The Washington Post

California to levy massive fine against Koch brothers groups

LEFT - Charles G. Koch - AP RIGHT - David Koch - Bloomberg Charles G. Koch, left (AP); David Koch (Bloomberg)

Two groups that are part of a conservative political network maintained by billionaire industrialists Charles and David Koch have agreed to a record $1 million civil settlement with the California Fair Political Practices Commission, the largest campaign fine in state history.

The Center to Protect Patient Rights and Americans for Responsible Leadership, two Arizona-based groups that have funneled money to various arms of the Koch operation, will pay the fine for their role in financing ballot initiative campaigns in California in 2012.

The groups sent $11 million to campaigns opposing Proposition 30, which raised the California sales tax and income tax; and supporting Proposition 32, which would have limited political contributions by way of payroll deductions. Proposition 30, which had backing from Gov. Jerry Brown (D), passed. Proposition 32, which took aim at labor unions’ political power, failed.

The FPPC and California Attorney General Kamala Harris (D) filed suit against Americans for Responsible Leadership over the source of the contributions. ARL said the money had come from Americans for Job Security, another Koch brothers operation, and CPPR; ARL then passed the money on to the Small Business Action Committee, a California-based independent expenditure committee.

An investigation found another $4 million contribution from CPPR to another California-based committee. Neither contribution was properly reported, and under state law, the receiving committees will have to turn that cash — more than $15 million in all — over to the California general fund.

“This is a nationwide issue. These groups exploit loopholes in state law to undermine the clear purpose of the law,” Ann Ravel, the chairwoman of the FPPC and an incoming member of the Federal Election Commission, said at a Thursday press conference. “They hid the names of the true donors.”

In a statement, Malcolm Segal, an attorney for the Center to Protect Patient Rights, said the settlement showed the committee never intended to hide information.

“The Commission today recognized that CPPR acted in ‘good faith’ and that there was absolutely no intent to violate campaign reporting rules,” Segal said.

The $1 million fine is the highest levied in FPPC history, and it ranks as the third-highest campaign finance fine ever levied. In 2006, the Federal Election Commission fined Freddie Mac $3.8 million. The following year, the FEC fined the defense contractor MZM Inc. and two lobbyists connected to former Rep. Randy “Duke” Cunningham (R-Calif.) a little more than $1 million.

A spokesman for the two Koch brothers groups didn’t immediately return an email.

Ravel has been working with other states to shine a light on so-called dark — or undisclosed — political money. Earlier this month, the FPPC announced a joint project with about a dozen other state and local governments to share best practices and advocate for transparency in political spending.

Reid Wilson covers national politics and Congress for The Washington Post. He is the author of Read In, The Post’s morning tip sheet on politics.

The Freddie Gray case

Please provide a valid email address.

You’re all set!

Campaign 2016 Email Updates

Please provide a valid email address.

You’re all set!

Get Zika news by email

Please provide a valid email address.

You’re all set!
Show Comments
New Hampshire has voted. The Democrats debate Thursday. Get caught up on the race.
The big questions after New Hampshire, from The Post's Dan Balz
Can Bernie Sanders cut into Hillary Clinton's strength in the minority community and turn his challenge into a genuine threat? And can any of the Republicans consolidate anti-Trump sentiment in the party in time to stop the billionaire developer and reality-TV star, whose unorthodox, nationalistic campaign has shaken the foundations of American politics?
Clinton in New Hampshire: 2008 vs. 2015
Hillary Clinton did about as well in N.H. this year as she did in 2008, percentage-wise. In the state's main counties, Clinton performed on average only about two percentage points worse than she did eight years ago (according to vote totals as of Wednesday morning) -- and in five of the 10 counties, she did as well or better.
What happened in New Hampshire
Upcoming debates
Feb. 11: Democratic debate

on PBS, in Wisconsin

Feb 13: GOP debate

on CBS News, in South Carolina

Feb. 25: GOP debate

on CNN, in Houston, Texas

Campaign 2016
What happened in N.H.
Most Read



Success! Check your inbox for details.

See all newsletters

Close video player
Now Playing

To keep reading, please enter your email address.

You’ll also receive from The Washington Post:
  • A free 6-week digital subscription
  • Our daily newsletter in your inbox

Please enter a valid email address

I have read and agree to the Terms of Service and Privacy Policy.

Please indicate agreement.

Thank you.

Check your inbox. We’ve sent an email explaining how to set up an account and activate your free digital subscription.