Photograph by Greg Johnston

Cayman Islands

Social welfare nonprofits, which can keep their donors secret, are a lot like Russian nesting dolls: Open one, and you’ll find a smaller version inside.

That’s what courts in California discovered last year when they tried to figure out who paid for TV ads attacking Gov. Jerry Brown’s tax increase plan. The courts forced an out-of-state nonprofit to reveal its donors only to find out that the ad money came from … another out-of-state nonprofit. That’s where the trail ended.

Prompted by a revelation last week that the Internal Revenue Service improperly targeted Republican-leaning nonprofit applicants, Congress is plunging  into the thicket of tax rules governing those entities. Hearings continue next week.

Campaign-finance watchdogs such as the Sunlight Foundation, Democracy 21, Common Cause and the Campaign Legal Center are imploring lawmakers to look broadly at whether politically active nonprofits are misuing their tax-exempt status. A Bloomberg story today highlights two groups — one Democratic and one Republican — that appear to be gaming the system by buying campaign-style ads and doing most of their work in election years.

There’s yet another way social welfare nonprofits participate in politics: They move dark money, Cayman Islands style. Sometimes a nonprofit gives money to a political committee that can more freely spend on politics, in effect keeping the real donors hidden. Bill Allison, editorial director of the Washington-based Sunlight Foundation, has called that phenomenon a “campaign-finance haven.”

Those tactics can bump up against stricter state campaign-finance laws, as was the case in California with the Americans for Responsible Leadership.

Two days before the November 2012 election, a California Supreme Court judge ordered the nonprofit based in Phoenix to reveal who gave it the $11 million that it in turn contributed to a business group opposing Brown’s California tax initiative.

Americans for Responsible Leadership reported that it received its money from the Center to Protect Patient Rights — another nonprofit with secret donors.

An October 2012 Bloomberg News investigation of the Center to Protect Patient Rights, also based in Phoenix, revealed that it raised $62 million for the 2010 elections and parceled out most of its money to other nonprofits.

The center’s donors remain a secret.

Original post is Nonprofits: Cayman Islands of Political Money by Political Capital.

Photograph by Ryan Anson/Bloomberg

Two of four 1,060-foot catwalks connect to the 525-foot main tower from the eastern end of the San Francisco-Oakland Bay Bridge.

So dozens of over-sized bolts built into the soon-to-be-opened $6.4 billion San Francisco-Oakland Bay Bridge snapped when they were tightened earlier this year.

What does California Gov. Jerry Brown have to say about it?

“Look, s— happens,” Brown said when asked today by a reporter whether the public should be concerned or lose faith in the project.

He had just finished delivering remarks at a memorial service for highway patrol officers killed on the job.

The Golden State is replacing the eastern span of the bridge, which was damaged when a 6.9-magnitude earthquake struck in October 1989, killing one motorist. It’s supposed to open in September after a decade of construction.

Earlier this year, more than 30 of the rods, each three inches wide and up to 24 feet long and a critical component of the new bridge’s earthquake safety features, snapped after they were tightened.

The state is testing the rest of the rods on the bridge and is developing a plan to fix those that failed.

“Very professional engineers are looking into it,” Brown said.

Remember, this is the governor who wants to “get s— done.’‘

That’s what he said at a press conference  last year announcing plans to build two massive, 40-mile underground tunnels to ship water to Southern California. He had asked the Legislature to build a canal for the same purpose 30 years ago, he noted, when he was California’s youngest governor. Now that he is back, as its oldest, he said in July:  “Analysis paralysis is not why I came back 30 years later to handle some of the same issues. At this stage in my life, as I see many of my friends dying — I just went to the funeral of my best friend a couple of weeks ago — I want to get s— done.”

Original post is Jerry Brown Channels Forrest Gump by Political Capital.

Photograph by Tom Pennington/Getty Images

Texas Gov. Rick Perry visits with fans prior to the start of the NASCAR Sprint Cup Series NRA 500 on April 13, 2013 in Fort Worth, Texas.

Texas Gov. Rick Perry has  picked Chicago as his latest job-recruitment target, running print and Internet advertisements through a weekly business newspaper urging Illinois companies to move to the second-most populous state.

In February, radio ads launched by Perry asked California business owners to consider relocating to Texas, citing lower taxes and a more favorable regulatory environment. Those ads prompted California Gov. Jerry Brown to mock the campaign as a “burp, barely a fart.”

“This is part of the governor’s ongoing efforts to reach out to companies whose policies make it difficult to live and do business,” spokeswoman Lucy Nashed said in an e-mailed statement.

