California Gov. Gray Davis has paid $100,000 from his campaign account to the American Taxpayers Alliance to cover the group's legal fees stemming from a lawsuit he filed in 2001 over their television ads.
The ads, which ran for about three weeks during the energy crisis, criticized Davis' handling of the state's power problems. The ads referred to California's blackouts as "grayouts from Gray Davis."
The Democrat, facing what looked like a tough re-election campaign in 2002, sued to try to force the group to reveal its financial backers, but lost the legal fight he took to the California Supreme Court.
The alliance then demanded that Davis pay its legal fees. The group provided The Associated Press a copy of the settlement and the $100,000 check, dated May 6.
Roger Salazar, a Davis adviser, acknowledged that there has been a settlement, but said he had no details. Davis feared the impact on political campaigns "if someone can come in and slam a candidate without having to disclose who was doing the damage," Salazar said.
The alliance is headed by Scott Reed, a Washington-based Republican strategist, and the commercials were produced by consultants tied to the Bush administration.
Reed said his organization's mission is to inform Americans of "misguided and unwise government decisions." He said he has no intention of revealing the source of the alliance's money.
"We have the option of disclosing our donors and we choose not to do so," Reed said.
Davis sued in hopes of learning the identity of the alliance's contributors, which he and other Democrats contended included energy companies that he accused of overcharging the state.
The governor initially won a judgment in San Francisco Superior Court, but the 1st District Court of Appeal said that state disclosure rules did not apply because the ads never clearly urged television viewers to vote for or against Davis.
Davis appealed to the state Supreme Court on the grounds that the ads were intended to hurt his attempt to win a second term, even if they did not specifically call for voters to oust him. The court upheld the ruling against him in December.
Davis was re-elected in November 2002.