Legislative Update

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Jim Small from the Arizona Capitol Times will give us the latest news from the State Capitol in our weekly legislative update.

Ted Simons: Good evening and welcome to "Arizona Horizon." I'm Ted Simons. Every week we update the latest on state politics with the "Arizona Capitol Times." And joining us now from the Capitol Times, is Jim Small. Jim, good to have you here. Thanks for joining us. We have a lot to talk about. I have to tell you this pro publica story released Friday, Republic ran it today, and you guys have been working in bits and pieces through much of this for quite awhile. Deals with the Koch brothers, deals with dark money, what kind of reaction is the story getting among lawmakers and folks at the capitol?

Jim Small: It is interesting. This is a story, I didn't do a word count on it. A very dense read, long read. You block out maybe an hour of time almost to get through the thing. It had a lot of information, a lot of really intricate financial dealings from these campaigns, national campaigns coming into Arizona and funneled back out to other national groups. At the core, I mean, a lot of it is stuff that was already known. A group based in Arizona, run by a Phoenix political consultant that was essentially the clearing house for money that came from the conservative -- from the Koch brothers network. And they acted as kind of the weigh-station for the money. Money came in and got sent out to other groups.

Ted Simons: This was Sean Noble?

Jim Small: Yes, the political consultant. I really think what was more revealing was some of the details and scope of how much money we were talking about and how it was spent. Some of the nuances about the whole very, very intricate system.

Ted Simons: Give us an example of some nuances that raised your eyebrows.

Jim Small: One thing that stood out in the whole thing, and it was a major point of the pro publica piece, was how much money was given to the consultant, to Sean Noble's consulting firm. I think about one in every five or six dollars that came in. And we're talking you know, well over $100 million that came in over the course of a couple of years went to pay his firm some kind of -- for some kind of work that was done. And it -- it is listed with a vague term, just like reimbursement for consulting services, which is kind of odd. This group didn't actually do anything. They didn't do any work. They didn't do any education. They didn't -- they existed merely as a way -- kind of a pass through for money, to add an extra layer of anonymity and security under the federal tax laws. It kind of raised eyebrows. Okay. Why are they getting paid $25 million, $24 million? What did they do to earn this? What kind of services were provided? The author of the piece spoke to several tax experts, nonprofit experts who said that this was definitely something that raised red flags and raised some eyebrows, and even looked at a number of politically active nonprofits to see how much money they spent on consulting fees and services and, I mean, it was a pittance certainly compared to even proportionally compared to what was spent.

Ted Simons: This money comes in, funneled through an absolute intricate web of this, that, good luck trying to follow the stuff. We do know that the top 2 primary initiative that was on the ballot, the sales tax extension or expansion, however you want to describe it, both lost, both lost big. Those losing campaigns, the campaigns to defeat both of those initiatives, funneled by these particular groups along with the independent redistricting commission. There is money going against that as well, correct?

Jim Small: Yes, back in 2011, when the redistricting commission was meeting and doing its work to draw new political boundaries for the state. A group emerged in the middle of the year, fair trust, FAIR, an acronym. Election law attorneys showed up at the meetings, a mapping consultant, and they would never answer questions directly about what, even what the acronym stood for, for one, and who was funding them. It was a constant -- everyone knew that they were representing republican interests, and that there was some kind of republican money behind them, but they would never disclose who it was, and then we still don't know the totality of who was funding the effort, but what we do know now thanks to this tax filing that pro publica based their story on is that this center to protect patient rights, this clearing house entity gave $150,000 of money from the Koch brothers network to the redistricting fight to the effort to basically lobby for districts that more represented republicans' wishes as opposed to democrats.

Ted Simons: All of this dark money flowing around, all on the up and up, after citizens united, but here in Arizona, a move, Michelle Reagan looking to shine a light, debate on how much good this would actually do her bill, how far is this bill to shine a light going to go?

Jim Small: Well, the bill got out of Michelle Reagan's committee yesterday. Passed out with some reservations. Some senators voted for it, I will vote for it to move along but have some reservations. Would like to see some things fixed. The bill was signed to two committees. This is the final week to hear bills of committee in Senate and the other Senate committee it was assigned to met on Monday and didn't hear it. So, it is up to the Senate president Andy Biggs. He can withdraw it if he chooses. He has never done that before. One of the things he made a strong point of last year that he would not withdraw bills from committees. He told a colleague that he that is no plans to withdraw it from this committee, if asked to do so. He has serious reservations about constitutionality of some of the provisions. Right now it looks like the bill is as dead as anything can be in the middle of February in the legislature, which means it is dead for now but could possibly come back later in the form of an amendment.
Ted Simons: It is on life support, if you will, because people say that anonymous speech is free speech, and if you force people to tell who they are and what they want to donate to, that would have a chilling effect.

Jim Small: That is one of the arguments, you know, for the folks who believe that the anonymous free speech -- the anonymous speech is something that everyone has the right to.

Ted Simons: The pro publica piece, it is long and indeed dense, but there is so much in there. Sean Noble, major piece, player in the story, certainly a big-time guy for awhile. Doesn't seem to be a big-time guy with the Koch brothers right now. Is he still a player in Arizona politics?

Jim Small: In Arizona politics I think absolutely. His firm does a lot of work in Arizona. I think we will see them involved. They will be involved in the attorney general campaign in one form other another. They are going to be involved in helping Doug Ducey win the Governor's office -- whether it is through a campaign or -- remains to be seen. Definitely involved in that effort. No doubt they are going to be involved in Arizona politics.

Ted Simons: Kirk Adams mentioned into the piece as well, as being another focal point for funneling -- is he still a player in terms of money fundraising in Arizona politics?

Jim Small: That remains to be seen. I think it remains to be seen for both gentlemen what they can do in this dark money, nonprofit world. If it is true that the Koch brother network ties have been severed or greatly diminished, it remains to be seen exactly what kind of fundraising abilities they would have. You would have to imagine that any effort on that end would have to be largely focused on local first and then moving on to national.

Ted Simons: This is the new normal, isn't it, as far as fundraising is concerned? Try and find something, good luck --

Jim Small: It has seen this year than more years in the past. How much money raised on his behalf by outside groups?

Ted Simons: Great stuff. So much to cover. Good to have you here. Thanks for joining us.

Jim Small:Journalist, Arizona Capitol Times;

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