Lawyer: My Clients Were Ignorant of the Law

BLXq1-FCAAAa0IwThe bulk of the fines three political committees in Glendale are liable for (click for original story) are related to Arizona election law statutes that require reporting of large contributions and expenditures within 24 hours. The Glendale City Clerk refers to them as “10k notices”.

Two of the committees are pushing referendums to negate two Glendale City Council actions taken during their August 12 meeting (click here) related to the proposed Tohono O’odham casino resort. Those committees already dropped stacks of petitions at the City Clerk’s office where they sit awaiting the resolution of their lawsuit against the City (for stating the actions are not referable).

The third committee is gathering signatures to recall Gary Sherwood, one of four council members that voted for the August 12 measures. This committee has declared success via the local media, yet has not turned in any petitions.

All three committees received more than $10k from yet ANOTHER committee, “Neighbors for a Better Glendale”. None of the committees filed any “10k notices” for either contributions or expenditures. All three committees are funded exclusively by the Gila River Indian Community.

Follow The Money

“Neighbors for a Better Glendale” is an “independent expenditure” (IE) committee in Glendale (click here). IE’s are legally allowed to accept large donations from all sorts of places “regular” committees (such as the three with complaints) cannot. The main restriction on IE’s is that they are not supposed to be directly involved in the political process.

So, the IE will accept donations and then funnel them to the appropriate political committee to accomplish anything they and, presumably, their benefactor(s) support.

In this case, Gary Hirsch and Jill Ryan run “Neighbors for a Better Glendale”. They also run the “No More Bad Deals for Glendale” and “Respect The Promise” committees that are circulating the referendum petitions against the Tohono O’odham casino. The third committee, “Recall Councilman Gary Sherwood” is run by Anna Lee (a member of the Salt River Pima-Maricopa Indian Community) and Ronald Lee.

The source of funds and likely legal representation for all four committees make it clear that the threat to the business of existing casinos is the driving force behind all three actions. Despite the more palatable reasoning of betrayals and illegal actions being opposed, we can all agree it’s really about protecting the profitability of the existing Gila and Salt River casinos. Right?

Ramp Up The Money Machine

In the 2012 election cycle, “Neighbors for a Better Glendale” had the same exclusive contributor. At that time, they distributed nearly $90k of the Gila River money to support the campaigns of Joyce Clark, Gary Hirsch, Jerry Weiers, and Gary Sherwood. The other $75k of their contributions went to oppose Proposition 457. The total approached $165k.

Money_ToiletThus far In the 2014 election cycle “Neighbors for a Better Glendale” has spent nearly $275k. That’s a significant spending increase considering not a dollar went to support a candidate for Glendale City Council.

None of that is illegal and the flow of the money can be discerned if one chooses to scour campaign finance reports and submit some information requests.

But, let’s suppose one wanted to oppose a time sensitive matter supported by organizations willing to write a lot of checks? How would you be able to discover with enough time to DO something about it that a LOT of money was being spent in your community?

That’s the purpose of the “$10k notices”, to let the interested general public know that large sums of money are being donated and/or spent. Without those notices, one would never know until a regularly scheduled campaign finance report was filed, which could easily be after the referendum signature gathering was complete.

“My clients didn’t understand the law”

As normal people, we can imagine the laughs from a judge if we stood in front of him or her for our 140 MPH speeding ticket and explained (throwing in a sheepish grin and a shoulder shrug) you didn’t understand the law and, thus, should not be penalized.

In her answer related to the missing $10k notices from both referendum committees, the attorney admits they are guilty of campaign finance reporting violations:

“At the time the contributions were made, the committees mistakenly believed that they were only required to file the campaign finance reports required by A.R.S. § 16-913.”

But, after admitting both the committees violated the same regulations, she goes on to say her deep pocketed clients with professional representation, years of experience in local politics and access to the advice of professional referendum petition circulators who should know the campaign regulations shouldn’t pay a fine:

“Because the errors were unintentional, the committees have not attempted to circumvent the reporting obligations, and the committees took prompt corrective action once the error was brought to their attention, we believe no penalties are appropriate.”

I don’t have a clerk to research case law where ignorance of the law is a reason to be excused from the fines prescribed by the law. Assuming there isn’t any, the committees should be forced to pay the maximum three times the amount of the contributions and expenditures.

Why The Maximum, Scrooge?

If an attorney decides to use the ignorance card in an argument defending a client, he or she should expect to be confronted with an equal and opposite argument that tries to determine whether it is reasonable to expect that same client to be familiar with the regulations they ignored.

In this case, all committees involved are fully funded by the Gila River Indian Community. There is not even a whiff of wrongdoing by Gila River, but nobody could argue they are not extremely politically active and savvy. Most would assume their continued support of an independent expenditure committee would be at least partially predicated on the level of professionalism said committee exhibited. Is there a vetting process for organizations receiving campaign funds from Gila River?

In this case, the committees paid something like $100k to Petition Partners for circulating their petitions. That firm is in this exact business and should be reasonably expected to be familiar with all the regulations related to a referendum attempt and the supporting financial reporting obligations of the committees they work for. You might reasonably expect that, when receiving a check for over $10k, part of that service would be to remind the committee writing that check that they should file the correct financial notices.

Lastly, both members of the referendum committees have been in the independent expenditure committee and political action committee game for a long enough time to have familiarized themselves with the appropriate regulations. At least one of them has run for office in the recent past, so he was responsible for correct finance reporting and knows the regulations.

The Secretary of State and/or the City of Glendale should pursue these violations. On the outside chance that happens, hopefully the book will be thrown at them.