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Watchdog group calls for investigation of $500,000 contribution to Ducey PAC

Claim says the contribution shielded its true funding source

Arizona Gov. Doug Ducey, R, speaks to supporters, Tuesday, Nov. 6, 2018, at an election night party in Scottsdale, Ariz. Incumbent Ducey defeated democratic challenger David Garcia for his second term. (AP Photo/Matt York)

Arizona Gov. Doug Ducey, R, speaks to supporters, Tuesday, Nov. 6, 2018, at an election night party in Scottsdale, Ariz. Incumbent Ducey defeated democratic challenger David Garcia for his second term. (AP Photo/Matt York)

A nonpartisan campaign finance watchdog group is claiming that a $500,000 contribution to Gov. Doug Ducey’s PAC is illegal and has asked Secretary of State Michele Reagan to investigate the contribution.

Citing campaign finance rules against shielding the real source of campaign contributions, the Campaign Legal Center says the Ducey Victory Fund Committee accepted a half million dollar contribution this election cycle from a shell corporation that was a front for an Arizona auto billionaire.

The Washington, D.C.-based group today asked Reagan to look into Blue Magnolia Investments, LLC, which it asserts was a company created by wealthy businessman Larry Van Tuyl, who made billions when he sold his auto dealership network to Berkshire Hathaway, Inc. The nonprofit group is asking Reagan to investigate both Van Tuyl and Blue Magnolia, but not the Ducey Victory Fund or Ducey’s campaign.

Blue Magnolia gave $500,000 to Ducey’s PAC on May 11, just two weeks after its formation as a limited liability company in Wilmington, Delaware.

Brendan Fischer, Campaign Legal Center’s federal reform program director, said his group identified Blue Magnolia as a “suspicious contributor” because all the evidence shows it did not have sufficient income from business revenue, assets or earnings to make the sizeable campaign contribution.

Fischer authored the letter sent to Reagan calling for an investigation into the contribution.

A representative for Blue Magnolia could not be reached for comment.

Van Tuyl’s name emerged as the man behind the corporation when the legal center filed a Federal Elections Commission complaint against Blue Magnolia after the group contributed $100,000 to a pro-Martha McSally super PAC on May 30.

That’s when the legal center first asserted Blue Magnolia facilitated a straw donation intended to hide its source, and thus, violated federal campaign finance law.

Approximately a month later, DefendArizona — which poured more than $21 million into Arizona’s U.S. Senate race to get McSally elected — updated its FEC report to identify Van Tuyl as the funder behind Blue Magnolia.

Now, the legal center is alleging Van Tuyl violated Arizona law by knowingly making a contribution under the name Blue Magnolia to the Ducey Victory Fund.

“We think the evidence is pretty clear that Arizona law was violated by having the source of this $500,000 contribution reported as Blue Magnolia when it appears very likely that Larry Van Tuyl is the actual source of that money,” Fischer said.

Fischer said the legal center has no evidence that the Ducey Victory Fund or the Ducey campaign had any knowledge that Blue Magnolia – if the charge is true – was being used as a vehicle for a straw donation.

J.P. Twist, Ducey’s campaign manager, declined to comment.

Arizona law allows PACs to accept unlimited contributions, meaning Van Tuyl primarily contributed to Ducey’s PAC via Blue Magnolia in order to shield his identity.

In the very least, the legal center is hopeful that, with the investigation, campaign finance reports will be updated to show that Van Tuyl was behind the contribution to Ducey’s PAC.

“That’s the most important piece – that the public knows the actual sources of funding for powerful elected officials,” Fischer said.

Van Tuyl has previously dabbled in Arizona politics, contributing $100,000 in 2016 to Arizonans for Responsible Drug Policy, which worked to defeat the state’s marijuana legalization measure, Proposition 205. He also forked over $50,000 to the Proposition 123 campaign, which asked voters to consider a $3.5 billion education-funding package.

Ducey vocally opposed Prop. 205 and championed Prop. 123.

The Campaign Legal Center was founded in 2002 and describes itself as a watchdog on ethics and campaign finance issues. The group’s founder, Trevor Potter, served as general counsel to John McCain’s 2008 and 2000 presidential campaigns.

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