Democrats Challenge Arizona Campaign Spending Law

PHOENIX (CN) — Twenty-five Democratic state senators and representatives sued Arizona on Wednesday, claiming it unconstitutionally reduced restrictions on campaign spending by nonprofits so long as they are in good standing with the IRS.

The lawmakers, joined by the Arizona Advocacy Network and the Bricklayers and Allied Craftworkers Local Union, claim that Senate Bill 1516 of 2016, touted by Secretary of State Michele Reagan as an attempt to clean up campaign rules, violates the Voter Protection Act and the state and federal constitutions.

Defendants include the State of Arizona, the Citizens Clean Elections Commission, and the Governor’s Regulatory Review Council.

Under the bill, signed into law by Gov. Doug Ducey in March 2016, a nonprofit that behaves like a political committee but is registered with the Arizona Corporation Commission and in good standing with the Internal Revenue Service cannot be regulated as a political committee. That is, it is not required to disclose donors.

“Laws that relate to free speech should not be so complicated that everyday Arizonans willing to participate in public service have to hire lawyers and accountants to get involved,” Ducey, a Republican, said after signing the bill. “This is the first step in simplifying our laws and regulations to provide more opportunity for participation in the political process and increased freedom of speech.”

Ducey apparently relied upon the Supreme Court ruling in Buckley v. Valeo, which essentially equated the spending of money with freedom of speech.

Supporters of SB 1516 say that the state may still require a nonprofit to reveal its donors if it is in bad standing with the IRS.

Critics of “dark money” say that is not enough.

The law “created a blanket exception from the reporting requirements for certain entities from being regulated as political committees,” the complaint states. And it does not provide any exception for rules passed by the Citizens Clean Elections Commission “concerning independent expenditures made by such groups.”

The plaintiffs also object that the law makes a filing officer “the sole public officer who is authorized to initiate an investigation into alleged violations … including the alleged failure to register as a committee.”

These provisions violate the Citizens Clean Elections Act and the Voter Protection Act “by restricting the enforcement of disclosure requirements under the authority of the Clean Elections Commission as applied to certain political actors, restricting the enforcement of the CEA as applied to certain types of expenditures and contributions, and by removing the Commission’s authority to enforce certain components of the Act against anyone,” according to the complaint.

The Democrats also say the law is unconstitutional because it amended the Clean Elections Act and was not passed with a three-fourths supermajority. It was approved in the Arizona House of Representatives by 31-27, and by 18-10 in the state Senate.

The plaintiffs represented by James Barton II of Tempe.

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