Setback in campaign finance disclosure realm

'Building Our Future' judgment overturned

Appeals Court finds in favor of bond committee, on a technicality

By David Tell, Messenger Editor

Government watchdogs thought they had reason to exult last year when a committee pushing Phoenix’s massive 2006 city bond package was found to have violated state disclosure law as to the funding sources for their advertising.
But a little less than a year after a Superior Court judge found the committee had unlawfully omitted disclosure, and awarded the plaintiffs over a million dollars in damages, the state Appeals Court has overturned the judgment, on what might well be considered a technicality.
The Appeals Court remanded the case to the lower court and directed that a verdict be entered in favor of the defendants, with court costs to be borne by the plaintiffs: Sonoran News reporter Linda Bentley and Childress Buick-Kia owner Rusty Childress.
The reversal hinged on a question dealt with by the Superior Court—wrongly, according to the appellate panel—concerning the application of a clause in the law’s disclosure requirement: that the disclosure of an ad’s top four funding sources is only mandated when at least 50 percent of its language deals with “the same subject.”
Superior Court Judge Michael Jones had ruled that because the seven Phoenix bond propositions constituted a package, with interlocking and overlapping spending items, they together represented a single subject—i.e., “the same subject,” per the clause in the law. Over about 23 pages of findings and supporting discussion, Appellate Judge Donn Kessler drew on law, precedent and the dictionary to conclude that, in supporting all seven bond propositions, the ads were not about the “same” subject.
In an interesting line of discussion, Kessler drew in points about the state Constitution’s “single subject” provision as illuminating the disclosure law’s “same subject” clause. Separately, he outlined the history of precedents, and the legal justifications, that required that the overall 2006 bond proposal be broken up into its seven separate ballot propositions in the first place.
According to a passage quoted in the appellate ruling, “the pertinent principle is that two or more separate and distinct structures or units cannot be combined into one single proposition and submitted jointly as one question. In the great majority of jurisdictions the general rule is well settled that ... there must be a separate proposition on the ballot for each distinct, unrelated, and independent object or purpose for which indebtedness is contemplated, showing separately the amount desired for each.”
So, for the Appeals Court—ironically—while the city was required to put forth its proposed bond items as separate propositions (thus representing different subjects), advertising supporting them was able to simply, easily and conveniently avoid disclosure requirements merely by supporting all of them in a single ad.
Kessler discussed the constitutional “single subject” requirement for initiatives and referenda to try to explain why the Legislature would have added the “same subject” exception to disclosure requirements, thus enabling such an easy avoidance of disclosure:
“Presumably, the legislative intent was to alert voters of the identity of supporters of ballot propositions dealing with the ‘same subject,’ so the voters could determine the possible implications of the propositions. This is especially true when various propositions deal with the same subject, but are actually adverse to or conflicting with each other such as those supporting bans on smoking but one of which is supported by the tobacco lobby. In contrast, in adding subsection (H), the legislature saw no need to require such identification when the advertisements dealt with more than one subject on which voters could separately cast their ballots and which were not conflicting,” Kessler wrote.
“Here, the voters could cast their ballots to approve some of the bond propositions, but not others, and the separate propositions were not necessarily dependent on each other and were not conflicting. Identification of supporters of all of the propositions, such as BOF [Building Our Future, the bond political committee], would not serve to identify the implications of voting on any one of the propositions.”
Kessler’s reasoning seems to contain the seeds of its own refutation. For example, he notes that it’s “especially true” that disclosure may aid voters in determining the implications of various propositions when they are on the same subject but backed by different interests. But while disclosure may be “especially” useful in such cases, that by no means implies it’s not also valuable when voters are evaluating different propositions.
