SACRAMENTO, CA — A network of corporate-backed political
action committees has coordinated the allocation of millions of dollars
into a number of legislative races this spring, blurring the identity of
contributors while overseeing a dizzying exchange of money that critics
say is meant to conceal the true extent of their influence.

The
committees’ names give the appearance of fighting for the little guy:
JobsPAC, Diversity PAC, Californians Allied For Patient Protection, for
example. But in every case, they are backed by corporate dollars and
they spend money strictly on behalf of candidates they believe will do
their bidding, critics say.

And voters have to work hard to find
out who is behind their advertising campaigns.

"It becomes a real
sleuthing game to figure out the original funding," said Kathay Feng,
executive director of California Common Cause, a campaign-finance reform
advocacy group. "These types of shell games can be used to hide the
identity of the original donor and remain hidden up until the election."

In
one case, a PAC named California Senior Advocates League has been
accused of laundering money to mask its corporate origins — only days
after it was formed.

In that case, a consumer group alleges that
the California Senior Advocates League took contributions from two
leading PACs whose donors include more than 40 businesses from the oil,
insurance, finance and other industries, and quickly offloaded $200,000 to a labor PAC that supported ex-lawmaker
and current insurance executive Juan Vargas in a Senate Democratic
primary race against the Democratic Party’s favorite, Assemblywoman Mary
Salas, D-San Diego.

The intent, said Doug Heller, executive
director of Consumer Watchdog, whose complaint with the Fair Political
Practices Commission is under review, was to give cover to the PAC run
by the American Federation of State, County and Municipal Employees, or
AFSCME, which did not want to appear to be taking cash from big business
in its effort to support Vargas. Salas and Vargas are still awaiting
the tallying of absentee votes in a close race that may be headed for a
recount.

"It cleaned the money," Heller said. "That’s why it’s
called laundering. They were hiding the funding sources. It was
important to have the appearance of authentic working people and not
corporations actually funding it."

None of the $319,000 the
California Senior Advocates League has received has come from groups
associated with seniors. All of it originates from the two PACs: JobsPAC
and Put California Back to Work, both of whose own funding is derived
entirely from the business sector.

Deborah Howard, the executive
director of the California Senior Advocates League, denied the
laundering charges, saying her group simply "shared the same objective
with the other organizations. The bottom line is that these
organizations may have given money to us but CSAL decided on its own how
to spend its money."

Willie Pelote, the political director for
AFSCME, who said his board endorsed Vargas based on his past support of
labor issues, said he was surprised when told who was behind the
California Senior Advocates League.

"I thought they represented
seniors," he said. "I need to take a look at that."

The impact of
special-interest money funneled through independent expenditures has
been decried by many political observers since 2000, when Proposition 34
placed strict limits on direct contributions to candidates but allowed
unlimited indirect spending for PACs run by corporations, unions and
parties.

This year has been no different, with a total of $15
million spent by independent groups through June 8, though the potential
stakes in the upcoming fall races appear to have heightened activity
among corporate-backed PACs, which are seeking to hedge against the
possibility of Democrats taking full control of the Capitol.

"Our
highest priority is to not allow a two-thirds majority" for Democrats,
said one person leading one of the business PACs who spoke on the
condition of anonymity. "That’s a key focus."

If Democrats get a
two-thirds majority in both houses of the Legislature, they could
approve taxes and budgets without requiring Republican support.

The
intensity among business-backed PACs has been clear in the special
Senate election between Rep. Sam Blakeslee, R-San Luis Obispo, and
former Democratic lawmaker John Laird. Business-backed PACs, led by
JobsPAC, have poured $1.3 million into the race, the bulk used for
attack ads on TV, radio and in campaign mailers against Laird. Interest
groups opposing Blakeslee or supporting Laird, in contrast, have spent
$161,570.

That race is headed to an Aug. 17 runoff, after
Blakeslee fell just shy of the 50 percent-plus-one threshold to win
outright in Tuesday’s special election.

In that race, JobsPAC
spent $864,000 to defeat Laird; the California Senior Advocates League
spent $103,000; and a PAC calling itself Real Solutions, Sponsored by
the Republican State Leadership Committee, provided $91,000. That group
is based in Virginia, and gets much of its money from oil companies
around the country.

"It was deliberately made difficult for voters
to know where the money was coming from and who they were getting
information from," said Janelle Beland, Laird’s campaign manager, who
said she expects more of the same in the runoff. "It’s going to be
special interests trying to control the game with their deceptive
advertising and mailing."

Business PACs also far exceeded their
opponents in the Salas-Vargas race in San Diego. They spent $2.4 million
in support of Vargas or against Salas, compared to $474,822 spent on
behalf of Salas or against Vargas. Put California Back to Work led the
way, pouring $1.2 million into that race.

John Sullivan, the
president of the Civil Justice Association, which runs the Put
California Back to Work PAC, along with two others that poured in
$327,000 into the Salas-Vargas race, said his goal is to elect a
candidate who will stop plaintiffs from "leveraging the laws to collect
windfall judgments from businesses."

Put California Back to Work
has received $245,000 from JobsPAC and more from others. Sullivan said
the free exchange of money between the business groups is legal and
smart.

"Sure, there is communication among the PACs established
and funded by business entities and associations," he said. "It’s a part
of normal planning. There’s no mystery to that. It all goes on within
the rules."

Chevron Corp. is another top contributor to JobsPAC,
with $123,000. Other significant contributors include Farmers Insurance,
AT&T, Anthem Blue Cross, The Irvine Co., Edison International,
Sempra Energy, Philip Morris and PG&E.

Just as the California
Senior Advocates League had no apparent ties to senior groups, the
Diversity PAC, which spent $9,500 in an independent expenditure against
Salas, has no obvious ties to diversity groups. Indeed, its sole source
of funding comes from corporate entities such as the United Services
Automobile Association, a financial services company, the Insurance
Brokers and Agents PAC, AT&T, Eli Lilly and PG&E.

When
asked who was involved in setting up the Diversity PAC, Tom Calderon,
the principal officer, responded, "I’m sorry. I’m busy," and hung up.

The
Diversity PAC also gave $150,000 to Put California Back to Work.