Settlement reached in controversial Arizona donor case

SACRAMENTO -- California campaign finance officials have reached a settlement in the high-profile investigation into an $11-million donation from an obscure Arizona nonprofit, according to a source familiar with the case.

The settlement involves the nonprofit, Americans for Responsible Leadership, and the Center to Protect Patient Rights, another Arizona organization involved in the donation.

The source was not authorized to discuss the case before a Thursday announcement and requested anonymity.

A press conference is scheduled for noon with Fair Political Practices Commission Chair Ann Ravel, who is leaving her current position this week to join the Federal Election Commission in Washington.

The controversial $11-million donation was provided in October 2012 to fight Gov. Jerry Brown’s tax-hike plan and support a separate ballot measure to weaken unions’ political power. California officials sought to unmask the donors behind the contribution, calling it “campaign money laundering.”

After a heated court battle in the waning days of last year’s campaign, Americans for Responsible Leadership said it received the money from two other nonprofits -- the Center to Protect Patient Rights and the Virginia-based Americans for Job Security. But both of those organizations also keep their donors secret, and state officials vowed to continue investigating.

Although such nonprofits do not need to disclose their contributors under federal law, a California regulation says they cannot conceal a donor’s identity if the contribution was intended for a state campaign.

A spokesman for Americans for Responsible Leadership declined to comment on Wednesday afternoon.

The Center to Protect Patient Rights is known as a clearinghouse for conservative political donations nationwide. The secretive organization has been tied to Charles and David Koch, billionaire energy executives and Republican donors.

The Small Business Action Committee, the political organization in California that received the $11-million donation to use in last year’s campaigns, may also face punishment under state law. The Fair Political Practices Commission can order committees that receive “laundered” funds to pay an equivalent amount of money into the state general fund.

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Twitter: @chrismegerian