Senator Pearce Letter Requesting Attorney General Opinion

8/6/2019 Senator Pearce Letter Requesting Attorney General Opinion

1/5

RUSSELL K. PEARCEPRESIDENT1700 WEST WASHINGTON,PHOENIX, ARIZONA 85007-2844CAPITOL PHONE: (602) 926-5760CAPITOL FAX: (602) 417-3118TOLL FREE: [email protected]

COMMITTEES:RULES - CHAIRMAN

LEGISLATIVE COUNCll- CHAI

DISTRICT 18

JOINT LEGISLATIVE AUDITCOMMITTEE - EX-OFFICIO

June 9, 2011

The Honorable Tom HorneAttorney General of ArizonaOffice of the Attorney General1275 West WashingtonPhoenix, AZ 85007

RE: Request for Formal Attorney General Opinion Regarding the Application of ARS 16-919 and 16-920 to Recall Committees

Dear General Horne:This is a request for a formal opinion of the attorney general pursuant to A.R.S. 41-

193(A)(7) on two questions concerning Arizona's campaign finance laws and their application inthe context of recall committees. Specifically, I am asking you to opine on whether corporateand labor organization contributions to recall committees are permitted under current Arizonalaw and, if not, whether such a prohibition violates the First Amendment to the United StatesConstitution. Secondly, Iam asking for your opinion on the application of A.R.S. 16-912.01and 16-914.01 to recall committees.1. Does Arizona law prohibit corporate or labor union contributions to a committeesupporting or opposing the qualification of a recall petition? If so, does thatprohibition violate the First Amendment?

An Arizona political committee known as "Citizens Who Oppose the Pearce Recall RC-02-2011" (the "Committee") recently asked the Secretary of State's office for its positionregarding the Committee's ability to accept contributions from corporations or labororganizations. A copy of the Committee's request is attached as Appendix 1. The Secretary ofState's office responded that A.R.S. 16-919 and 920 prohibit recall committees fromaccepting contributions from corporations or labor organizations. A copy of the Secretary ofState's response is attached as Appendix 2. It appears that the Secretary of State's application ofA.R.S. 16-919 to committees engaged in efforts to support or oppose the qualification of arecall petition is legally incorrect based on prior attorney general opinions, case law andlegislative amendments to the campaign finance statutes following efforts to recall GovernorMecham. See Appendices 1 and 2. Even if the Secretary of State's reading of the statute iscorrect-and I do not believe that it is-the Secretary of State is failing to consider the FirstAmendment implications of denying corporations and labor unions the right to participate insupporting or opposing the qualification of a recall question for the ballot.


2/5

The Secretary of State's conclusion is that the A.R.S. 16-919 ban on corporate andlabor organization expenditures to influence the result of any election applies in the context ofactivities for or against the qualification of a recall petition. The Secretary of State's reasoningin support of this conclusion is based on the post-Mecham amendment of some statutes toinclude recall. The Secretary of State acknowledges that A.R.S. 16-919 and 16-920 were notsimilarly amended to include recall but contends that those statutes remain applicable tocorporate donors who are attempting to influence elections. The Secretary of State's position isthat "[c]ausing an election to happen or prevent it from happening, influences an election" and,therefore, Arizona State Democratic Party v. State of Arizona, 210 Ariz. 527 (2005) does notapply here. App. 2 at 2. But the Secretary of State's conclusion fails to consider some criticalinformation contained in the Committee's May 25, 2011 letter. See App. 1 at 3-4. First, inDemocratic Party, the Supreme Court notes that penalizing conduct requires specificity and thedefinition of "election" used in A.R. S. 16-919 removes any ambiguity by stating that anelection in which corporate contributions is prohibited is the "election of an individual person toa particular office." Second, A.R.S. 16-919(A) not only prohibits corporations and labororganizations from making contributions to influence the result of an election but prohibits "thedesignating individual who formed an exploratory committee, an exploratory committee, acandidate or a candidate's campaign committee to accept any contribution of money or anythingof value from a corporation or a limited liability company for the purpose of influencing anelection." Recall committees are not included. Third, the Secretary of State does not considerwhat it means to influence the result of an election. A.R.S. 16-901(7) defines "election" tomean "any election for any initiative, referendum or other measure or proposition or a primary,general, recall, special or runoff election for any office in this state other than the office ofprecinct committeeman and other than a federal office." But A.R.S. 16-919(F)(1) contains afar more narrow definition of "election" by stating that it "means any election to any politicaloffice, any election to any political convention or caucus or any primary election held for thepurpose of selecting any candidate, political committee or other person for any political office,convention or caucus." The Legislature knows how to specify the inclusion of recall and has notdone so in any way in A.R.S. 16-919.

