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City Clerk Fines BLUPAC for Failure to Disclose ‘Dark Money’ Expenditures

The Santa Clara City Clerk has fined non-profit “civic education” group BLUPAC more than $9,000 for failing to disclose campaign expenditures last year.

At the end of January, City Clerk Rod Diridon became aware that BLUPAC had filed a campaign expenditure reports with the state. During the Nov. 2016 election, BLUPAC contributed to Citizens for Economic Council slate mailers. However, while BLUPAC registered locally as recipients, it failed to register on the donor side.

Whenever an agency files as a major donor, defined as an individual or entity that contributes more than $10,000 to local or state officeholders, committees or candidates in a calendar year, or as an independent expenditure committee, defined as an individual or entity who spends at least $1,000 to support or oppose state or local candidates or ballot measures in a calendar year, state law requires the person or entity to file a Form 461.

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The forms do not indicate whether BLUPAC filed as a major donor or independent expenditure committee.

BLUPAC submitted the 10 Form 496s and the Form 461 to the City 92 and 14 days late, respectively. The $10 per day late fee amounted to $9,340 that BLUPAC must pay by March 10.

Diridon called BLUPAC’s funding practices “nebulous,” submitting a memo to the Council and City Attorney Feb. 16.

“They operate in this kind of funky space in the law with not a lot of clarity for a lot of folks,” Diridon said.

If the fine pushes BLUPAC’s expenditures over $50,000, it would be required to disclose its donors. However, Diridon said he is unsure how the fine is categorized, saying he referred the matter to the City Attorney.

Santa Clara City Attorney Brian Doyle was unavailable for comment Tuesday.

“It is important that if a Dark Money independent expenditure committee operates within the City, they realize they will be held accountable,” Diridon said. “If they are going to use the law as a shield they should also comply with it–that gives us some justice in our community.”

Doug Chan, founder of BLUPAC, said the failure to file was a “jurisdictional oversight.” He called the fine “excessive.”

“There was no attempt to not comply with local laws,” Chan said. “We take our filing obligations very seriously.”

Chan refused to answer questions about the fine.

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