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Tucson lawmaker targets dark money in campaigns with disclosure bill

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Thursday, Jan. 31, 2013
By Sean Peick
Cronkite News

PHOENIX – A state lawmaker wants to force shadowy political groups to disclose the sources of dark money they pump into campaigns.

“Most Arizonans are tired of having dark money rule their politics,” said Sen. Steve Farley, D-Tucson.

He authored SB 1265, which would require an individual or organization contributing money that came from another source to disclose that source to the recipient, including whether the money passed through any other intermediaries.

Those receiving the contributions would then have to disclose that information in campaign finance reports, leading to more informed voters, Farley said.

Failure to disclose in either scenario would result in a Class 6 felony.

Farley’s bill was assigned to the Senate Elections Committee but as of Thursday hadn’t been scheduled for a hearing.

Dark money played a prominent role last year in the campaigns against Proposition 204 and Proposition 121, both of which were defeated. Americans for Responsible Leadership, an obscure nonprofit listing a Phoenix post office box as its address, contributed $1.5 million between the two campaigns – more than half the total money received by the opposition.

Proposition 121 would have created a nonpartisan primary system, while Proposition 204 would have established a 1 cent-per-dollar sales tax to benefit education and other causes.

While Americans for Responsible Leadership didn’t have to disclose the source of money contributed in Arizona, legal action by California forced the group to disclose that $11 million contributed there passed through two other dark money groups.

California law requires a nonprofit’s contributors to be identified if they contribute with the intention that that money will be spent on political campaigns.

According to filings with the Arizona Corporation Commission, one of the founders of Americans for Responsible Leadership was Robert Graham, who was recently elected chairman of the Arizona Republican Party. Graham is the president and CEO of RG Capital, an investment advisory company in Scottsdale.

Kirk Adams, former speaker of the Arizona State House and an unsuccessful candidate for Congress, was listed in the most recent filings as the group’s president.

Dark money also played a part in the most recent Phoenix mayoral race. A nonprofit called Phoenix Citizens United formed in opposition to Republican Wes Gullett, while another nonprofit called Arizona Citizens United did the same against Democrat Greg Stanton, the eventual winner.

Farley said SB 1265 addresses any such organization, regardless of whether it is liberal or conservative in its support.

“People have the right to play in the political arena,” he said. “They don’t have the right to hide who they are.”

Paul Johnson, the former Phoenix mayor who helped lead the campaign for Proposition 121, said that the legislation seemed to be more than just a step in the right direction.

“In the end, it will be a benefit to all sides to have it,” he said. “Either side can become stressed about why they wouldn’t like it, but again my own personal opinion is it is very, very important to democracy to make sure the public has an idea of who’s giving the money.”

Ann-Eve Pedersen, who chaired the committee advocating for Proposition 204, said the change would shed some helpful light.

“I think if you have something like that in place, it might deter the use of dark money to try and come in,” she said.

Sen. Michele Reagan, R-Scottsdale, chairwoman of the Senate Elections Committee, said she was glad that Farley was attempting to tackle the issue. However, she said that under Citizens United, the 2010 U.S. Supreme Court ruling that allowed unlimited political contributions by corporations, it’s difficult to achieve Farley’s goal.

“If they create three or four shells right now and we want to drill down, they can create 20 under Citizens United,” Reagan said. “The point is it’s just fruitless.”

However, Farley said he’s optimistic about the bill’s future given the broad spectrum of dark money groups.

“I believe that it doesn’t matter whether they’re for you or against you,” he said. “We all should be supporting this type of transparency.”