Ann Ravel, the outgoing chair of the California Fair Political Practices Commission, had accused libertarian philanthropists Charles and David Koch of funneling “dark money” into ballot initiatives Proposition 30 and Proposition 32 in 2012.

The libertarian Koch brothers are reviled by the left.

Prop. 30, sponsored by Gov. Jerry Brown, was a large income tax increase on those earning more than $250,000 annually. Prop. 32 would have prohibited unions from using members’ automatic payroll-deducted funds for political campaign contributions.  Prop. 30 passed, and Prop. 32 was defeated.

At a FPPC press conference Thursday, Ravel said that Americans for Job Security “sent dark money to the Koch network, which has tentacles all over the country.”

However, during the press conference when Ravel was asked by a reporter about the $11 million donation, she admitted the FPPC had no evidence that any of the funding was actually from the Kochs. “I don’t believe we know what money was included in the $11 million, and I think that was part of the purpose of the exchange.”

Pot, meet kettle

Ravel, the outgoing chairwoman of the FPPC, held the press conference announcing the largest fine in FPPC history Thursday of last week, the day before she was leaving to become the head of the Federal Election Commission as a President Obama appointee.

The FPPC attempted to link the Koch brothers to violations of campaign finance disclosure laws, apparently without any evidence the Kochs were personally involved.

“Americans for Responsible Leadership Admits Campaign Money Laundering, Discloses $11 Million Donor,” the FPPC website headline says. “Americans for Responsible Leadership, the Arizona non-profit corporation that made an anonymous $11 million donation to a California campaign committee, today sent a letter declaring itself to be the intermediary and not the true source of the contribution. It identified the true source of the contribution as Americans for Job Security, through a second intermediary, The Center to Protect Patient Rights.”

What’s interesting is while most of the media decry the Koch brothers’ political contributions and donations, left-wing political donor George Soros is revered, despite his ties to hundreds of non-profit organizations, media outlets, and politicians. The government largely leaves Soros alone now that Barack Obama is President.

The last FEC fine handed out to a Soros organization was in 2007 by the Federal Election Commission, for $375,000.

“Numerous news reports have tried to link the Kochs to the funding, citing Sean Noble, founder of CPPR, who had worked as a consultant to Koch Industries in the past,” the Washington Free Beacon reported. “The group has no formal ties to the Koch brothers.”

Teamsters’ love the fine

“California Teamsters and allies used the power of their numbers last year to defeat Proposition 32, an anti-worker proposal secretly funded by the Benedict Arnold Koch Brothers and other anti-worker billionaires,” Teamsters Magazine reported following the press conference.

“From the Koch network, according to a story today by Dan Morain in the Sacramento Bee,” Teamster Magazine said. “Two Republican operatives cooked up Proposition 32, managed to get it on the ballot and then went looking for the money to broadcast their propaganda. There was plenty of it — many millions, in fact. The only problem was, the greedy billionaires who contributed didn’t want their identities known.”

“Ms. Ravel’s comments about Koch are unfounded and without factual basis, as she acknowledged in her press conference,” said Melissa Cohlmia, communications director for Koch Industries, in the Washington Free Beacon.

“Despite the millions of dollars rich extremists were willing to throw at Proposition 32, workers were ultimately able to prevail because they stood united against big business,” Teamsters Magazine said.

The accused

Two nonprofit groups, the Center to Protect Patient Rights and Americans for Responsible Leadership, reached a civil settlement with the FPPC, agreeing to share a $1 million fine.

The FPPC accused the non-profit groups of failing to disclose financial contributions used to oppose the union measure, which was ultimately defeated by California voters in 2012.

“The lawsuit filed against Americans for Responsible Leadership is yet another action taken by the Fair Political Practices Commission to increase political transparency and promote fairness in the election process,” the FPPC website says.

Americans for Responsible Leadership President Kirk Adams, a former Arizona lawmaker, called the fine a vindication for his group after top Democratic California officials last year made “outlandish claims of money laundering, criminal violations,” ABC news reported. Adams said ARL actions were inadvertent violations of disclosure laws.

