Az Supreme Court hears challenge to dark money disclosure law

The fate of Proposition 211, an overwhelmingly popular law
passed in 2022, was placed in the hands of the Arizona Supreme Court on
Thursday.

The justices heard oral arguments from the Goldwater Institute, the
plaintiff, and from the Arizona secretary of state, whose office
defended the proposition.

Proposition 211, popularly known as the “Voter’s Right to Know Act,” passed with 72% of the vote. The Goldwater Institute,
a public policy research organization, filed a lawsuit challenging the
proposition in December 2022, asserting that it infringed on free speech
and privacy rights.

“The unfortunate reality is that this law simply does not allow that
speech to occur. It does not allow space for expression in this state,”
said Jon Riches, the vice president for litigation and general counsel
at the Goldwater Institute.

The law requires major statewide campaign donors to disclose where
the money came from. Any entity spending at least $50,000 on campaign
media has to identify its donors who gave at least $5,000. In local
elections, the disclosure threshold is $25,000.

Campaign media spending refers to money spent in support or
opposition of a candidate through television, digital media, print,
radio or other similar advertisements.

The Goldwater Institute called the proposition “donor doxing” —
publishing private information with malicious intent. The Arizona
Secretary of State’s Office, the defendant in the case, disagreed with
that characterization, and said the law calls for transparency.

The Goldwater Institute said that it worries for donors whose
information is made public, such as their address and employer. Other
opponents of the law argued that the information gives ammunition to the
opposition, who might be unhappy, and puts a target on the backs of
donors.

“They’re afraid of the activist organizations out there, they’re
afraid of politicians and others that want to exact retaliation because
they simply support a position or belief that they disagree,” said Scot
Mussi, the president and executive director of the Arizona Free
Enterprise Club.

Former Arizona Attorney General Terry Goddard, the driving force
behind the law’s passing, said the transparency is necessary for
informed voting.

“It’s a way to allow the voters to have the chance to know who it is
that’s trying to persuade him one way or the other,” Goddard said. “And
without that information, you just can’t cast a knowledgeable vote.”

Goddard said the proposition and the sentiment behind it are important countrywide, especially in Arizona, after a “dark money” scandal in 2014.

Dark money refers to the money that moves
from one donor to another entity and then finally to a campaign. The
entity that actually donates the money to campaigns takes the original
donor out of the equation.

In 2014, Arizona Public Service, a power company, donated more than
$10 million to various groups supporting two Arizona Republicans running for Arizona Corporation Commission positions. Both Republicans won their races and later supported an APS request to increase electric bills in the state.

The Arizona Supreme Court is deliberating the arguments, and a
resolution is not expected anytime soon. Both sides said they felt
confident after the arguments, and remained hopeful that the ruling
would go their way.

Andrew Gould, a former Arizona Supreme Court justice, represented the
Goldwater Institute during the oral arguments on Thursday. He – along
with other Goldwater Institute staff – focused on the infringement of
free speech.

“What this law does is it takes people who want to anonymously
express themselves through organizations that will speak on their
behalf,” Gould said. “It denies them that way. It strips them of that
anonymity, and it exposes them to retaliation in every form,”

But Eric Fraser, representing the Arizona Secretary of State’s
Office, disagreed. He said free speech and donations are not the same
thing.

“The donor is not speaking, donor is not writing, donor is not publishing,” he said, comparing donations to speech.

Goddard echoed the sentiment.

“It’s no infringement on free speech,” he said. “It’s an effort to
make sure that voters have all the information they need to cast a
knowledgeable vote. And I think that’s our fundamental obligation, is to
make sure that people feel confidence that they’re making the right
decision.”