‘No on Measure B’ Campaign Fined $61,500

Dec 7, 2015 4:00 PM PST

CANOGA PARK, Calif. — California’s Fair Political Practices Commission has levied $61,500 in fines against opponents of Los Angeles County’s Measure B, the voter-approved 2012 ballot measure that requires talent to wear condoms during sex scenes.

The enforcement division of the state agency said that the No on Measure B campaign failed to report the exact source of a $75,000 donation from Manwin, now known as MindGeek. The campaign also accepted more than $250,000 from the U.S. division of the Luxembourg-based adult entertainment company.

The parties to the the complaint — No on Government Waste, No on Measure B campaign, Major Funding by Manwin USA; MindGeek USA Inc. (formerly known as Manwin USA Inc.); MindGeek’s Froytal Services Ltd.; and the Free Speech Coalition’s Diane Duke — agreed to the agencies stipulation, decision and order to reach a final disposition without the necessity of holding an administrative hearing to determine the liability of them.

While the fines have been agreed to by the parties, the Fair Political Practices Commission will hold a hearing on Dec. 17 in Sacramento to confirm its order which involves multiple violations of the California’s Political Reform Act.

Those violations, numbering 16, include unlawful contributions from foreign principals in connection with a local ballot measure, failure to comply with ballot measure committee name requirements regarding disclosure of the economic interest of major donors of $50,000 or more and campaign reporting violations.

In particular, the commission said that in October 2012, Duke and the No on B committee filed a pre-election campaign statement that failed to report that Manwin’s Froytal division was the true source of a $75,000 contribution.

Froytal at the time was based in Nicosia, Cyprus, but, according to the commission, Duke and the No on B committee reported that Manwin’s U.S. division was the true source of the contribution.

“Duke maintains that she mistakenly viewed Froytal and Manwin USA as the same company,” according to the enforcement division of the state agency. “She was familiar with Froytal because it had paid membership fees to the Free Speech Coalition (Duke’s employer) on behalf of Manwin USA — and she was accustomed to treating Manwin USA as the member, even when Froytal paid the fees. Furthermore, there is no evidence that Duke or the committee intended to conceal the involvement of a foreign principal.

“Rather, this mistake appears to have been something less than deliberate concealment — albeit more than an inadvertent oversight. Nevertheless, the misreporting deprived the public of information regarding the actual source of the contribution.”

The parties to the complaint agreed to an administrative penalty in the amount of $61,500, of which Duke and No on Government Waste, No on Measure B, Major Funding by Manwin USA are jointly and severally liable for $32,000, MindGeek USA Inc. is liable for $24,500, and Froytal Services is liable for $5,000.

Duke on Monday told XBIZ that the proposed stipulation, decision and order by the Fair Political Practices Commission showed that “all parties believed that the contributions were legal and the FPPC acknowledged that there was clearly no intent to go against campaign regulations."

“It is obvious that [AIDS Healthcare Foundation’s Michael] Weinstein brought this issue up now in an attempt to curb contributions to the looming November 2016 statewide ballot initiative," she said. 

The AHF, which has sponsored numerous forms of condom legislation, also had a hand in The California Safer Sex in the Adult Film Industry Act, which now is eligible for the Nov. 8, 2016, general election ballot. 

Weinstein’s initiative needed at least 402,468 projected valid signatures to qualify by random sampling, and it exceeded that threshold last month. 

Under election law, the initiative will be qualified for the November 2016 ballot on June 30 unless Weinstein withdraws the initiative prior to that date.

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