“Mainstream Arizona,” an organization put together to counter what its founders saw as a legislative swing to the ideological right, absorbed a final legal blow and will be disbanded, one of its founders said.

Legal rulings have forced Mainstream to abandon its stated position as a policy group exempt from state regulation, pay a fine of $5,000 and register as an ordinary political committee.

In a consent order with the Attorney General’s Office that was announced March 29, Mainstream also promised to demonstrate within 30 days that none of the mailings it did during the legislative elections last fall was paid for with corporate money.

Grant Woods, one of Mainstream’s co-founders, told a reporter March 30 that the mailings “were so watered down they had limited effect, but even watered down they were found to be advocacy.” “It’s time to go a different direction,” he said. “A more grassroots approach would be more effective — recruiting candidates, teaching them how to run a campaign and voter turnout.”

Mr. Woods said Sen. Carolyn Allen, R-8, and former secretary of state and current state Administration Department Director Betsey Bayless have been meeting to plan grassroots strategy. “We’re going to disband Mainstream and work with Betsey,” he said.

Before the rulings, Mainstream had raised money from individuals and corporations without regard to state-imposed limits, and the consent order states that no individual who in good faith exceeded the contribution limit imposed by state law on political organizations will be prosecuted.

Mainstream Arizona was formed in the fall of 2003 by Mr. Woods, who was attorney general from 1991 through 1998, and Jack Jewett, a member of the state Board of Regents and former member of the Arizona House. Their stated purpose, still posted on the Mainstream Web site, had three elements: “1) Promote the importance of moderate policy solutions; 2) Inform voters of the extreme positions taken by legislative candidates; and 3) Thwart the efforts of radical groups attempting to shift the Arizona Legislature to the extreme right.”

A 527 Group

Mainstream was organized as a “527” group, governed by Sec. 527 of the federal internal revenue code and — in its view — not subject to state requirements for registering and disclosing its financing as a political organization. It raised enough money to get involved in the 2004 election and made several mailings to voters.

The mailings variously included the names and photographs of nine Republican legislators who were seeking re-election as moderates and had refused to align themselves with the right wing of their party in the Legislature.

The Citizens Clean Elections Commission (CCEC) reviewed the mailings and decided they amounted to advocacy on behalf of the “Mainstream Nine.” Early last August, about a month before the primary election, the CCEC distributed $67,500 to publicly funded opponents of the nine, to match the value of the mailings. Mainstream sued, saying its mailers were not advocacy for candidates but for a moderate approach to policy.

The CCEC’s decision caught the attention of the Secretary of State’s Office, which monitors and enforces required campaign reports and already was fielding questions about why matching funds were being distributed by the CCEC. The secretary of state sent the attorney general a memo saying there was reasonable cause to believe that Mainstream was a political committee and was not in compliance with campaign finance law.

That memo prompted a review by the AG’s Office, and in late August, the AG’s special counsel for elections, Jessica Funkhouser, determined that Mainstream was indeed an ordinary political organization, not exempt from state reporting, and should have complied with Arizona law.

A little more than a month later, on Oct. 4, Maricopa County Superior Court Judge Edward Burke ruled against Mainstream on the CCEC election mailer decision, saying the CCEC was correct in finding that the Mainstream mailings had “expressly advocated” the election of the nine GOP moderates. Mainstream did not appeal.

Negotiations continued with the Attorney General’s Office, and those now have been resolved, according to a copy of the consent agreement and order, which says the parties are agreeing “to fully and finally resolve all outstanding election-related issues involving Mainstream.”

Mr. Woods said the agreement will have an effect beyond Mainstream. “I think it’s going to be the end of 527s in Arizona,” he said.

The actual election effect of the Mainstream mailings remains debatable. In the Republican primary election last Sept. 7, five of the nine candidates who had been featured in the mailings were defeated. The four others — Ms. Allen and Reps. Jennifer Burns, Marian McClure and Michele Reagan — subsequently won re-election. —