Dark Money Debate

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Hear from both sides as attorneys Tim LaSota and Tom Ryan debate the pros and cons of so-called “dark money,” money that is spent to influence elections without the requirement to disclose the source of the cash.

Ted Simons: Lasotaia with 114 million in dark expenditures reported in the state's 2014 campaign season alone. Tonight we welcome Tim Lasota, general counsel for the Arizona Republican party, a proponent and Tom Ryan, standing against the use of dark money. Define dark money.

Tim LaSota: I think what opponents of free political speech would characterize dark money as is money that maybe they think is improperly disclosed, but that's a very good point right off the bat. Really what this is about is an effort to limit free political speech. There have been a number of cases decided by the Supreme Court and other courts that have expanded right to free speech, appropriately so. More in keeping with what our founders wanted. Some people such as Mr.Ryan over here are very upset about that.

Ted Simons: Talk to me about dark money. What are we talking about?

Tom Ryan: What we're talking about is undisclosed amounts of millions of dollars that are coming in flooding into our state and purchasing seats within our elective government. We don't get to know who they are. There's a very corrosive effect. It leads to corruption. It's not healthy for the state politicians. Let me give you a great example. As you know our Arizona Corporation Commission right now is under investigation by the FBI because of the money that you talked about at the top of this segment that flowed into the state of Arizona.

Ted Simons: Does that not happen if there is no anonymous political speech?

Tom Ryan: In, it still happens but here's the deal. We have the right to know who is out there buying these elections. That is the problem. In fact in citizens United the Supreme Court decision one of the things that justice Scalia, a well-known conservative scholar said, we're going to open the floodgates but we fully expect disclosure in this whole thing because people have a right to know civic involvement.

Ted Simons: Do people have a right to know who is funding political campaigns?

Tim LaSota: Let me correct what Mr. Ryan said. What he said is ridiculous frankly about purchasing elections. Everyone has the right to political speech. This corruption, where is the corruption, Tom? Every one of these investigations that you trumpet over and over again, they always end up in the same place, which is right in the garbage can. You have no evidence of corruption.

Tom Ryan: Not all of mine have involved corruption. Some involve conflict of interest like the Corporation Commission. This isn't about me or my beliefs it's a question is dark money good for Arizona and nobody woke up this morning and said the one problem is not enough money chasing politicians around.

Ted Simons: The idea of knowing who donates to campaigns sounds like a good thing.

Tim LaSota: I think it is. I think that when candidates engage in political speech I think that it is appropriate to require that they disclose their contributions. Where the problem comes up is with corporations and corporations have the right to free speech. The Supreme Court said so. The Supreme Court is -- they obviously are right but the First Amendment protects the rights of businesses also. So they have this right and who is a contributor to a corporation? If General Motors makes a political contribution, who is a contributor to them? Anyone who bias car? I think the problem is that the people who want to stamp out this new form of free speech essentially have not come up with a way to regulate it that would pass constitutional muster.

Tom Ryan: Actually there are ways to regulate it. The first is Montana and then California. Both of them have strict disclosure requirements. In fact a local political funding company here in Arizona got fined [speaking simultaneously] Let me finish, please. Prop 8 election in California they have excellent disclosure laws. That's what we're asking for. I'm not asking for limits of money. I'm asking for disclosure of who is buying up the seats we have here.

Tim LaSota: I think very few people in Arizona would hold up California as a model of much of anything these days, certainly not their laws regulating free speech. I think what we saw in California is an example of the types of miscarriages of justice we get when we empower unaccountable government agents to try to go after and stamp out free speech.

Tom Ryan: That's funny. We just pass add law in Arizona called Senate bill 1516. It completely gutted our campaign violation laws. It now says if you are a 501c4 and the recognizing you don't have to register in the state of Arizona. What if foreign countries are coming in buying up water boards and by water boards I mean commissions. What about drug car temperatures purchasing certain of our politicians? Nobody can say that doesn't happen. That's why this is important.

Ted Simons: Do you think that happens?

