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Monday, May 27, 2024 | Back issues
Courthouse News Service Courthouse News Service

Disgorgement Trickles in From Friends of Kochs

(CN) - A recipient of so-called "dark money" from the conservative Koch Brothers put a $300,000 dent on Friday in a multimillion disgorgement order.

The disgorgement stems from a record civil settlement announced in October with Arizona-based Center to Protect Patient Rights and Americans for Responsible Leadership. Both entities belong to a network of nonprofits operated by billionaire businessmen Charles and David Koch.

Shortly before the November 2012 election, the conservative groups jumped into California politics in support of Proposition 32, a measure intended at curbing labor unions' ability to raise political cash, and in opposition of Proposition 30, a tax increase for education pushed by Gov. Jerry Brown.

The California Fair Political Practices Commission (FPPC) and the state attorney general's office quickly launched a joint investigation, and found that the Center to Protect Patient Rights was the actual source of two multimillion contributions that had not been properly reported.

For the first contribution of $4.08 million to the California Future Fund (CFF) in September 2012, the center used the American Future Fund (AFF) as an intermediary.

A month later, the center made an $11 million contribution made to the Small Business Action Committee (SBAC), a California independent expenditure committee, using Americans for Responsible Leadership as an intermediary.

Americans for Job Security and its political consultant, Tony Russo, had initially raised the funds in question to purchase issue advertisements related to the union and education propositions.

That November, voters approved Prop. 30 and defeated Prop. 32.

In settling the charges, the center and Americans for Responsible Leadership agreed to pay a $1 million.

The CVV and SBAC meanwhile must disgorge the contributions, and signed judgments stating as much, the FPPC revealed Friday.

SBAC also made a $300,000 payment toward its obligation.

"Any future funds received by SBAC or CFF will be used towards the judgment," the FPPC said in a statement.

SBAC's principal officer is Joel Fox, and the CFF's principal officer is Barbara Smeltzer.

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