Can Arizona Ballot Measure Campaign Unmask 'Dark Money' Political Donors?

"If you are not ashamed of the cause you represent, take off your mask, let everyone see who you are."

Those are the words of Arizona Representative Jay Lawrence, R-Scottsdale, who has proposed a new law to ban masks at political protests.

In fact, the same could be said of "dark money" contributions to political candidates and causes, which have been used by both Republican and Democratic groups.

But the masks could be stripped off big-money donors in a couple of years, if voters end up approving a planned 2018 ballot initiative filed last week.

The "Stop Political Dirty Money Amendment" (see below) would reverse a trend in recent years of hiding the source of contributions.

The initiative is headed by Terry Goddard, who formerly served as Phoenix mayor and state Attorney General.  The ballot measure would require the exposure of the actual people behind contributions of $2,500 or more in political races. The unmasking would be triggered once those people, or the groups they support, spend more than $10,000 on an election within a two-year period.

The Citizens Clean Election Committee would be made responsible for enforcing the new state constitutional amendment, which would only apply to state and local elections. Violators who fail to disclose their original sources properly would face fines up to three times the amount of the contributions spent in a campaign.

"This is to be transparent," Goddard said of the initiative, comparing dark-money schemes to money-laundering schemes by "drug dealers."

Such secret donations became much more popular after the 2010 Citizens United ruling by the U.S. Supreme Court, which approved the ability of corporations and wealthy people to funnel money into nonprofit companies governed by the Internal Revenue Service called social welfare organizations.

Arizona Governor Doug Ducey got a substantial boost for his 2014 campaign from such sources, as did two candidates for the Corporation Commission, Tom Forese and Doug Little. The Republican politicians benefited from groups reportedly funded by the billionaire Koch brothers and Pinnacle West, the parent company of Arizona Public Service, which pumped up the candidates while attacking their competitors.

Liberals seethed in particular over the secrecy behind the races of the commissioners, who were viewed as anti-solar APS puppets. APS also admitted giving about $4 million to two groups that influenced the debate over subsidies to solar users in 2013, according to Arizona State University's Morrison Institute for Public Policy.

Sandra Kennedy, a former Democratic lawmaker and corporation commissioner, told Phoenix New Times in 2014 that she lost her second bid for the commission in 2014 because of $1.7 million in dark money spent to defeat her.

The APS dark-money scandal "got a lot of people energized" to do something about the issue, but the planned initiative would solve many pervasive problems related to secret contributions, Goddard said.

"Arizona is a poster child for dark or dirty money," he said. "I believe we are the number one in the country for the penetration of dark funds."

As an example, Goddard pointed to the money spent last year in Arizona in support of various Republican candidates for the Arizona Legislature — and against their opponents — by the American Federation for Children, a group headed up by billionaire Betsy DeVos, the U.S. Education Secretary.

Last year, Ducey approved a new state law passed by Republican legislators that makes Arizona's disclosure requirements align more with federal rules — in other words, allowing more dark money and unlimited contributions to the IRS-governed, politically oriented social welfare organizations.

Goddard filed the initiative earlier this week at the Arizona Secretary of State's Office with former state Attorney General Tom Horne, a Republican. Horne became the target of a Democratic dark-money group in 2010.

The supporters of the planned initiative have a tough job ahead of them.

The initiative is being run as a possible amendment to the Arizona Constitution, so the campaign must gather about 226,000 signatures by July in order to get on the ballot. Then it has to convince voters to approve it — while its opponents, potentially, funnel millions of dollars in dark money to try and derail it.

A campaign by Goddard and others in 2016 for a similar initiative shutdown after a wealthy donor pulled support.

Goddard, currently a board member of the Central Arizona Water Conservation District, admitted he has no "big cat" donor this time. For now, he's relying on donations that people make on the group's website, OutlawDirtyMoney.com.

Interestingly, conservative leaders seem to hold mixed feelings on allowing secret political donations. Arizona Secretary of State Michele Reagan was against dark money before she encouraged passage of the new state law that facilitates it.

And Goddard noted that deceased conservative icon Antonin Scalia of the U.S. Supreme Court questioned the idea of secrecy regarding campaign petitions in Washington state in 2010, the same year he helped approve the Citizens United case.

"Requiring people to stand up in public for their political acts fosters civic courage, without which democracy is doomed," Scalia wrote in the Doe vs. Reed case. "For my part, I do not look forward to a society which, thanks to the Supreme Court, campaigns anonymously ... and even exercises the direct democracy of initiative and referendum hidden from public scrutiny and protected from the accountability of criticism.

"This does not resemble the Home of the Brave."

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