A silver lining in the ‘Dark Money’ cloud in Tucson

Supreme Court Justice Anthony M. Kennedy, writing the majority opinion in Citizens United v. FEC (2008)(.pdf), emphasized the importance of disclosure of the sources of campaign money:

Shareholder objections raised through the procedures of corporate democracy, see Bellotti, supra, at 794, and n. 34, can be more effective today because modern technology makes disclosures rapid and informative. A campaign finance system that pairs corporate independent expenditures with effective disclosure has not existed before today. It must be noted, furthermore, that many of Congress’ findings in passing BCRA were premised on a system without adequate disclosure. See McConnell, 540 U.S., at 128 (“[T]he public may not have been fully informed about the sponsorship of so-called issue ads”); id., at 196–197 (quoting McConnell I, 251 F.Supp.2d, at 237). With the advent of the Internet, prompt disclosure of expenditures can provide shareholders and citizens with the information needed to hold corporations and elected officials accountable for their positions and supporters. Shareholders can determine whether their corporation’s political speech advances the corporation’s interest in making profits, and citizens can see whether elected officials are “‘in the pocket’ of so-called moneyed interests.” 540 U.S., at 259 (opinion of SCALIA J.); see MCFL, supra, at 261. The First Amendment protects political speech; and disclosure permits citizens and shareholders to react to the speech of corporate entities in a proper way. This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages.

This utopian ideal of transparency and rapid disclosure of donors through modern technology that Justice Kennedy conjured from his fertile imagination simply does not exist in the state of Arizona.

Arizona has among the weakest campaign finance disclosure laws in the country, and our Secretary of State is proposing new regulations that will make opaque “dark money” expenditures by anonymous individuals who are never disclosed even easier. The Arizona Capitol Times (subscription required) reports, Reagan eyes election law rewrites for 2016:

The proposed package drafted by the Secretary of State’s Office would completely replace the existing laws in Title 16, Chapter 6, Article 1 of the Arizona Revised Statutes, the non-Clean Elections portions of the state’s campaign finance laws.

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For example, the current statutory definition of “contribution” runs nearly 1,200 words. Reagan’s proposal would condense it down to less than 100 words.

One of the more significant changes would reduce the types of political committee established in law from nine to three. Currently, state law requires separate types of committees for candidates, political action committees, independent expenditures, ballot measures, recall campaigns, political parties and other entities.

Reagan’s proposal would leave only three types of committees to deal with all manners of electioneering: candidate committees, political parties and political action committees. Entities would not have to file as a committee unless they are organized for the primary purpose of influencing elections – the same is true under current laws – and raises or spends at least $1,000 for that purpose, a higher threshold than the current $500 level.

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Another notable change is the elimination of “super PAC” status, which allowed higher contribution limits for political action committees that receive contributions of at least $10 from at least 500 individuals over a two-year period. Reagan’s plan would keep the concept but change the official designation for such PACs to “macro status” because the term “super PAC” now has a “different universally known meaning” as an independent expenditure committee since the U.S. Supreme Court’s 2010 ruling in Citizens United v. FEC.

Spencer said the rewrite would also clarify candidates’ ability to contribute to other committees with their own campaign war chests, which he described as a gray area, at best. The law currently allows candidates to give “surplus monies” to other candidates, within the state’s contribution limits. The secretary of state’s plan specifies that candidates can give to other candidate committees at any time.

The Secretary of State’s Office is using the proposed rewrite to eliminate a law requiring independent expenditure committees to notify targets of its attacks within 24 hours. In May, Spencer said the office would stop enforcing the law on the grounds that it was unconstitutional, but Reagan stated a month later that she would continue enforcing the law.

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In some ways, Reagan’s proposal would make campaign finance reporting more transparent. While political committees currently do not file campaign finance reports in years without elections, Reagan’s overhaul would require quarterly reports every year. During calendar quarters in which there is an election, committees would have to file pre- and post-election reports.

However, in at least one way, campaign finances would become a bit more opaque. Reagan’s plan eliminates a requirement that ballot measure committees report all contributions of at least $10,000 within 24 hours. A summary provided by the Secretary of State’s Office said the more predictable quarterly reports will replace such “aberrant” reporting requirements.

Arizona’s Tea-Publican leaders are openly hostile to Justice Kennedy’s clarion call to create a fully transparent rapid disclosure campaign finance reporting system through modern technology that “enables the electorate to make informed decisions and give proper weight to different speakers and messages.”

Arizona’s Tea-Publican leaders take their marching orders from the “Kochtopus” Death Star, the Goldwater Institute, whose goal it is to dismantle all campaign finance laws, from contribution limits to donor disclosures. The Goldwater Institute rejects the fundamental democratic principle that “transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages.” The Goldwater Institute serves the interests of the Plutocracy who prefer to operate in the darkness and anonymity to manipulate elections.

So it should come as no surprise then, given Arizona’s weak campaign finance laws and open hostility to campaign finance disclosure of donors, that the Pima County Superior Court rejected a creative claim by Tucson attorney Vince Rabago to break through this morass of “dark money” political committees operating in Arizona. Tucson “dark money” group wins legal challenge:

A Tucson “dark money” group successfully defended itself from a legal attack by Democratic activists.

Pima County Superior Court Judge Gus Aragon said there were no grounds for the temporary restraining order the Democrats were seeking. See Minute Entry Order (.pdf).

The legal action, filed by Barbara Tellman, claimed the [out of state] Foundation for Responsible Accountable Government Inc. violated state law when it did not register with the Arizona Corporation Commission to do business in Arizona.

