Home / AZ legislators / Candidates got away with ignoring big-dollar disclosure requirement

Candidates got away with ignoring big-dollar disclosure requirement

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Statewide and legislative candidates widely ignored a requirement to disclose big-dollar contributions during the final days of their campaign, and election officials are in no mood to go after them.

When lawmakers voted in 2013 to increase by up to five-fold the amount of money candidates can accept from a single campaign donor, they attempted to assuage critics by also requiring candidates to disclose any large, last-minute campaign contribution in real-time – or face steep fines.

But candidates, many of whom voted for the bill as lawmakers and benefited from the increased campaign contribution limits, have widely ignored that disclosure requirement, and nobody has pursued any enforcement action against them.

An analysis of all campaign finance reports filed by legislative and statewide candidates in 2016 shows at least $115,000 in contributions of $1,000 or more that were disclosed late, or not at all, violating the law and opening up candidates to possible collective civil fines of nearly $350,000.

This year, at the request of the Secretary of State’s Office, lawmakers voted to repeal the disclosure requirement altogether as part of an overhaul of Arizona’s election laws. That repeal took effect only after this year’s election, and for all of the 2016 election cycle, that disclosure requirement was still in place.

Secretary of State Michele Reagan said lawmakers and her office decided to remove the requirement this year because, in part, it was pretty small potatoes.

In this Monday, April 11, 2016 photo, Secretary of State Michele Reagan answers reporter questions after meeting with voters at the Cartwright School District headquarters in west Phoenix, Ariz. Voters personally voiced their experiences to Secretary of State Reagan during the community outreach event in Phoenix. Many of the west Phoenix residents complained about long lines. (AP Photo/Ryan Van Velzer)

Secretary of State Michele Reagan (AP Photo/Ryan Van Velzer)

“What we kept hearing from (lawmakers) about the $1,000 notifications is they don’t do anything for anyone in the real world. Most campaign fundraising has been completed by that time,” she said, adding that it’s a requirement for a candidate to get online and post information “that nobody needs.”

She said while there were no complaints filed against candidates for filing those reports late, lawmakers and her office worried the requirement would turn into a political opportunity to file frivolous complaints against their opponents.

“We looked it up, and found there had been zero complaints about this, so why do we even have it in law? It’s just another catch, another gotcha, to allow one candidate to sue another candidate. The only people who were benefiting from this were attorneys,” she said.

But former Secretary of State Ken Bennett, who supported the 2013 bill, was surprised to learn that lawmakers repealed the disclosure requirement this year.

Bennett called removing the requirement “a step in the wrong direction.”

“I thought it was an important part of transparency if the limits were going to be raised,” he said.

Bennett said the greater contribution limits were supposed to go hand-in-hand with a greater responsibility for candidates to report their income, in order to keep the public apprised of who is making major contributions to political campaigns in the final days before an election so voters can make an informed decision on Election Day.

“Why was it OK and an integral part of what we were doing three years ago, which I supported, but now it doesn’t have to be continued?” Bennett asked.

 A shot of steroids

Following the U.S. Supreme Court decision in the Citizens’ United case in 2010, lawmakers worried that they, as candidates, were in danger of being relegated to the sidelines of their own campaigns by the wave of outside money, often from anonymous sources through “dark money” groups.

Rep. JD Mesnard, R-Chandler.

Rep. JD Mesnard, R-Chandler.

HB2593, the 2013 campaign finance bill sponsored by Republican Rep. J.D. Mesnard, was designed to work like a shot of steroids for candidates’ campaign committees – pumping them up to better compete with increasingly powerful outside groups.

The bill, which Republican lawmakers approved and former Gov. Jan Brewer signed into law, increased the maximum contribution an individual can make to a statewide candidate to $2,500 from $1,000 or to $2,500 from $488 for legislative candidates, and removed the cap on how much aggregate money a candidate can receive from political action committees.

As a tradeoff for the increase, the bill contained a provision that gave candidates just three days to file a campaign finance report disclosing any contributions of $1,000 or more that they receive less than 20 days before the primary or general election.

The consequences for those who don’t file those reports are steep. They face a possible civil penalty of up to three times the amount of the original contribution.

Mesnard and other Republicans argued that funneling more money through candidates themselves would actually increase the public’s ability to follow the money in politics because candidates, unlike dark money groups, are required to name their donors. And anyway, they said, Arizona’s campaign contribution limits were so low they were in danger of being declared unconstitutional, should someone bring a lawsuit.

Democrats argued that increasing campaign contribution limits would only exacerbate the problem of too much influence from money in politics, and would further undermine the state’s publicly-funded campaign finance system by not also increasing the amount of money made available to publicly funded candidates.

About the only part of the bill that wasn’t contentious was the new reporting requirement. Both sides agreed requiring candidates to alert their opponents and the public of any large, last minute contributions was a good idea.

Reagan voted for the bill back when she was a senator and chair of the Senate Elections Committee.

“I always think that anytime we can put more sunshine on some of the (campaign) activity that is happening, the public is better off,” she said at the time.