In the case of the 2006 Phoenix bond program, watchdogs pointed out that the undisclosed backers of the propositions included some—Westcor and Arizona State University, to name just two—that might well have expected to benefit from all or several of them. The plaintiffs in the case believed the voters were entitled to know the identity of those backers.
Nonetheless, while admitting the Legislature’s underlying intent was generally to require disclosure, Kessler argued the limiting exception must have been legitimately and knowingly intended: “Applying the test from the ‘single subject’ rule to A.R.S. §16-912.01(H) is also compatible with the requirement that we construe statutory language to fulfill the legislative intent underlying the statute.”
“While we agree with the superior court that the overall legislative intent underlying A.R.S. §16-912.01 is to require disclosure to the public of who is supporting a ballot proposition, the clearly-stated legislative intent limited such requirement under subsection (H) of that statute to require disclosure only when fifty percent or more of the advertisement dealt with the ‘same subject.’ While there is no legislative history to guide us on what the legislative intent was in using the words ‘same subject,’ we presume that the legislature knew and approved of the judicial branch’s interpretation of the ‘single subject’ concept under Arizona Constitution, Article 21, §1.”
The question remains, then, why the Legislature would add an exception to disclosure that could so easily be exploited and invoked to avoid it? As argued above, the Appeals Court’s implication that the disclosure requirement is only useful to voters when applied to ads on a “single subject” does not necessarily follow.
Plaintiff Bentley said she’s trying to pursue just that question, to bolster an intended appeal to the state Supreme Court. “I’m researching the law and Legislature’s original intent,” Bentley said. “It goes back a long way. If you read campaign finance laws, they require disclosure, disclosure, disclosure. [But the Appeals Court is] saying ‘If you logroll it all together, you can circumvent the law.’”
“Logrolling” is the prohibited practice of bundling together disparate items in bond proposals or different subjects in state ballot propositions. But Bentley points out that in the advertising for the set of 2006 bond items, the Building Our Future political committee in effect “logrolled” its support for them all. And thus, per the Appeals Court, “In your promotion, you’re exempt from disclosure. It sounds absolutely stupid,” she said. “Out-of-state interests and others have spent millions of dollars on logrolling [support for the bonds] together.”
But why would the Legislature have created a loophole so big you can drive a truck full of cash through it? “Legislators don’t all have the best command of the English language,” Bentley said. “If you read [the statute], you go ‘What the hell does this mean?’”
Bentley said she was surprised the reversal turned on the apparent exception clause. “They threw it out on the one issue, which we thought was the nothing issue,” she said, reiterating that the Superior Court judge had found the bond propositions so entwined that they were on “the same subject.” “There’s so much crap in some of those bonds individually. So if they passed Prop 1 but not Prop 2, you’ve bought radio equipment for new police stations, and you don’t build the stations.” Or vice versa, she added.
The Appeals Court said since it found basis for reversal just on the clause at issue, it did not consider other arguments by the defendants, including attacks on the constitutionality of the disclosure statute on First Amendment grounds. Those defense arguments were also thoroughly considered and countered by Judge Jones.
In the meantime, the defendants have obtained a fraction of their approximately $1.2 million judgment, and they only got that—about $130,000—through assiduous legal wrangling, Bentley said.
“We have whatever they had left in the bank. They did a fraudulent transfer. They took the money and transferred it to a bank account and gave it to Andy Gordon’s firm to appeal, as a retainer,” Bentley said. “After we won, they were spending our money. If they lost [on appeal], there would be no way to pay us because they would have spent it. We had to go for garnishment, had a debtor hearing to find out what they did with the money—had to do a debtor exam. Lauren [Weinzeig] of Gordon’s firm finally told [plaintiff’s attorney] Carolyn [de Szendeffy], ‘We took that for retainer on appeal.’ We had the court make them give it back.
“We’re not going to spend it till we know for sure if we won or lost, in case we have to give it back,” Bentley said. In the meantime, if they lose, the fact they’re responsible for court costs isn’t so bad, she said. “Costs aren’t much, a couple hundred bucks. They were just awarded costs, not attorney fees—that would be hundreds of thousands.”

