Darkness Visible

Democratic state lawmakers want to shine a light on dark money

The 2014 election brought a flood of so-called "dark money" into Arizona campaigns.

Close to $15 million was spent by groups whose donors remained anonymous as of Oct. 28, 2014, according to Arizona's Politics blogger Mitch Martinson, who tracked the money behind campaigns throughout the year.

The rise in dark-money spending is not unique to Arizona; the spending by non-profits and corporations has happened across the nation in the wake of the U.S. Supreme Court's 2010 Citizens United decision.

Arizona has been a central hub for the dark-money shell game; a 2014 ProPublica report showed how Sean Noble, who now heads up a nonprofit called American Encore, distributed more than $137 million in the 2012 elections from Charles and David Koch, the big-spending conservatives who have developed a vast political network to support Republican candidates.

Noble has defended the right of his donors to remain anonymous in order to protect themselves from political retaliation.

State Rep. Bruce Wheeler, a Democrat who represents Tucson, said last week that he intends to introduce legislation that will require dark-money groups to reveal their funding.

"It would require that contributors to these 401(c)(4)s comply with transparency requirements of identifying themselves," Wheeler said. "Who are they? Who is contributing? I think that's really, really important."

The legislation is still being crafted, but it will likely be similar to a proposal rolled out just before the election by Democratic secretary of state candidate Terry Goddard, who was hammered in the final weeks of the 2014 campaign by at least $300,000 in negative TV ads by the non-profit 60-Plus Association, which has links to the Koch Brothers' political network.

Goddard, a former Arizona attorney general, told the Weekly that he's still working on legal language for the proposal, but he believes he can pattern it off similar laws in California that have helped uncover some of the donors to dark-money campaigns there. He said one key element would be investing power to investigate dark-money spending not only with the Arizona Secretary of State's Office but also with the Clean Elections Commission and possibly grant private citizens the ability to file complaints in court.

He added that he believes the penalty should have an impact on the candidate being supported rather than the nonprofit orchestrating the campaign because financial sanctions don't seem to have much of an impact.

"I don't think it makes sense for a disclosure violation to be monetary penalty for the contributor," Goddard said. "It should be a prohibition against the candidate from holding office. That's the only one that works. Sean Noble got fined a million dollars and it didn't slow him down a bit."

But Goddard acknowledged that kind of provision could also be gamed by political operators who could then create fund campaigns to support candidates they don't want to see in office in hopes of seeing them disqualified.

"You have to be very careful in crafting the language," Goddard said.

He added that if lawmakers don't act, he'll work on putting the proposal on the 2016 ballot via an initiative.

He said the threat of taking a plan directly to voters is "the only way to get attention at the Legislature. The Legislature needs to consider doing the right thing. I don't have great hopes that they will."

Goddard said because the U.S. Supreme Court has ruled that limits on spending by outside groups are unconstitutional, disclosure is vital to keeping voters informed about who is funding campaigns.

"The idea of putting any kind of limits on contributions is pretty much out of the picture," he said. "So I think the only protection that citizens have who are making arguments for or against a proposition is absolute transparency. You need to know who is on which side, who is supporting candidates and who is opposing them. And by who, I mean the specific entity, not a 501(c)(4) shill who has been set up for the purpose of hiding who the real contributor is."

Whether the effort to expand disclosure by dark-money groups is successful, lawmakers will likely have to tackle campaign-finance law. A federal court judge last year ruled that Arizona's current definition of a political committee was unconstitutional because it was too vague and too broad. Unless lawmakers fix the law, political committees will be able to spend money without regulation.

And there's still the question of whether lawmakers will move to change other aspects of election law. Newly inaugurated Secretary of State Michele Reagan, who oversees Arizona's elections, pushed through a 2013 package of election-law changes that included limits on the collection of early ballots by political groups, new ballot obstacles to third-party candidates, bigger hurdles to groups that attempt to put initiative measures on the ballot and other provisions. But after a coalition of political groups were able to put the changes on the 2014 ballot, lawmakers repealed the changes rather than allow voters to decide their fate.

Some of those changes could be part of new bills in the upcoming legislative session.

"I would not be at all surprised to see those return," said Goddard.

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