But as secretary of state, Reagan pushed a bill through the Legislature this year that eliminated the disclosure portion of the law, leaving only the increased contribution limits intact.

Reagan’s priority for the 2016 legislative session was passing a complete overhaul of Arizona’s election laws. And while that bill, SB1516, carried over many portions of the old campaign finance law, the $1,000 contribution notification requirement didn’t make the cut.

She said that bill was designed to ensure people can get involved in the political process without facing frivolous lawsuits from those on the opposing side of a campaign, and removing the $1,000 notification requirement furthered that goal.

“The whole goal of SB1516, the overriding goal, was to try to keep candidates, consultants, volunteers and activists out of courtrooms (and) not having to hire lawyers over silly things that we all knew weren’t going to go anywhere,” she said.

Too heavy a burden

Republican Sen. Adam Driggs, who sponsored SB1516 on behalf of Reagan’s office, said they decided to scrap the requirement because it was simply too heavy a burden for candidates.

“We have a citizen Legislature. We have volunteer people helping you on the financial end (of a campaign), and it was a cost benefit analysis. Does it really help someone in the public to know someone gave you $1,000 before an election, as opposed to the burden of having to (file the report)? To me, it’s more of a trap for candidates than it is a benefit for the public,” he said.

He said the requirement was also difficult to follow – contributors sometimes send checks that are dated a month earlier, and when candidates do receive them, they’re unsure of how to reflect that in the notification. And candidates don’t always have time to enter those checks immediately, he said.

“You just do it when you can. And then you don’t know, like, do I post it as the date of the fundraiser? But even at a fundraiser, most of the checks I get are written on different dates. So it’s hard to know, and it’s hard to remember: Did I get this at a fundraiser, or did someone drop this off to me?” Driggs said.

Driggs noted that it’s not like the public won’t eventually know about the contributions. After all, they’re still required to be disclosed at the next regular campaign finance period. The only difference is they won’t know about the contribution immediately, and won’t find out until after the election.

(Graphic by Rachel Leingang, Arizona Capitol Times)

(Graphic by Rachel Leingang, Arizona Capitol Times)

“In some races, in the last 20 days there’s still money being raised, but if you look at the average, that’s not really when the major fundraising is happening. You can’t send out a mail piece three days before the election,” he said.

Driggs said that if lawmakers want to bring back the disclosure requirement, they’re free to do so. But when he removed it in SB1516, nobody complained.

Democratic Sen. Steve Farley of Tucson, who voted against both the 2013 campaign contribution increase and the 2016 election law re-write, said nobody in the Legislature complained about the removal of that requirement because they were focused on the host of other changes that Driggs’ bill made, and that specific provision escaped broader scrutiny.

He compared the insertion of that requirement and its eventual repeal to legislative sleight of hand performed by Reagan and Republican lawmakers.

“That’s an old trick,” he said.

But Reagan pushed back against the idea that there was anything nefarious in repealing the law, and said she’s the same transparency advocate she was in the Senate – she just has to pick her battles more carefully now.

“I haven’t changed a bit,” she said, adding that while she hasn’t yet been able to accomplish everything she wanted to increase transparency in Arizona’s electoral system, she has had some wins and has big plans for 2017.

$116,000 worth of late or missing reports

The Arizona Capitol Times combed through hundreds of campaign finance reports to calculate which lawmakers received $1,000 contributions within the 20-day window preceding the primary and general elections, and found dozens of examples of candidates filing later than the three-day deadline, or not at all.

Of the 38 reports that were filed late, candidates missed their deadlines by an average of 10 days. In total, the Capitol Times spotted more than $116,000 worth of late or missing reports, and the public still hasn’t seen the final spending reports for the 2016 election.

A dozen of those late filings were from lawmakers who were around in 2013 and voted for the notification requirements and stiff penalties. All of them also voted to repeal the notification requirements this year.

But Mesnard, the incoming House speaker and sponsor of the 2013 bill requiring the additional reports, said those campaign finance reports can be misleading.

According to the reports, Mesnard was 10 days late in filing a notification for a $1,000 check he received just before the primary election. But Mesnard said that’s not accurate.

“I was never late,” he said.

Mesnard explained that even if a check was made out a month before it ever reached him, the three-day clock to file doesn’t start ticking until he actually “obtains possession of the contribution.”

“I base everything I enter into the system on the date of the check to be consistent.  So I was not late, I filed it as soon as I received it. So, I even had a conversation with the secretary of state because it showed up as late, but I filed it according to the law – within 24 hours of when I knew that I got a check,” he said.

“I saw that it popped up as late and I was upset. Because it looks bad, but I was following the law,” he said.

Mesnard said the requirement as written in his bill was problematic, and almost impossible to fairly enforce.

There’s no way for the Secretary of State’s Office to know when a candidate actually received the contribution, he noted, and basing it off the date a check is written isn’t fair to candidates who may not receive the check until much later.

Essentially, it was a noble idea that didn’t work out in reality, he said.

“But if folks want to talk about a way to make it work, I’m open to having that conversation,” he said.

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