SACRAMENTO -- The state's political watchdog agency is formally opening a probe into who was behind the shadowy $11 million donation to a business group that ran campaigns against Gov. Jerry Brown's tax-hike proposal and for a measure that would have curbed labor's political treasuries.
The investigation, which begins Thursday, will look into communications between the Arizona nonprofit group, Americans For Responsible Leadership, and two other conservative groups through which the $11 million passed in a political money laundering scheme.
"These are the ones we know exist," said Ann Ravel, chairwoman of the state Fair Political Practices Commission. "But it does not preclude our ability to investigate others we come across."
The campaign contribution originated with the Americans for Job Security, which passed it to the Center to Protect Patient Rights, which then secretly handed it off to the Americans for Responsible Leadership. That group donated the $11 million to the Small Business Action Committee, the California PAC that ran the two ballot measure campaigns.
Details of the transactions did not come to light until the state Supreme Court forced the groups to reveal themselves the day before the election. Brown's measure, Proposition 30, ultimately prevailed, and the anti-union measure, Proposition 32, failed.
Ravel said she wants to know who donated to the groups.
All three groups could see fines totaling $33 million,
Beth Miller, spokeswoman for the business action committee, said her group has "fully complied with all disclosure requirements" but will "certainly cooperate completely with the investigation."
The fines would go to the state's general fund.
The two groups, Americans for Job Security and the Center to Protect Patient Rights, are part of a web of so-called dark donors who operate largely out of public view, shielded by their status as nonprofit advocacy groups supposedly not primarily involved in politics.
One has ties to David and Charles Koch, the billionaire brothers who have played a huge role in spreading anonymous political cash around the country. The other has ties to GOP uber-strategist Karl Rove, whose American Crossroads Super PAC spent $300 million in campaigns this year.
Americans for Job Security has been described by the nonpartisan Center for Responsive Politics as "pro-Republican," "pro-business" and "established to directly counter labor's influence." It was founded in 1997 by Michael Dubke and David Carney, two GOP strategists who also formed Crossroads Media, which runs advertising for American Crossroads, Rove's Super PAC.
The Center to Protect Patient Rights, also based in Arizona, is run by Sean Noble, an operative of the Koch brothers, who are worth a combined $50 billion, according to Forbes.
Noble, a GOP strategist, was hired in 2010 to coordinate the Koch brothers' distribution of millions of dollars to dozens of entities. He has been a member of a group, called the Weaver Terrace Group -- dubbed Rove's "Fight Club" -- that meets regularly to plot campaign financing strategies.