Arizona Court of Appeals rules on ‘dark money’ disclosures (expect an appeal)


dark_moneyThe Arizona Court of Appeals has held that the Committee for Justice and Fairness, financed by the Democratic Attorney Generals Association which spent about $1.5 million attacking Republican Tom Horne in the 2010 attorney general’s race, can be forced to disclose the source of their cash even if their commercials don’t specifically advocate for anyone’s election or defeat.

This case requires some background.  An Administrative Law Judge ruled that the Committee for Justice and Fairness violated state laws by not registering as a campaign committee. Its television ads urged viewers to contact Horne’s office at the Arizona Department of Education and voice their concerns, though it made no reference to his attorney general campaign or his Democratic opponent, Felecia Rotellini.

That ALJ opinion was appealed to the Maricopa County Superior Court. Superior Court Judge Crane McClennen ruled that two provisions of Arizona statutory law were unconstitutional in reversing the ALJ.

The Arizona Capitol Times (subscription required) reported at the time, Judge sheds light on campaign finance ruling:

In a notice of final judgment, Superior Court Judge Crane McClennen said two specific provisions of a statute on express election advocacy were unconstitutional.

The first provision defines express advocacy as any communication containing words such as “elect,” “reject,” “endorse” or a handful of other “campaign slogans or words that in context can have no reasonable meaning other than to advocate the election or defeat” of a candidate.

The second broadens the definition to include public communications regarding a political candidate that does things such as paint the candidate in a favorable or unfavorable light, and takes into account the placement and timing of such communications.

* * *

McClennen said he struck down the statute based on arguments presented in earlier court filings by attorneys for the Committee for Justice and Fairness.

CJF attorney Marty Harper relied heavily on two recent landmark campaign finance rulings, Federal Election Commission v. Wisconsin Right to Life and Citizens United v. Federal Election Commission. Harper argued that the ads were issue advocacy, not express advocacy, because they did not urge Horne’s defeat, and that Arizona statutes requiring disclosure were unconstitutional.

In a February filing, Harper wrote that laws requiring issue advocacy groups to register with the Secretary of State’s Office and disclose its three largest contributors would have an “impermissible chilling effect” on free speech. Furthermore, he said the administrative law judge’s “vague and overbroad” interpretation of the law violated the U.S. Supreme Court’s ruling in the Wisconsin Right to Life case, which prohibits the use of “contextual” factors and bars the state from banning speech merely because an issue might be relevant to an election.

Under the interpretation of the law used by the administrative law judge and the Maricopa County Attorney’s Office, Harper argued that any person who criticized Horne in 2010 for his position on Tucson’s ethic studies program – a fiercely debated issue – could be required to register a political committee.

“Such a chilling effect would be an unconstitutional infringement on the free speech rights afforded to all citizens,” Harper wrote. “The right to speak about (elected) officials’ job performance is not suspended when the elected official runs for the same or another office.”

Harper also argued that the state’s filing and disclosure requirements are impermissible burdens on free speech under the landmark Citizens United ruling. He said the courts had misconstrued the statutes to create an “illusion” that the filing requirement is just a “minor inconvenience.”

“To the contrary, Arizona’s statutory scheme is similar to the one that Citizens United found to be burdensome. Moreover, violations carry serious criminal penalties and large fines,” he wrote.

This is the Superior Court opinion that the Court of Appeals reversed yesterday. The Arizona Capitol Times reports, Appeals court upholds campaign finance disclosures:

In a case with statewide and possibly immediate impact, the Arizona Court of Appeals ruled Thursday that “dark money” groups can be forced to disclose the source of their cash even if their commercials don’t specifically advocate for anyone’s election or defeat.

The judges unanimously rejected arguments by Committee for Justice and Fairness that its last-minute commercial attacking Tom Horne ahead of the 2010 general election was not really designed to affect the election. The court ruled that the timing of the commercial and its content show its only purpose could be to try to sway voters not to support him.

Potentially more significant, the appellate judges said disclosure requirements of Arizona election laws are constitutional, overruling the decision of a Maricopa County Superior Court judge.

Judge Lawrence Winthrop, writing for the unanimous three-judge panel, said disclosure laws serve “substantial governmental interests,” including providing voters with information to aid them in evaluating the candidates and the sources of their support. He also said it deters actual corruption “by exposing large contributions and expenditures to public light.”

Thursday’s ruling has implications far beyond what happened in the 2010 race for attorney general.

It comes as several organizations are running TV ads and sending out mailers attacking various candidates for the upcoming primary. Lawyers for these groups have said they are free to hide their donors from the public because they are simply “educating” voters about the issue and the individuals and not expressly advocating for anyone’s election or defeat.

But Winthrop said the commercial or mailer must be examined in its entirety – including its timing – to determine its real purpose.

Maricopa County Attorney Bill Montgomery, who pursued the committee to disclose its funding, said the ruling is an important victory for voters.

“You want to be able to weigh whether or not the criticism being offered, or praise, is something that you can give any legitimacy to,” he said.

Montgomery conceded the ruling requiring disclosure of funds still allows one group to hide behind another. But he said even that still serves a purpose.

“At least it then allows the voter to say, ‘OK, I’m just seeing one organization behind another organization and another organization, and I’m going to take that into account in weighing whether or not I really believe the message,” he said.

Tom Irvine, the attorney representing the committee, said an appeal to the Arizona Supreme Court is possible [likely].

He said the judges ignored the fact that the U.S. Supreme Court has said commercials and mailers must be judged by exactly what they do and do not say and not by any “external analysis” of what might be the real reason for them.

* * *

Irvine fared no better in his arguments to the court that the reporting requirements are unconstitutional because forcing groups to identify their donors would chill their free speech rights.

Winthrop said that argument works only if a “reasonable probability exists an organization or its members face threats, harassment or reprisals due to disclosure.” But the judge said Irvine presented no evidence of harassment or retaliation involving the committee or its donors, pointing that it already discloses contributor information in reports filed with the Internal Revenue Service.

Montgomery said that, even if Thursday’s ruling is upheld by the Supreme Court, there will still be ways for groups to “game” the system.

Read the Court of Appeals Opinion Here (.pdf).

I suspect this case will be appealed to the Arizona Supreme Court, and consistent with U.S. Supreme Court precedents, could very well be overturned. It’s too early to get excited.


  1. If it stands, it applies to all groups — the court is saying that Arizona statutory law is constitutional. The “money=speech” Goldwater Institute is not going to stand for that.

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