Texas has no income tax, compared with a 5 percent levy in Illinois, and union membership is much lower, Nashed said.

A call to Illinois Gov. Pat Quinn’s press aide, Brooke Anderson, was not immediately returned.

Texas had a 6.4 percent unemployment rate as of February, compared with a 9.5 percent rate in Illinois. Illinois has the lowest rating among the U.S. states by Moody’s Investors Service and Standard & Poor’s and both companies have it on negative outlook, meaning the grade could be cut further.

TexasOne, a public private partnership, is paying for the $38,450 of advertising in Crain’s Chicago Business, according to Perry’s statement.

Original post is Texas to Chicago: Send Us Your Overtaxed, Underemployed Masses by Political Capital.

Photograph by Eric Risberg/AP Photo

President Barack Obama walks with California Attorney General Kamala Harris after arriving at San Francisco International Airport.

Kamala Harris, California’s attorney general, got an apologetic phone call last night from the president of the United States — for calling her good looking.

Not only good looking — “the best-looking attorney general,” President Barack Obama called Harris, during a party fundraising event in California yesterday.

“He apologized for the remark,” Jay Carney, the White House press secretary, said at today’s press briefing. “They’re old friends,” Carney said of Obama and Harris. The president “has known her for a long time, and he apologized for it.”

The praise from the president for one of only eight female attorneys general in the U.S. stirred rounds of criticism, questions and humor in social media — i.e., Twitter was burning up. When Obama got home to Washington last night, he got on the phone.

“He called her to apologize for the distraction created by his comments,” Carney said. “And you know, they are old friends and good friends, and he did not want in any way to diminish the attorney general’s professional accomplishments and her capabilities.”

“He certainly regretted that it caused the distraction” that one reporter suggested had been created by the incident, Carney said. “He apologized for it and believes that she is a superb attorney general for the state of California — has done an excellent job in all areas.”

Can’t buy the publicity @kamalaharris has gotten in the last 24 hrs. Wonder if @gavinnewsom mailing 8-by-11 glossies to the White House.

— Mark Z. Barabak (@markzbarabak) April 5, 2013

Original post is Obama’s Apology to Kamala Harris: Phone Call to an Old Friend by Political Capital.

Photograph by Scott Eells/Bloomberg

Kamala Harris, attorney general of California, waves before speaking during day two of the Democratic National Convention (DNC) in Charlotte, North Carolina, on Sept. 5, 2012.

President Barack Obama, in California for some party fundraising, caught his audience’s attention with his notice of the state attorney general:

Obama just riffed in how hot Cali AG Kamela Harris is. “By far, the best looking attorney general…(audience: “oh’s”)…C’mon, it’s true.”

— HansNichols (@HansNichols) April 4, 2013

Photo of California Atty Gen Kamala Harris from her official website: oag.ca.gov/about

— Mark Knoller (@markknoller) April 4, 2013

Vice President Joe Biden might have something to say about all this:

Beau Biden not happy. RT @ktumulty: Obama calls Kamala Harris ‘the best looking attorney general’ washingtonpost.com/blogs/post-pol…

— gwen ifill (@pbsgwen) April 4, 2013

As Andy Rooney liked to ask, `Ever wonder why?’

Why do pols say so many dumb things at fundraisers? Must be something about all those rich people in one room nym.ag/12mLVwn

— Jill Lawrence (@JillDLawrence) April 4, 2013

Original post is Obama: California’s AG ‘Best Looking’ — and Beau Biden? by Political Capital.

Photograph by Jim Watson/AFP via Getty Images

President Barack Obama delivers remarks from the wharf near the PortMiami tunnel project in Miami, Florida on March 29, 2013.

With a quartet of California fundraisers, President Barack Obama will test his ability to replenish his party’s campaign accounts without the threat of his defeat to motivate Democratic donors.

Obama leaves Washington today for a Western trip that is four parts fundraising and one part presidential business. He will begin with an official event in Denver, Colorado to press Congress to pass a bill to address gun violence. Then he heads to the San Francisco area for the fundraisers.

The president will be pressing his contributors to help him win back Democratic control of the House of Representatives in 2014 and shore up the national party’s finances.

He may be met with some donor fatigue.

“Raising money is never easy,” said Bill Burton, a former White House spokesman who is co-founder of Priorities USA, a political action committee that supported Obama in the 2012 election. “But it’s particularly difficult following a general election cycle that started earlier and burned through more money than any other in history.”

