Dark Money Group Files Suit Against Arizona’s New Campaign Finance Disclosure Law

by | Mar 18, 2023 | Politics, Corruption & Criminality

Photo by Jim Small | Arizona Mirror

Dark Money Group Files Suit Against Arizona’s New Campaign Finance Disclosure Law

by | Mar 18, 2023 | Politics, Corruption & Criminality

Photo by Jim Small | Arizona Mirror

Dark Money specialty group, Americans for Prosperity (Koch supported) filed the suit against Arizona's law with the loopy claim that it violates a First Amendment "right to privacy."

A lawsuit filed in federal court Friday aims to declare the anti-dark money ballot measure that Arizona voters approved last year unconstitutional on grounds that political donors have a First Amendment right to do so anonymously, among other claims.

Voters widely approved Proposition 211 last year, with more than 70% of voters choosing to require that big-money donors disclose their names to political action committees. The Voters’ Right to Know Act triggers disclosure if an individual gives $5,000 or more to a committee that spent at least $50,000 on a given statewide or legislative race or ballot proposition.

On local elections, the disclosure rate drops to $2,500 for individuals and $25,000 for committee spending.

The lawsuit filed in federal court in Phoenix on Friday by the conservative advocacy group Americans for Prosperity and its foundation says that such disclosures have a “chilling effect” on the free speech of Arizonans and are a violation of the First Amendment.

“The First Amendment safeguards the right of individuals to donate to private advocacy organizations of their choosing without undue risk that they will be subjected to their identities being disclosed or other chilling by the government,” the lawsuit says. The lawsuit is similar to one filed in state court last year by the Center for Arizona Policy and the Arizona Free Enterprise Club.

At the heart of the lawsuit is the argument that anonymous political speech is protected by the First Amendment. Terry Goddard, a former Arizona attorney general and the driving force behind the Voters’ Right to Know Act, said the arguments against disclosure aren’t new — and have been rejected by courts.

“I think the arguments they make have been thoroughly dealt with,” Goddard told the Arizona Mirror.

Citizens United Redux?

The group behind the suit, Americans for Prosperity, is no stranger to “dark money.”

“Dark money” refers to political nonprofits that spend money on political ads, robocalls and other efforts to sway elections without any requirement to disclose donors.

During the 2014 midterm elections, the group was one of the largest spenders on political ads and due to its nonprofit status, did not have to disclose the source of its donors. It continues to play a key-role in major conservative causes.

The term garnered extra attention after the United States Supreme Court ruled on the case of Citizens United v. FEC which prohibited the government from restricting independent expenditures that are commonly associated with “dark money” from political campaigns by corporations, nonprofits, labor unions and other groups.

Since the SCOTUS ruling, groups like End Citizens United have sought to rein in anonymous spending in elections by large corporations and donors which they see as a way to influence policy making that unfairly overpowers the average voter.

“Without that transparency it is easier for them to raise big chunks of money from millionaires and companies that want to buy influence from politicians in Washington,” Adam Bozzi, spokesman for End Citizens United, a political action committee that is working to reverse the SCOTUS decision. “They want to do that without any scrutiny.”

Bozzi pointed out that former U.S. Supreme Court Justice Antonin Scalia even favored transparent disclosure and former U.S. Supreme Court Justice Anthony Kennedy wrote in the Citizens United ruling that, while the First Amendment protects political speech, transparent disclosure allows citizens to react to that speech.

But not everyone sees it that way.

“Compliance-wise, it is just a nightmare,” Luke Wachob, senior director of communications and policy for People United for Privacy Foundation told the Mirror about Prop. 211.

According to the lawsuit and Wachob, the voter-approved law will make it so those who advocate at the Capitol will also be running afoul of disclosure laws due to the “overly broad” language of the proposition.

The argument rests on the claim that the proposition does not adequately define “campaign media spending,” leaving an open door to interpretation, and adds on the window of time prior to an election in which disclosures must be made and other forms of political speech may be impacted.

“It is going to trip up a lot of legislative groups looking to talk about legislation around the legislative session,” Wachob said.

Plaintiffs and advocates for anonymous political spending say that the disclosure required by Prop. 211 opens up donors to harassment.

“People vote in private booths,” Wachob said. “It is a very similar idea, that when you support a nonprofit group or advocacy group…you should not have to have your name, address, employer published.”

In today’s divisive political environment, Wachob contends that exposing donors could create retaliation or chill speech, as donors would think twice about donating out of fear. There is some established case law to support this as in 2015, then California Attorney General Kamala Harris was blocked in federal court from receiving the donor list of Americans for Prosperity.

People United for Privacy, the group Wachob represents, is funded in part by groups that also fund Americans for Prosperity and has rallied against dark money disclosure in other states where Americans for Prosperity has also done work.

“Let me not be cavalier, they started the wheels rolling in the district court,” Goddard said, when asked by the Mirror if he thought a SCOTUS challenge was inevitable. Goddard added that they followed SCOTUS precedents in drafting Prop. 211 and that he believes strongly that the voter-approved measure is constitutional.

Republished with permission from Arizona Mirror, by Jerod MacDonald-Evoy

Arizona Mirror

Arizona Mirror

Amplifying the voices of Arizonans whose stories are unheard; shining a light on the relationships between people, power and policy; and holding public officials to account.

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