Condom measure opponents fined for taking donations from foreign interests

Reporting from Sacramento —  Opponents of a Los Angeles ballot measure that required actors in adult films to wear condoms while working have agreed to pay $61,500 in fines for campaign finance violations that included hiding large donations by foreign interests, the state ethics agency said Monday.

The fines are proposed against the No on Measure B committee, which fought a measure approved by city voters in 2012, according to documents released by the state Fair Political Practices Commission. The campaign committee has agreed to the fines proposed by the FPPC staff, but the commission will meet Dec. 17 and decide whether to approve the penalties.

Among the commission’s allegations is that the campaign received $343,000 from pornography firms with ties to Cyprus and Luxembourg in violation of a state ban on contributions from foreign principals in connection with local ballot measures.

“California’s ballot measure process is a powerful means of shaping California law, and it is designed to serve the interests of the people of California — not the interests of foreign principals,” a report by the commission’s enforcement staff said.

The funding that year came from Manwin USA Inc., an adult film industry company based in Burbank, and Froytal Services Ltd., which was incorporated under Cyprus law.

Froytal and Manwin USA were subsidiaries of Manwin Licensing International, a Luxembourg-based Internet video and online advertising conglomerate, which specialized in pornography, the investigation found. That parent firm was managed by Fabian Thylmann, who is not a U.S. citizen.

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The FPPC report said Froytal improperly contributed $75,000 to the No on Measure B committee in violation of a prohibition on contributions by foreign principals. The money was improperly reported publicly as coming from Manwin USA.

Investigators also say Manwin USA later made five contributions to the campaign totaling $252,000 that were violations because Thylmann, a foreign national, participated in the decision.

Diane Duke, the campaign treasurer, told investigators that she mistakenly viewed Froytal and Manwin USA as the same company. “All parties believed that the contributions were legal,” she said.

The FPPC report concluded that there is no evidence the committee intended to conceal the involvement of a foreign principal.

Michael Weinstein, president of the Los Angeles-based AIDS Healthcare Foundation, a leading proponent of Proposition B, welcomed the fines. “We have a right to democracy where we, not foreign powers, get to decide our own future,” Weinstein said.

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In an unrelated case, the FPPC said that state Sen. Jeff Stone (R-Temecula) and a supporter have agreed to pay fines of $5,500 each after his 2014 campaign accepted funds that exceeded the contribution limit and failed to properly report a donation.

In 2013, supporter Dan Stephenson, owner of a real estate firm, hosted fundraisers in a luxury box at a Los Angeles Lakers basketball game and at a Los Angeles Kings hockey game to raise money for Stone’s state Senate campaign, the commission report said.

Rancon Real Estate Corp. paid the $7,808 cost for the luxury box, food and drinks, while $8,200 raised came from 17 entities in which Stephenson held an ownership interest.

The limit on contributions from one source was $8,200 and the combined contribution from Stephenson’s firms was nearly twice that.

The fine was the result of two reporting mistakes by the committee’s treasurer, said Dave Gilliard, a campaign spokesman for Stone. “The FPPC said they found ‘no evidence that the committee intended to violate the law,’” he said.

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