The president’s fundraising starts tonight with a reception at Pacific Heights home of Thomas Steyer, the founder of Farallon Capital Management LLC, and his wife, Kat Taylor, at a cost of $5,000 per person, according to a copy of the invitation. That event, with proceeds going to the Democratic Congressional Campaign Committee, will be followed by a dinner at the home of Ann and Gordon Getty at a cost $32,400 per seat.

The next day, Obama will raise money for the Democratic National Committee, which had $21.9 million in debt at the end of February, with a $32,400-per-person brunch at the Atherton home of Liz Simmons and Mark Heising, the founder and managing director of Medley Partners, according to a person familiar with the matter. His final event, also in Atherton, is at the home of Levi Strauss heir John Goldman. Tickets there range in price from $1,000 to $20,000.

Obama is expected to raise $1.8 million at the two DNC events, and has committed to total of six fundraising trips before June 30, said the person, who requested anonymity.

The president reactivated his campaign’s donor network last month to raise money for Organizing for Action, a nonprofit advocacy group founded this year by former campaign aides. The events today and tomorrow mark a return to traditional party-building.

“Democrats should be heartened by the fact that even though donors may be a little low on enthusiasm, the president is not,” said Burton.

Original post is Obama’s Post-Election Fundraising: Replenishing a Party by Political Capital.

Photograph by Rich Pedroncelli/AP Photo

State Senator Tony Strickland, R-Thousand Oaks, second from left, discusses the newly formed Taxpayers Caucus during a news conference in Sacramento, Calif., on Feb. 23, 2011.

California Republican Tony Strickland is seeking a rematch with Democratic Rep. Julia Brownley, who defeated him last November in a Ventura County-based district west of Los Angeles.

Strickland, a former state legislator, filed a statement of candidacy and a statement of organization with the Federal Election Commission to prepare for a 2014 race against Brownley, who won their 2012 race by 52.7 percent to 47.3 percent.

That closely tracked the 54.0 percent to 43.7 percent margin by which President Barack Obama defeated Republican challenger Mitt Romney in a district, the 26^th, that includes Oxnard and Thousand Oaks in Ventura County and a small part of Los Angeles County.

Strickland raised about $2.5 million during the 2012 campaign compared with $2.2 million for Brownley, who benefited from most of the $4.1 million in outside spending on the race, according to the Center for Responsive Politics.

Original post is California: Strickland Seeks Rematch with Brownley by Political Capital.

Photograph by Mark Wilson/Getty Images

President Barack Obama participates in a naturalization ceremony in the East Room of the White House on March 25, 2013 in Washington DC.

President Barack Obama will headline two San Francisco Bay-Area fundraisers next week for the Democratic National Committee, which is trying to dig itself out of a $22 million hole.

Obama will make his DNC pitches on April 4; the day before, he’ll participate in two San Francisco fundraisers for the Democratic Congressional Campaign Committee.

The April 4 festivities begin with a 30-person brunch at the Atherton  home of Liz Simons and Mark Heising, followed by a lunch for 200 at the nearby home of Marcia and John Goldman, according to DNC invitations.

Heising is managing director of Medley Partners, a private equity firm based in San Francisco. He sits on the board of the Environmental Defense Fund. Obama named Goldman, a board member of the San Francisco Symphony and its former president, to the Advisory Committee on the Arts for the John F. Kennedy Center for the Performing Arts.

Brunch costs $32,400 and includes a photograph with the president, and lunch is $1,000 per plate (more for a photo).

It could be a $1 million day for the DNC, which needs the cash influx. In its March 20 report to the Federal Election Commission, it reported almost $22 million in debts and obligations and about $4 million cash on hand as of the end of February.

The parties are experiencing a bit of reversal of fortune these days.

The Republican National Committee’s money woes while former Maryland Lt. Go.v Michael Steele was its chairman were well-chronicled. Last month, the RNC had zero debt and $7.5 million in the bank.

Original post is DNC in Money Pit, Obama Heading West: Gold on That Bay by Political Capital.

Photograph by Mark Wilson/Getty Images

Justin Kenny of Akron, Ohio holds a modified Stars and Stripes flag in front of the U.S. Supreme Court, on March 26, 2013 in Washington, DC.

That’s the percentage of Americans who have a favorable view of the Supreme Court, according to the Pew Research Center.

That compares with 31 percent who have an unfavorable view of the high court, according to interviews conducted March 13-17.

The public’s view of the Supreme Court is near a quarter-century low of 51 percent set last summer, when it upheld the core of President Barack Obama’s health-care overhaul. In the wake of that ruling, the high court’s approval rating plunged among Republicans, who opposed the overhaul, and rose among Democrats.

