Judge strikes down campaign finance provisions

A Maricopa County judge has struck down several provisions of a 2016 top-to-bottom rewrite of Arizona’s campaign finance laws, including one that allowed the Arizona Democratic Party to spend millions of dollars helping Katie Hobbs win the race for secretary of state.

Superior Court Judge David Palmer on Wednesday ruled that Senate Bill 1516, the rewrite spearheaded by Secretary of State Michele Reagan’s administration, violated the Voter Protection Act, a 1998 amendment to the Arizona Constitution that sharply limits the Legislature’s ability to change voter-approved laws.

The progressive Arizona Advocacy Network filed the lawsuit in November 2017, alleging that the campaign finance overhaul violated the Voter Protection Act by unlawfully amending the Clean Elections Act, which established Arizona’s public campaign funding system, that voters approved in 1998.

Among the laws that Palmer struck down was one allowing “coordinated party expenditures.” That law permitted political parties to not only spend on behalf of its candidates in a general election, which had already been allowed, but to coordinate with the candidates on how the money is spent, which had been prohibited prior to the passage of SB1516.

Both the Republican and Democratic parties used the law this year to support their candidates, but the most visible coordinated campaign was the $3.3 million the Arizona Democratic Party spent to boost Hobbs.

Given that Hobbs defeated Republican Steve Gaynor by only 20,252 votes, the coordinated campaign by the party may have been a decisive factor in her victory.

Hobbs, who is currently the Senate minority leader, is a plaintiff in the case, meaning she helped strike down a law that may have been directly responsible for her narrow victory in the secretary of state’s race. And because the Secretary of State’s Office is a defendant in the case, Hobbs may soon be in the unique position of being both plaintiff and defendant in the same case.

Palmer also struck down a provision of the 2016 law that made the secretary of state the only public official with the authority to initiate investigations into alleged violations of a number of campaign finance laws. In doing so, the law purported to strip such authority from the Citizens Clean Elections Commission.

In addition, Palmer’s ruling nixed laws exempting payment for legal and accounting services from Arizona’s campaign contribution limits, meaning donors had free rein to cover such costs for political candidates without exceeding contribution limits; and allowing Clean Elections candidates to use their public funding to pay fines and civil penalties.

The Arizona Advocacy Network praised the ruling as a win for transparency.

As Arizonans, we know Clean Elections is the best tool we have to fight corruption, dark money and undue corporate influence. ‘We the People’ created Clean Elections because the Legislature had failed in its constitutional duty to ensure our elections are open and honest,” the organization said in a written statement.

Attorney Jim Barton, who represents the Arizona Advocacy Network, said he expects there to be an appeal in the case. An attorney representing the Secretary of State’s Office, which is one of the defendants, could not immediately be reached for comment. Attorney Timothy La Sota, who represents another defendant, the Governor’s Regulatory Review Commission, said no decisions have been made, but said appellate courts typically decide such challenges to state law.

Matt Roberts, a spokesman for Reagan, said the Secretary of State’s Office has not yet determined whether it will appeal the ruling. Reagan will only be in office for another month, after which Hobbs will be sworn in as secretary of state.

Not every defendant was unhappy with the ruling. The Clean Elections Commission is technically a defendant in the case, but took similar positions as the Arizona Advocacy Network.

In particular, the commission was pleased with Palmer’s ruling on the provision that purported to make the secretary of state the only public official with the authority to initiate many campaign finance investigations. That “dual jurisdiction” was a source of contention between the commission and Reagan, and led the Secretary of State’s Office to ask the Governor’s Regulatory Review Council in 2016 to strip the the commission of that authority over anyone except candidates who run using the Clean Elections system.

The council ultimately backed Reagan and ruled that the commission lacked legal the power to enforce campaign finance laws against non-Clean Elections candidates and other political committees, though the commission maintains that the council has no authority over it. Voters in November gave the council such authority when they passed Proposition 306.

If the matter ends up back before the council, Palmer’s ruling could aid Clean Elections, said Mary O’Grady, an attorney representing the commission.

“It certainly reinforces the commission’s enforcement authority. So I think it would undercut the positions that GRRC has taken in the past,” O’Grady said. “If GRRC pursues these issues, I think this definitely provides more support in terms of the commission’s perspective on it.”

The Voter Protection Act requires a three-fourths vote of the Legislature to amend a voter-approved law, and even then, changes must further the law’s purpose. Palmer ruled that, by passing the Clean Elections Act in 1998, voters effectively locked in pre-existing laws that the act incorporated.

By changing statutes that the Clean Elections Act relied on, the Legislature voted to “eradicate the very core of the Act” when it passed SB1516, Palmer wrote. Because those amendments did not receive a three-fourths vote and did not further the purposes of the Clean Elections Act, the Legislature violated the Voter Protection Act, Palmer said.

“[T]he provisions of the Act that are at issue here concern the very basic nuts and bolts reasons for its use and the underpinnings of the Clean Elections System,” the judge concluded.

Jeremy Duda
Associate Editor Jeremy Duda is a Phoenix native and began his career in journalism in 2003 after graduating from the University of Arizona. Prior to joining the Arizona Mirror, he worked at the Arizona Capitol Times, where he spent eight years covering the Governor's Office and two years as editor of the Yellow Sheet Report. Before that, he wrote for the Hobbs News-Sun of Hobbs, NM, and the Daily Herald of Provo, Utah. Jeremy is also the author of the history book “If This Be Treason: the American Rogues and Rebels Who Walked the Line Between Dissent and Betrayal.”

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