Arizona Attorney General Tom Horne's hopes of settling his campaign finance case have been dashed for now, as Yavapai County Attorney Sheila Polk today filed a notice with the administrative law court, signaling that discussions between the two sides on Thursday did not end in a resolution.
"No settlement was reached," reads the notice, "and the parties anticipate proceeding with the hearing as scheduled starting on February 10, 2014."
Horne's attorney Michael Kimerer would not comment on the substance of the settlement conference. But he lamented the lack of results.
"It's unfortunate," he told me. "We did not have any success in reaching a settlement, and now we plan on proceeding and showing that Tom Horne wasn't involved in any campaign violations."
A call to Polk's office for comment was not immediately returned.
In October, Polk ordered that Horne and former campaign operative Kathleen Winn (now the AG's outreach director) pay back nearly $400,000 that was contributed to Winn's 2010 independent expenditure committee, Business Leaders for Arizona.
Both Polk and before her Maricopa County Attorney Bill Montgomery found that Horne and Winn had illegally coordinated efforts between BLA and Horne's campaign.
BLA raised more than $500,000 in the 2010 general election to pay for a TV ad critical of Horne's Democratic rival Felecia Rotellini, whom Horne bested by a little more than 60,000 votes.
Sources knowledgeable about Thursday's settlement conference tell me that Polk took a hard line, and would not agree to let Horne pay a fine without an admission of wrongdoing.
These same sources indicate Polk offered to let Horne pay a settlement amount of $250,000. As part of the deal, Horne would have to admit that he broke the law.
But Horne refuses to make any admissions regarding alleged coordination between himself and Winn.
In a related matter, Horne appears close to a resolution of whistleblower Meg Hinchey's lawsuit against Horne and Horne's chief of staff Rick Bistrow.
Hinchey is the AG investigator who discovered evidence of alleged campaign finance improprieties by Horne and Winn and turned it over to the FBI. She claims she suffered retaliation as a result.
Because of Hinchey's whistleblowing, the FBI investigated Horne for alleged obstruction of justice, tampering with witnesses and other violations.
However, both the U.S. Attorney's Office and the Maricopa County Attorney's Office declined to pursue criminal charges against Horne.
Montgomery sought to fine Horne, but local courts ruled that Montgomery could not handle the matter, and it ultimately was conflicted out to Polk.
Recently, the parties in the Hinchey case informed the U.S. District Court of Arizona that settlement talks had produced "an agreement in principle," which would be finalized in about three weeks.
Horne's most recent campaign finance report shows that he's raised around $277,000 to battle former Arizona Gaming Director Mark Brnovich in the GOP primary.
An impressive number, until you learn that $100,000 of that total is a loan from Horne's sister Christine Newman, whose husband Richard Newman was also a contributor to BLA in 2010.
Hey, what's family for anyway, right?
