Judge rules Horne did not violate campaign finance laws - East Valley Tribune: Politics

Judge rules Horne did not violate campaign finance laws

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Posted: Tuesday, April 15, 2014 9:30 am

Attorney General Tom Horne did not violate campaign finance laws in his successful 2010 election, a state administrative law judge ruled on Monday.

In a 30-page ruling, Tammy Eigenheer acknowledged there were phone calls and emails between Horne and Kathleen Winn prior to the general election. At that time Winn was operating Business Leaders for Arizona, billed as an independent campaign committee.

Eigenheer also said state laws preclude a candidate from coordinating with an independent committee on how it spends its money.

But Eigenheeer said that the Yavapai County Attorney's Office had not proven to her that what either Horne or Winn broke campaign finance laws.

The judge pointed out that there were reasons other than the election for Horne and Winn to have communicated with each other. That included that Winn, who now works at the Attorney General's Office, was helping Horne with a commercial real estate purchase.

In essence, Eigenheer said evidence of improper conduct in a key phone call between the pair was largely circumstantial.

“While there are inferences that can be made, there are also reasonable explanations that the communications related to Mr. Horne's real estate transaction that was pending at the same time,” Eigenheer wrote.

The judge also rejected claims by the Yavapai County Attorney's Office that Horne, in an email to Winn just weeks before the vote, was telling her how her campaign committee should spend its money. That email included polling information showing Horne was losing ground to Felecia Rotellini, his Democrat foe.

But Eigenheer concluded there was no evidence that anything Horne wrote to Winn had a “material effect” on how Winn actually spent more than $500,000 on a last-minute commercial attacking Rotellini.

“No new ads were produced and it does not appear that the distribution markets changed based on the email,” the judge wrote.

Monday's ruling is not the last word. Eigenheer's findings are only a recommendation to Yavapai County Attorney Sheila Polk who had brought the civil charges against Horne and Winn after reviewing evidence. That included information gathered by the FBI which had been investigating and tailing Horne prior to the 2010 election.

Polk can accept what Eigeneer concluded, reject it or modify it.

“The judge's decision is lengthy and detailed,” Polk said in a prepared statement. “I will carefully review it and make my decision within 30 days.”

If she rejects Eigenheer's conclusion that would push the case into Maricopa County Superior Court. Horne called Eigenheer's findings “a vindication.”

“It supports what I've been saying all along that there was no coordination,” he said. Horne said that's why he would not settle the case because it would have required him to admit he broke the law.

But Horne's problems may not be over even if Polk does not pursue the case.

That FBI tail turned up other issues likely to become an issue in his GOP primary against Mark Brnovich and, if he survives that, a rematch in November against Rotellini. That includes a minor hit-and-run accident and allegations in an FBI report that Horne did not leave a note because he was trying to conceal an affair.

At issue is that last-minute $513,340 television commercial attacking Rotellini, paid for by Business Leaders for Arizona.

There are no limits on how much independent committees can take from any one source. By contrast, Horne was limited to taking no more than $840 from any one source.

If there was coordination between Winn's group and Horne, that effectively made the over-the-limit contributions to her group illegal contributions to Horne. The same is true for corporate donations which Winn could accept but Horne could not.

Polk ordered Horne and Winn to refund all donations above the limits, totaling about

$400,000. They refused, leading to three days of hearings in February before Eigenheer.

Much of Eigenheer's ruling turned on whose version of the story appeared more believable.

Polk pointed to several things, including a reference that Winn made in emails to a campaign consultant about changes “we'” want made in the TV ad. The prosecutor said that, given all the evidence, when Winn said “we” have a problem with the script “it is reasonable to conclude that ‘we’ meant Winn and Horne.”

Winn, however testified that the “we” in the email referred to Business Leaders for Arizona, George Wilkinson, the campaign treasurer, and attorney Greg Harris who had a client who had contributed $30,000 to her committee.

Eigenheer called the inference by the Yavapai County Attorney's Office “plausible.”

“It is just as equally plausible that Ms. Winn was referencing her earlier conversation with Mr. Wilkinson when she said ‘We do not like’ and ‘We are doing a re-write,’” the judge wrote. “It is also reasonable that Ms. Winn felt she had a certain duty to the contributors, including both Mr. Harris and his client, and considered them among her ‘several masters.’”

The email at issue started as an email to Horne from Ryan Ducharme, who did telephone polling for John Huppenthal, a Republican running for state school superintendent.

It said an independent ad being produced to support Rotellini was “starting to peel away votes.” Ducharme also suggested attacking Rotellini “trying to hide from her record (SB 1070, ties to unions calling for AZ boycott, etc.).”

Horne forwarded all that to Winn, evidence Polk said showed Horne was trying to get Winn to use it to get an additional $100,000 from the Republican State Leadership Committee. But Eigenheer said Winn already had obtained the extra funds from Christine Newman, Horne's sister, and the judge said there was no evidence that the email changed how Winn was spending the money.

That FBI tail of Horne produced a report that Horne had driven his own vehicle from the Attorney General's Office to a nearby state parking garage and the emerged later in another vehicle with a woman who worked in the office as a passenger. The agents tailed him to a garage near downtown where they said he struck another vehicle but did not report it.

In a written report, FBI agent Brian Grehoski asserted Horne did not stop and leave information because he was trying to conceal an extramarital affair he was having with the passenger. Horne eventually pleaded “no contest” to a criminal misdemeanor charge he left the scene of an accident without leaving a note, paying a $300 fine – $582 with surcharges.

The attorney general said he was going to a nearby restaurant. But Horne said Monday he would “not dignify” questions about whether he was having an affair.

Horne also pointed out that Eigenheer found evidence Grehoski had lied on the stand during the hearing about the existence of a phone call he had with a witness, a call that records showed had not occurred.

“We found out how credible this guy's testimony is, haven't we?” Horne said.

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