The announcement is an embarrassment for Hansen, who lost his bid after NBA owners voted to keep the team in California's capital city, and it could undermine support for the local ballot measure Hansen funded that is designed to put to a citywide vote the council's planned $258 million subsidy for a downtown arena.
"I made a mistake I regret," Hansen said in a written statement. "While I'm sure everyone can appreciate how easy it is to get caught up in the heat of battle, with the benefit of hindsight, this is clearly a decision I regret."
Hansen had said he would end his effort to buy the Kings for $625 million after the NBA blocked the sale, and a group of investors led by technology executive Vivek Ranadive bought the team a day later for $535 million.
Hansen publicly wished the city well after losing his bid to buy the team. Yet the California Fair Political Practices Commission said that a month later, Hansen gave $80,000 to pay signature gatherers trying to get the measure on next June's ballot, and the group violated state law by refusing to disclose the donation.
The NBA has said that Sacramento must build a modern arena to keep the Kings in town. The team's new owners have set a 2016 target.
Hansen's money was funneled through the Los Angeles law firm of Loeb & Loeb. Hansen said the firm approached him about making a contribution to the petition effort after he had hired them to gauge citizen opposition during the battle over the sale.
Members of Sacramento Taxpayers Opposed to Pork, which filed to put the initiative on the June 2014 ballot, distanced themselves from the money and said they use only volunteers to circulate petitions. Spokesman John Hyde said the money went to a political group that offered to assist STOP's efforts.
"No doubt this is a PR nightmare for STOP," Hyde said. "We didn't know where that money came from and we weren't the recipient of any of that funding."
The signature gatherers are halfway to the 22,000 they need to qualify the measure by December, Hyde said.
Gary Winuk, chief of the commission's enforcement division, said Hansen donated $100,000 total. It was not immediately clear what happened to the additional $20,000, though Winuk said it might have been spent on other expenses. He said the investigation is continuing.
"These are as sophisticated parties as you can get and they should know better," Winuk said. "Most people just comply when we call them. They just happened to make us take them to court."
The donors were intentionally denying the public information that could help them decide whether to sign the petition, he said.
The commission filed a lawsuit Thursday to learn the donor's identity and revealed during a Friday news conference that it was Hansen.
"Unbelievable," said state Senate President pro Tempore Darrel Steinberg, who is from Sacramento and was active in efforts to keep the Kings in town.
Kings and NBA officials declined comment, as did Sacramento Mayor Kevin Johnson, a former NBA all-star who led the fight to keep the team.
Suspicion about the origins of the money originally had fallen on the Maloof family that previously owned the team because the same law firm had long represented them.
The commission was dropping its lawsuit, but Winuk said Hansen and the law firm could face a civil fine of up to $80,000 plus an administrative fine of up to $5,000 for each of at least three campaign-reporting violations.