Until a recall petition qualifies for the ballot and a recall election is called, there is nocandidate election. Until there is an election, a recall committee is much like an initiative orreferendum committee or any other ballot measure committee. The activities of all of theseballot measure committees is geared to something other than the election or defeat of acandidate. In First National Bank of Boston v. Belloti, 438 U.S. 907 (1978), the Supreme Courtof the United States struck down a statute that prohibited corporations from making contributionsor expenditures to influence the outcome of a vote on any question submitted to the voters on thegrounds that the First Amendment does not allow political speech restrictions based on aspeaker's corporate identity. In 2010, the Court relied on this principle in concluding that acorporation has the constitutional right to make independent expenditures in support ofcandidates. Citizens United v. Federal Election Commission, 130 S.Ct. 876 (2010).

We return to the principle established in Buckley and Belloti that theGovernment may not suppress political speech on the basis of thespeaker's corporate identity. No sufficient government interest justifieslim its o n the po li tic a l s p ee ch o f fo r -p ro fit and non -p ro fit c o rp o ra tions .Citizens United, at 913.

Direct corporate or labor contributions to candidates may still be prohibited but notindependent expenditures. The Secretary of State reasons that the holding of the Citizens United


3/5

case should not apply to recall committees because "candidates are free to coordinate with recallcommittees prior to the recall being called .... " App. 2 at 2. But candidates also coordinatewith initiative and referendum committees on issues important to candidates and that fact doesnot undermine a corporation's constitutional right to expend its funds in connection with thosecampaigns. Further, until a recall election is ordered there can be no election and no candidateswith whom to coordinate. See Ariz. Atty. Gen. Op. 187-111. If only those opposing thequalification of a recall can be said to be coordinating with a candidate, the Secretary of State'sreasoning seems to mean that corporations or labor unions are allowed to contribute to a pro-recall committee but not to an anti-recall committee. Clearly, both sides of the recall questionmust be treated equally.

If a recall election is called, any committee advocating the election or defeat of acandidate in that election will be subject to the laws governing candidate committees and directcorporate and labor union contributions will be prohibited. The activities of recall committeesthat have taken corporate funds will at that point be limited to activities that cannot be said toconstitute express advocacy for or against any candidate. With all due respect, the Secretary ofState appears to have confused the two, distinct phases of a recall and has failed to recognize thatthe First Amendment limits application of A.R.S. 16-919 beyond the exceptions stated inA.R.S. 16-920.2. Do the provisions of A.R.S. 16-912.01 and 16-914.01 apply to recall committees?

A recall petition is being circulated by "Citizens For A Better Arizona in Support ofRC-04-2011." It has filed a statement of organization with the Secretary of State. It is subject to thereporting requirements of A.R.S. 16-913(G) (providing for a schedule of reporting inconnection with a recall election). On June 1, Citizens Who Oppose the Pearce Recall filed acomplaint with the Secretary of State questioning Citizens For A Better Arizona in Support ofRC-04-2011's apparent lack of compliance with A.R.S. 16-914.01. Appendix 3. On June 3,the Secretary of State's Office responded that this statute does not apply to a recall committee.Appendix 4.

