'Dark money' influencing state races - East Valley Tribune: Politics

'Dark money' influencing state races

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Posted: Monday, August 4, 2014 12:00 pm

The race for who could be a heartbeat away from governor is being financed largely by a “dark money” group that will not disclose its donors.

A search of records by Capitol Media Services shows that, as of Friday, the Arizona Free Enterprise Club had spent a hair under $560,800 to influence voters in the race for secretary of state. Most of that was in mailers to those who can vote in the Republican primary extolling the virtues of current state Rep. Justin Pierce.

Some were pro-Pierce, detailing his views on issues unrelated to the duties of the office, like his support for gun rights and opposition to human cloning. But a few, like one labeled a “voting guide,” also blasted his GOP foes, state Sen. Michele Reagan and businessman Wil Cardon.

That outside funding dwarfs the $193,162 that Cardon reported spending in his most recent public filing and $66,494 spent by Reagan, though she has collected a total of $295,284.

The organization has spent another more than $448,250 to make Tom Forese and Doug Little to the Republican nominees for the Arizona Corporation Commission. Its most recent mailer, labeled the “2014 Arizona Voting Guide,” paints GOP foes Vernon Parker and Lucy Mason as supporters of Barack Obama and his “radical energy agenda” that supports solar energy subsidies and tax breaks “that will drive our energy bill through the roof.”

Save Our Future Now, a separate group that also is not disclosing donors, has spent more than $361,178 also to defeat Parker and Mason.

Including legislative races, the most recent reports show the Free Enterprise Club already has spent $1.13 million this election with several weeks remaining before the Aug. 26 primary.

The spending on the race for secretary of state is of note since the organization normally gets involved in questions of tax policy. By contrast, that official handles largely ministerial duties like state elections and trade names.

But as chief election officer, the secretary of state has purview over whether candidates and committee are violating campaign finance laws. Pierce is the only candidate from either party who opposes any restrictions on anonymous speech to influence campaigns, like limits pushed unsuccessfully just this past session by Reagan.

Pierce said it's a matter of “free speech,” saying some might not participate in the political process if their identities are disclosed.

But Scott Mussi, executive director of the organization, said its interest in more basic.

“We believe that Justin is a rising star and is going to be a great fighter for many of the issues that we care about,” he said. And Mussi said the key is not the job Pierce wants now but one he may want — or inherit — later.

“Arizona has a long history of secretary of state potentially becoming governor,” he said, whether by election or, as in the case of incumbent Jan Brewer, because her predecessor quit.

The Free Enterprise Club is incorporated under section 501(c)(4) of the federal Internal Revenue Code for social welfare organizations. As such, it says it need not identify its donors, though state law does require it to file reports when it spends money on Arizona campaigns.

Mason and Parker claim Arizona Public Service, the state's largest electrical utility, is using the group to funnel money into their race. APS, for its part, is not confirming the financing — but not denying it, either.

Spokesman Alan Bunnell said APS has been the subject of a “non-stop propaganda war” by Tell Utilities Solar won't be Killed, an organization funded by companies in the business of selling and leasing rooftop solar units that enable people to cut their electric bills, as well as California investors. He said they have "misrepresented important Arizona energy issues'' to further their own interests.

And TUSK has spent $236,000 in the race, largely to defeat Little.

“It would be irresponsible for us not to defend our company,” Bunnell said, saying that “no one disputes our right to participate in the political process.”

Campaign aside, the Free Enterprise Club has lobbied on behalf of issues of concern to APS. This past session it opposed efforts by Reagan to overturn a ruling by the state Department of Revenue that solar panels leased by homeowners seeking to cut their electric bills are subject to property taxes.

Reagan said she believes Arizona law already makes such panels exempt. But Sean Laux, spokesman for the Department of Revenue, said that's true only for panels owned outright by homeowners.

With costs upward of $20,000, leasing has become more popular, but Laux said because the panels remain property of the leasing companies, his agency has to classify them as being in the business of generating electricity, making them no different for tax purposes than any other power plant, solar or otherwise.

But if taxes are passed on to homeowners, that would wipe out some, if not all, of the savings in utility bills of leasing the panels.

Mussi, who testified against Reagan's fix, said that stance is in line with his organization's position that some laws and policies essentially amount to a subsidy of solar customers — and the companies that sell and lease panels — through rates paid by everyone else. That includes “net metering” where utilities essentially are required to buy back excess power generated by the rooftop units.

The organization is not only spending money to influence races. It also got the U.S. Supreme Court to ensure that its spending did not get diluted by its foes.

In a 5-4 decision the justices, in a suit brought by the organization, voided a provision of the voter-approved Citizens Clean Elections Act which gave publicly financed candidates attacked by outside groups additional matching funds.

“The direct result of the speech of privately financed candidates and independent expenditure groups is a state-provided monetary subsidy to a political rival,” wrote Chief Justice John Roberts for the majority. He said that "substantially burdens the speech of privately financed candidates and independent expenditure groups without serving a compelling state interest.''

The organization has been involved in other issues.

It opposed Proposition 100, the temporary one-cent hike in sales taxes pushed by Gov. Jan Brewer in 2010 as an alternative to deeper budget cuts. The measure passed anyway.

And it managed to derail a proposed 2008 ballot measure to hike sales taxes for transportation projects.

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