By John Hrabe

California’s chief political watchdog sent the blogosphere into a collective tizzy earlier this year. In April, Ann Ravel, chairwoman of the Fair Political Practices Commission, floated the idea that California become the first government body in the country to regulate political blogs and websites.

Bloggers all over the country reacted with outrage, leading Ravel to quickly revise the idea.

“As opposed to asking the bloggers to do it on their sites, which is the most effective option for the consumer, it may be more reasonable and less problematic to require that we get an isolated accounting from the committees,” said Ravel, who interrupted her South American vacation in April to speak with CalWatchDog.com about the regulations.

Five months later, the FPPC will hold a public hearing today to discuss the first draft regulations based on Ravel’s revised idea. To her credit, Ravel listened to bloggers’ concerns and has followed through on her promise to “get an isolated accounting from the committees.” The draft regulations would apply exclusively to campaign committees, which are already heavily regulated by the state. Bloggers would also be excluded from the reporting requirements.

“It was thanks to many of the bloggers who talked to me and emailed me to inform me of those concerns that I was able to fully understand the problems,” Ravel told CalWatchDog.com last week. “While I do not concur that it is unconstitutional to ask bloggers to identify who is paying them for political activity, I understand that to do so might have consequential problems that would be difficult to deal with in a reasonable way that balances free speech and the openness of the Internet with the need for disclosure.”

Ravel said that she continues to believe her initial idea would have withstood any constitutional challenges. Many free speech experts say such regulations of paid political bloggers would fall well within established First Amendment precedents.

“When a blogger is paid to write for a campaign, that’s basically a campaign buying a political advertisement,” UCLA law professor Eugene Volokh, who publishes the legal blog, The Volokh Conspiracy, explained earlier this year. “The Supreme Court has held (in McConnell and Citizens United) that the government may require political advertisers to identify the source of the advertisement. Requiring the blogger to identify his speech as an advertisement paid for by a campaign would be much the same as the identification requirements that had been upheld — it would inform the public about who is actually paying for the speech, and do so at the moment the speech is received.”

FPPC Draft Regulations Apply Exclusively to Committees

Political bloggers won’t have to test their luck in the courts, at least for now.

The blog regulations, as currently proposed by the commission, are strictly limited to campaign committees. “A committee, pursuant to Section 82013(a), must include amounts paid to any person who engages in activities such as the following, on the committee’s behalf,” the draft regulations state. That would put the onus for reporting political blogging entirely on the campaign committees that already file extensive campaign documents with the state commission.

Campaign committees that pay bloggers to provide content for a post, blog, video or social media mention would need to disclose “the amount of the payment, the payee, the name of the person providing services, and the name of the Internet publication, blog or website and the URL on which the communications are published.”

Mixed Reaction from Political Bloggers

Such regulations are likely to sit well with many political bloggers.

“If everyone plays by the same rules, and the FPPC can develop a site where disclosure is a few clicks and keystrokes, then I am fine with it,” Gregory Cole, who publishes at flapsblog.net, told CalWatchDog back in April when the blog regulations were first suggested.

The prolific blogging duo at CalBuzz.com shared a similar view, after reviewing the FPPC’s proposed regulations.

“California’s Fair Political Practices Commission is moving in the right direction in their new draft proposal governing expenditures for paid online communications,” wrote CalBuzz’s Jerry Roberts and Phil Trounstine. “We’re convinced Ravel and the FPPC are not out to squash free speech or prevent people working in campaigns from using Twitter and Facebook.”

However, CalBuzz would still like to see greater clarification of the types of activities that would trigger the disclosure requirement.

“The regulations should make clear that purchasing advertising from a web site at the standard market rate does not constitute employment of the personnel of that web site, whether the site is published by a stand-alone internet operation or is the online presence of a newspaper, magazine or radio or TV station,” they wrote.

Fleischman and Maviglio: FPPC Shouldn’t Become the Internet Police

But not all bloggers are happy with the draft regulations.