Recall committees are political committees under Arizona law. See A.R.S. 16-901(19) (definition of "political committee" includes combinations of persons "in support of oropposition to an initiative, referendum or recall or any other measure or proposition"); 16-901(19)( d) (listing "[a] committee organized to circulate or oppose a recall petition or toinfluence the result of a recall election" as a type of political committee"); 16-901 (5) (defining"contribution" to include "any gift, subscription, loan, advance or deposit of money or anythingof value made for the purpose of influencing an election including supporting or opposing therecall of a public officer or supporting or opposing the circulation of a petition for a ballotmeasure, question or proposition or the recall of a public officer"); 16-901(8) (defining"expenditures" to include "any purchase, payment, distribution, loan, advance, deposit or gift ofmoney or anything of value made by a person for the purpose of influencing an election in thisstate including supporting or opposing the recall of a public officer or supporting or opposing thecirculation of a petition for a ballot measure, question or proposition or the recall of a publicofficer").

A.R.S. 16-914.01 requires that the A.R.S. 16-913 campaign finance reports ofpolitical committees "acting in support of or opposition to the qualification, passage or defeat ofan initiative or referendum or any other ballot measure, question or proposition" besupplemented upon the occurrence of specific events. The first time a committee receivescontributions totaling $10,000 or more, a notice must be filed with the Secretary of State within


4/5

24 hours after reaching the $10,000 amount. A.R.S. 16-914.01(B)(l). An additionalnotification is due within 24 hours of the first time that a committee's expenditures reached atotal of$10,000 or more. A.R.S. 16-914.01(B)(2). And the first time any single contributor'scumulative total of contributions to a committee has received contributions totaling $10,000 ormore, notice of that fact must be given within 24 hours. A.R.S. 16-914.01(B)(3). Each ofthese notices must identify the contributors, the dates of receipt and the amounts of contributionsor the amount, recipient and purpose of the expenditures. A.R.S. 16-914.01(C). Theinformation is also included on the regular A.R.S. 16-913 reports. Initiative and referendumcommittees are specifically mentioned as subject to these requirements. Although recallcommittees are not mentioned by name, are such committees included within A.R.S. 16-914.01 's broad language applying its provisions to "any other ballot measure, question orproposition"? (Emphasis added).

A.R.S. 16-914.01 provides crucial information in connection with all types ofcommittees advocating for or against the qualification of a ballot question. In the case of a recallpetition drive during a non-election year such as 2011, a recall committee could go the entireduration of its activity without being required to file any disclosure of its campaign financeactivity. If a recall election is called, pre- and post-election reports are filed. But if Citizens ForA Better Arizona in Support ofRC-04-2011 qualifies the recall for a March 2012 election, thecommittee would collect contributions and make expenditures for more than one year-for all of20ll-before being required to file regular campaign finance reports. The Legislature hasprovided an important mechanism for maintaining the flow of information to the public withrespect to significant financial activities by committees seeking to gain ballot access for issues aswell as committees advocating the election or defeat of those issues. I believe the Legislatureintended this requirement to apply to recall committees such as Citizens For A Better Arizona inSupport ofRC-04-2011.

Similarly, A.R.S. 16-912.01, provides for advertising disclosures by ballot measurecommittees.A. A political committee that makes an expenditure in connectionwith any literature or advertisement to support or oppose a ballotproposition shall disclose and, after November 2, 2010, shall includeon the literature or advertisement the words "paid for by", followedby the name of the committee that appears on its statement oforganization or five hundred dollar threshold exemption statement,and shall also include in such literature or advertisement the fourlargest of its maj or funding sources as of the time the literature oradvertisement is printed, recorded or otherwise produced fordissemination. If a political committee has fewer than four majorfunding sources, the committee shall disclose all major fundingsources.Is a recall committee a ballot measure committee within the meaning of this section?

I request that your office issues a formal opinion on th ese que stio ns a t th e ea rlie stavailable opportunity. This is a matter of significant statewide concern. At the moment Iunderstand that there are seven recall committees of record with the Arizona Secretary of State'soffice. I am aware that there are two open recall committees of record with the Clerk of the Cityof Phoenix. Undoubtedly there are other open committees in other jurisdictions. It is also myunderstanding that various city clerks, including the Phoenix City Clerk and the Scottsdale City


5/5

Clerk have concluded that state law allows corporate contributions to recall committees. Youropinion in this matter will be of value to nearly every political jurisdiction in the State. Thankyou in advance for your prompt attention to this request.

The Honorable Russell PearcePresident, Arizona State Senate

Documents

Senator Pearce Letter Requesting Attorney General Opinion