Editor's Note: This article is the second in a series of developing stories surrounding the disclosure of the donors behind the Arizona group, Americans for Responsible Leadership. The first in the series is available at "Americans for Responsible Leadership Inquiry [Developing Story]"

Americans for Responsible Leadership Appeals Lower Court Ruling in Favor of FPPC

Americans for Responsible Leadership (ARL) has followed through with its promise to appeal the Supreme Court’s (i.e., the lower court) final ruling in favor of the Fair Political Practices Commission’s (FPPC) demand for an audit where FPPC would get information from ARL to determine “whether it (ARL) has complied with applicable California law and regulations and whether, under applicable California regulations… the donors’ identities must be disclosed.”

ARL is an Arizona-based campaign financing group that has recently involved itself in California political campaigns. ARL has been called a “mystery donor” because its campaign donations come from unnamed and utterly unknown sources. What is known is that ARL is a Phoenix-based non-profit group that is primarily active in Arizona, currently focused on opposing Arizona Proposition 121 and Proposition 204, opposing open primaries and a sales tax renewal, respectively.

On October 15, ARL made its first campaign contribution in the State of California with its contribution of $11 million to the Small Business Action Committee Political Action Committee (PAC) to support Proposition 32 and defeat Proposition 30 in the 2012 California elections. Proposition 30 “temporarily increases the state sales tax rate for all taxpayers and the personal income tax rates for upper-income taxpayers” while Proposition 32 (Stop Special Interest Money Now Act) enacts various measures to “curb actual corruption and the appearance of corruption of our government by corporate and labor union contributions.”

Fair Political Practices Commission Seeks Audit of Americans for Responsible Leadership

After ARL contributed $11 million to the Small Business Action Committee PAC, the FPPC sought an audit of ARL related to the contribution. The FPPC has stated that the initial reason for the audit was a complaint filed with the FPPC on October 18 by a “good-government” group. The FPPC performs audits in order to “encourage compliance and detect violations of the [Political Reform] Act.” The Political Reform Act “governs disclosure of political campaign contributions and spending by candidates and ballot measure committees.” The Act created the FPPC and gives it power to audit organizations under certain qualifying circumstances, which ARL admits that it meets: ARL does not dispute that “FPPC has the legal authority to conduct the audit.”

However, ARL has suggested that the audit sought by FPPC is politically motivated. Ann Ravel, the chair of the FPPC, was appointed by Governor Jerry Brown. However, no evidence has been given to support the accusation that Ann Ravel or the FPPC are acting in any inappropriate capacity because of the fact that ARL denounced Governor Brown’s tax increase in Proposition 30.

FPPC Files Suit in Lower Court for ARL’s Noncompliance with Audit

ARL has refused to comply with the FPPC audit prior to the November 6, 2012 election. In reaction to ARL’s noncompliance, FPPC filed suit in Superior Court of California, County of Sacramento. FPPC sought a preliminary injunction (which would force action by ARL prior to a trial) that would require ARL to “immediately produce all records requested by the FPPC and answer any and all questions relevant to its audit related to ARL’s contribution” to the PAC.

The Superior Court’s Final Ruling was in favor of FPPC. ARL threatened to appeal the decision of the Sacramento Superior Court issuing a rare mandatory injunction that required the group to immediately comply with an audit by FPPC. Superior Court Judge Chang concluded that voters would be irreparably harmed if they cast their votes on Election Day without the financial information regarding ALR, potentially including information about donors’ identities, that could ultimately be a factor that weighs on their decision about how to vote on the propositions publicly supported (Proposition 32) or criticized (Proposition 30) using ARL funds.

Voters Likely to be Left without Information on Election Day

There is little chance that a decision will be made before Tuesday, so voters will be left “without information that may influence their votes” on Election Day. Attorney General Kamala Harris correctly concluded that "This information is, by its very nature, only relevant before the election."

Importantly, the situation is not unique. According to the Sunlight Foundation, “advocacy groups that don't disclose donors have dumped more than $200 million into the presidential and congressional races this season.” Looking toward the future, Ann Ravel has promised that the FPPC will “scrutinize big donations from other untransparent groups as well.”