Tim LaSota: First of all there are no black helicopters. I think what he's talking about here is just pure fantasy, the drug cartels are getting involved in American election them. The broader point is he's completely mischaracterized Senate bill 1516. As it is now an entity is only a political committee if they are primarily devoted to express advocacy. A C4 is it not a significant change in law.

Ted Simons: Very quickly, how do we know that cartels or nefarious folks are not involved if we don't know who is involved?

Tim LaSota: Well, I mean, how do we know anything?

Tom Ryan: I got -- [speaking simultaneously]

Ted Simons: Hold on. Let him respond.

Tim LaSota: I think C-4s have some disclosure requirements. Candidate committees have disclosure requirements; 5-27s have disclosure requirements. I mean the system now this notion that allowing more free speech is somehow bad is just a faulty notion.

Ted Simons: It can be argued, can it knot, that monitoring anonymous political speech in certain ways puts a chilling effect on speech.

Tom Ryan: Respectfully, no it doesn't. What it is is all we're asking is for disclosure. By the way, let's go back to your jam example. If I'm a shareholder, I may not be happy about the way my corporation is spending the money I'm entitled to. If they are expending it on causes I don't agree with that's the opposite of free speech. That becomes compelled speech. As a shareholder I want to know what my corporation is doing. The same for unions. I would like to know where my union dues are going. So that's why we have this kind of disclosure for these things. Leaving it to the IRS to monitor Arizona's campaign finance violations as they have done under 1516 is the height of silliness.

Ted Simons: Please.

Tim LaSota: First of all the IRS does have a fairly robust enforcement mechanism. So I think that the notion that keeping one's IRS C4 status is somehow easy or the IRS is a toothless tiger I think most Americans would disagree.

Tom Ryan: Name one entity revoked under the 501c4 status.

Tim LaSota: Happens all the time.

Tom Ryan: Name one.

Tim LaSota: That crossroads whatever it was had theirs revoked. There was a liberal organization that had theirs revoked. It happened.

Tom Ryan: Rarely.

Ted Simons: Why would anyone want to donate anonymously?

Tim LaSota: Because they fear retribution. It's a sad fact of life that some elected officials or public officials will abuse the power of their office to punish people who donate money and where the money is used to go after that person. That is the big problem with these big regulatory schemes that people like Mr. Ryan cook up is it empowers unelected bureaucrats to essentially use the law as a hammer to go after opponents. They don't have to win. They just have to make you spends millions of dollars in attorneys' fees and it has precisely the chilling effect that they like.

Tom Ryan: Every time I as an individual, a citizen of the state of Arizona, make a donation to a campaign my name goes on a record down at the Secretary of State's office. I don't get that protection. You don't get that protection. Why are we granting it to these anonymous people hiding behind 501c4s? There's a great book out by Jane Mayer called dark money. If you want to read a good account of what's happening, Arizona is ground zero for dark money and it ought to cause concern for every citizen in the state of Arizona.

Ted Simons: But the idea of retribution, that again, let's say I donate anonymously because I know I like you. I want you to win but I know if I do this -- people could target me in a variety of ways, thus maybe I'm not going to donate. Is that not a chilling effect?

Tom Ryan: No. It rarely happens. I mean you look at elections now, when can you tell me when there's been retribution for somebody who has made a contribution. There are situations for example when we know that corporation versus been giving to Alec, the cover organization for the Koch brothers and people have gone after them as a boycott. That's not the same as retribution in the sense of you may be hinting like the forefathers were when they were doing the federalist papers.

Ted Simons: Have they got a point?

Tim LaSota: No. We have cited an example in California that Tom likes to cite to. A $1 million fine for what was essentially a paperwork error is ridiculous. That's the type of enforcement we get with these schemes.

Tom Ryan: That was not a paperwork error.

Tim LaSota: Come on, Tom.

Tom Ryan: It wasn't a paperwork error.

Tim LaSota: That was political payback.

Tom Ryan: It was an obligation to disclose their donors under California law and they didn't do it.

Tom Ryan: They went after the affordable care act. That meant officials went after them. [speaking simultaneously]

Ted Simons: Again, the idea of openness and transparency, some would listen to this and say that you are not necessarily for transparency. Are they wrong?

