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Arizona Democrats divided over plan to ban corporate and billionaire contributions

Key Points:
  • Arizona Democrats propose “People’s Primary” to bar big money in primary elections
  • The proposal would impose penalties on candidates who don’t reject outside spending
  • Arizona Democrats would be the first party to enact such a policy nationwide

Arizona Democrats want to bar corporate and billionaire contributions in their primary elections, an appealing idea that has been bogged down in the details as the August primary looms.

The proposed “People’s Primary” could set a national precedent and may come up for a vote at the party’s general meeting on Jan. 24.

But some Democrats worry the proposal, which would impose stiff penalties for candidates who don’t take the anti-big money pledge, would handicap Democratic candidates. Others, while supportive, say key details still need to be worked out.

Still others, such as Jeanne Lunn, a party committee chair, say the pledge is not the right solution to the admitted problem of big money in campaigns.

“I would love to get this unfair advantage out,” Lunn said of independent expenditures. “However, this is not the mechanism to do it.”

The pledge would put the burden on candidates to rebuff any ads that rich individuals and corporations might run to favor or disparage them.

There would be no limits on the donors. Instead, it would require the candidates targeted by that spending to decrease their own expenditures by half as much.

Potentially more significant, however, is that candidates could not ask or demand that others don’t spend on their behalf. That’s because state laws make it illegal for them to coordinate in any way with a committee making independent expenditures.

But proponents contend the idea has strong support and they’re intent on establishing the practice ahead of the Aug. 4 primary.

To bolster their pitch, they commissioned a poll that found 72% of Arizona Democrats back the idea, although the support slips to 65% when informed of the details, such as financial penalties for non-compliance and loss of party backing.

The survey by Public Policy Polling also indicated the Democrats would be viewed more favorably by enacting constraints on outside spending, although a majority of the 765 Arizona voters polled Dec. 12-13 said it wouldn’t make any difference in their party registration. The poll had a margin of error of plus or minus 3.5%.

“Voters are getting sick of this big-money corruption and it’s getting worse,” said Kai Newkirk, co-chair of the party’s Progressive Council. “As Democrats, we need to draw a clear contrast.”

That contrast, if enacted, would pertain only to the primary election, where the party has some sway over its candidates. But the restrictions would not apply to the general election. It would be suicidal to impose them, Newkirk has said.

“Any big donor who wants to help in the general election and join the anti-fascist coalition — they are welcome to,” Newkirk said.

Penalties for noncompliance

Candidates who take the “People’s Primary” pledge would agree to reject any outside spending greater than $5,000 from an independent expenditure committee on their campaign — whether that spending was supportive or critical of them. Failure to do so would trigger a requirement to give half of the amount spent by the outside group to a charity designated by the state party.

Candidates who reject the pledge would lose party support, including access to the all-important voter registration lists the party manages and to the party’s financial support.

The pledge is aimed at curbing the independent expenditures which have blossomed in the wake of the U.S. Supreme Court’s Citizens United case in 2010.

Devil in the details    

Last June, Arizona Democrats supported the concept of creating the anti-big money policy, a first in the nation. But hammering out the details has been long and tedious and has resulted in compromises to get broad support.

For example, supporters are now pitching it as a pilot program for the 2026 primary. The policy would apply only in districts and jurisdictions with heavy Democratic registrations, leaving out critical swing districts where Democrats perennially hope to prevail.

It would not apply to statewide races, such as this year’s contests for governor, secretary of state and attorney general.

Newkirk said it was a concession to those worried about unintended consequences for the general election, such as limiting a candidate’s ability to build name ID and support. Besides, the state as a whole is not heavily Democratic, as the pilot program requires.

Former Attorney General Terry Goddard supports the policy. It aligns with the transparency requirements in Proposition 211, a ballot measure voters approved in 2022 to require disclosure of the key contributors to independent expenditure committees — a move that could curtail large-dollar donations.

Absent any federal legislation to rein in spending from independent expenditure committees, it makes sense to turn to the state party to impose its own restrictions, said Goddard, a Democrat.

“He’s got something here that should be a defining difference between Republicans and Democrats,” Goddard said of Newkirk’s efforts.

But there has been quiet opposition from some fundraisers, he said, as worries about “unilateral disarmament” persist.

