The Citizens Clean Elections Commission on Aug. 10 dismissed a complaint against Republican gubernatorial candidate Len Munsil, but unanimously voted to advance an inquiry into campaign services acquired by Governor Napolitano.
By 3-2 vote, the CCEC found no reason to believe that Mr. Munsil had improperly retained the services of two political consulting groups even as the campaign’s coffers ran dry.
The complaint was filed by Arizona Democratic Party Chairman David Waid in mid-July, citing “questionable expenditures or lack thereof” by Mr. Munsil to consultant groups Sproul and Associates and the VBP Group.
Mr. Waid alleged that finance reports had indicated that the Republican candidate had agreed to pay approximately $7,000 a month to consultants, but during the month of April only $1,000 was disbursed — giving the indication that Mr. Munsil had improperly received in-kind contributions or entered into debt for services provided.
The decision, in which the commission’s two Democrats — Chairwoman Marcia Busching and Commissioner Ermila Jolley — cast “no” votes, came after testimony by David Maddox, an attorney working on behalf of the Munsil campaign.
Mr. Maddox told the commission that the services provided by the consultants and campaign spokesman Vernon B. Parker either ceased, slowed to bare minimum, or some connected to the campaign agreed to volunteer during the month in question.
Having campaign workers move in and out of paid service is not unusual during a campaign, and in fact was done by Ms. Napolitano during the 2002 election cycle, he said.
He expressed concern that the complaint, which he deemed unfounded, could have implications given the proximity of the primary election and the Aug. 10 beginning of early voting.
“We don’t want to suffer the political consequences for something we didn’t do,” he said. “Early voting begins today.”
Commissioner Gary Scaramazzo, an independent appointed by Ms. Napolitano, said the political considerations should be taken into account when making enforcement decisions.
“I don’t want the commission to be influencing (an election) if we don’t have to,” he said.
Napolitano report approved; questions remain
In the Napolitano campaign issue, the CCEC unanimously approved a final report of Ms. Napolitano’s campaign expenditures and contributions from March 1 to March 22, but the report does not address the merits of the pending complaint.
The independent report by Fester & Chapman P.C., was unable to determine the value of the services provided to Ms. Napolitano’s campaign due to the firm’s inability to find a comparable vendor to Integrated Web Strategies, which created the Web site and e-mail system in question.
The complaint against Ms. Napolitano was filed by Glenn Hamer, executive director of the Arizona Republican Party. A determination on the complaint will occur in future commission meetings, said Todd Lang, executive director of the CCEC.
Mr. Hamer’s complaint alleged Ms. Napolitano violated Arizona campaign finance regulations by entering into a contract with IWS to operate a campaign Web site and a mass e-mail system before her candidacy was officially established on March 1.
Andy Gordon, an attorney for Ms. Napolitano, has previously told the commission that the issue of whether she spent campaign money before the filing date is a legal matter for the Secretary of State’s Office and the Attorney General’s Office.
Mr. Gordon also said the campaign had enough cash to pay for the services when it began verbally contracting with IWS and he placed the value of the March 1 version of the Web site at approximately $1,000.
The independent campaign finance report approved by the commission states that on March 1, Ms. Napolitano’s campaign had a $2,573 cash balance, but an Aug. 10 letter by Mr. Hamer to Mr. Lang reiterated the GOP position that the deal was reached prematurely and the services are valued at a minimum of $20,000.
That amount is based upon a formal March 15 contract between IWS and Ms. Napolitano, where she agreed to pay the firm $27,500 to create and maintain the Web site.
The contract, according to an earlier report by Mr. Lang, contained an early termination clause that guaranteed IWS would receive 75 percent of the total contract amount if the agreement between the two should terminate before nine payments of $3,055.55 were received.
The Napolitano campaign has stated the agreement qualifies as a regularly reoccurring expense and is therefore exempt from immediate reporting requirements.
Under CCEC regulations, candidates running with public funding are forbidden from incurring debt, and a failure to act on the complaint could have potential side effects for the commission, according to Mr. Hamer’s letter.
“If the commission does not find Napolitano violated these regulations, it would most likely lead to major problems in future campaigns,” wrote Mr. Hamer. “…A Clean Elections candidate could make expenditures, campaign, design signs, etc., long before the commission would have jurisdiction over their activities, leading to severe enforcement issues.”