Friday, November 1, 2013

NEWS ANALYSIS: Arizonan for Responsible Leadership: Arizona Treasurer Doug Ducey Remains Mum On Anonymized Donors of Anti-Sales Tax Campaign Monies

(Arizona's Politics is an independent, non-partisan political news blog.  When we engage in analysis or commentary, we attempt to label it as such.  This article may be classified as "news analysis" because it attempts to "provid(e) interpretations that add to a reader's understanding of a subject.")

Last year, Arizonans defeated a ballot measure to continue the one-cent sales tax that had been dedicated to education funding.  Arizona Treasurer Doug Ducey - now, a likely candidate for Governor - led the campaign to defeat the sales tax continuation, and accepted more than half of the committee's budget from anonymized donors.

Americans for Responsible Leadership ("ARL") and their sister organization (Center to Protect Patient Rights, or "CPPR") last week reached a settlement with the State of California's Fair Political Practices Commission in which they paid a $1.0 million civil fine and details of the anonymizing process were opened for public view.

(For more details on the anonymizing process uncovered in the California investigation and subsequent settlement, please click here for Arizona's Politics' accompanying article.)

That new information re-raises questions about ARL's involvement in the two committees opposing Arizona ballot measures last fall, and the State Treasurer's knowledge and understanding about the so-called "dark money" donations and his comfort level with the lack of donor disclosure.  Arizona's Politics has requested an interview or responses from Mr. Ducey on this subject;  when (if) he responds, we will supplement this article.

ARL assisted two different campaign committees opposing Arizona ballot measures in 2012: $575,000 to Save Our Vote, opposing Proposition 121 regarding an open primary process;  and $925,000 to No On 204, the committee chaired by Mr. Ducey.

In the case of No On 204, ARL's $925,000 represented more than half of the $1.8 million ($1,798,000, to be exact).

California's investigation showed that ARL became the primary funding conduit there out of a desire to protect the identities of the original contributors. The campaign committee gave potential donors the choice of allowing their identities to be disclosed, or protecting their identities through the use of a series of non-campaign non-profits (AJS/CPPR/ARL).

Did Mr. Ducey or his committee's political consultants provide potential Arizona donors with the same disclose/anonymous option?  This question becomes even more interesting when considering that one of No On 204's political consultants was DC London, a firm headed by Arizona political consultant Sean Noble.  Noble has been the money "wizard" behind the Koch Brothers' network of organizations last year, and was  praised in an e-mail to Charles Koch released in the California investigation.

It is, of course, possible that the ARL money for the Arizona ballot measure campaigns did not originate with Arizona donors and that it came from persons or businesses elsewhere in the country.  However, that the two ballot measures opposed dealt with local (Arizona) issues that would not likely be part of a national effort makes that possibility less likely.

California's statutory scheme and watchdog agency regarding disclosure of campaign contributions is much closer to the blurry dividing line where regulation oversteps constitutional rights of free speech/association/etc. than Arizona's, Arizona does have some statutes that could be of relevance in this and future cases (although even those statutes may be in legal limbo due to ongoing court cases).

For example, A.R.S. Sec. 16-914.01  places notification responsibilities on large contributions from a "single source" to a ballot measure campaign close to an election.  Sec. 16-907 makes it a felony to make or accept contributions in the name of another, as well as to make or accept earmarked contributions.  (In the California case, ARL/CPPR made sure that the group sending them money included language that there was no earmark, although the interviews made it clear that the group did trust ARL/CPPR to send it to the specific campaigns - and, did in fact, make two successful specific withdrawals.)

California's investigation into ARL/CPPR resulted in the Settlement Agreement in which the groups acknowledged an "inadvertent" violation and paid the civil fine of $1,000,000.  If Arizona's Attorney General (Tom Horne, a Republican) were to conduct a similar investigation, it would be extremely unlikely to result in  any charges filed, a civil lawsuit, or even a Settlement Agreement.  At the most, it would identify the original source of the $1.5 million donated by ARL.

Nevertheless, it is a questionable campaign finance endeavor for a State Treasurer who is likely to run for Governor to be involved in.  Is it appropriate for the State Treasurer to be soliciting and/or accepting large amounts of anonymized contributions?  (While it was not for his personal campaign, his chairmanship of the successful No On 204 committee undoubtedly significantly boosted his political standing with many in Arizona's Republican party.)  And, what will be Mr. Ducey's positions on Arizona's campaign finance and disclosure laws if he becomes Governor?

As noted earlier, Arizona's Politics has requested responses from Mr. Ducey, and will update with his comments.

(For more details on the anonymizing process uncovered in the California investigation and subsequent settlement, please click here for Arizona's Politics' accompanying article.)

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