Former state party chair Raquel Teran also supports the concept. It might have made a difference in her hotly contested 2024 primary contest against Yassamin Ansari for a congressional seat, where Ansari benefited from at least $1.3 million in independent expenditures from crypto companies.

The policy details need more work before being embedded in the party’s bylaws, Teran said. Making concessions, such as limiting the program to only heavy Democratic districts, makes sense.

“Until we end Citizens United, we can at least start with blue districts,” she said.

Meanwhile, Republicans are sitting back and shaking their heads.

Can candidates control donors?

Republican consultant Chris Baker said the policy is hypocritical, applying only to primaries but allowing the outside expenditures for the general election.

More importantly, it puts candidates in a bind, Baker said. It assumes candidates have control over independent expenditure committees, which by law must not have any coordination with the candidates they support or oppose.

“How do you go to a candidate who legally cannot coordinate with the big money and tell them you cannot coordinate with a campaign you have no control over?” he said.

Newkirk dismisses such arguments, contending candidates have ways of knowing who is working in their favor and therefore can call on them to stop their support.

Besides, he said, the current proposal would consider exceptions for candidates who are attacked in their primary campaigns by an independent expenditure committee.

He is hopeful the recent polling showing support for the primary pledge will move party leadership to bring it up for a vote. If that doesn’t happen, Newkirk said he has the necessary signatures to force a special meeting in the near future to consider the policy.

He pointed to a memo that Harvard University law professor Lawrence Lessig wrote in response to the Arizona Democrats’ policy.

“I think it is clear that a political party has the freedom, as an aspect of its associational rights, to identify the values that are central to it and to require candidates in the party to affirm those values,” Lessig wrote.

Lessig is a supporter of the policy, which draws on the example set by Massachusetts U.S. Senate candidates more than a decade ago. In 2012, Sen. Scott Brown, a Republican, and challenger Elizabeth Warren, a Democrat, each took the “People’s Pledge” to reject outside money, or suffer a financial penalty on their own campaign coffers.

While neither had to pay a penalty, there was still evidence that outside groups got involved in the race through activities such as direct mail.

Newkirk acknowledged that political players may find ways to work around the Arizona proposal, and those could be addressed down the road.

“We can’t solve everything with one stroke,” he said.

But the Democrats’ solution, if enacted, might not change much of anything.

“Big money’s not going away,” Baker, a veteran of GOP campaigns, said. “There’s too much at stake.”

How a steadier state party chair brought cheap postage and big dollars to 2024 candidates

Republicans long neglected a provision of campaign finance law allowing state political parties to coordinate with candidates, granting cheaper mail rates and greater, albeit indirect, corporate support for nominees.

But this 2023-2024 cycle, under new chair Gina Swoboda, the Republican Party of Arizona leveraged the strategy long-used by the other side to orchestrate high-caliber mail campaigns in competitive legislative districts.

Despite being outspent by the Democratic Party, Republican majorities grew stronger in both chambers, and consultants and the party treasurer point to the last ditch effort as a saving grace.

“Given what we were up against, we needed every possible advantage to compete with the other party financially,” said Chris Baker, consultant for Sen. Vince Leach, R-Tucson, who pitched the effort to Swoboda in August.. “It’s easy now to say, ‘Look, we won, you know, we picked up a seat in the Senate. We won two seats in the house. Everything went well.’ But three months ago, the general consensus was we were probably going to lose seats in both chambers.”

In 2016, as part of an overhaul of campaign finance, the Legislature passed a provision clearing the way for “the payment by a political party to support its nominee,” including printing, distributing and taking on postage expenses.

Under state law, state political parties can mail at nonprofit rates, which can be anywhere from 20% to 30% cheaper than the price paid by a candidate or committee.

Coordination can also open the door to roundabout benefits from investments from corporate donors, who would otherwise be barred from contributing to a candidate directly under Arizona law.

The same provision exists on the federal level, too, as the non-allocable mail rule.

“The current laws that govern interaction and coordination between the state party and candidates were written, drafted and passed by Republicans,” Daniel Scarpinato, consultant and President of Winged Victory Agency, said. “And yet have largely not been utilized by them, but have very effectively been used by Democrats.”

In past cycles, Democrats have by-and-large handed the reins to the state party on mailing, as well as TV and radio advertising.