“The FPPC doesn’t have the resources — nor the need — to become the Internet police,” Jon Fleischman, publisher of the Flash Report, and Steve Maviglio, a Democratic political consultant and blogger, wrote in a joint Sacramento Bee opinion piece. “But now the FPPC wants to go where no other state has gone before: requiring anyone who receives payment from a campaign that is posting any content on the Internet to be reported — from a field worker who spends one day of a campaign knocking on doors and tweets about it from her iPhone, to the campaign manager who spreads the word on a blog, to a part-time student paid to coordinate campus volunteers and posts a humorous YouTube video about the ballot campaign he’s working on.”

“It should stick to its knitting and work on enforcing the voluminous campaign reporting rules already on the books, instead of attempting to slow the revolution of online communication that is revolutionizing American politics,” the political odd couple wrote.

When CalWatchDog.com spoke with Ravel last week, she confirmed that her top priority was achieving those objectives.

“I want to achieve the purposes of the Political Reform Act — to increase public trust in government with the purpose of engaging people in public life,” she said. “I think that the best way to ensure trust is open information, provided by the government, that is easily accessible.”

Looking past the blog regulations, Ravel also laid out an ambitious set of goals for improving the commission’s website and public disclosure tools.

“I am working very hard to get an online filing and access system, utilizing open source codes, so that everyone — bloggers, news reporters, and the public, can find information and make connections to help them make decisions about their elected officials,” she said.

Note: John Hrabe serves as a senior editor for the Flash Report, which is published by Jon Fleischman.

Previous CalWatchDog.com articles on this controversy:

FPPC chair backs away from mandatory disclosure of blogger payments

Calif. blog regulations could hit Drudge, citizen journalists

By John Hrabe 

Following widespread criticism from online pundits and free speech advocates, California’s political watchdog is backing away from a plan to require news websites and bloggers to disclose payments received from campaigns and political committees.

Ann Ravel, chairwoman of the Fair Political Practices Commission, announced earlier this month her intention to pursue regulations of bloggers that are funded to advocate for or against candidates. “Ultimately I’d like to see the FPPC require it,” Ravel declared at an April 19 campaign finance conference in Sacramento, the Orange County Register reported. After listening to bloggers’ concerns, Ravel now says that that she will be looking for other ways to inform the public about any potentially biased online sources.

“There are probably insurmountable complexities to making them mandatory,” Ravel told CalWatchDog.com while on vacation in South America. “As opposed to asking the bloggers to do it on their sites, which is the most effective option for the consumer, it may be more reasonable and less problematic to require that we get an isolated accounting from the committees” for the campaigns.

“The committee should have the obligation, but not the blogger or the news media,” she added. 

In addition to greater itemization of campaign committee payments, Ravel discussed a voluntary disclosure process for voters to verify with the FPPC that a blog or website does not receive campaign funds.

“Most people get [campaign] information from the Internet, and it should be known to them if people are getting paid,” she said.

Ravel’s reversal received mixed reaction from political bloggers. 

“Today’s voluntary disclosure will be tomorrow’s mandatory regulation,” said Jon Fleischman, publisher of the Flash Report, a website for which this author serves as a senior editor. “If the FPPC starts with voluntary disclosure of campaign payments, it will inevitably become a mandatory requirement of all blogs and websites.”

Other bloggers welcomed the idea of a voluntary disclosure process. 

“I’d be happy to voluntarily post every dollar I receive,” said Scott Lay, who publishes AroundtheCapitol.com, a non-partisan news aggregation website. “Let’s face it, we have some big time flacks that take money and tweet and blog all day long for money.”

Ravel: We Have the Power to Go Out of State

Critics of a state-level disclosure requirement also complained that they would be at a disadvantage to websites that are physically based out of the state. “The Internet is global,” wrote Mark Paul on his blog, the California Fix. “The commission’s jurisdiction is limited to California.”

The state’s top campaign regulator, who spoke to us by phone from Brazil, agreed that the Internet age changes how political information is shared and campaigns are regulated. However, she steadfastly defended the agency’s authority to regulate online political activities designed to influence California elections, even if sites are physically based out of the state.

