PHOENIX — Back in 2014, the state’s largest electric company put $10.7 million into successful efforts to elect Republicans Tom Forese and Doug Little to the panel that controls how much utilities can charge customers.
Three years later, the Arizona Corporation Commission approved a 4.5% rate hike for Arizona Public Service.
However, the company did not disclose its 2014 funding of the candidates until 2019. And it was able to do that because state laws allow donations to be funneled through other entities to run independent expenditure campaigns for or against candidates, with no disclosure requirement.
All that would come to an end if voters approve Proposition 211. It is designed to unearth the ultimate source of all campaign funding.
The measure is drawing fire from the business-oriented Arizona Free Enterprise Club which contends that this kind of disclosure would lead to harassment of donors.
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“They want the names of private citizens so that they can dox, harass and cancel them in their communities,” said club President Scot Mussi. “And they intend to use their friends in Big Tech and the Corporate Media (which are exempt from this initiative) to aid them in their quest.”
That’s also the conclusion of Cathi Herrod, president of the Center for Arizona Policy.
“This initiative is about bullying some citizens out of campaign involvement,” she said. “The desired effect is to scare contributors out of donating to campaigns, while their own donors virtue signal by touting their donations to woke causes.”
But that ignores existing Arizona law, says former Attorney General Terry Goddard who crafted what is known as the Voters’ Right to Know Act.
“Everybody in Arizona who gives $50 or more has to give a full disclosure,” he said, citing statutes that require public disclosure of anyone who makes direct donations to candidates or ballot measures. If harassment is an issue, Goddard says there already would be evidence of a problem.
“What our friends from the Free Enterprise Club are saying is, ‘Well, our friends are special and shouldn’t have to do that,’” Goddard said.
Mussi says this is different.
“You’re talking about private citizens giving to private organizations,” he said. And if that organization does give money to a cause or candidate, that fact is disclosed.”
Mussi said it’s no different if the “private citizen” giving to an organization is a regulated utility that intends for the “private organization’’ to use the funds to affect an election.
Goddard also dismissed the possibility that public disclosure could be used to harass people over their small donations.
“We set the disclosure limit at $5,000,” he said.
“People who give $5,000 can take care of themselves,” Goddard continued. “I’m sorry, that’s just the way it is.”
And the law applies only to organizations that spend at least $50,000 on statewide campaigns or $25,000 on other campaigns.
He also said there’s a provision in the initiative that allows those who believe they or their family will be physically harmed if a donation becomes public to petition the Citizens Clean Elections Commission to request a waiver.
Then there’s the legal question.
Goddard acknowledged that the U.S. Supreme Court, in the landmark 2010 case of Citizens United, prohibits the government from restricting independent expenditures for political campaigns by corporations, labor unions and other organizations. But he said the justices did not bar disclosure requirements.
Mussi, however, cited a 2021 ruling by the nation’s high court that voided a California requirement that charities and nonprofit organizations operating in the state provide the attorney general’s office with the names and addresses of their largest donors. He said that precedent applies to groups who are formed to influence elections, suggesting that if Proposition 211 is approved it will lead to litigation.
The initiative has gained its share of supporters.
One of them is Democrat Sandra Kennedy who was on the losing end of that 2014 vote for the state Corporation Commission.
She finally got elected to the panel in 2018. By that time, Little had resigned to take a job in the Trump administration, and Forese lost his reelection bid that year.
Kennedy then went on to get the commission to issue a subpoena of both APS and Pinnacle West Capital Corp., its parent, to disclose political spending.
“On the heels of their 2014 dark money spending, there was an enormous rate increase and confusing rate plans for APS customers to choose from, providing that dark money takes money out of people’s pockets,” she said. And Kennedy noted that when APS went public with its funding on commission races, the company also disclosed other spending that year.
That included $50,000 to the Republican Governors Association, which helped Doug Ducey win his first election, and $425,000 to the Republican Attorney Generals Association which, in turn, bought commercials to help elect Mark Brnovich.
Company officials said in 2019 they would not fund future campaigns.
The measure also has other backers.
“The League of Women Voters of Arizona believes democracy should be protected from distortion by undisclosed individuals and corporations buying media in election campaigns to persuade voters,” said organization president Pinny Sheoran in a statement of support.
The merits of the proposal aside, Mussi called the measure “incredibly confusing.”
As crafted, it requires campaigns to trace the cash back to the original donors, even if the money has been run through multiple organizations.
“Compliance with this thing is going to be almost impossible,” Mussi said. “How do you comply, really, with that without either forcing every organization into entering into complicated agreements with each other, or forcing groups not to associate with each other at all?”
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