Appeals court upholds core of AZ ‘dark money’ disclosure law voters approved in 2022

Photo by Jim Small | Arizona Mirror

Republican legislators won a small victory in their attempt to overturn a voter-approved measure that bars anonymous “dark money” in Arizona campaigns, but an appellate court ruled that the bulk of the law passes constitutional muster and can be enforced in the 2024 elections.

A three-judge panel on the Arizona Court of Appeals ruled to uphold the majority of the Voters’ Right to Know Act, which voters overwhelmingly passed in 2022. However, it concluded that a provision in the law that bars the legislature — which Republicans narrowly control — from limiting the Citizens Clean Elections Commission from enforcing the “dark money” disclosure provisions is unconstitutional. 

More than 70% of Arizona voters in 2022 cast their ballot in favor of Proposition 211, also known as the Voters’ Right to Know Act. The law aims to eliminate dark money election spending by requiring political committees that spend at least $50,000 in statewide or legislative campaigns reveal the identities of individual contributors who give more than $5,000. Individuals who give $2,500 or more to a committee spending at least $25,000 in local elections would also have to disclose their names, mailing addresses and employers. 

Since the voters approved it, numerous court challenges to its validity have failed, but the appeals court on Thursday issued a ruling partially in favor of House Speaker Ben Toma and Senate President Warren Petersen, who challenged the act on behalf of the legislature. 

Toma and Petersen, both Republicans, lost a challenge in the trial court in December when they attempted to convince a judge to block the implementation of the act ahead of this year’s election. 

If Maricopa County Superior Court Judge Timothy Ryan had agreed, then dark money groups could continue to make political donations without any disclosure to the public. 

Toma and Petersen’s attorneys argued that the act has no guardrails and no oversight from the legislature, but defendants Attorney General Kris Mayes and Secretary of State Adrian Fontes, both Democrats, and the Citizens Clean Elections Commission, which is charged with enforcing the act, all stood behind the law. 

The appeals court decision, penned by Acting Presiding Judge Michael Catlett, agreed with the trial court in part and chose not to block the act entirely. Instead the court chose to place a temporary hold on the portion of the law it deemed unconstitutional. That part of the law would prohibit the Legislature from passing legislation prohibiting or limiting the Clean Elections Commission’s rules or enforcement of the act. 

“(The act) is unconstitutional in part because it prohibits the Legislature from passing any law prohibiting or limiting the Commission’s rules or enforcement actions,” Catlett wrote, in agreement with arguments from Toma and Petersen. 

The appeals court also remanded the portion of the case pertaining to the unconstitutional part of the act back to the trial court. 

“In sum, the Legislature has shown a strong likelihood of success on its challenge to (that particular section of the act) because it has standing and that section unconstitutionally restricts its lawmaking power,” Catlett wrote. 

But while Toma and Petersen claimed that the entire act should be struck down, the appellate court disagreed. 

“The Legislature is not likely to succeed on its request to enjoin the Act in full,” Catlett wrote. 

The legislative leaders argued that the section of the law restricting legislative oversight of the commission could not be severed from the act as a whole, even though severability of any part deemed unconstitutional from the rest of it was written into the act. The courts also ruled that Toma and Petersen didn’t have standing to challenge three rules regarding the act that the Clean Elections Commission had already created. 

“Through that (severability) clause, the people expressed their will that courts should respect any part of the Act not deemed unconstitutional,” Catlett wrote. 

Toma and Petersen claimed that the rules that the Clean Elections Commission created to govern the act “shrink the constitutional scope of the Legislature’s powers.” 

But the defendants and the judges disagreed. 

“The flaw in the Legislature’s theory is this: delegating authority does not, standing alone, nullify legislative power,” Catlett wrote. “To the contrary, when the Legislature delegates, it can still legislate, including on subjects falling within the delegation.”

This leaves open the possibility that the legislature could pass laws that would limit the commission’s ability to create rules for enforcing dark money disclosure. 

“(T)he controversy over whether and how the Act should delegate authority to the Commission remains a political dispute between the legislative and executive branches of government. We are ‘naturally reluctant’ to referee such a dispute,” Catlett wrote. 

The conservative Arizona Free Enterprise Club and the Center for Arizona Policy previously challenged the law in court, claiming it violates their free speech rights, but their cases have repeatedly been struck down by various courts.

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