Prop. 306 may not scrap disputed Clean Elections rules

The controversial Clean Elections rules that led Republican lawmakers to attempt to curb the agency’s authority through Proposition 306 may be here to stay, even if voters approve the measure.

Prop. 306 would subject the Arizona Citizens Clean Elections Commission, which administers the state’s public campaign financing system, to the same regulatory rulemaking restrictions as other state agencies, including oversight by the Governor’s Regulatory Review Council (GRRC), whose members are appointed by the governor.

Republican lawmakers included that provision in the measure in response to a years-long fight between the Secretary of State’s Office and the commission over the extent of its regulatory authority over outside independent expenditure groups that spend money in Arizona elections.

Under state law, “dark money” groups and other outside campaign committees must file campaign finance reports for each quarter and for other designated reporting periods during election years. However, the Arizona Citizens Clean Elections Commission requires them to report that spending more promptly: within 24 hours during the two weeks before an election, and by the following Tuesday outside that two-week window.

Late in the election season, the Clean Elections reports are the only way the public can track campaign spending by outside groups in a timely manner. The last campaign finance reports of the 2018 election cycle were due Oct. 29, and covered the reporting period that ended on Oct. 20.

So, without the Clean Elections reports, voters would know little about independent expenditures during the critical last weeks of the election. The Legislature in 2016 eliminated similar “trigger reports” that independent expenditure groups had to submit to the Secretary of State’s Office, which left Clean Elections as the only entity requiring spending-driven reporting by independent expenditures.

At the heart of the dispute is not just the reporting requirements — those are part of the statutes approved by voters in 1998 when they created the Clean Election system — but the commission’s authority to enforce them. Arizona Secretary of State Michele Reagan and other Republican critics have argued that the Clean Elections Commission is acting beyond the scope of its jurisdiction and has usurped the secretary of state’s authority, creating a confusing and dual enforcement system for campaign finance laws where groups that spend money in elections can be punished for alleged violations, even if other election officials have determined that they didn’t break the rules.

Clean Elections advocates, however, tout the commission as the only truly independent entity regulating campaign finance, and argue that its independence will be hindered if it’s subject to the whims of GRRC, whose members are appointed by the governor.

In at least one high-profile case, the Clean Elections Commission took action on a campaign finance enforcement matter after other elections officials have declined to do so when it levied a $96,000 fine against Legacy Foundation Action Fund, a dark money group that aided Gov. Doug Ducey during the 2014 election with television ads against one of his rivals in the Republican primary. Legacy Foundation challenged the commission’s authority in a lawsuit, but lost after courts ruled that it missed a key deadline.

Secretary of State Michele Reagan’s office filed a complaint with GRRC, which vets and approves regulations by state agencies, in a bid to overturn the Clean Elections rules governing reporting by independent expenditure groups and traditionally funded candidates, which includes civil penalties for those that don’t comply. The council ultimately ordered Clean Elections to rescind the rules, but the commission refused, saying the council lacked the authority to do so.

Prop. 306 would place the commission explicitly under GRRC’s authority, which could preempt future fights over how far Clean Elections’ authority extends.

It would also prohibit Clean Elections candidates from giving any of their public campaign funding to political parties. That became a controversial issue after the commission in 2017 passed a new rule clarifying publicly funded candidates’ ability to make payments to political parties and nonprofit organizations, and imposing new reporting standards for such payments.

Advocates of Prop. 306 cite that rule as the primary impetus behind the ballot measure, while critics describe it as a Trojan horse meant to secure voter approval for the regulatory overhaul.

The fate of that rule if Prop. 306 passes is unambiguous, since the measure will ban outright any such payments to parties. But it’s unclear exactly what, if anything, would happen to Clean Elections rules on independent expenditure reporting in a post-Prop. 306 world.

Tom Collins, the executive director of the Clean Elections Commission, emphasized that the disputed reporting requirements are in state statute, and that the commission’s authority to enforce those requirements emanates from that. Because of that, Collins questioned whether the commission even needs specific rules to authorize its enforcement of those laws.

“They’re not amending that part of the statute,” Collins said of Prop. 306.

State Election Director Eric Spencer, who wrote the GRRC complaint from the Secretary of State’s Office against the Clean Elections Commission, took a similar view. He said his understanding is that Prop. 306 will apply to future issues, and he said he would be surprised if it resurrected the feud over Clean Elections’ reporting rules.

“I have never assumed that, if Prop. 306 passes, it will put that controversy back on the front burner. I just have assumed that it will apply going forward. But I don’t know. I really don’t know,” Spencer said.

The Arizona Department of Administration, which is GRRC’s parent agency, declined to comment.

“Saying anything prior to the election would be speculation. I’m sure there will be additional clarity after Nov. 6,” ADOA spokeswoman Megan Rose said.

GRRC member Frank Thorwald also declined to make any predictions about what would become of the disputed rules.

“I’m not going to speculate on anything at this point. We’ll see what happens,” he said.

The Clean Elections spending reports can be a timely source of information about election spending for members of the public. But finding those reports can be a challenge.

During the 2016 election cycle, those reports appeared exclusively on the commission’s website, but not on the secretary of state’s website because of its dispute with Clean Elections over the extent of the commission’s authority. Since then, Clean Elections and Reagan’s administration put their differences aside and agreed to put the reports on the secretary of state’s new campaign finance website, known as See the Money.

But Collins said the secretary of state’s system is unreliable, and recently resumed posting independent expenditure reports on the Clean Elections website.

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