Failure to Disclose: Complaint Against Tom Steyer Clean Energy Group Referred to AG

The group behind Tom Steyer’s failed effort to mandate renewable energy standards in Arizona is in hot water for not properly disclosing campaign spending during the 2018 election cycle.

According to a complaint filed against the Clean Energy for a Healthy Arizona Committee (CEHA), the committee failed to properly disclose spending used to advocate for or against candidates, and even in support of the ballot measure, which is a no-no according to state law.

In a letter from former State Elections Director Eric Spencer, the “Secretary of State finds reasonable cause to believe that CEHA violated A.R.S. 16-926(B)(3)(l) and (m) by failing to separately itemize its independent and ballot measure expenditures.”

The complaint was referred to Attorney General Mark Brnovich by Spencer, but according to spokesperson Ryan Anderson, the office further referred the complaint to Maricopa County Attorney Bill Montgomery to prevent any appearance of bias.

“Given the millions of dollars spent by the ballot committee to unsuccessfully defeat the attorney general, we determined the best way to avoid any appearance of prejudice was to refer this complaint and investigation to the Maricopa County Attorney’s Office,” Anderson said.

During the final weeks of the 2018 campaign, CEHA began to shift resources away from the failing ballot measure and towards advocacy for and against legislative and statewide candidates, including Brnovich, to the tune of more than $4 million. The details behind these expenditures are murky since the committee did not clearly identify and delineate its spending in reports filed with the Secretary of State’s Office.

For example, some independent expenditure costs were vaguely filed in campaign finance reports, others filed in trigger reports with the Clean Elections Commission and other spending were described as “operating expenses,” even though the dollars were used to advocate for or against candidates.

Attorneys representing CEHA claim that the trigger reports filed with the Clean Elections Commission should satisfy the legal requirements, but Spencer disputed that claim. CEHA also claimed it did not have had the ability to upload the independent expenditure trigger reports directly to the Secretary of State’s campaign finance system, which Spencer says is untrue.

The group also lumped together independent expenditures and ballot measure expenditures under the category of “operating expenses,” thus preventing the disclosure of required information.

Per existing law, A.R.S. 16-926 (B)(3)(a),(l),(m), independent expenditures must include “identification of the candidate, office sought by the candidate, election date, mode of advertising and distribution of publication date.” Similarly, ballot measure reporting must include “identification of the ballot measure, ballot measure serial number, election date, mode of advertising and distribution or publication date” according to A.R.S. 16-926 (B)(3)(m).

According to Spencer, “filing trigger reports with the Clean Elections Commission,” which only requires limited information, “does not satisfy the requirements enforced by the Secretary of State.”

In the spirit of transparency in campaign spending, Spencer concluded that the violations warranted further review by the state’s top law enforcement officer.

The complaint points out that CEHA in the Pre-General report, “inaccurately denoted as ‘operating expenses’ at least $1,464,858.83 in disbursement that likely qualify—and should have been reported—as ‘independent expenditure’ and/or ‘ballot measure expenditure.’”

“These are serious allegations worthy of further examination by prosecutors,” said Matthew Benson, spokesman for the No on Prop 127 campaign. “Unfortunately, these allegations reflect a pattern of misconduct on the part of the Clean Energy for a Healthy Arizona Committee, whether in its improper disclosure of campaign spending or use of dozens of convicted felons to gather petition signatures. We look forward to the Maricopa County Attorney’s findings.”

“If ballot measure expenditures are buried as operating expenses, or independent expenditures only get reported to the Clean Elections Commission, campaign finance reports cease to have the requisite transparency called for by Arizona law,” Spencer said.