California bill takes aim at dark money in politics — will Jerry Brown sign it?

By Katy Murphy
San Jose Mercury News, October 1st, 2017

SACRAMENTO -- The barely legible print that briefly flashes on-screen at the end of political ads will be gone, replaced by information people can clearly read, if Gov. Jerry Brown signs a closely watched bill targeting “dark money†in campaigns.

The unions, corporations or billionaires behind the money would be listed, rather than the obscure committees with misleading, feel-good names that wrote the checks.

Good-government advocates, including the co-author of the 1974 Political Reform Act, say the DISCLOSE Act would make California's campaign-advertisement disclosure laws the toughest in the country.

If the measure is signed into law, said co-author Sen. Jerry Hill, D-San Mateo, voters will know when they see or hear an ad: “Who's paying for this, whose interests are being supported by it, and who has the most to gain?â€

But what may sound like a logical step toward more transparency in Sacramento is nothing less than revolutionary when politics are involved.

The proposal has been repeatedly floated in the Capitol, but for years it looked as if it might never pass the Legislature. Business and labor interests -- the major underwriters for lawmakers on both sides of the aisle -- have long fought proposed changes. And then there is the reality that people, lawmakers included, don't like to regulate themselves, said Jessica Levinson, an election law, ethics and campaign finance expert at Loyola Law School.

“People who win under the current system tend not to want to alter that system and put more limitation on themselves,†she said.

But citizens organized by the California Clean Money Campaign flooded the Capitol with calls over the summer when the bill was stuck in a Senate committee, spurring Senate President Pro Tem Kevin de León to push it forward, said Trent Lange, the organization's president. And the bill's author, Assemblyman Kevin Mullin, D-San Mateo, managed to neutralize the labor opposition with changes relating to membership dues used in campaigns.

On the floor this month, Mullin urged his colleagues to prove the naysayers wrong and vote for the bill. They did, approving it 59-15, with five Assembly Republicans, including the East Bay's Catharine Baker, signing on. The Senate had passed it just days earlier, 29-9.

Now the bill is in the hands of the governor, who more than 40 years ago helped to shape California's Political Reform Act of 1974 as secretary of state in the post-Watergate era. Brown is not always eager to change the law, which he knows inside and out. The governor has both signed and vetoed reform bills in recent years, rejecting proposals he felt would add complexity without helping solve the underlying problems.

In an interview this week, Mullin said: “I feel pretty bullish the governor will sign it,†calling it “a reform whose time has come.â€

Critics of the bill, including Republican Assemblyman Matthew Harper, R-Costa Mesa, who voted against it, complain that it stacks the deck for Democrats by making an exception for membership dues, helping the labor unions that fund Democrats' campaigns.

If a member's dues are used to pay for a campaign, the organization -- not the individual dues-payer -- would appear as the contributor as long as the total amount is below $500. Mullin and others argue the change eases the paperwork burden for membership organizations while making it easier for the public to follow the money. But Republicans have cast the provision as union-friendly politics as usual.

“What this does is it creates a massive, dark-money loophole that unions can drive through,†Harper said. “It's what Democrats do over and over again.â€

But Bob Stern, who co-authored the Political Reform Act of 1974 and was the first general counsel for the California Fair Political Practices Commission, sees it differently.

“I think the main thing is to label the union as the true source,†he said.

Stern said he couldn't predict what Brown would do, but that he supported the legislation. “You can pick at the bill, obviously, but it is a major step forward. I think it would become the toughest bill in the country.â€

For Assemblyman Al Muratsuchi, D-Torrance, it is personal. Last year, he was hit with an attack ad featuring a Los Angeles schoolteacher convicted years earlier of lewd conduct.

The ad was paid for by a political action committee led by the Palo Alto billionaire Charles Munger Jr., who spent over $2 million to defeat Muratsuchi over the past two election cycles. (Muratsuchi lost his re-election bid in 2014, but was elected in 2016.) The ad took aim at legislation that Muratsuchi had carried on schoolteacher dismissals and tried to link the lawmaker to the difficulty of firing teachers such as Mark Berndt, who was sentenced to 25 years in prison for lewd acts.

The commercial ends, not with Munger's name -- as would be required under the DISCLOSE Act -- but with the name of his political action committee: Spirit of Democracy.

“It was easy for voters to be fooled by the nature of the ads,†Muratsuchi said in an interview this week, “because who can be against the spirit of democracy?â€

When it comes to tracing the true source of money, the bill is tougher on ballot initiatives than on candidate expenditures. For example: If Chevron or the California Teachers Association or San Francisco billionaire activist Tom Steyer give huge sums of money to a political committee and those funds ultimately pay for a ballot measure ad, their names will have to appear -- even if their money passes through three more committees first.

The same “follow-the-money†provisions would not apply as extensively to expenditures for individual candidates -- a concession made to win the bill's passage.

Hill, who has for years tried to help pass various versions of the legislation, offered a vivid analogy for why the Legislature is not likely to revisit the issue in the future: “In politics, it's whose ox is being gored? And this hits too close to home.â€


What it would do: Assembly Bill 249, by Assemblyman Kevin Mullin, D-San Mateo, proposes sweeping changes to disclosures on campaign ads. It would require the three largest contributors (of $50,000 or more) to be listed on ballot measure ads or ads about candidates by outside groups.

A new look: On video and TV, the disclosures must appear against a solid black background in a clear font that is not all-caps, fill the bottom third of the screen and stay up for a full five seconds. Each of the three major funders 'names must appear on a separate line. Disclosures on radio ads would need to be made with the same speed as the rest of the ad -- no more speed-talkers.

Print, TV, video, radio, mass mailers, robocalls: The bill, which Gov. Jerry Brown has yet to sign into law, would apply to print, online, TV and radio ads as well as mass mailers and robocalls. Requires radio ads and robocalls to name the two largest funders.

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