“I believe we do have the power to go out of state,” Ravel said of online political activity intended to influence the California electorate. “If there is money being spent, no matter where that money comes from, we have the power to regulate that.”

CalWatchDog.com has previously reported that some legal experts believe legal precedents could allow California’s political regulatory agency to cross state lines. UCLA law professor Stephen C. Yeazell argues that Pavlovich vs. Superior Court, a 2002 California Supreme Court case, established an “effects test” for evaluating jurisdictional claims in the Internet age. He believes it could provide a legal justification for the FPPC’s regulation of out-of-state bloggers, if the sites featured California ads or content.

Bloggers Singled Out

In response to her original proposal, many bloggers expressed outrage with being singled out and treated differently from traditional media sources.

“While more transparency is a good idea across the board, bloggers often get singled out for ethics concerns when there are far greater conflict-of-interest problems with commentators in the traditional press,” said David Atkins, who has been blogging off and on for seven years for DailyKos and Digby’s Hullaballo. “I just resent the notion that bloggers are being singled for disclosure issues that are more prevalent and more consequential in the traditional media.”

Atkins, who also serves as the first vice-chair of the Ventura County Democratic Party, said that he goes out of his way to disclose any campaign affiliations, including when he is an “unpaid super-volunteer.”

“The same newspapers that are happy to print stories by the likes of Judith Miller as ‘objective journalism’ seem overly concerned about the ethics of bloggers, and that double standard seems to be applied by the FPPC in this case as well,” Atkins said.

In Ravel’s mind, “it’s not bloggers versus regular media,” as long as the outlet accepts “advertisements at the market rate.” 

Political Watchdog to Fundraise

Ravel said that her highest priority as the state’s ethics czar has been to increase disclosure.

“My aim is to have everything on the FPPC website. That is the goal. All those forms should be in one spot and easily searchable,” she said.  

In order to achieve that goal amid ongoing budget constraints, Ravel suggested that the state agency that oversees campaign fundraising might do fundraising of its own.

“The FPPC has the ability to fundraise,” Ravel pointed out. “I’ve been going out talking to a number of foundations and other public service groups that provide some coding work to see if there are ways to get this done.”

Stephen Frank, the conservative publisher and editor of the California Political News and Views, criticized the idea of a government regulatory agency, such as the FPPC, seeking funds from private organizations or advocacy groups.

“Imagine if Al Gore could start funding the EPA, imagine what damage that could do,” Frank said. “I am surprised that as a Democrat she wants to privatize a government agency because that is the slippery slope that she is suggesting.”

Frank believes that fundraising from “organizations of her choosing” would allow biased nonprofit organizations to influence regulators.

“I would strongly suggest she approach George Soros to fund her efforts to silence freedom of speech, that is his specialty,” he said.

By John Hrabe

California’s chief political watchdog, Ann Ravel, recently announced plans to regulate political websites that accept payments from campaigns. Last year Gov. Jerry Brown appointed her to head the Fair Political Practices Commission.

California bloggers right, left and center quickly criticized the proposal for quashing free speech and putting them at a disadvantage to out-of-state competitors.

“The Internet is global,” wrote Mark Paul on his blog, the California Fix. “The commission’s jurisdiction is limited to California. If campaigns find it useful to make payments to online sock puppets, won’t they funnel the dollars to bloggers living outside the state? Do we want to send jobs out of California?” Paul also is the co-author of the new book, “California Crackup: How Reform Broke the Golden State and How We Can Fix It.”

Out-of-state competition might not be a problem, say some legal experts, because California’s Fair Political Practices Commission could cross state lines and police out-of-state blogs and websites, including international news aggregators like the Drudge Report, regardless of their location. And there is adequate case law to back it up.

Pavlovich Precedent: The ‘Effects Test’

UCLA law professor Stephen C. Yeazell argues that Pavlovich vs. Superior Court, a 2002 California Supreme Court case, established an “effects test” for evaluating jurisdictional claims in the Internet age. He believes it could provide a legal justification for the FPPC’s regulation of out-of-state bloggers, if the sites featured ads from California campaigns.

