Gov. Jerry Brown hailed a judge's tentative ruling this week that an Arizona nonprofit group must reveal the source of an $11 million political donation to opponents of Proposition 30, the Brown-backed education tax measure on next week's ballot.
Speaking from his Los Angeles office, Brown told City News Service that even though the ruling is tentative, "it is profoundly significant."
"This is one of the biggest cases I've ever seen initiated by the Fair Political Practices Commission," Brown said, adding that the ruling, if finalized, will mean that "secret money from Arizona can be audited and that the laws of California have to be respected."
"So the No on 30 folks finally may have to come out of the shadows, take off their masks and tell us who the big donors really are," he told CNS.
Several school districts, including South Pasadena Unified, are counting on the proposition to keep them from losing millions more from budgets already slashed from years of cuts.
The FPPC had begun an audit of the donation by the Arizona nonprofit, known as Americans for Responsible Leadership, but the nonprofit failed to produce records requested by the commission. The FPPC went to court, arguing that it wanted to review the source of the funding prior to the Nov. 6 election to ensure the group was in compliance with financial disclosure laws.
Attorneys for ARL, which contributed the money earlier this month to the Small Business Action Committee PAC, argued that the group is not required to disclose its donors and contended that the FPPC had no authority to conduct an audit until after the election.
The PAC opposes Proposition 30 and supports Proposition 32, which would restrict the collection of union dues for political purposes.
But in her tentative ruling, Sacramento Superior Court Judge Shelleyanne W.L. Chang said the FPPC was within its authority in auditing the source of the money. She also noted that ARL's rights would be protected, since the FPPC's audit may ultimately conclude that there was no violation of state disclosure laws, and that the FPPC's audit records are kept confidential.
"Without the FPPC's audit and review of appropriate records, potential disclosure of information prior to the general election critical to the public in deciding how to vote for Propositions 30 and 32 may not be made," the judge wrote.
Another hearing is scheduled for Wednesday in Sacramento. If Chang sticks with her tentative ruling, officials from ARL may be required to turn over information on its donors to the FPPC by Thursday afternoon.
"I hope it'll hold up," the governor told CNS. "It's well-reasoned. And then the question is, can the audit disclose the identity of the big money (donors) before the election? That's the question and it's very important. If people with a lot of money can break the law, it sets a bad example. And now the state government has taken steps to ensure the integrity of our electoral process."
Proposition 30 would increase the sales tax by a quarter-cent on the dollar for four years and raise the income tax on annual earnings over $250,000 for seven years. The increased revenues would result in an increase to the minimum guarantee for schools and community colleges under terms of Proposition 98, approved by voters in 1988.
Opponents contend that Proposition 30 would hurt small business and job creation and that the Legislature should enact changes to the public employee pension systems and cut wasteful spending before raising taxes. Opponents also believe the Legislature and Brown should make education a higher priority in their budget decisions instead of raising taxes.