In the world of outside spending, even watchdogs reap the benefits

Arizona Corporation Commissioner Bob Burns has crafted his re-election campaign on being a watchdog against outside money in elections.

He has polarized the political community with his investigation into a utility company’s fiscal role in the 2014 commission election, and trumpeted himself as the only person on the commission willing to do something about it.

But even Burns, who co-penned a letter asking utility companies to stay out of commission elections and went as far as to try to hire an out-of-state lawyer to conduct an investigation, is the darling of an outside spender.

Save Our AZ Solar, a pro-solar energy committee bankrolled by SolarCity, the nation’s largest solar installer and a company chaired by tech mogul Elon Musk, shelled out $686,522 in support of Burns in the Republican primary, nearly as much as all of his opponents spent combined.

Burns, on the other hand, spent slightly more than $70,000 in the same time frame, about one-tenth of what was spent on his behalf.

Save Our AZ Solar is an independent expenditure committee: a group that spends money to support or oppose a candidate without coordinating with that candidate. Candidates don’t know they appeared in an outside-funded mailer or ad spot until it goes out to the public.

“I didn’t even attempt to find out (about the outside spending),” Burns said. “All I get is a notice saying my name was used in a campaign piece.”

Mixed feelings

Burns said he had mixed feelings about the amount of money in the Corporation Commission race, and that his letter was more intended for groups that hid the source of their money, unlike Save Our AZ Solar.

“In the past, the utilities voluntarily stayed out of commission races,” Burns said. “Apparently, they felt like they were pushed into having participated in a campaign. I would prefer that nobody got involved that has so close a relationship with the Corporation Commission.”

Other groups are not always so transparent, and many don’t report the sources of their funding.

No law forbids this practice, no de facto policy discourages it and nothing is inherently wrong with it. But each election, the amount of money spent by independent expenditure committees – groups that expressly advocate for the election of a candidate without coordinating with that candidate – is a source of considerable debate, especially for those without reported funding, so-called “dark money” groups.

And the amount of money these groups spend in Arizona elections is on the rise.

As of the last campaign finance reports from the state primary, IEs, which are not bound by the same contribution limits as direct donors to a campaign, spent more than $2 million in support of various statewide and legislative candidates in the primary election alone. That number is sure to spike with the general election.

The biggest issue with that outside spending, said Arizona State University political scientist David Wells, is accountability.

“IEs are far less accountable,” Wells said. “Ads can be misleading. And if candidates have to run an ad spot themselves, they have to be more accountable.”

He said large amounts of money can affect races that people who aren’t local politics buffs don’t know or care about – and enough of these small races can alter a state’s legislative or general political makeup.

A bigger stake in elections

He pointed to the controversial SB1516, which passed earlier this year and puts enforcement of electioneering groups in the hands of the IRS, rather than state agencies. Critics said it opened up the state to more dark money spending, and Wells said he agrees.

IE spending isn’t a new phenomenon, but the amount of money these groups have been spending in Arizona elections has increased in recent years.

For comparison, in 1998, IEs spent $328,094, adjusted for inflation. Candidates, meanwhile, spent almost $8 million in today’s dollars. While candidates are still as a whole outspending IEs, the outside groups have taken an increasingly large stake in the elections over time.

IE spending increased gradually until 2012, when it more than doubled, going from 2010’s $3.4 million to $7.9 million.

The precipitous increase came after the U.S. Supreme Court’s ruling on Citizens United v. the FEC, which was handed down in early 2010 and prevented restrictions on independent political spending by nonprofit groups, some of which are set up by unions and corporations.

The greatest single jump came in 2014, when major statewide races chummed the water for big spenders. IE groups spent almost $28 million, of which $1.8 million went in support of Doug Ducey’s successful campaign for governor. On the other side of the coin, IEs spent $6.4 million in opposition to his Democratic counterpart, Fred Duval — approximately $2 million more than Duval was able to drum up himself.

The 2016 election is unlikely to reach such heights without a gubernatorial campaign, but a greater amount of lower-profile races makes IE influence much more tangible, Wells said.

In other words, there is less IE spending in 2016, but recent history indicates that the gap between candidate spending and IE spending is smaller in years without gubernatorial elections. And when candidates are responsible for less of the money spent in support of their campaigns, the voting public is more susceptible to information run in ads paid for with outside money, especially when the source of that money isn’t publicly available.

The American Federation for Children, for example, a group with an uncontroversial-sounding name, spent around $220,000 in support of mostly Republican candidates who were likely to vote favorably on issues of school choice and charter schools, a staple of many conservative platforms.

However, the federation has no reported income.

“We’re very transparent about our mission,” said Matt Frendewey, the national communications director for the American Federation for Children. “Every child deserves a world class education. We believe that parents have a fundamental right to choose for their kid.”

Frendewey deflected any claims of impropriety stemming from a lack of reported funding.

“We’re very open,” he said. “(We don’t report funding) because we follow the law. We report what’s required by law.”

Open or not, it’s impossible to tell which interests are funding groups like the American Federation for Children. In a primary where many candidates were outspent by IE groups, the salience of Wells’ concerns intensifies.

It’s important to note that candidates with the most outside support don’t always win, and the law isn’t being broken, Wells said. But, he still views the issue with caution.

“It’s a crass way of putting it, but it tells the voting public that the elections are for sale,” he said.