‘Dark money’ in Arizona could get darker

This case has been kicking around in court for some time now, and has the potential to unravel the weak laws Arizona has regulating the disclosure of campaign contributions and expenditures. The Tea-Publicans in the legislature had a chance to fix this problem they created with indecipherable statutory language, but in the last legislature they did nothing — you’re shocked, I’m sure!

Howard Fischer reports, Court could make tracking political ‘dark money’ harder:

A federal judge is being asked to rule that “dark money” groups that don’t now disclose the source of their contributions can also legally hide how they’re spending the money — and on whose behalf.

Attorney Paul Avelar pointed out to U.S. District Judge James Teilborg that Teilborg already declared more than a year ago that a key state law about political committees is unconstitutional. Teilborg said the 183-word definition of who has to register with the state is so vague as to be unclear to “people of common intelligence.”

But Avelar told Teilborg on Wednesday that Arizona continues to require groups spending money on campaigns to register. So now he wants the judge to issue an order immediately blocking the state from enforcing the law. Avelar, an attorney with the Virginia-based libertarian organization Institute for Justice conceded that would have ripple effects.

If the law about who needs to register with the secretary of state goes away, so do all the laws that govern what political committees — other than those operated by candidates themselves — need to do. And that includes detailing not just what they are paying for TV commercials, newspaper ads, mailers and phone banks, but also which candidates those efforts are designed to elect or defeat.

That possibility alarms Jim Drake, the assistant secretary of state.

“I don’t think you can understand what sort of chaos that would cause,” he said.

Drake said it would leave Arizonans with no way to tell which outside groups have been spending millions of dollars to influence their votes. It also would leave those groups free to run attack ads without even a hint of the amount they are spending.

And it would even eliminate those minimal disclosures that outside committees are now required to make at the end of their TV commercials.

Drake said if Teilborg enjoins enforcement of the law, the state will seek immediate review by the 9th U.S. Circuit Court of Appeals. And he said the state will ask that Teilborg’s ruling be placed on hold until that can happen.

He said, though, that absent a stay or overturning the law, the judge’s order would leave the door wide-open to all sorts of spending that can be shielded from the public — at least until the Legislature gets a chance to go to the Capitol to try to fix it in a way acceptable to the judge.

Some background on this case, Dina Galassini of Fountain Hills, Ariz. – The Institute for Justice:

In early October of 2011, Dina Galassini sent an email to 23 friends and neighbors asking them to join her in opposing a local bond issue.  Dina thought that the bond issue was a bad deal for town residents that would only put the Town further into debt and would make a tax increase inevitable.  She asked her friends to write letters to the editor and to forward her email to anyone they thought might benefit from it.

Then Dina asked them to join her in two protests.  She thought gathering together with friends and neighbors on a street corner and waiving signs would be an effective way to get her message out about the bond issue.

* * *

Within a week after sending out her email, Dina received a letter from the town clerk urging her to “cease any campaign related activities” until she had registered as a “political committee” under Arizona law and complied with “all of the requirements associated with a PAC.”  According to the clerk, although an individual acting alone is not a political committee, “if any additional person or persons join the effort” they must register as a PAC “prior to any electioneering taking place.”

Under Arizona law, even groups that intend to spend less than $500 must register with the government before distributing any literature, making signs, or passing out flyers.  Even if they don’t intend to raise funds from others, the fact that their speech has value is enough to qualify them as PACs.  Under the law, they must appoint a treasurer and chairman; they must designate a bank account; they must put notices on their signs stating that they were “paid for” by a PAC; they must track their activities and be prepared to open their files to the town; and they must file a notice of termination when the election is over.

* * *

On October 26, 2011, the Institute for Justice filed suit against the Town of Fountain Hills for violating Dina’s First Amendment rights.  Thanks to a ruling from the court, Dina was able to hold a protest two days before the end of mail-in voting on November 8.  Not everyone is lucky enough to get free legal representation so quickly, however, and Dina pressed forward in her case for a ruling that will free up all Arizonans from burdensome campaign finance laws.

On September 30, 2013, Judge James A. Teilborg struck down Arizona’s campaign finance scheme.  He held that Arizona’s definition of “political committee,” under which Dina was regulated, is vague, overbroad, and unduly burdensome.  Describing the law, Judge Teilborg noted that “it is not clear that even a campaign finance attorney would be able to ascertain how to interpret [it]” and that “[s]uch vagueness is not permitted by the Constitution.”  Further noting the “heavy hand of government regulation,” he went on to hold that the “practical effect of [campaign finance] regulations for small groups makes engaging in protected speech a ‘severely demanding task.’”

While the Institute for Justice purports to defend the First Amendment freedom of speech of this sympathetic individual, its actual goal is to eliminate all restrictions on political speech and disclosure of campaign contributions and expenditures. As Howard Fischer reports:

Avelar told Teilborg that the state continues to impose the registration and reporting requirements — illegally, he contends — in statewide and legislative races.

Assistant Attorney General Paula Bickett did not dispute that, but she argued that the ruling simply bars Fountain Hills from enforcing the law. And she said that once Galassini’s dispute with Fountain Hills was resolved, the legal issue went away.

“The court no longer has jurisdiction,” she told Teilborg.

The judge was skeptical.

“It sounds like you’re suggesting that because it’s just a judgment against the city, it has no ramification beyond that, and therefore is not really a declaration of unconstitutionality,” Teilborg told Bickett.

“It is a declaration of unconstitutionality as it applies to the town,” she responded.

But Teilborg persisted, pointing out that the lawsuit claimed the entire law is unconstitutional, not just that Fountain Hills was applying it illegally. Bickett, however, insisted that only the town could be bound by his ruling.

Teilborg said he will consider the arguments.

Avelar said that if the judge sides with challengers, there are broad implications.

He said many of the requirements the state imposes on groups that seek to influence elections turn on the fact that state law requires political committees to register. The laws then list things political committees must do, including disclosing how they are spending their money.

And if the judge says the definition of what is a political committee is unconstitutional and unenforceable, then no one has to register — and everything tied to that, including reporting expenses, goes away.

Avelar said it did not have to come to this.

“This is the state’s fault. They’ve been aware that this statute is constitutionally problematic for three years,” Avelar said, referring to when the lawsuit was first filed.

Moreover, he pointed out that Teilborg called the law “facially unconstitutional” more than a year ago. He said that provided lawmakers with enough time to recraft the statute in a legal way.

“And the only amendment they’ve made to the definition of a ‘political committee’ in those three years actually made the definition less intelligible,” Avelar said.

Tea-Publicans in the Arizona legislature have no interest in doing anything about the flood of secretive dark money flowing into Arizona because they are the largest beneficiaries of that dark money. This is going to be one of the biggest fights in the next legislature.