Attorney general, Elections Division say labor-backed group did not violate state rules

Portland's Our Oregon, a labor-backed group active in initiative campaigns, was exonerated Friday from election law violations, after a year-long investigation by the attorney general's office and state Elections Division.

Conservative activist Richard Leonetti filed an elections complaint a year ago, accusing Our Oregon of failing to register as a political action committee and fully report its contributions and expenditures, despite playing an active role in 2006 ballot measure campaigns. The elections complaint was referred by the state Elections Division to the attorney general's office because of possible criminal violations.

Secretary of State Bill Bradbury ruled Friday that Our Oregon doesn't have to meet the same requirements as a political action committee, because it is registered as a public benefit nonprofit corporation, a federal designation also known as a 501(c)(4) organization.

'As a (c)4, as a nonprofit, they're not required to file as a political action committee; they're governed by a different set of rules,' said Scott Moore, Bradbury's spokesman.

In a a letter issued to Leonetti Friday, state elections director John Lindback concluded: 'After a thorough investigation, the Elections Division has determined that Our Oregon does not meet the definition of a political committee and is not subject to contribution and expenditure reporting.'

Kevin Looper, executive director of Our Oregon, said his organization followed the letter of the law, and reported spending for different 2006 ballot measure campaigns as in-kind contributions to those campaigns. 'There is still federal protection for nonprofits to raise money in compliance with the law without having to open up their books,' Looper said. 'We report more fully than any of the organizations who would be standing in political opposition to us.'

Our Oregon reported its staff costs for aiding each of the ballot measure campaigns, but did not provide the source of its funding. The state's two largest public employee unions, Oregon Education Association and Service Employees International Union Local 503, are major donors to Our Oregon, Looper said. The two unions provided all five members of Our Oregon's board of directors at the time of Leonettti's complaint.

Records supplied to state investigators showed Our Oregon spent $875,462 in 2006, but only $220,000 of that was 'reportable political expenditures,' Lindback concluded.

Our Oregon and leaders of the two unions previously complained about conservative activist Bill Sizemore's efforts to camouflage his funding for ballot measure campaigns. Sizemore, as court hearings revealed, used a separate foundation to funnel certain funds, thus avoiding have to disclose the source of the money.

The complaint by Leonetti raised questions that the unions were also not being forthcoming about their financing of ballot measures.

Leonetti could not be reached for comment Friday. A lawyer advising him in the complaint, Greg Howe, said the decision will prompt conservative groups to change their structure so they can avoid detailed campaign finance reporting.

'I think what will happen is everyone else will do the same thing. If the left can hide its contributions this way, so will the right,' Howe said.

Bradbury agreed the case highlights a potential problem about proper disclosure of campaign money, Moore said. As a result, Bradbury announced he'll appoint an advisory panel to explore reporting requirements for political committees.

'My fear, and the fear of many other people concerned about full campaign finance disclosure, is that campaign bankrollers are using this ambiguity in the law to stay hidden in the shadows,' Bradbury said in a prepared statement.

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