Campaign finance disclosure reforms under consideration in Arizona

Posted by AzBlueMeanie:

I am glad to see that some members of the Arizona legislature are ready to consider my suggestion. Campaign finance disclosure reforms: follow California's model law.

The Arizona Capitol Times (subscription required) reports Campaign finance moves called ‘political money laundering’:

California’s highly publicized fight to
force an Arizona-based nonprofit to disclose its contributors revealed
nothing more than another secretive nonprofit.

Americans for Responsible Leadership (ARL) made headlines in Arizona
for putting about $1.6 million into the campaigns against Proposition
204, a proposed sales tax increase, and Proposition 121, which would
have created a “top-two” primary system. ARL provided the overwhelming
majority of the funding against those measures, both of which failed.

Critics, especially those involved in the campaigns for the two
initiatives, decried the secrecy of ARL’s funding. Because the group is
nonprofit, it didn’t have to reveal the source of its money.

Last session, Rep. Eddie Farnsworth unsuccessfully pushed a bill that
would have required nonprofits, other corporations, labor unions and
LLCs that make independent expenditures to register as political
committees. The Gilbert Republican does not plan to revive the
legislation next year.

But Rep. Steve Farley, D-Tucson, intends to introduce a similar
measure. Farley said he will sponsor a bill to create an Arizona law
similar to the statute that allowed California to force ARL to disclose
the source of $11 million it contributed to two California ballot
measure campaigns.

“There’s got to be a way that you have to show who’s paying the
money,” Farley said. “What’s the point of having any election laws if
people can dodge it that easily?”

Farley, who will move to the Senate in January, believes there is
bipartisan support for such a bill. He noted that many Republicans faced
opposition from independent expenditure campaigns with unclear funding
sources.

* * *

Even if Farley can get the support he
needs for such a bill — Farnsworth’s legislation never got a vote on the
House floor — he’ll likely run into another problem. Finding out the
true source of an organization’s money is easier said than done.

California’s Fair Political Practices Commission forced ARL to reveal
the source of the $11 million. But the source turned out to be another
501(c)(4) nonprofit, whose contributors were secret as well.

Secretary of State Ken Bennett, who worked with Farnsworth on his
legislation earlier this year, said he’d like to see a renewed attempt
next session at transparency laws that would let voters know who is
funding campaigns. But that’s a difficult task, he said, when
contributors can give money through intermediaries, as happened with
ARL.

Bennett said he isn’t sure whether a California-style law is the best answer to the problem.

“They had a commission that was able to kind of force them to
disclose. But what good did it do them?” Bennett said. “I don’t know how
to get around that for sure. But that would be one of the questions
that we’d have to work on.”

Sen. Michele Reagan, who will chair the
Senate Elections Committee next session, said she’d be open to
legislation creating more transparency. She said she knows of lawmakers
who are planning transparency legislation, and that she would bring the
issue to a group of election officials she’s working with on an
elections omnibus bill.

But Reagan, R-Scottsdale, worried that a California-style law might
run afoul of the U.S. Supreme Court’s Citizens United ruling, which
upheld the rights of corporations and labor unions to spend on
campaigns. She said California’s law hasn’t been challenged since the
high court issued its ruling in early 2010.

I suggest you go back and read Citizens United. The U.S. Supreme Court expressly approved disclosure rules, like the DISCLOSE Act languishing in Congress. Spending and secretly operating in the dark are two different things.

“It would be wonderful if we can figure
out a way to get it written,” Reagan said. “The limit for disclosure
would need to be high enough where you’re not unduly affecting
nonprofits who have large memberships.”

Elections attorney Kory Langhofer said there are ways to write such
laws so regular nonprofit organizations, corporations or labor unions
wouldn’t be forced to disclose the source of all their funds. A lot of
legitimate social welfare organizations and companies also contribute to
campaigns, he said.

And the Legislature could pass laws requiring the contributors to the
groups to disclose their funding as well, he said. But the law would be
hard to enforce if it drilled down too far into the money chain.

“Can Coke really figure out where all this money (that the company contributed to a campaign) came from?” Langhofer asked.

* * *

Farley said he wants election officials
and law enforcement representatives to be able to find out the funding
source for groups that give to organizations such as ARL. He compared it
to criminal money laundering investigations that attempt to find the
source of illegally concealed money.

“If they’ve made a contribution to a group over which we have
authority, then we should have the legal authority to check where that
money’s coming from,” Farley said. “In effect, what we’re looking at
here is political money laundering.”

There’s support for new transparency laws on both sides of the aisle.

The usual suspects on the right are not supportive. And I understand that some labor unions helped to kill Farnsworth's bill last year. It is going to take persistent public lobbying of your state legislators to start cleaning up the "dark money" corruption in Arizona. This is the hard work of democracy between elections.

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