As we reported in November, the California Fair Political Practices Commission reached a settlement agreement with two entities (Center to Protect Patient Rights and Americans for Responsible Leadership) involved in a 2012 ballot measure. Those entities agreed to pay a $1 million fine. The FPPC said that it would require the entities that received the contributions, California Future Fund for Free Markets (“CFF”) and the Small Business Action Committee (“SBA-PAC”) (the bottom-most entities on this chart) to disgorge the contributions they received from AFF and ARL (a total of about $15 million), even though they did nothing wrong.
The FPPC made good on its threat and recently announced that it had entered into stipulated judgments with CFF and SBA-PAC that requires those entities to disgorge the $15 million they received. CFF made an initial (and likely final) payment of $300,000 to the state, which was the amount it had left in its bank account.
Any future money those two entities raise will have to go to California. Of course, since one committee has been closed and the other said it will close, it seems like this will be the end of the matter (and would they really be able to raise any money just to pay a penalty anyway?). What is amazing is that the FPPC said the two groups that received the money did not do anything wrong, and yet they have been forced to pay the state the amount they received, even after having already spent it.
The FPPC said that it will continue to aggressively enforce the disclosure laws in California, so any groups that plan to be active in California elections will have to be very careful to comply with the necessary registration and reporting laws. And, as the disgorgement from the recipients shows, complying with disclosure laws means doing plenty of diligence on the donor groups to make certain that they have disclosed properly.