[ by Melanie Gretchen ]

Voting season brings out the best – and the worst  – of everyone.

An Arizona nonprofit engaged in "campaign money laundering," according to California's election-watchdog agency.  The nonprofit, Small Business Action Committee PAC, failed to properly disclose the source of $11 million that it donated to a group that opposes a tax-increase measure backed by Calif. Gov. Jerry Brown.

Government Findings and Allegations. The California group last month received an out-of-state donation under the name of the Arizona-based group Americans for Responsible Leadership, which on its website describes its mission as advancing "government accountability, transparency, ethics, and related policy issues."  However, that group was serving as an intermediary, and didn't disclose the original source of the $11 million to the recipient or the state government.  Here's what California's Fair Political Practices Commission did:

• successfully filed suit in Superior Court last week: a judge ordered the nonprofit to disclose its donors
• After an appeals court reversed the decision, the commission went to the state Supreme Court, which ordered the Arizona group to disclose its donors
• The commission and the group settled, with the group producing the source of the money: Virginia-based nonprofit Americans for Job Security, which contributed through an Arizona intermediary called the Center to Protect Patient Rights, another nonprofit.

The out-of-state donation constitutes the "largest contribution every disclosed as campaign money laundering in California history."  California law requires that groups serving as intermediaries for contributions disclose their source to the recipient.  Small Business Action Committee PAC said Monday it "had no knowledge" that the $11 million had come from an intermediary.

For further details, go to [WSJ, 11/5/12].