Steve Gaynor and Katie Hobbs have one thing in common: They’re relative unknowns across the state as they make their bids to be Arizona’s next secretary of state. And since neither candidate has a distinct name identification advantage, the election will ultimately come down to who voters feel is more competent, said veteran political strategist Chuck Coughlin.
Arizona’s secretary of state is next in line to become governor if the incumbent leaves office. The state has a long history of governors not completing their full terms, in which case the secretary of state would move up to the Ninth Floor.
Coughlin said voters will have to ask themselves, do they want someone with Gaynor’s business background or do they want someone with a legislative track record like Hobbs serving as the state’s chief elections officer and second in command.
“One would have to ask the question at the end of the day of all the voters in Arizona: who do you trust more to run our elections? That to me is the key argument here,” he said.
Gaynor, a businessman and political newcomer, skyrocketed through political ranks this year to oust incumbent Michele Reagan in the Republican primary.
Hobbs, a Phoenix Democrat and Arizona’s Senate minority leader, worked her way up through the Legislature before seeking statewide political office.
Gaynor, who is president of Phoenix Management Group LLC, a private equity firm, and B&D Litho California, Inc., a commercial printing company, had never run for office before he filed to run for secretary of state in February.
He has shaped his campaign around his business background, saying he would run the Secretary of State’s Office like a business.
But there are some blemishes on Gaynor’s business record. He has been sued several times in business-related matters.
Gaynor blamed California’s business and legal environment after settling a lawsuit in California that accused him of underpaying workers. On the campaign trail, Gaynor has often decried the Golden State’s burdensome regulations and tried to paint Hobbs as a California liberal, who wants to make Arizona more like its neighbor.
But Gaynor also faced two business-related lawsuits in Arizona.
In 2010, he was locked in a complicated legal battle involving the sale of his Arizona and Colorado-based printing plants. The purchaser of the two plants sued Gaynor, alleging he violated a non-compete agreement by “soliciting customers for business forms” to his California plant, thus competing with the new owners of the Phoenix and Denver-based plants.
Gaynor made $12.5 million on the 2007 sale, according to court documents filed in Maricopa County Superior Court.
Gaynor’s California plant prints commercial materials like paperback books and catalogs. The other two plants printed business forms like checks and invoices.
In selling the two plants, Gaynor agreed the California printing plant couldn’t be in the business of manufacturing business forms. Although the plant occasionally printed some business materials, it was not in the business of printing business materials — an endeavor that would have required additional, costly printing equipment, Gaynor said.
Gaynor dismissed the suit as meritless, but he eventually settled for a “minor” amount. He said he couldn’t remember how much he paid in the settlement.
“I paid them a little money kind of for them to save face and go away,” he said.
Gaynor also faced a lawsuit in 2005 for breach of contract from when he bought a small printing company through his business Gaming Supplies LLC. He agreed to purchase the company from a company based in California for $130,000.
Gaming Supplies was required to pay $40,000 in cash up front and then pay off the remaining $90,000 in 32 monthly installments. In the lawsuit filed in Maricopa County Superior Court, the owners of National Card West Inc. claimed Gaynor didn’t pay any of the monthly installments.
Gaynor’s company then countersued.
The seller didn’t perform as promised, Gaynor said, explaining why he held back on payment. He said he was in the midst of coming to agreement with one of National Card West’s partners on payment when the other partner filed suit.
Both parties agreed to dismiss the case just months after it began, according to court records. Gaynor no longer owns Gaming Supplies LLC.
People can file lawsuits saying whatever they want, but that doesn’t make what they’re saying true, Gaynor told the Arizona Capitol Times.
“The mere filing of a lawsuit doesn’t mean there was something untoward about the action,” he said.
Lawsuits aren’t the best way to solve business disagreements, but the United State has turned into a “litigious society” wherein people often turn to litigation to solve their problems, he said.
Gaynor also said his experience with litigation is good experience for being
secretary of state because of the sheer amount of lawsuits the state office faces.
“For being secretary of state, it certainly is advantageous to have legal experience,” he said.
Specifically, Gaynor cited a recent voter registration lawsuit filed against the state last year, which resulted in a consent decree streamlining the voter registration process. Gaynor has said the consent decree is unconstitutional and the state shouldn’t have settled the case.
In an October 3 debate, Hobbs pointed out the California lawsuit.
“You talk about being a successful businessman and running the Secretary of State’s Office like a business,” Hobbs said. “Yet you have these problems and you didn’t follow the law and you settled a lawsuit.”
Middle Ground Voters
Although he has been a big donor in federal elections across the country, Gaynor was virtually unknown in state political circles before his secretary of state bid. But since he clinched the GOP nomination for secretary of state, he was welcomed into the political establishment.
Next week, Gov. Doug Ducey will attend a fundraiser for Gaynor, a sign that the political newcomer has earned the governor’s blessing.
Meanwhile, while Gaynor almost entirely self-funded his primary campaign — to the tune of $1.5 million — he is picking up financial support from other Republicans now that he is the party’s nominee.
“After the primary, people have been very generous. I’ve actually raised a lot of money,” Gaynor said in a recent debate.
But average Arizona Republicans don’t necessarily know who Gaynor is, Hobbs said in an interview.
“The Republicans don’t really know Steve Gaynor,” she said. “It’s going to be a fight for those middle ground voters because I don’t think they know either one of us.”
Hobbs is a social worker who served as a chief compliance officer for the Soujourner Center — a domestic abuse shelter. She was first elected to the Legislature in 2010, after she decided she wanted to do more to help vulnerable populations.
After a slew of bungled elections in recent years, both Hobbs and Gaynor have promised to fix the Secretary of State’s Office.
Both candidates also share some similar goals for the office, should they be elected.
Hobbs and Gaynor have cited protecting elections from cybersecurity threats as a top priority. They have also promised not to use the office for political purposes.
But there are some differences between the two.
Hobbs’ main goal is to make it easier for everyone to vote. Hobbs stressed that students, rural voters and low income voters struggle to vote because of various barriers.
Gaynor is more concerned about preventing election fraud.