The Stop Special Interest Money Now Act” but only deals with unions and corporations. It would leave untouched contributions by wealthy individuals, businesses (such as LLCs and financial companies), single-issue advocacy groups and, of course, shadowy groups like Americans for Responsible Leadership. 

Virtually nothing is known about ARL, formed under the IRS code 501(c)(4). It is one of a new breed of campaign contribution vehicles which, because of recent court decisions and favorable legislation, is designed for nonprofit groups operating as social welfare organizations but has a loophole allowing participation in politics. It’s a loophole easily large enough to accommodate one of the largest California campaign contributions so far this year.

ARL’s website promotes its opposition to a proposed Arizona sales tax initiative and an Arizona proposition that would usher open primaries and top-two general elections into the state. 

Another 501(c)(4), the California Future Fund for Free Markets, gave $4 million to the Yes on Prop. 32 campaign. Its funding came from the American Future Fund, a creature of billionaire brothers David and Charles Koch.

Although he has yet to flex his muscles in California politics, entertainer Stephen Colbert has created the Colbert SuperPac SHH 501(c)(4), which he acknowledged is one of those “unregistered money guns, shooting up the election with untraceable political slush funds.” Colbert has conducted a year-long campaign to throw light on a political practice that has transformed fundraising and shifted political power centers at lightning speed.

According to, the proportion of outside spending in political campaigns with no disclosure of donors (excluding political party committees) has skyrocketed from 1.6% in 2006 to 43% in 2010. The Center for Public Integrity says that, since Labor Day, 44% of independent money unleashed by the U.S. Supreme Court’s Citizens United decision—about $100 million—is from non-disclosing, non-profit corporations.   

–Ken Broder


To Learn More:

Shadowy Arizona Group Inserts Itself into California Campaigns (by Steve Harmon, Bay Area News Group)

Mystery Arizona Group Sends $11 Million to Fight Unions, Gov. Jerry Brown (by Kevin Yamamura, Sacramento Bee)

California Campaigns Swamped with Independent Spending (by Chris Megerian, Los Angeles Times)

Stealth Spending on the Rise as 2012 Election Approaches (by John Dunbar, The Center for Public Integrity)

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