Setting the record straight

Glenn Hamer

March 31, 2016

Much of the media coverage and commentary over SB 1516, a major cleanup of Arizona’s confusing campaign finance statutes, has been wildly inaccurate. We’re all entitled to our own opinions, but not to our own facts. Here are the facts:

Claim: The state is ceding its regulation of campaign spending to the federal government.

This claim is so far off the mark as to make me wonder whether the media doesn’t understand campaign laws or whether it’s choosing just to ignore the facts.

Obtaining tax-exempt status with the IRS is a rigorous, tedious, drawn-out process that involves excessive disclosure, scrutiny, and hoop-jumping. It is not one that an organization engages in on a whim, nor one that can be entered into without the assistance of legal and accounting professionals and the costs associated with retaining them.

If you’re worried about fly-by-night organizations corrupting Arizona politics, you should support the IRS compliance. Groups that want to parachute into Arizona for a political season and then disappear may opt out of participating in Arizona, or will elect to register as a political committee.

Private sector, for-profit newspapers can say whatever they want (as long as it’s not libelous), when they want, without fear of having their tax status revoked. Must be nice.

Claim: Shady groups will proliferate in Arizona during election season, and then disappear.

The legislation provides the secretary of state with a specific mechanism to identify bad actors, bring them within the reporting system, and assign penalties.

If an organization seeking to purposely evade Arizona campaign finance reporting applied today for IRS tax-exempt status, it is highly doubtful that it would receive it in time to play in this year’s elections. Even if it did receive tax-exempt status, it would have to comply with rigorous federal requirements that restrict its political activity and direct it to have a legitimate social purpose, as well as maintain its federal and state filing obligations. Any non-compliance may subject an organization engaging in Arizona elections to political registration and reporting obligations.

Claim: Unlimited amounts of “dark money” will buy candidates.

Nowhere in this legislation is language permitting corporate contributions, or unlimited contributions of any sort, to candidates.

Candidate committees are limited in the amounts they may receive from contributors, and in the sources of those funds. Nothing in SB 1516 changes that.

To the extent that an organization wishes to engage in independent expenditures, however, their ability to do so has been expressly defined by the U.S. Supreme Court. Any state law that seeks to usurp that ability would be ripe for a challenge in federal court.

If anyone has a beef with the fact that businesses may lawfully exercise their rights of free speech by making expenditures for state elections independent of any candidate, they should take it up with U.S. Constitution, not Michele Reagan.

Claim: Money will unduly influence ballot measure campaigns.

Those who would seek to diminish speech in the political arena complain that non-profits may spend as much as they want on initiatives that will be included on the ballot. There’s a reason for that, though.

Contribution limits exist to prevent corruption. People can be corrupted; ideas cannot. The federally prescribed standard holds that issue advocacy is not “political activity.” Any limits placed on the expenditure of monies on issue advocacy efforts, therefore, are unnecessary and only serve as unwarranted burdens on political speech.

Claim: Disclosure is diminished under SB 1516.

Nothing in SB 1516 changes the requirement that political communications contain disclaimers listing multiple entities responsible for funding them. This information allows voters to discern between credible and frivolous political ads they see on television, hear on the radio, or read in print. If an individual does not recognize the entities identified, he or she can make a reasoned decision about the weight to give that particular ad. To believe that voters can’t differentiate between a communication from a longstanding association like a chamber of commerce, and one from an obscure political organization is to have a complete lack of faith in the intelligence of Arizonans.

SB 1516 preserves those critical provisions in the law that inform voters about political committees’ contributions and expenditures, as well as the parties responsible for all political communications, regardless of the type of entity making them.

Enough with the hyperventilating. More than 90 percent of SB 1516 is already in current law, just clarified, simplified, and presented in a more user-friendly way.

SB 1516 is the result of a year’s work and tireless effort. It properly balances the competing interests of transparency and disclosure on one hand, and ease of participation on the other. It will, as a result, provide a clearer campaign finance system that will benefit all who use it. Arizona’s political system will be better for it.

Glenn Hamer is the president and CEO of the Arizona Chamber of Commerce and Industry