How the Koch Brothers laundered illegal campaign contributions

A California lawsuit brought by elections watchdog the Fair Political Practices Commission has unraveled a network of nonprofits that the Koch Brothers used to launder millions in illegal campaign contributions. These were made to campaigns over two ballot measures: one that would have raised taxes on the wealthiest Californians; the other crippled unions' fundraising. The Kochs funneled $15m into these campaigns, using a series of front-organizations that were also apparently employed by other billionaires including Charles Schwab, Gene Haas, Bob Fisher, and Eli Broad.

By October 2012, Russo had steered nearly $29 million for his Props. 30 and 32 advocacy campaign to Americans for Job Security. But there was a problem. Election day was less than two months away, and the way campaign law works, the standards for disclosing donors get tougher within that two-month window. So, out of fear that its donors could somehow be revealed, AJS and its lawyers took precautions, choosing to funnel the money through the Center to Protect Patients Rights, which was run by Sean Noble, who was then the primary outside consultant and strategist to the Koch brothers' national donor network. The settlement documents indicate that AJS made three, no-strings-attached donations to Noble's group: $4.05 million on September 10, 2012, $14 million October 11, 2012, and $6.5 million.

Here, the money trail forks into two trails. In one direction, CPPR gave $7 million to a nonprofit called the American Future Fund, which in turn passed $4.08 million of that to a subsidiary in California. That subsidiary, the California Future Fund for Free Markets, finally spent the money on influencing Props. 30 and 32.

In the second direction, CPPR directed $13 million to its Arizona neighbor, Americans for Responsible Leadership. ARL then passed $11 million of that money to the Small Business Action Committee in Sacramento, which spent the money influencing Props. 30 and 32.

Here's the bottom line: A California fundraiser raised a boatload of money. He shuffled it through a network of secretly funded nonprofit groups to hide the donors' identities. And when the money finally arrived in California in time to influence the 2012 elections, the fingerprints on the money had been thoroughly scrubbed off—and in the process, the operatives masterminding this scheme had broken the law.

California Watchdog: "Koch Brothers Network" Behind $15 Million Dark-Money Donations
[Andy Kroll/Mother Jones]

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