Secretary of State Ken Bennett is launching a probe of groups that try to influence elections but claim they don’t have to disclose who is providing the cash.
Bennett said Thursday that a U.S. Supreme Court decision last year blew a big hole in campaign finance laws by saying corporations and unions have the right to spend as much as they want in support of or opposing any candidates. The only requirement is that these efforts remain independent of the candidate’s campaign.
And Bennett said he has no problem with that.
But the secretary of state said several groups have sprung up claiming that they fit that exemption. And those groups are refusing to disclose their donors.
Bennett is asking three of those groups to submit to audits in a bid to find out whether they truly qualify.
That Supreme Court ruling applies to organizations that exist for other purposes but decide to spend some of their money on campaigns. For example, Bennett said, Coca-Cola is entitled to use some of its profits to influence elections and not have to disclose the source of those funds, though Arizona law requires them to report how much they spent and on which races.
Bennett is focusing on corporations that have formed recently that may be little more than thinly disguised efforts to convince people to vote a certain way. He said he has seen this in two current races: the recall effort against Senate President Russell Pearce and the Phoenix mayoral contest.
So he’s asking for some answers from them.
“Where entities are not clearly indicating to us that they haven’t just formed under a variety of wonderfully sounding names to get around this, then we’re going to be OK with them,’’ he said. But Bennett said he wants to be sure “that they haven’t just created a facade with a nice-sounding name to combine contributions from others.’’
Bennett conceded the problem is even more complex than that.
He said there is a whole other exemption in the law for groups whose main purpose is to educate voters about some specific issue. But Bennett said that they may still be trying to influence an election — and required to file campaign finance reports — even if they do not use the magic words “vote for’’ or “vote against’’ some candidate.
One of the entities under scrutiny is a group called “Citizens United for Progress,’’ which has sprung up in that Mesa recall.
It recently sent out postcards informing voters that Olivia Cortes, whose name is on the ballot, had withdrawn from the race and that any votes for her would not be counted. The beneficiary of such an “educational’’ campaign would likely be Jerry Lewis, the lone remaining foe of Pearce, who probably would get votes that otherwise would have gone to Cortes.
Bennett said efforts to get information from this group have so far proved fruitless.
He said a decision on whether a group is campaigning or merely involved in “issue advocacy’’ will have to be made on a case-by-case basis. Some of that will be judged on the wording of the materials sent out or in any commercials.
“That is not only dependent on what the information looks like and what it says, but it’s when somebody says it, to whom they say it,’’ Bennett explained. “If it’s only happening to voters where an election is occurring, then it becomes harder in our mind to believe that’s just general voter education.’’
In some ways, Bennett said he considers investigation of groups involved in the recall to be a trial run for the races for the 90 legislative seats that will be up for grabs next year. He wants to create what he calls a “strike zone,’’ spelling out clearly what is and is not exempt from campaign finance laws.
Even if that happens, though, Bennett said time may not be on his side. That’s because his office has no authority to actually block any expense or shut down any organization but only to investigate and, where appropriate, refer the issue to the Arizona Attorney General’s Office.
In fact, he acknowledged, there is no specific authority in the law to even demand that organizations open their books to the kind of audits he wants to conduct. But Bennett said a failure to respond could be seen as admission of something to hide, leading to the case being sent to the Attorney General’s Office.
Bennett said he is looking at whether to ask the Legislature for more authority to act against offending groups without having to get the lawyers involved, but said he has made no decision.
In any event, the penalty against offenders is limited to a fine equal to three times the amount illegally spent.