This story was originally published by CalMatters. Sign up for their newsletters.
After more than two years, California’s political ethics watchdog has closed its investigation into a controversial campaign donor network, concluding that the group followed legal advice from the state and therefore did not violate contribution limits.
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The decision clears the way for a bold new approach to raising and spending money in California elections. Political committees now have state regulators’ blessing to create an unlimited number of affiliated committees with different leaders, and then closely coordinate fundraising and candidate donations among them. That could exponentially increase their influence on campaigns.
Govern For California — a 16-chapter nonprofit that aims to counter the influence of organized labor at the state Capitol and which aggressively backed the rise of Assembly Speaker Robert Rivas — declared “vindication” to its supporters.
But the extent of the Fair Political Practice Commission’s probe over the past two years remains unclear. In a one-paragraph “no action closure letter” dated Monday, assistant enforcement chief Angela Brereton cited a 2020 advice letter to clear Govern For California of any wrongdoing.
“After our investigation and review of the evidence, the Enforcement Division has found that Govern For California has followed the advice given to it by the Commission,” Brereton wrote. “Therefore, we are closing this matter without further action because the allegations have been disproven.”
Brereton did not return a message seeking clarification. Shery Yang, a spokesperson for the commission, said in an email that the enforcement team “obtained and reviewed voluminous evidence to make its conclusion,” but did not answer follow-up questions about what the evidence entailed. She also declined to provide a copy of the investigative report.
Govern for California founder David Crane, a Stanford University lecturer and former economic adviser to Gov. Arnold Schwarzenegger, also did not respond to an interview request.
“We’re happy the matter is closed, though not that we were dragged through the mud and had to spend time, energy and money defending against a politically-inspired action,” he wrote in a message to his group’s mailing list. “But we are aware that this is the sort of thing that happens to people who challenge the status quo in Sacramento.”
A CalMatters report in 2022 explored Govern For California’s growing prominence in state politics as Rivas, a Salinas Democrat, made his move to take control of Assembly leadership. That election cycle, the organization donated millions of dollars to dozens of legislative candidates; most of the money came from a small group of Bay Area venture capitalists, tech executives and philanthropists who maxed out to each chapter in its statewide network.
Several campaign finance experts told CalMatters that the structure of the chapters — which consult with Crane, receive a majority of their funding funneled through a central committee and regularly make identically sized donations to the same candidates on the same days, using the same treasurer and law firm — pushes the boundaries of state law by potentially enabling donors to circumvent contribution limits.
Crane denied that characterization and compared his organization to unions and their local affiliates. But unions differ from Govern From California in some critical ways, including their broad membership of workers, who contribute small amounts to campaign spending through their dues, and their non-political functions such as collective bargaining.
Following the publication of the story, a former labor union leader filed a complaint against Govern For California with the Fair Political Practices Commission. The commission’s enforcement division quickly rejected that complaint, citing its 2020 letter that advised: “Provided the GFC Statewide Committee and all local chapters are controlled by different individuals, who independently direct and control the entities’ respective contributions, the contributions from GFC Statewide Committee and each local chapter do not share contribution limits.”
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