Pro-SolarCity IE argues that transparency laws are unconstitutional

Luige del Puerto//October 28, 2016

Pro-SolarCity IE argues that transparency laws are unconstitutional

Luige del Puerto//October 28, 2016


Save Our AZ Solar, which is spending millions of dollars to elect its favored candidates to the Arizona Corporation Commission, is insisting that disclosure laws requiring it to report its spending are unconstitutional.

Under the laws, “any person” that independently seeks to influence a candidate election and reaches certain threshold amounts must report the spending activity.

The Arizona Citizenss Clean Elections Commission this week preliminarily found that the SolarCity-funded group has violated those requirements, which are spelled out in the Clean Elections Act.

Save Our AZ Solar lawyer Roopali Desai said the disclosure laws are “unconstitutional because the true justification for their reporting requirements – that is, matching funds – evaporated with the decision of the U.S. Supreme Court in Arizona Free Enterprise Club v. Bennett.”

Desai was referring to the case where the court declared Arizona’s matching funds under the Clean Elections Act to be illegal.

Save Our AZ Solar has rebuffed the commission’s offer to settle the matter by paying $15,000, and made a counter offer of $8,000.

Tom Collins, executive director of the Citizens Clean Elections Commission, said Desai’s arguments have no basis.

First, the secretary of state’s reporting system directs filers to the CCEC’s electronic form, he said.

More significantly, no court has declared the Clean Election Act’s reporting requirements to be unconstitutional, Collins said, arguing that, on the contrary, the Arizona Supreme Court concluded that enforcing the Act’s reporting requirements is a “paramount” duty of the CCEC.

Additionally, lawmakers kept in place the reporting laws, even while repealing the matching funds provisions, Collins noted, adding that the laws do not single out an IE, but “any person” who engages in electioneering spending, Collins said.

Transparency is a major issue in the contest for three spots at the commission, which regulates utilities and sets rates. Some candidates have argued that utilities should disclose if they funneled money to third-party groups to influence the result of the race. Others said it would chill companies’ political speech rights.

The issue has taken on a more urgent sense this week, as total outside spending on the contest has now surpassed all the outside spending in the 2014 race.

Already, outside groups have spent nearly $4.7 million this year, both in the primary and general elections, and more is expected in the coming weeks.

In 2014, total outside spending on the race was about $3.8 million, and Arizona Public Service was suspected of funding the dark money campaign to elect Commissioners Doug Little and Tom Forese. APS has never publicly affirmed nor denied its role in the 2014 contest.

Mesa resident Steven Miner earlier complained to the Clean Elections Commission that Save Our AZ Solar violated the Clean Election Act’s reporting requirements. A review by the commission showed other expenditures (the total is more than $700,000) that Save Our AZ Solar also failed to report in a timely fashion.

Save Our AZ Solar, which has so far spent roughly $2.5 million to support Commissioner Bob Burns, a Republican who is seeking re-election, and Democrat Bill Mundell, ultimately filed the reports on Oct. 20, but noted that it’s not conceding its position that the laws are unconstitutional.

Desai first insisted that the group’s pro-Burns mailer, which was the subject of the original complaint, isn’t actually expressed advocacy, and even if it is, the law requiring that any campaign literature regarding a candidate be mailed to the candidate 24 hours after sending it to the public is unconstitutional.

She also said the laws require reports to be filed with the secretary of state, but that office hasn’t provided any method for filing them; hence, the laws cannot be complied with.

But Desai mainly argued that the Clean Election Act’s reporting requirements’ rationale “evaporated” when the U.S. Supreme Court struck down the Clean Election’s matching funds system.

She insisted that financial disclosure requirements, such as those in the Act, are subject to “exacting scrutiny requiring a substantial and narrowly tailored need,” and cited Citizens United, the landmark U.S. Supreme Court ruling blamed by many for ushering in the flood of spending by dark money groups, in arguing that disclosure laws burden the First Amendment.

She also argued that the disclosure requirements single out independent expenditure committees.

In a subsequent letter, Desai also said the CCEC went outside the scope of the original complaint, and suggested that, if the CCEC hasn’t been doing “this level of independent research” in this election cycle, its decision to do so in the case of Save our AZ Solar “could give rise to a claim of selective enforcement rooted in the Equal Protection Clause.”

Former commissioner Kris Mayes, who heads Save Our AZ Solar, said her group reported its election activities to the secretary of state “pursuant to the reporting requirements set forth in law, but not to the Clean Elections Commission.”

“After the commission advised the Save Our AZ Solar Committee that its position is that reports should also be filed directly with the Commission, we did so, because we want to support transparency in Arizona elections,” she added.

In August, Mayes promised to disclose “every single dime of anything we spend on the election … We’re committed to not using dark money and to being totally transparent.”

The Pinnacle West-funded Arizona Coalition for Reliable Electricity saw an opportunity to lambast Save Our AZ Solar.

“After 3 years spent pointing the finger at others, it is now the height of hypocrisy for SolarCity and Save Our AZ Solar to argue for anything less than full disclosure of their campaign finances,” said the group’s spokesman, Matthew Benson. “Given the campaign of falsehoods and fabrications that Save Our AZ Solar has chosen to engage in, it’s not surprising they would hope to shield their activities from Arizona voters.”

This week, the CCEC also found there’s a reason to believe that Save Our AZ Solar violated the law’s notification requirements for campaign ads.

Collins, the CCEC executive director, disclosed that Save Our AZ Solar refused an offer to settle the matter by paying $15,000, and instead offered $8,000.

Collins said he and Desai, the pro-solar group’s lawyer, briefly talked about settlement amounts in a phone call but were “thousands of dollars apart, and had a disagreement about issues relating to the enforcement process.”

Save Our AZ Solar has so far spent about $2.5 million to support Burns and Mundell, according to filings at the secretary of state and Clean Elections.

Pinnacle West-backed Arizona Coalition for Reliable Electricity has so far spent about $1.9 million supporting Burns, as well as Mundell and Republican Andy Tobin, who was appointed to the commission.

The Arizona Association of Realtors IE is a distant third in spending, at about $324,000. The group is supporting the GOP candidates.

During the general election alone, Save Our AZ Solar has spent about $1.8 million, $1.4 million of which went to aid Mundell.

Burns has gotten about $1.1 million, coming from the groups allied with the solar industry, the Realtors and Pinnacle West IE. Dunn and Tobin have both gotten about $744,000 in support from the realtors and Pinnacle West.

Democrat Tom Chabin, meanwhile, has gotten just $2,120 in support from SolarCity itself, in the form of an email sent to SolarCity customers endorsing him, Burns and Mundell.