California Settles 'Dark Money' Case: Source

WASHINGTON -- California's Fair Political Practices Commission on Thursday will announce a settlement in its probe into an $11 million contribution made by a "dark money" nonprofit group in the 2012 elections, according to a source with knowledge of the case. The commission will disclose the deal at a press conference scheduled for noon.

The settlement involves an $11 million contribution from the previously unknown Arizona-based nonprofit Americans for Responsible Leadership to the Small Business Action Committee, which opposed Gov. Jerry Brown's tax increase initiative in last year's elections. Common Cause California spotted the contribution and reported it to the Fair Political Practices Commission, which began an investigation.

A judge forced Americans for Responsible Leadership to reveal the original source of the money. But that disclosure showed that the money came from the Center to Protect Patient Rights, another Arizona nonprofit, which received the money from Americans for Job Security, a Virginia-based nonprofit. Both of these groups were connected to political money network operated by the billionaire Koch brothers.

The Fair Political Practices Commission called the money "the largest contribution ever disclosed as campaign money-laundering in California history."

The commission's inquiry sparked a state grand jury investigation into suspected violations of campaign finance law and money laundering. The investigation has included subpoenas issued to political consultants and donors.

The probe launched commission Chairwoman Ann Ravel into national news. She has since been picked as a commissioner for the Federal Election Commission .

Meanwhile, Koch operative Sean Noble , who helped manage the Koch political money network last year, has fallen out of favor with the industrialist brothers since the investigation began.

UPDATE: Oct. 24 -- The Los Angeles Times reported Thursday that the settlement will include a $1 million fine against Americans for Responsible Leadership and the Center to Protect Patient Rights.

In a later press conference, Fair Political Practices Commission chair Ann Ravel announced the record $1 million fine against Americans for Responsible Leadership and the Center to Protect Patient Rights for violating campaign finance disclosure laws in the 2012 election.

"This case highlights the nationwide scourge of dark money nonprofit networks hiding the identities of their contributors, Ravel said. The FPPC is aggressively litigating to get disclosure and working on laws and regulations to put a stop to these practices in California.

Ravel also announced that the Small Business Action Committee must disgorge the $11 million contribution made by the Americans for Responsible Leadership.

The press conference also covered another "dark money" contribution unearthed in the investigation. This involved a $4.08 million contribution to the California Future Fund from the Center to Protect Patient Rights that first passed through the American Future Fund. Ravel said that the California Future Fund must also disgorge this $4.08 million contribution.