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Confusion reigns as Court of Appeals blocks campaign finance law

 

MoneyMaze

An Arizona Court of Appeals ruling that put the state’s new campaign contribution limits on hold triggered widespread confusion among candidates and election attorneys.

The appellate court on Oct. 15 barred Secretary of State Ken Bennett from implementing HB2593, barely a month after the law went into effect. The law dramatically raised the state’s campaign contribution limits and made a host of other changes to Arizona’s campaign finance laws.

Candidates can no longer collect contributions of up to $4,000 from an individual, and are once again bound by the old limits of $440 in legislative races and $912 for statewide candidates. But it’s been more than a month since a Maricopa County Superior Court judge allowed the law to go into effect, and some candidates have already taken advantage of the higher new limits.

“Within minutes of the Court of Appeals ruling, chaos has erupted among every candidate for public office, from the city of Phoenix to the governor’s race. People are looking for answers,” said Mike Liburdi, an attorney with the law firm Snell and Wilmer who defended HB2593 in court.

The Arizona Attorney General’s Office and Secretary of State’s Office have no answers for candidates yet. Both are waiting for a full opinion from the Court of Appeals, which issued only a brief order enjoining HB2593, and a spokeswoman for Attorney General Tom Horne said the office likely won’t issue any guidance until after the Arizona Supreme Court weighs in on the injunction.

It is unknown exactly when a full opinion will come down. Election attorneys say it could be anywhere from a few days to a few months.

In the meantime, there are a lot of unanswered questions. Candidates are wondering whether they have to give back contributions that exceed the old limits. No one is sure whether they have to continue using separate committees for the 2014 primary and general elections, as the Attorney General’s Office and Secretary of State’s Office said is required under HB2593.

The law also eliminated aggregate caps on the amount of money that contributors could give per year. Now that the cap is back in effect, some contributors may have already exceeded the limit for this year. Under HB2593, candidates were no longer held to an aggregate limit on the amount of money they could accept from political action committees as well.

Sit tight and wait

Many election attorneys were unsure about what advice to give their clients, with the most common instruction being to simply stop collecting money in excess of the old limits, which are now back in effect. Matt Roberts, a spokesman for Secretary of State Ken Bennett, said the old limits are “safe harbor.”

Roopali Desai, an elections attorney with the firm Coppersmith Schermer and Brockelman, said she is advising clients who have already received larger contributions to sit tight and wait for further instructions.

Issues such as whether candidates will have to reimburse money or whether they still must have two campaign committees are up in the air, she said.

“The statute is enjoined. Now, how do you unwind some of the work that’s been done?” Desai said.

Elections attorney Lisa Hauser isn’t advising people to start giving back money. But she said she’s told them to prepare for the possibility.

“If I were a candidate who had already taken funds that were in excess of (the old) limits since Sept. 13, I would sort of put those funds aside,” said Hauser, of the firm Gammage and Burnham. “You want to proceed with caution.”

Others, such as elections attorney Kory Langhofer, questioned whether it would even be legal to force candidates to reimburse money they’ve collected in the past month.

“As long as it was legal when the contribution was made, I don’t know how you would commandeer or assume control over the campaign’s money that was legally acquired,” said Langhofer, of Brownstein Hyatt Farber Schreck.

Relatively few big checks

Some questioned whether the return to the old limits, at least on a temporary basis, would have much of an impact. Campaign consultant Constantin Querard said only a few legislative candidates have probably raised large checks under the new limits, which means the Court of Appeals decision won’t cause much disruption.

“The average state legislative candidate, who was receiving $200, $300 or $400 — they are still getting the same amounts,” he said.

Querard said the impact may be more significant among a small number of statewide candidates, such as gubernatorial hopeful Doug Ducey or attorney general candidate Mark Brnovich. Political consultant Bert Coleman agreed, citing Ducey as a candidate who may suffer due to the ruling.

But for the most part, Coleman said, candidates aren’t raising $2,000 or $4,000 checks to begin with.

“It is not as though a bunch of heavy-hitter donors are running out and writing $2,000 checks to these candidates. That’s absolutely not the case,” Coleman said. “Raising the limits did not increase the donor base. It just allowed a few, select folks to give a bit more.”

Even before the Court of Appeals enjoined the new law, Arizona’s campaign finance system was in a state of flux. Due to a provision in HB2593 that distinguishes the primary and general as separate elections with their own $2,000 contribution limits, the Secretary of State’s Office and later the Attorney General’s Office opined that candidates must now create separate campaign committees for each. They are largely prohibited from transferring money between the two.

Rep. J.D. Mesnard, the sponsor of HB2593, is working on a cleanup bill to eliminate the two-committee requirement. Mesnard, R-Chandler, said he will continue working on the bill, but isn’t sure what he’ll do if the law is still in limbo when the 2014 legislative session begins.

“There were already a lot of questions, obviously, with the implementation of it,” Mesnard said. “I don’t know what we do now as far as even trying to fix it if the bill itself has been stopped.”

The return of the aggregate limit for individual contributors may be problematic for some. At a Sept. 20 fundraiser for 13 Republican lawmakers who voted for Gov. Jan Brewer’s Medicaid expansion plan, organizers urged attendees to give $500 to each of the legislators. Anyone who did so gave a total of at least $6,500 that night, meaning they already exceeded the $6,390 cap for the year.

Langhofer said election officials likely can’t penalize anyone who exceeded the cap while it was temporarily legal. But those people probably won’t be able to contribute again until 2014.

As yet, no explanation

The Court of Appeals did not explain its decision. But the Citizens Clean Elections Commission and other foes of HB2593 argue that the Legislature violated the Voter Protection Act when the passed the law.

Because the 1998 Citizens Clean Elections Act reduced the preexisting limits by 20 percent, commission attorney Joe Kanefield argued that the limits are subject to the Voter Protection Act. It requires a three-fourths vote to change a voter-approved statute, and only when a change furthers the intent of the voters. HB2593 met neither of those criteria, he said.

By approving the 20-percent reduction, Kanefield said, voters intended to lock in the campaign contribution limits as they existed in 1998.

“They certainly weren’t trying to just create an arithmetic formula that the Legislature could just circumvent by setting the limits at 125 percent of whatever they wanted the limits to be,” said Kanefield, of the law firm Ballard Spahr. “It would have been quite astonishing if the Legislature, the day after the Clean Elections Act passed, simply removed the limits or raised them back up substantially.”

Liburdi, who represents Senate President Andy Biggs and House Speaker Andy Tobin in their defense of the law, has asked the Court of Appeals to stay its injunction until it issues its full opinion. He wouldn’t definitively say his clients would appeal the decision, but said they are “inching in that direction.”

Mesnard was hopeful that the Arizona Supreme Court would reinstate the law. If not, he said he expects a federal court challenge to the constitutionality of the old limits. Opponents of the old limits contend they are so low that they violate the First Amendment’s free speech guarantee.

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