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Updated Feb 18, 2014 - 4:54 pm

Arizona bill aims to track political spending

PHOENIX -- A proposal requiring groups that spend money in Arizona elections to reveal their donors passed its first hearing before a Senate committee Tuesday after its enforcement provisions and reach were significantly watered down.

The effort backed by Republican Sen. Michele Reagan and Democratic Sen. Steve Farley that targets so-called dark money passed the Elections Committee unanimously, although Reagan said it is a work in progress and more changes are likely.

Senate Bill 1403 is an attempt to give voters information about who is paying for ads and other efforts backing candidates and other political causes.

The proposal was amended Tuesday to replace a criminal penalty with a civil fine. The amendment also exempted groups registered with the Internal Revenue Service as action organizations, including those funded by corporations, unions and political actions committees, from its disclosure provisions.

Reagan says those groups are already playing by the rules and she's targeting groups who don't disclose spending.

``I can't pick a fight with them too,'' Reagan said in an interview. ``I've got to choose my battles wisely, and I'd prefer to go after groups that we're getting absolutely no disclosure from.''

Reagan acknowledges a tough battle ahead to get the bill through the Legislature.

The proposal requires groups that spend money disclose their top three donors and fines them three times the amount of the expenditure if they fail to disclose it to the Arizona secretary of state's office.

Farley said the changes to the bill, while removing the criminal penalties and groups that register with the IRS, makes strong steps toward disclosure.

``Remember, currently the state has nothing,'' Farley said. ``It's an important issue to disclose who is influencing our political system with their money, and it is significantly better that the current state.''

Secretary of State Ken Bennett testified that while the proposed legislation isn't perfect, it is a good start at ending anonymous spending that doesn't allow voters to know who is trying to influence their vote.

``The cornerstone of political speech is disclosure,'' Bennett said. ``It's almost impossible to determine how much stock to put into an argument if you don't know who's making the argument.''

Bennett also urged the Legislature to change the frequency of campaign disclosures, which now can be more than a year between filings on off-election years only every few months during election years.

``We need to be bold in Arizona and move in the direction of much more frequent disclosure,'' Bennett said.

Although the bill passed with bipartisan and unanimous support, some committee members said they would be looking for changes before it reaches the full Senate. Some of those members worried that the bill may limit political speech.

``It concerns me that this also could be suppressing our constitutional First Amendment rights of expression,'' said Sen. Kimberly Yee, R-Phoenix. ``We certainly shouldn't allow the government to get in the way of our speech.''

Sen. Adam Driggs, R-Phoenix, expressed much the same concern, noting a 2010 U.S. Supreme Court decision known as Citizen's United that allowed unlimited spending from corporations, unions and political action groups. He says regulating that spending requires a delicate balancing act.

Reagan said those who testified against the bill had a vested interest in keeping the spending secret.

``Everybody that signed in in opposition to this bill wants one thing- and that is for nothing to happen,'' Reagan said. ``They want the status quo. Their clients do not want us to see what they're doing.''

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