Anti-Casino PAC Fined $75k For Campaign Finance Violations

The City of Glendale Arizona’s Attorney’s Office has notified the attorney (click here) representing a Glendale, AZ political action committee (PAC) of a $75,000.00 fine levied against them for violating State of Arizona campaign finance statutes.

One Pocket To Another Pocket In The Same Pants

Gary Hirsch (LinkedIn image)

Gary Hirsch (LinkedIn image)

Campaign finance laws are intended to protect the public from abuses of the political process. In this case, the Glendale City Attorney finds the PAC in question, “Respect The Promise” (RTP), ignored existing statutes willfully with intent to deceive the electorate.

The original citizen complaint (click here) noted RTP had received all of it’s funding from one source, an Independent Expenditure Committee (IE)  “Neighbors for a Better Glendale” (NFBG).

NFBG and RTP have the same officers, Gary Hirsch and Jill Ryan.

The complaint also noted the funding for the IE also came from a single source, the Gila River Indian Community.

The flow of funds to RTP was from the Gila River Indian Community to NFBG.

Gary and Jill then wrote checks from their IE to fund RTP and another of their PAC’s “No More Bad Deals for Glendale” (NMBD) to circulate petitions opposing some Glendale City Council actions regarding the Tohono O’odham casino under “construction” in Glendale.

Between the June 2013 and September 2014 election periods, RTP received $107,000 from the Gila River Indian Community via NFBG to oppose the Tohono O’odham casino.

None of those fund transfers were illegal and the Gila River Indian Community is not culpable at all.

The reporting of those funds by the committee was definitely illegal, RTP’s attorney admitted it was illegal in her answer to the complaint (click here). The attorney basically stated “Ooops, we didn’t know so it’s okay.”

Lack Of Reporting

One of the items in the complaint against RTP (click here) was that RTP ignored campaign finance reporting requirements related to contributions and expenditures of $10,000 or more. Any cumulative contribution or expenditure amount meeting or exceeding $10k within a reporting period must be reported within 24 hours of crossing the $10k threshold.

RTP never reported despite blowing well past the $10k threshold multiple times. Hirsch and Ryan had a similar problem (and a similar excuse from the same attorney) with their NMBD committee, although I haven’t seen correspondence from Glendale to indicate a similar fine will be levied.

The complaint summarizes the reasoning behind the reporting requirments:

The purpose of these statutes is to prevent a committee “flying under the radar”. This committee was in existence prior to August 15, their “June 30” campaign finance report showed only the activity from a prior attempted referendum. They could have then legally completed their current referendum petition circulation with NO PUBLIC NOTICE WHATSOEVER.

Michael Bailey, the Glendale City Attorney, agreed.

Glendale Attorney Details Violations

Bailey summarizes the violations he feels RTP is responsible for.

Michael Bailey Glendale City Attorney

Michael Bailey
Glendale City Attorney

Finding 1
On April 1, 2014 Respect the Promise in Opposition to R-14-01 – Neighbors for a Better Glendale (R-14-01) received a contribution totaling ten thousand dollars.

Reasonable cause exists that Respect the Promise in Opposition to R-14-01 – Neighbors for a Better Glendale (R-14-01) did not timely report receipt of contributions totaling ten thousand dollars or more in accordance with A.R.S. §16-914.01(B)(1) and A.R.S. §16-914.01(B)(3).

Finding 2
On August 18, 2014 Respect the Promise in Opposition to R-14-02 – Neighbors for a Better Glendale (RTP) received a contribution totaling thirty thousand dollars.

Reasonable cause exists that Respect the Promise in Opposition to R-14-02 – Neighbors for a Better Glendale (RTP) did not timely report receipt of contributions totaling ten thousand dollars or more in accordance with A.R.S. §16-914.01(B)(1) and A.R.S. §16-914.01(B)(3).

Finding 3
On April 1, 2014 Respect the Promise in Opposition to R-14-01 – Neighbors for a Better Glendale (R-14-01) expended ten thousand dollars (Petition Partners).

Reasonable cause exists that Respect the Promise in Opposition to R-14-01 – Neighbors for a Better Glendale (R-14-01) did not timely report expenditures totaling ten thousand dollars or more in accordance with A.R.S. §16-914.01(B).