“Under the Pavlovich test, the question is whether or not the speech is aimed at California,” Yeazell said, when asked if California had jurisdiction to regulate an out-of-state website like the Drudge Report. “On the one hand, the website’s speech is aimed at California by advertising California campaigns and posting links about California stories.”

“Internet jurisdiction is a mess,” added Samuel Issacharoff, Professor of Constitutional Law at New York University School of Law, who shared Yeazell’s interpretation of the Pavlovich precedent.

Aggregators, Bloggers and News Sites Affected

National political websites and news aggregators, such as the Drudge Report, the Huffington Post, the Daily Caller and Real Clear Politics commonly feature stories on California while also running advertisements from California candidates, initiatives and campaigns. Matt Drudge, now a Florida resident, founded his website while based in California.

“What kinds of content would trigger the disclosure?” asked Paul. “Any sort of favorable comment about a campaign or critical comment about a rival campaign? Links to news reports favorable or damaging to a campaign?” They were questions raised by many California bloggers.

An FPPC spokeswoman told CalWatchDog.com that the specific details have yet to be determined. She added that Ravel was currently traveling out of the country and would be available for an interview on Friday.

Jerry Roberts and Phil Trounstine of CalBuzz, who are the only bloggers to interview Ravel on the subject, wrote on Monday, “We’re happy to report, after our conversation, we think she agrees with us that the best way to confront secret payments to websites that propagandize for their retainers lies in stricter, more timely and precise reporting of campaign expenditures.”

Critics of the state’s regulatory agency are less optimistic and warn that the proposal is a first step toward more regulations of political speech.

“This means a lot more than the issue at hand; it means the first of many additional steps to regulate political speech,” said Jonathan Wilcox, a communications consultant and former speechwriter for Gov. Pete Wilson. “Given the troubling political practices just in Sacramento, some will wonder if the FPPC could catch a speeding driver at the Indy 500.”

Chandra Sharma, the publisher of Fox and Hounds Daily, complained about the agency’s bad track record with new technology.

“The FPPC’s attempts to regulate online political speech over the past few years have been badly conceived and ill-informed,” he said. “This is yet another example of the FPPC attempting to regulate a medium it doesn’t understand, and as others have already noted, they haven’t even begun to realize the kind of unintended consequences that would manifest themselves as a result.”

No Protection from the First Amendment

Both Yeazell and Issacharoff, experts on jurisdictional issues, are skeptical that the FPPC would win a dispute with out-of-state bloggers because of complicating factors, such as First Amendment concerns. “I also imagine the courts being hesitant to extend the reach of a state regulatory agency in this case given other factors, including the First Amendment implications,” argued Yeazell. However, First Amendment experts believe that a state regulation of political websites, if properly crafted, could withstand a First Amendment challenge.

“When a blogger is paid to write for a campaign, that’s basically a campaign buying a political advertisement, said UCLA law professor Eugene Volokh, who publishes the legal blog, The Volokh Conspiracy. “The Supreme Court has held (in McConnell and Citizens United) that the government may require political advertisers to identify the source of the advertisement. Requiring the blogger to identify his speech as an advertisement paid for by a campaign would be much the same as the identification requirements that had been upheld — it would inform the public about who is actually paying for the speech, and do so at the moment the speech is received.”

Michael Houston, a partner at the Newport Beach firm Cummins & White, LLP, shared Volokh’s interpretation and emphasized that there’s little difference between a paid blogger and paid spokesman.

“Frankly, I see little difference between a blogger advocating for a candidate or cause and a paid spokesman,” said Houston, who specializes in political law and regulatory issues. “The only real question is whether the bloggers should have to do so on their own.”

Former FPPC Chairman Dan Schnur expressed concern that new regulations “would discourage people from adding their voices to the political dialogue.”

“Whether it is constitutional or not shouldn’t be the only threshold,” said Schnur, the director of the Jesse M. Unruh Institute of Politics at the University of Southern California. “It may be constitutional but that doesn’t mean it’s a good idea”

(Coming up Friday: Part II: How Bloggers’ Voices Will Be Affected.)