Forty-seven percent of Republicans and 56 percent of Democrats have a favorable opinion of the Supreme Court, according to Pew’s most recent surveys.

The Supreme Court this week is considering same-sex marriage for the first time. It will hear arguments today on a California ballot measure, passed by voters in 2008, that prohibited same-sex marriage. The court will hear arguments tomorrow on the constitutionality of the 1996 Defense of Marriage Act, which prohibits the federal government from recognizing same-sex unions. The court will decide the cases by June.

The California ballot measure banning gay marriage has lost support in public opinion polls, Bloomberg’s Alison Vekshin reported yesterday. Dozens of people, some of them hired by interest groups, lined up outside the Supreme Court days ago in hopes of securing a chance to witness the arguments, Bloomberg’s Nick Taborek reported.

This week’s arguments may yield insight into whether the Supreme Court “cares what big business thinking about gay marriage,” Bloomberg BusinessWeek’s Paul Barrett wrote. Companies including Apple Inc. and Facebook Inc. filed briefs in support of same-sex marriage.

Original post is Bloomberg by the Numbers: 52 by Political Capital.

Photograph by Manuel Balce Ceneta/AP Photo

Sen. Dianne Feinstein, D-Calif. speaks during a news conference on Capitol Hill in Washington on Jan. 24, 2013, to introduce legislation on assault weapons and high-capacity ammunition feeding devices.

Ted Cruz, the first-year Republican senator from Texas who has taken on some senior lawmakers in rhetorical fisticuffs during his debut on Capitol Hill, ran into one contender today who showed little patience for his brashness.

Cruz put a question to Sen. Dianne Feinstein, the Democratic senior senator from California and former mayor of San Francisco who witnessed bloodshed in her own tenure at City Hall and is pushing a ban on assault weapons and mega-sized ammunition clips in the aftermath of the shootings of 20 schoolchildren in Newtown, Connecticut, with a Bushmaster.

“The right of the people” to keep and bear arms, Cruz said, is a term of art in the Second Amendment that is sounded in the First Amendment as well.

“The question that I would pose to the senior senator from California is, would she deem it consistent with the Bill of Rights for Congress to engage in the same endeavor that we are contemplating doing with the Second Amendment in the context of the First or Fourth Amendment,” Cruz said.

“Namely, would she consider it constitutional for Congress to specify that the First Amendment shall apply only to the following books and shall not apply to the books that Congress has deemed outside the protection of the Bill of Rights? Likewise, would she think that the Fourth Amendment’s protection against searches and seizures could properly apply only to the following specified individuals and not to the individuals that Congress has deemed outside the protection of the Bill of Rights?”

“I’m not a sixth grader,” Feinstein replied. “Senator, I’ve been on this committee for 20 years. I was a mayor for nine years. I walked in, I saw people shot. I’ve looked at bodies that have been shot with these weapons. I’ve seen the bullets that implode. In Sandy Hook, youngsters were dismembered.”

“Look, there are other weapons” that people can purchase, she said. “I’m not a lawyer, but after 20 years I’ve been up close and personal to the Constitution. I have great respect for it. This doesn’t mean that weapons of war and the (Supreme Court’s) Heller decision clearly points out three exceptions, two of which are pertinent here.”

“And so I — you know, it’s fine you want to lecture me on the Constitution,” she said. “I appreciate it. Just know I’ve been here for a long time. I’ve passed on a number of bills. I’ve studied the Constitution myself. I am reasonably well educated, and I thank you for the lecture.”

The bill, she said, specifies more than 100 banned weapons — yet it exempts more than 2,000 weapons.

“Isn’t that enough for the people of the United States?” she asked. “Do they need a bazooka?.. I come from a different place than you do.”

“I would note she chose not to answer my question,” Cruz said, pressing his luck.

“The answer is obvious — no.” Feinstein said.

The chairman of the Senate Judiciary Committee joined in, Democratic Sen. Patrick Leahy of Vermont, pointing out to Cruz that, in his home state of Texas, the state Board of Education “tells people which books they can and cannot read.”

The ban on assault weapons and clips with more than 10 rounds of ammo passed the committee by a vote of 10-8 along party lines, only Democrats backing it.

President Barack Obama congratulated the committee:  “ These weapons of war, when combined with high-capacity magazines, have one purpose: to inflict maximum damage as quickly as possible.  They are designed for the battlefield, and they have no place on our streets, in our schools, or threatening our law enforcement officers. ”

The ban is likely to die in the full Senate.

Original post is Cruzing for a Lecture: Feinstein on Guns by Political Capital.