Ruth Ann Marston seeks Dist. 7 Council seat

We ordinarily would wait a week or two following its cover date to post a story from our print edition. But rather than get scooped, and since, delivery personnel being out of town, the bulk distribution of the paper may be a little late this month, here's the breaking news—already a couple weeks old, actually, as of the posting date—but as far as we know, it hasn't been carried elsewhere ... yet.

Midtowner to vie in Dist. 7
Seeking Council seat when Lingner exits, Marston cites big credentials

By David Tell, Messenger editor

In a field that is growing almost as crowded as the race for the Democratic nomination for president, one of Midtown’s own has thrown her hat in the ring to succeed Doug Lingner on City Council in District 7.
Ruth Ann Marston is a longtime Willo resident and educator who retired from the Phoenix Elementary School District No. 1 a few years ago. She is now in her second term on its governing board, as its president. She also leads the loosely organized Phoenix Historic Neighborhoods Coalition, as well as serving as president of the Central Arizona Chapter of the Arizona Historical Society. Supplicants for rezonings and their opponents also are familiar with her reasoned statements and actions as part of the Encanto Village Planning Committee, of which she is a past chair.
While all these offices and accomplishments position her well for support from within the urban-historic end of District 7, Marston acknowledges that a key task will be introducing herself to residents and organizations in the bulk of the district, which wends through southwest Phoenix.
Despite the fact that Midtown’s historic neighborhoods represent only a small portion of District 7 both geographically and demographically, Councilman Doug Lingner has been a staunch supporter of historic neighborhood and preservation issues. Election of Marston could be expected to only enlarge that support and awareness.
To get acquainted with the rest of the district, “I plan to do a lot of walking and meeting people,” Marston said. But she said she’s not unknown in the southwest part of the city. “I have contacts in the west and southwest valley through the work on the planning committee where I’ve been a member for 10 years. So I’ve been active in planning and zoning issues, particularly when people have tried to break zoning rules, or go around the system so zoning was not predictable—and when they take opportunities for personal self-aggrandizement instead of helping the whole valley develop.”
As an example, “I was active keeping people from building very dense developments around 75th Avenue and I-10. Light rail is going in there and there will be a park and ride lot. Developers were planning to break through the industrial zoning south of the freeway to build very dense industrial housing in areas that would be surrounded by big trucks,” Marston said. She pointed out that seven of the city’s 15 or so village planning subunits are in whole or part in District 7; thus the district’s representative’s reach and sphere of concern is quite broad, in virtue of his or her role in making appointments to the respective planning committees.
She added her service on the school board gives her contacts in school systems throughout the valley.
As for reaching out to the Hispanic constituents in the district, “I’ve taken Spanish classes”; she speaks “porquito, no mas.” She said she spoke Spanish more fluently when she was a school principal and the skill was called upon more often.
Marston said the idea of running for Council had “been growing on me as I’ve watched the city become interested in reinventing itself through education. I’m a lifelong educator. I can see that there are gaps in the city’s effort. Having the university downtown is great, but unless the rest of the educational system support it and kids come to those programs ready, it will be less effective. Having children come from somewhere else is not as useful to Phoenix.”
Marston said access to downtown schools by the city’s own residents involves “being prepared to be successful, and second, to be able to afford to be successful,” she said. “There are a lot of kids in the downtown area whose parents can’t support them through college, they’re going to need ways to work their way through and I don’t think we’ve addressed that adequately.”
Would the inevitable attention to additional city and constituent concerns dilute Marston’s ability to serve the historic end of the district and its issues? “I don’t think it’s a question of dilution. I think things are complementary,” she said. “The historic district supports the whole culture of the city of Phoenix. It’s very important to preserve the historic area itself. Just having a bunch of people living in proximity doesn’t constitute a city. A city is the sum of the past and its future aspirations. It’s important to know what we’ve been in order to build on it. It is absolutely true that you’re doomed to repeat the past if you forget it.
“People don’t move to Phoenix because there’s a lot of dirt,” Marston said, acknowledging that it’s partly the climate that draws them. But they also move here “because of the ambiance, the way they’re treated and opportunities that are available. The opportunities are largely due to foresight of people in the past, on, for example, water conservation and infrastructure. You can move your car in Phoenix, not like LA or Chicago. People have thought ahead in terms of larger infrastructure and we need to continue to think ahead, have that kind of foresight.”
At the same time, “Phoenix needs to be developed for livability, for sustainable growth—and not only for immediate profitability,” she said. “What really needs to happen—I’m a great believer in collective wisdom. We need to have substantial agreement about how Phoenix will grow. It needs to be detailed, especially at the neighborhood and village level. We have to insist on it. We can’t let [personal] gain on the part of an individual or group change the opportunity for sustained livable growth.”
In a field in which other contenders have already announced and in some cases garnered important endorsements, how does Marston see her chances? She points to her two wins in school board elections: “In 2002, I got 38.24 percent of the vote in a field of five candidates and two write-ins, in a vote-for-two situation. For ’06, I got 44.2 percent of the vote in field of three. You know how hard school board races can be fought. Knowing that you have a chance of winning is part of the thing about making your decision about whether to run.”
Marston also said she was more inclined to run when attorney Harry Keidan agreed to be her campaign manager. She said as she is a Republican and he’s a Democrat, that broadens her outreach to the district's voters and people of influence.
Given that Council races are officially nonpartisan, and the rest of her record and profile, she doesn’t expect party affiliation to be a factor overall, nor as to her support within Midtown, where the voter registration tilts slightly Democratic, unlike most of the state. She says she became a Republican during Sen. Barry Goldwater’s heyday, and has toyed with switching parties, as District 4 Councilman Tom Simplot recently did following the November elections. “Many of us are questioning our party affiliation, because it doesn’t mean what it did when we registered,” she said. But she resists switching camps at the moment, acknowledging it would be seen as patently opportunistic. “It would be obviously self-serving. The only reason at this time would be the candidacy, and no one would believe it” to be motivated by principle. She said party registration aside, Midtown “doesn’t’ necessarily vote Democratic. It shouldn’t be a disadvantage.”
Others who have thrown their hats in the District 7 ring include Michael Nowakowski, Laura Pastor, Dustin Steiger, Santos Chavez and Troy Price. Look for coverage later in the campaign season that provides more information on all the viable candidates.