Calif. suit targets anti-initiative group

AZ organization gave $1.1M to beat 2 state propositions
2012-10-26T00:00:00Z Calif. suit targets anti-initiative groupHoward Fischer Capitol Media Services Arizona Daily Star
October 26, 2012 12:00 am  • 

PHOENIX - An Arizona group that has funneled more than $1.1 million to defeat two Arizona ballot initiatives was sued Thursday by California authorities to force disclosure of who the money came from.

In a lawsuit filed in Sacramento County Superior Court, the Fair Political Practices Commission says Americans for Responsible Leadership, set up as a nonprofit corporation, gave $11 million to fund two separate ballot campaigns in California. What's missing, according to the legal papers, is any disclosure of where the group, which listed a Phoenix post office box as its address, is getting its money.

The California commission wants a judge to force the organization to provide that information.

If the lawsuit is successful, it could also provide a peek at who is behind the $750,000 donation to the campaign against Proposition 204, making it the largest single source of money opposing the bid to create a permanent 1-cent-per-dollar surcharge on the state sales tax.

The same organization also gave $415,000 to defeat Proposition 121, which would create an open primary system for all Arizona elections.

Matt Roberts, spokesman for Secretary of State Ken Bennett, said unlike in California, the failure to disclose the donors for Arizona ballot measures does not violate this state's campaign finance laws.

"Time is of the essence," attorneys for the California commission told the judge there, with the election in less than two weeks.

But a lawyer for Americans for Responsible Leadership is fighting the move, saying the demand for the information is premature at best. Attorney Brad Benbrook already has succeeded in pushing the court hearing back until Tuesday.

The organization's $11 million went to the Small Business Action Committee PAC two weeks ago.

That group opposes California's Proposition 30, a measure being pushed by Gov. Jerry Brown to impose a temporary income tax hike on those earning more than $250,000 a year along with a quarter-cent sales tax. It also supports Proposition 32 to ban corporate and labor donations to candidates.

State lawyers say without the list of donors and the records to verify it, the group's conduct "will cause great and irreparable harm to the voters of California by potentially denying them vital information regarding the true source of large sums of money being spent to advocate for and against statewide initiatives."

Papers filed with the Arizona Corporation Commission list Robert Graham and Eric Wnuck as incorporators.

Graham owns RG Capital, a Scottsdale-based investment advisory firm. He also is trying to become the new chairman of the Arizona Republican Party.

Wnuck was an unsuccessful candidate for Congress.

State Treasurer Doug Ducey, who is heading the anti-204 effort, said the current board also includes Kirk Adams, the former speaker of the Arizona House and, like Wnuck, an unsuccessful congressional candidate.

Ducey dismissed questions of whether Arizona voters are entitled to know who provided the $750,000 to his campaign. He said all he and the voters need to know is that the cash came from Americans for Responsible Leadership.

"If you want more detailed information beyond that, that really is a question for Americans for Responsible Leadership," Ducey said.

Calls to Graham, Wnuck and Adams were not returned.

In legal filings Thursday, Benbrook asked for the demand for documents to be quashed, at least in part because there is a "legitimate interest that donors to nonprofits have in maintaining their privacy." He argued there is no evidence the list needs to be made public.

That goes to the peculiarity of California law.

Ann Ravel, who chairs the California commission, said the statutes are designed to protect donors.

"It's an issue of notice," she explained. "Some of these donors do not realize that the money is going for political purposes."

But Ravel said the beneficiary is the public, which gets to find out the real sources. She said that's why the commission went to court to seek the disclosure order.

"People are voting already," Ravel said.

Benbrook, however, said the demand for the records and to make the donor list public before the election is based on the assumption that Americans for Responsible Leadership is doing anything that requires disclosure. He argues the court must first have a hearing to determine if the information is public before ordering disclosure.

"Once a public disclosure is made, that bell cannot be un-rung," Benbrook said in his court filing.

He also said the commission has "demonstrated willingness to prejudge this matter and litigate in the press," so his client "has absolutely no confidence" the commission will keep any information it gets confidential until there is a final ruling on whether the donor list needs to be disclosed.

On StarNet: Learn more about the candidates, propositions and news in local elections at azstarnet.com/elections

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