Republicans aim to pull veil from small political contributions

Legislative Republicans who for years have trumpeted their support of money in politics are now looking for ways to curtail some spending after a tsunami of out-of-state Democratic dollars failed to result in the electoral take over Democrats sought. 

Republicans remain loath to tinker with laws regulating independent expenditures from outside groups — some of which don’t disclose their donors — as they view that spending as protected free speech. But Senate Republicans are rallying support for proposals to change how small contributions are reported, a change that would disproportionately affect Democratic candidates.

Chief among the proposed changes is a cap on how much candidates can report in aggregate as donations from “multiple contributors,” said Senate President Karen Fann, R-Prescott. As long as a single person doesn’t contribute more than $50 to a campaign during an election cycle, the public may never learn that person’s name because their contributions can be reported in aggregate without the names, occupations or addresses required with larger contributions.

“When it was set in statute many years ago, the intent was if you had a small fundraiser and everybody chipped in a $20 bill for your election, you could just write it down as one fundraiser, $500 collected in miscellaneous donations, cash,” she said. “You didn’t have to make the person fill out all that information about where they worked and all of that stuff. That’s been going really good, up until this year.”

This year, a handful of Democratic candidates in high-profile races reported tens of thousands of dollars in contributions from “multiple contributors,” thanks largely to national fundraising efforts. Senate candidates Felicia French, Ajlan “A.J.” Kurdoglu and Christine Marsh and House candidates Coral Evans and Judy Schwiebert appeared on multiple roundups of swing candidates on sites like ActBlue, giving small donors an easy option to chip in $10 or $20 and have it divided among candidates in tightly contested local races across the country. 

ActBlue, a nonprofit technology organization that helps Democratic candidates raise money from small donors online, has been around since 2004. But the number of contributions and the amount raised through the site has exploded since the presidential election of Donald Trump in 2016 energized liberal voters to protest, phone-bank and pull out their checkbooks to get Democratic candidates elected. 

A 2018 analysis from the Center for Public Integrity and data-based political news site FiveThirtyEight found that both the number of contributions and the total dollar amount raised by congressional candidates through ActBlue more than doubled between 2016 and 2018. By the 2018 election, ActBlue accounted for more than half of all Democratic congressional fundraising, and donors from California and New York gave about one-third of that money.

Democrats who live in deep-blue districts in blue states have little reason to volunteer for or give money to their own local candidates. Over the past two years, ActBlue and other liberal organizations have found a way to connect those Democrats with candidates for Congress, state legislatures and district attorneys in other states who might pull off a win with extra help. 

Proponents view the Democratic small-dollar fundraising machine as a way for ordinary people to counteract the role of politically active billionaires — people like Mike Bloomberg, Tom Steyer and George Soros on the left and Sheldon Adelson, the Koch brothers and the Ricketts family on the right — who give huge sums personally and funnel more money through political action committees.

But Republicans who seek to change Arizona’s campaign finance laws next year say that New Yorkers and Californians who won’t be directly affected by Arizona legislation shouldn’t play a big role in choosing who passes that legislation. 

“It’s a big deal and it should really concern people from both parties,” said Sen. J.D. Mesnard, R-Chandler. “If our state legislatures become nationalized, then we’re gonna lose our identity.”

Mesnard narrowly won his re-election campaign, despite an opponent, Kurdoglu, who outraised him by more than $150,000 and more than $1.6 million in outside spending meant to defeat him. 

More than $100,000 of Kurdoglu’s roughly $400,000 in contributions came in small amounts reported as coming from “multiple contributors,” with no indication of where those contributors lived. An additional 481 contributions, totaling just over $90,000, came from people with California addresses.

Kurdoglu was far from alone in the money derby. In each hotly contested legislative race, Democratic candidates reported previously unheard of sums of small contributions, and the level of detail in which they were reported varied from candidate to candidate, and even within campaigns themselves. 

For instance, Democrat Christine Marsh — who appears likely to win narrowly over Republican Sen. Kate Brophy McGee in a north Phoenix legislative district — reported more than 330 sub-$5 contributions with names, addresses and occupations attached. She also had more than 100 reports of aggregate contributions from small donors.

One bill Mesnard plans to introduce next year would limit candidates to reporting only $5,000 in aggregate small contributions, and only allow contributions from Arizona residents to fit under that cap. Every Arizona contribution past that $5,000 limit — and every contribution from an out-of-state resident, no matter how small — would have to be reported in detail, with the donor’s full name, address and occupation in public record. 

A bill forcing more transparency in campaign contributions may seem like an odd step for Mesnard, the lawmaker who introduced a controversial campaign finance law in 2017 that sought to ensure people could anonymously contribute money to independent expenditure groups — often referred to as “dark money” — that spend money in elections. 

Mesnard said he still believes that political donors should be entitled to privacy in their financial giving, citing concerns that elected officials will use public lists of contributors to go after their political rivals. But he draws a distinction between dollars given to outside groups and money given directly to candidates, which federal law requires be disclosed.

He’s not considering an all-out limit on out-of-state spending, as is the case in Alaska, where a case challenging the constitutionality of a $3,000 cap on contributions from out-of=state donors is meandering through the court system. Contributions from out-of-state family or friends, or trade associations that may be headquartered in other states, aren’t inherently bad, Mesnard said. 

“What I really have a harder time with is donations from just random people,” he said. “It’s a partisan thing. A blue or a red organization comes along and says ‘We need to take over these legislatures. Give money here.’ I can understand that more at the federal level with national implications, but what happens in Arizona, what difference does it make to someone in Illinois or in New York, other than just purely partisan politics?”  

Fann, the Senate president, said she’s also suspicious of the high number of out-of-state contributors who listed their employment status as “not employed.”

When it comes to contributions made through ActBlue, the majority of “not employed” might just be retired people. The site requires contributors to check a box indicating whether they’re employed or not but doesn’t differentiate between unemployment and retirement, and it’s clear from contributions processed by the site that some retirees initially check that they are employed and then manually write in “retired.”