October 13, 2014 3:00 pm • Capitol Media Services
PHOENIX — Both Republican Michele Reagan and Democrat Terry Goddard say they believe something needs to be done about “dark money” influencing elections in Arizona.
But the two candidates for secretary of state differ in their approach. And they don’t even agree on what the state can legally do.
The issue has taken center stage as outside groups are pouring millions of dollars into TV commercials and mailers in an effort to influence the race. And with a few exceptions, they are not disclosing the original source of the money because many are organized under the federal Internal Revenue Code under section 501(c)(4).
That designation is reserved for social welfare organizations, which also are allowed to lobby and influence elections. And they need not disclose names of members or donors.
But Goddard, a former attorney general, said he believes Arizona has a right to demand more from them, despite that federal loophole.
“The fact that they are a 501(c)(4) is a federal IRS designation,” he said.
“That has nothing to do with whether they’re a political entity in the state of Arizona,” Goddard said. “If they’re a political entity, they should register and should disclose their contributors.”
However, Reagan, who served a combined 12 years in the Arizona House and Senate, questions whether the state can simply decide campaign finance laws and disclosure requirements apply to those in that category.
What the state can do, she said, is police these organizations to ensure they are, in fact, spending more than half their dollars on social welfare issues and report the ones that fail to the IRS. Then, if the federal government finds them out of compliance, they would automatically be in violation of Arizona law.
She thinks the better solution is to force disclosure by companies putting money into these groups.
“If a corporation is giving that amount of money to a 501(c)(4), it’s their decision to say ‘I’m giving this money’ and they should own up and tell the public that they are giving this amount of money to a group that may be electioneering,” Reagan said.
Goddard also is blasting Reagan for voting for 2013 legislation that would have made it harder for third-party candidates to qualify for the ballot and imposed new restrictions on those circulating initiative petitions.
Reagan says its not her fault because others put those provisions into a bill she sponsored to make needed changes in laws dealing with early ballots. She said, given an all-or-nothing choice, she believes there was more good in the measure than bad.
And the law never took effect, as lawmakers voted to repeal it after foes gathered enough signatures to put the question to voters.
The race is also significant as secretary of state is first in line for governor if that person dies, quits or is removed from office, something that has occurred five times in the last half century.