Records from the Federal Communication Commission show the Arizona Democratic Party coordinated TV and radio advertising for Gov. Katie Hobbs’ run for secretary of state in 2018, for Adrian Fontes’ secretary of state campaign, Kris Mayes’ attorney general campaign and Hobbs’ gubernatorial campaign in 2022. In 2024, the party coordinated with competitive legislative candidates in select districts.

The same tactic has passed Republicans by until this election cycle.

Chris Baker and now-House Speaker Steve Montenegro pitched candidate coordination to Swoboda in early August.

“To her credit, it would have been easy for her to say, ‘Hey, you know, we’re not set up for this. Let’s get a longer runway, and maybe we’ll do it two years from now,’” Baker said. “But to her credit, she recognized the threat.”

Swoboda did not immediately respond to a request for an interview submitted to the party.

With an eye on competitive districts, Baker said the party then hired a candidates’ mail vendor or consultant to produce literature and then, with the greenlight from the legal team, pay for and distribute mailers.

Baker said that in order to make this work, the party pledged not “to play consultant, or author, and tell the candidates what they could or could not say,” but did set ground rules at the outset.

Each piece of mail was reviewed by the party’s legal team for any potentially libelous material, to avoid any legal liability and for any implicit or explicit attacks on either another Republican candidate or the Republican Party platform.

Attorney Kory Langhofer noted the state party’s responsibility and review is crucial in ensuring legal compliance.

“Legally, the state party must retain control of the message on non-allocable mail, and not just as a pass-through from the candidate,” Langhofer said. “So the whole program requires candidates to trust the party will target its mailing and design its mail pieces appropriately.”

All in all, according to Baker, the party coordinated mailers for 22 candidates, ranging from the Trump campaign to the legislative races.

Baker credited Swoboda and AZGOP Treasurer Elijah Norton for taking on the effort weeks before the general election.

“There would have been no dishonor for her to say, ‘Look, we just don’t have enough time.’ But she didn’t do it. She jumped in,” Baker said.

Norton said coordination required trust from candidates, given their part of paying into the state party, without any earmark or requirement the party spend the funds in a particular way.

Per pre-general election campaign finance reports, the higher candidate investments included about $75,000 from state Sen. Shawna Bolick, R-Phoenix, over the course of the cycle, and $70,000 from Sen.-elect Carine Werner.

Norton said this cycle’s program saw about $700,000 put in from candidates and a return $750,000 investment from the party.

“Once a legislative candidate donates to the party, the party can do whatever it wants with that money,” Norton said. He said Swoboda’s standing as party chair made a significant difference, drawing a contrast to past party chairs.

“For example, under Kelli Ward and Pam Kirby, they spent 200 grand on a bus and a party, and I just don’t think people thought they were going to be good stewards of contributions,” Norton said. “And in this new administration, we were very fiscally conservative. We didn’t do an election night party. We focused on spending all of our resources on winning races, and that was obviously reflected in the results.”

Norton noted corporate donors came back to the party, too, noting contributions from the Arizona Restaurant Association, which contributed $24,000, and the Arizona Chamber of Commerce and Industry, which gave $48,000.

The AZGOP reported about $4,000 from corporations in the first quarter, $136,208 in the second, $18,500 in the third, and $96,000 in the pre-general report.

“It was trust,” North said. “I think donors and organizations and groups have to and candidates have to trust the party to be good stewards of the donations that they give. And if they don’t have trust, then they don’t give. When we would receive a contribution, we would make sure that the contribution was spent on winning races, not on all the finer things that prior administrations wasted it on in the past.”

And win races they did.

Republicans grew their majority in the House to 33-27, and picked up one seat in the Senate, winning seats in key swing districts.

Baker said the strategy made all the difference for Leach, noting he came out of a competitive primary against incumbent Sen. Justine Wadsack with “basically no money.”

He said Leach sent nine pieces of mail through coordination with the state party to a neighborhood of 30,000 to 35,000 voters.

Anecdotally, as one of the reviewers of other candidate mail, he said candidates in other districts, campaigns sent anywhere from five to eight pieces of mail to equally, if not more, expansive voter lists.

“We maybe would have been able to do half that. In a close race like that, that was a game changer,” Baker said. “It really made all the difference in the world for us. I think a lot of candidates in these very tight, competitive races would say the same thing.”

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