Finding 4
On August 29, 2014 Respect the Promise in Opposition to R-14-02 – Neighbors for a Better Glendale (RTP) expended twenty-five thousand dollars (Petition Partners).

Reasonable cause exists that Respect the Promise in Opposition to R-14-02 – Neighbors for a Better Glendale (RTP) did not timely report expenditures totaling ten thousand dollars or more in accordance with A.R.S. §16-914.01(B).

The committees have clearly failed to comply with A.R.S. §16-914.01

Determining The Civil Penalty

Refer to the City Attorney’s letter (click here) for all the details, but Bailey goes on to explain the factors considered in the determination of the fine:

1. The number of violations
The committees have committed four violations.

2. The sophistication of the campaign committees and sponsoring organization.
The committees have a sponsoring organization and a sophisticated team of advisers.

3. Egregiousness of the offense.
These matters do not appear to be simply oversights that were self-reported and subsequently corrected. Rather, the defects were not cured until the city clerk received a citizen complaint and notified the committee.

4. Harm to the citizens of Glendale.
One underlying purpose of the statute is to preserve the transparency in the election process. In the context of the referendum, citizens should have available to them information not only the subject of the referendum, but also the identity of parties supporting or opposing the referendum.

  • Respect the Promise in Opposition to R-14-01 – Neighbors for a Better Glendale (R-14-01) gathered all signatures by April 24, 2014. All signatures were gathered without the financial information available to the public. The financial information was not available until June 30, 2014. Compliance with statute was obtained on October 24, 2014.
  • Respect the Promise in Opposition to R-14-02 – Neighbors for a Better Glendale (RTP) gathered all signatures between August 14, 2014 and September 12, 2014. All signatures were gathered without the financial information available to the public. The financial information available on or about September 16, 2014. Compliance with statute was obtained on October 24, 2014.

5. Mitigating factors.
The committee reported the contributions and expenditures on subsequent campaign finance reports (noting the disclosure occurred almost 90 days after the statutory event and 60 days after the gathering of signatures) and cured the defect after notification.

So, as stated in the original complaint, it does make a difference that the people involved are extremely familiar with the political process and have been responsible for hundreds of thousands of dollars in political receipts and expenditures.

How Much?

Bailey explains why he didn’t lower the boom completely on RTP, letting them off the hook with a third of the possible fine:

The sum of all violations equals seventy-five thousand dollars. The statute authorizes this office to assess a fine three times the amount imporpoerly reported. Given the facts contained in the clerk’s letter (click here) and the considerations above, it is the finding of the Glendale City Attorney’s Office that campaign violations occurred and a fine is herby levied in the amount of seventy five thousand dollars.

Please remit a check in the amount of seventy-five thousand dollars to the Glendale City Clerk’s Office at your earliest convenience.

Petition Sheets Submitted

The problem with fines, regardless of the amount, is that they don’t REALLY solve the problem. There are gigantic stacks of completed petition sheets awaiting the resolution of a lawsuit brought against the City of Glendale by the same people.

It’s quite possible all those expensive petition signatures will simply be shredded. But, if they aren’t, should signatures gathered by people willfully ignoring campaign financial reporting specifically designed to inform the electorate of EXACTLY these sort of large expenditure operations?

Isn’t it entirely possible that an extremely well financed group looking to kill something that would potentially have a large financial impact on future profits of their sponsoring organization be willing to take a chance on a fine for the advantage of hiding the source of their funding?

The answer has to be a clear “yes” despite the denials offered by the attorney for the groups.

To Summarize

Money_ToiletIt’s important to note that, while the Gila River Indian Community funded all of these initiatives, they operated completely within the bounds of propriety. It would be hard to blame them for the expenditures, if for nothing else than the significant threat to their income posed by a competing casino in Glendale.

That said, the sloppy work and hubris of the IE’s and PAC’s they decided to support will hopefully give the Community pause before they cut them another check for anything.

Consider the liability of a $75,000 fine. It’s clear the responsibility for paying that fine rests squarely on the shoulders of the RTP committee. Will the Gila River Indian Community feel the need to pick up the tab for their errors?

Maybe we’ll see the answer in campaign finance reports filed in Glendale in the future.

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