Corporate Financial Disclosure

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A discussion about HB 2385, a bill introduced in the Arizona State House of Representatives, that is designed to strengthen corporate financial disclosure requirements, making it easier for the public to know the source of political ads.

Ted Simons: When the United States Supreme Court issued its ruling in the Citizens United case it opened the doors for businesses and unions to spend money to oppose or support political candidates. Some are worried that such power could be abused and a bill has been introduced in the state legislature to strengthen corporate financial disclosure requirements making it easier for the public to know who is paying for certain political advertisements. Here to discuss that bill is Arizona Attorney General Tom Horne, a supporter of the measure, and Nick Dranias of the Goldwater Institute, which has come out against the bill. Thanks for joining us tonight on "Arizona Horizon."

Tom Horne: Good to be with you. Good to be with you. Nick and I disagree about this issue but he did work on another Supreme Court case I'm interested in that was so good I told the Goldwater Institute I forgave them all their prior --

Ted Simons: All right. Why is this particular bill a good idea?

Tom Horne: It's a good idea because we don't want to have anonymous speech. We want to know who it was that paid for the attack ads that we see or sometimes the attacks really nasty personal attacks that occur, people need to know who is behind it.

Ted Simons: People need to know who is behind anonymous speech.

Nick Dranias: I don't think people should have to choose between their first amendments rights and privacy. There's a real problem going after third party groups, people who just organize themselves collectively in a group and spend money to project their message. There's a problem with treating them as equivalent to candidates. They aren't. They are ordinary citizens organizing as corporations or unions or other legal forms that want to spend money to project the message. One of the things that really concerns me about this bill is that it presumes the electorate is so incredibly dense that the only way that the political market can correct for abuses of free speech is if the government puts its heavy hand of regulation into the market in fact very few examples of abusive speech by independent expenditure committees have ever significantly impacted an election and the market is fully capable of dealing with that. That people trade on the reputation. They trade on who they are. They have enough of an incentive to disclose who they are in the process without additional laws.

Ted Simons: You mention people trade on reputation. How do we know -- if we want to know your reputation why not let everyone know you're part of this particular process?

Nick Dranias: The First Amendment says no law shall abridge freedom of speech. You don't start with the premise we're going to abridge freedom of speech and figure out how to get to that point. We first recognize people should be free to speak without any legal hindrance. Clearly lays a number of complicated legal hindrances in front of groups.

Ted Simons: Heavy handed government, keeps people from their freedom of speech.

Tom Horne: let me give you an example. I remember Len Munsil running against Don Goldwater for the Republican nomination for governor. A piece went out saying something about Len's oldest child being illegitimate. Terrible, nasty, personal attack. Everybody assumed Don Goldwater was behind it because he would benefit. A lot of people got mad and voted for Len for that reason. I can testify personally knowing that my statement is true, after the election it turned out a group of Democrats had done it. The public had a right to know who did that. That nasty personal attack on Len.

Ted Simons: I would think the public would also need to know some Republican and right leaning groups are also sending out attack ads.

Tom Horne: Absolutely.

Ted Simons: Why should we not know whether it's left or right? How is it abridging freedom of speech?

Nick Dranias: People are fearful of political retaliation. If this wasn't about deterring people from expressing themselves, this wasn't what it was really about, there would be some way to protect people's privacy. There's no way. We shouldn't forget there was a time when membership lists of politically active groups were sought by the by state legislatures during the civil rights era for the purpose of political retaliation. When groups organized to take positions on controversial issues they have a legitimate concern about their privacy.

Ted Simons: But if groups organize and take positions on controversial issues, isn't that -- let the chips fall where they may? If you're taking a position on a controversial issue shouldn't you be for lack of a better phrase man enough to say here's what I think?

Nick Dranias: Not when the government is doing it through law. The First Amendment says no law shall abridge freedom of speech. If we go back to the Federalist papers the founding fathers advocated for the ratification anonymously. Things would be hyper regulated under this new law.

Tom Horne: Let me tell you what the United States Supreme Court said. It was a 5-4 decision allowing corporations to spend money but on this point it was 8-1, eight agreed with this statement. The First Amendment protects political speech and disclosure permits citizens and shareholders to react to the speech of corporate entities in a proper way. This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages. That was eight justices agreed with that statement.

Nick Dranias: It also said prolix laws chill free speech. People of common intelligence must necessarily guess at the meaning of the laws and its application. The devil is often in the details. Definition of the word contribution is two pages. I have read this document now probably five times myself. I'm a constitutional lawyer. I still don't know what the word contribution means, yet this law says I cannot freely organize a corporation to speak unless I comply with this. That means my freedom of speech is contingent upon hiring a campaign finance attorney more expert than I am.

Ted Simons: There's also concern that if you are a group who says I'm for basically organizing to educate voters, we're not organizing to influence, just to educate, that slips through a loophole.

Tom Horne: That's true. Arizona law is actually stronger than what I think the U.S. Supreme Court permits. I said I think it's strong enough. It's stronger than what can pass constitutional muster in court. The issue is are you trying to influence an election or educating voters. That's an important distinction where the Supreme Court has put a broad standard saying you have to show specifically that you're making it clear to voters that you want them to elect or defeat a candidate to come under this law.

Ted Simons: I could easily say that I want to educate voters that my opponent fathered an illegitimate child. That's education. I think they should know that. I'm not necessarily against him.

Tom Horne: I think the court would rule you're trying to influence the election and you would have to disclose who it is. That's my point really. The quo takes that Nick just read about prolix, that came from a dissenting opinion from Justice Thomas with whom no other justice joined. So the conservatives Alito, Scalia, and Roberts didn't accept that. Eight judges felt it was important we have disclosure.

Ted Simons: You got a relatively conservative Attorney General, you have a leader at the legislature, you have a relatively conservative Secretary of State. These folks are saying we need some transparency. What's going on?

Nick Dranias: People on the right side of the law make mistakes. The Attorney General has made a mistake. He's mistaken for example about that quote. That quote comes from page 7, the slip opinion, written by Justice Kennedy, not by Justice Thomas. Prolix laws are a problem. When you define contribution like, this the only people this shuts up are unsophisticated groups. Sophisticated groups can navigate this because they have the resources to hire a campaign finance attorney to tell them what this means. Unsophisticated groups are the ones that are really burdened by laws like this.

Ted Simons: If sophisticated groups can get around that doesn't that suggest there's something to navigate around? And to get around? It doesn't sound to me like it's very transparent. If I'm Corporation LLC, and I think so and so fathered an illegitimate child, boom, let the chips fall where they may.

Nick Dranias: I agree with that. I think in realty because of the complexity of so-called disclosure laws, they are not really about the public's right to know. What this is really about is creating barriers to entry by unsophisticated political groups.

Tom Horne: Well, anybody who reads the English language, at, say, a 6th grade level, can understand definition of contribution. It's not that difficult. If you're contributing money or services or in some way promulgating nasty attacks on others, don't say I'm such a tender plant I can't take criticism for my participation in the public arena. Disclose who you are so people know the source of these kinds of attacks.

Ted Simons: Good discussion. Thank you both for joining us.

Tom Horne:Arizona Attorney General; Nick Dranias:Goldwater Institute

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