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Calif., PACs Reach $1M Campaign-finance Settlement

Although fundraiser Tony Russo says in an interview transcript released Thursday that he met with a consultant for the Koch brothers to help plan the campaign and that donors "liked the Koch model" of influencing elections through issue advocacy, Koch Companies Public Sector, which is owned by the Koch brothers, denied involvement in the Proposition 32 campaign in a statement.

"We did not support, either directly or indirectly, this ballot initiative, which would have restricted public and private sector employees' rights to contribute to candidates," the statement said.

The state watchdog agency said the two groups that received the money and led the campaigns in California are required to make their respective $11 million and $4 million payments to the state general fund.

But Steve Churchwell, an attorney for the Small Business Action Committee, said the group has no intention of paying the $11 million because the law applies only to candidate elections and not ballot initiatives. He said his group has not been found to have violated any campaign finance laws.

The California Future Fund has been disbanded since the election. A message left with its associate, American Future Fund, was not returned Thursday.

Barbara Smeltzer, one of two people named in the commission's letter as responsible for paying $4 million, said she knew nothing about the investigation or the demand.

Smeltzer, who is active in Republican politics from her home in Dubuque, Iowa, is listed as assistant treasurer of California Future Fund, but said she had never heard of CFF and never wrote or accepted checks.

Asked why her name surfaced in connection with the case, she said, "I have no clue whatsoever."

___

Associated Press writer Tom Verdin contributed to this report.

Copyright 2011 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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