The Foundation for Responsible Accountable Government Inc. gave $50,200 to Revitalize Tucson, an independent expenditure committee, which then spent $45,600 on billboard ads attacking Democratic Tucson City Council members who are up for reelection this year.

In court documents, Tellman described the foundation as a “dark money” group, meaning donors’ names are not publicly disclosed.

Tellman’s attorney, Vince Rabago, tried a line of questioning in court to find out about the anonymous donors, but foundation president and Republican activist Christine Bauserman testified the names of people who give money to the group are “nobody’s business.”

Justice Anthony Kennedy writing the majority opinion in Citizens United v. FEC begs to differ.

The weak reporting from the Arizona Daily Star does not adequately inform readers. Vince Rabago provided more details by email:

President of “Dark Money” corporation bankrolling political committee in Tucson City Council election forced to testify, claims it’s “none of your business” who the undisclosed donors are!

In my last update, we let you know about our lawsuit on behalf of a Tucson voter to stop an out-of-state corporation called Foundation for Responsible Government Inc. from spending any more anonymous political contributions in Arizona until it registers with the Arizona Corporation Commission.

We got really interesting testimony and new developments, even though we did not win the case. It was a tough battle and a unique approach never tried before, so we knew it might be difficult. The Court denied a Temporary Restraining Order on the basis of the judge’s view that the conduct of this out-of-state corporation is not “business” activity within the meaning of the business registration law, and found no imminent harm from the activity. The judge determined that the out-of-state corporation making donations to the Revitalize Tucson political committee was not “transacting business” in Arizona, a conclusion that we respectfully but strongly disagree with. The only business of this corporation appears to be that of trying to influence our government through elections and election related activity. It may not be selling products, but it certainly appears to be in the business of influencing our elections with anonymous corporate donors.

The Arizona Daily Star reported on the developments.

But there are some silver linings in the clouds of Dark Money from the new information that was revealed for the first time ever in public.

First, the President of this out of state “Dark Money” corporation — a GOP activist from Tucson named Christine Bauserman — was required by the Court to testify under oath at the hearing about their conduct. We believe this may be a first for a Dark Money corporation influencing local elections in Arizona!

She gave testimony that ought to make your blood boil if you want transparency in our elections and if you’re against undisclosed corporate donors influencing our elections. When asked who is funding this corporation, she refused to reveal the identity of the donors, saying it is “not public” information and it is “none of your business.” But it is the business of the public!

Anytime that an out-of-state Dark Money corporation is completely bankrolling a political committee’s political campaign in Arizona — or anywhere — the public deserves to know who their secret donors are! This is the height of hypocrisy for a corporation which claims that it wants accountability and responsibility from the government, yet refuses to be accountable with any disclosure of its donors.

Astonishingly, she claimed that the $50,200 in political contributions by the corporation to the political committee were not “political contributions!” She incredibly claimed they were Foundation “grants,” even though she is personally the listed Chairwoman of the political committee that has reported the donations as political contributions in official campaign finance reports!

The judge did not allow any questions about the corporate donors, so we still don’t know who is backing this Dark Money corporation bankrolling the political committee. After the hearing, the plaintiff Barbara Tellman said, “It’s frustrating that the corporation and people the running the corporation involved will not reveal the donors of this corporation that funded the political committee. What are they hiding? We just don’t know and the defendant’s president said that it was none of our business.”

Finally, it took some effort and questioning, but the President of this Dark Money corporation eventually gave more surprising testimony never revealed before to the public prior to our lawsuit. The heads of this corporation are the same three people in charge of the political committee! The President of the out-of-state corporation is Christine Bauserman. The Chairwoman of the political committee is Christine Bauserman. The other Board Member of the corporation is Frank Antenori. The sponsor of the political committee is also Frank Antenori. The treasurer of the corporation is a Sean Bailey, and the treasurer of the political committee is Sean Bailey. Last but not least, the out-of-state corporation is even using the same Tucson mailing address being used by the political committee when the corporation makes its political contributions.

This information has never been revealed before. It tells us a lot about a carefully orchestrated shell-game of concealment and the undeniable relationship between a Dark Money corporation and a political committee.

One can only guess how the discussion goes among themselves, when these three people – on behalf of the independent expenditure political committee – apparently ask themselves as officers of the corporation — to make political contributions to their own political committee, and also call them “grants.” It must be a difficult decision.

The President of the corporation even testified that they had “no intent” at the present time to give more donations and that no “grant” requests were pending. Apparently, the heads of Revitalize Tucson have not yet asked themselves (as the heads of the out-of-state corporation) for more political contributions. Such previously undisclosed manipulation of entities to influence our elections can cause you to shake your head in disbelief.

One thing is clear from the court’s ruling allowing a Dark Money corporation to continue engaging in our elections without registering as a corporation in Arizona: Legal reform is needed to force disclosure from corporations that engage in this sort of activity.

Reform is desperately needed if an out-of-state Dark Money corporation can so easily game the system by claiming that its own direct political contributions are not political contributions and instead are “grants” from a private foundation, when that same entity is actually registered with the IRS as a 501(c)(6) “trade” member organization, and where the political committee is officially reporting the money as political contributions.

This case was a victory in exposing what is really going on, who was involved and how, and by shining sunlight on the political cancer of anonymous and undisclosed corporate Dark Money in our elections.

We plan on sharing the evidence we discovered with others, including regulators and elected leaders concerned with transparency in elections. We will remain vigilant and continue seeking ways to protect our democracy from secret corporate Dark Money influence.

This is just one of many efforts across this country to fight against Dark Money and find out who is really influencing our elections. The fight against anonymous Dark Money will continue.