Political committees organized outside California (federal PACs and PACs formed in other states) may have to disclose their own donors to the State of California even though they have not made a direct contribution in California, according to regulatory amendments recently approved by the California Fair Political Practices Commission (FPPC).   The amendments further clarify that federal and out-of-state PACs that make expenditures to influence California elections must send “major donor” and “nonprofit filer” notifications to their donors alerting them of their potential registration and reporting requirements. The new regulations clarify 2014 regulations aimed at uncovering so-called “dark money” in politics (See prior Nossaman E-Alert on the 2014 FPPC regulations: New Non-profit Donor Disclosure Takes Effect July 1, 2014 for California Elections, 6/12/2014.)

Federal and out of state PACs that make expenditures in California may determine which of their donors must receive major donor or nonprofit filer notifications by identifying their most recent contributors, prior to the date of the expenditure, listed in their federal or other state campaign finance reports. (They may cross-reference their federal or state report in their California filing.)

The 2014 regulations require multipurpose organizations to send “major donor” notification letters to donors of $5,000 or more within two weeks, and donors of $10,000 or more within one week, if the contribution is received during the 90 days before an election.  Additionally, if a multipurpose organization identifies another multipurpose organization as the source of funds relating to a political expenditure, the recipient multipurpose organization must send a “nonprofit filer notice” to the contributing organization stating that it may be required to register and file expedited campaign statements disclosing its donors. Importantly, with contributions made 90 days or less before an election, the “nonprofit filer notice” must be provided within 24 hours.

The objective of this multilayered reporting is to capture donors of funds that move through several nonprofits in order to shed light on the “dark money” phenomenon that occurred as a result of the 2010 Supreme Court decision Citizens United.