Arizona Supreme Court Takes on the Battle Over ‘Dark Money’ Disclosure Law

The Arizona Supreme Court has decided to hear key aspects of a challenge to the state’s significant campaign finance disclosure law, which seeks to eliminate anonymous political spending. This case could significantly alter the regulations governing how financial contributions aimed at influencing voters are disclosed.

Specifically, the court will examine whether Republican legislative leaders possess the authority to contest new “dark money” disclosure rules established by the Citizens Clean Elections Commission under Proposition 211, known as the “Voters’ Right to Know Act.” This proposition received overwhelming support from voters in 2022. Additionally, the court will assess whether a clause limiting legislative oversight can be deemed separate from the overall law.

The legal challenge was initiated in 2023 by House Speaker Ben Toma and Senate President Warren Petersen, who sought to prevent the enactment of Prop. 211. This law mandates that any contributions over $5,000, used for campaign spending, must disclose their original sources. It characterizes “dark money” as the practice of obscuring political donations through multiple intermediaries to disguise their origins.

In December 2023, a trial court judge ruled against the Republican leaders, finding that they failed to present sufficient evidence to argue that the law violates the constitution and undermines legislative authority. However, an appellate court later determined that one aspect of the law did unconstitutionally limit the Legislature’s power, allowing it to be removed without invalidating the entire voter-approved law.

Furthermore, the Appeals Court found that the legislators did not have standing to challenge the Commission’s enforcement rules for dark money disclosures. It cited instances in election administration where legislative delegation has coexisted with future lawmaking, reinforcing this point.

The appellate court clarified that any constraints on legislative power stem from the state constitution’s Voter Protection Act and other regulatory measures, rather than from the Commission’s authorized rulemaking.

Key mechanisms established by these rules include a provision allowing donors to withdraw their contributions from being used for campaign purposes, a clarification on when polling and research activities necessitate disclosure, and a framework for the Commission to issue advisory opinions, which offer legal security to compliant parties.

Toma and Petersen contend that if any portion of the law is unconstitutional, the entire statute should be invalidated, despite its “severability clause.” This clause states that courts cannot nullify the entire law based on the unconstitutionality of specific sections. They also assert that legislators should retain the right to contest the Commission’s rulemaking authority.

This case raises essential questions regarding legislative oversight of voter initiatives. A ruling in favor of the legislative leaders could lead to the annulment of the dark money disclosure law entirely. Conversely, a more limited decision might uphold the Legislature’s oversight while maintaining the disclosure requirements.

Proponents of the law, including the Clean Elections Commission, argue that its primary goal of uncovering the sources of political spending will remain effective even if some legislative oversight is acknowledged. With 72% voter approval for Prop 211, the implications of this case are significant for Arizona’s political landscape. The Supreme Court has yet to announce a date for oral arguments in the case of Toma v. Fontes.