Tim LaSota: No, I'm for transparency. We have candidate elections and the candidates have to disclose their contributions, independent expenditure committees. Set of 527s. In the realm of C4's we have a new entity the regulators have not been able to find out a way to determine what's a contribution to that entity. It's very difficult. You have a corporation. Corporations don't get contributions at least a lot of them don't. They get income. They sell things to people and they pay a money for that. You have a very difficult task, any regulator does, in drawing the line between what's a contribution and what's just a corporation doing business. The people who are so hot to regulate this and stamp out this new form of free speech just haven't found a way to do it constitutionally. I don't know that they ever do. The point is their goal isn't disclosure. Their goal is eradication.

Tom Ryan: This whole idea that this is a new form of free speech let's deal with that quickly. Money has been in politics from the get go. The problem is now we're allowing massive amounts, billions of dollars nationally, to go undisclosed where we don't get know where the money is coming. From money is not free speech. I don't care what anybody says. Money does one thing. It excuses me. It buys you access to free speech. If I call a dog's tail a leg, a dog sometime only has four legs just because I call his tail a leg doesn't make it have five legs. Free speech is not money and money is not free speech.

Tim LaSota: I have no idea what you just said. Free speech is absolutely requires money. Free speech is much more than just being able to stand on a street worn corner sands r and say I'm Jesus. It means little without the ability to get one's message out. This society --

Tim LaSota: We shouldn't have to rely on just the up in. The broadcast news. If you want to be able to go out there and exercise your right to free speech you ought to be able to spend money to do it. It's essential to free speech.

Tom Ryan: What you're saying is those who are the broken, down trodden, oppressed, poor have also or no free speech right.

Tim LaSota: That's not true.

Ted Simons: How would you compare the average Joe who only has a certain amount of money with the average corporation which has a ton more money? Is it fair that that corporation can speak louder and more often than the person?

Tim LaSota: Of course it's fair that people with a bigger voice have a bigger voice. Saying that's unfair is like saying it's unfair that the president has a bigger voice than the average American. You're always going to have that in an open society. People have that more or fewer resource. That's no reason to bring down people with fewer resources to a lower level.

Tom Ryan: You want to know the government dark money buys take a look at Senate bill 1516. I testified against that bill. Said it's a danger to Arizona. I told them that I was going to lead the effort for a citizen's referral. I have been doing that. Literally on the last day in the two or 3:00 a.m. they passed house bill 2296, exactly the same bill, with the purpose being making it impossible for the citizens of the state of Arizona to disagree with the state legislature over dark money. [speaking simultaneously] it's exactly the same bill. That is the government -- [speaking simultaneously] Senate bill 1516 referendum team it's exactly the same. The only think it did was accelerated everything to cover the current primary cycle. Other than that it's exactly the same bill.

Ted Simons: We're running out of time. Bottom line for those who like anonymous political speech is it protects unpopular speech. Do they have a point?

Tom Ryan: No, they do not have a point. This is not about protecting unpopular speech. Unpopular candidates and points of view. If you're putting the money out there we have a right to know who is putting their thumb on the scale when talking about our elected officials in the state of Arizona.

Tim LaSota: I would say that people who want to regulate this don't get the right to stamp out this free speech all in the name of regulation. I think they have to figure out an appropriate way to do this and how come we never hear any of these examples of corruption that Mr. Ryan talks about? He always talks about corruption, corruption, corruption.

Tom Ryan: You want to talk about Dave Gowan, Speaker of the House?

Tim LaSota: We had -- [speaking simultaneously]

Ted Simons: We'll end it here. Good to have you both here. We appreciate it. Wednesday on Arizona Horizon hear about a plan to self previously decides carted biogas at a local wastewater treatment plant and we'll discuss Arizona's historic connection to the G.I. bill. That is it for now. I'm Ted Simons. Thank you so much for joining us. You have a great evening.

Video: "Arizona Horizon" is made possible by contributions from the friends of Arizona PBS, members of your PBS station. Thank you.

Tim LaSota: Attorney, Tom Ryan: Attorney

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