Yes on Proposition 102's Contributions Raise Legal Questions: By Mark R. Kerr

TUCSON (Observer Update) - Legal questions over contributions made to, and the expenditures of the proponents of Proposition 102 have arisen.

Recently committee’s for political candidates and ballot measures filed their pre-primary financial statements with the Arizona Secretary of State’s office, per state statute, to report the monies raised and spent on expenditures during their respective campaigns.

For the yesformarriage.com, the proponents of Proposition 102, the proposed state constitutional amendment to define marriage as solely a union between “one man and one woman,” reported raising a total of $631,195.36 and spending $49,343.08, leaving a cash balance of $581,852.28, leaving a person to think that the proponents have raised a significant some of money for their efforts, Arizona law and court precedent in Standhardt v. Superior Court (2003) notwithstanding.

Delving further, under Arizona Revised Statutes (A.R.S) 16-916, filing statements of contributions and expenditures; public inspection into the yesformarriage.com filing (Filed ID# 200810206), raises some legal questions.

First, the individual contributions, the section of the financial report for “business contributions” and expenditures list that all transactions were cash transactions.

Under A.R.S. 16-902 Section C: “Before a political committee accepts a contribution or makes an expenditure it shall designate one or more state banks, federally chartered depository institutions or depository institutions the deposits or accounts of which are insured by the federal deposit insurance corporation or the national credit union administration as its campaign depository or depositories. The political committee shall notify the filing officer of the designation of the financial institution either at the time of filing the statement of organization pursuant to section 16-902.01 or within five business days after opening an account. All withdrawals or disbursements from these accounts require the signature of the treasurer or a designated agent of the political committee.” No such bank or institution is listed on the yesformarriage.com report.

Under state law, specifically A.R.S 16-904. Treasurer; duties; records; civil penalty: “In Section F: Unless specified by the contributor or contributors to the contrary, the treasurer shall record a contribution made by check, money order or other written instrument as a contribution by the person whose signature or name appears on the bottom of the instrument or who endorses the instrument before delivery to the committee. If a contribution is made by more than one person in a single written instrument, the treasurer shall record the amount to be attributed to each contributor as specified. In Section G: All contributions other than in-kind contributions must be made by a check drawn on the account of the actual contributor or by a money order or a cashier's check containing the name of the actual contributor or must be evidenced by a written receipt with a copy of the receipt given to the contributor and a copy maintained in the contribution records of the recipient.” The yesformarriage.com financial report of cash donations and expenditures brings these statutes into play.

Arizona law, A.R.S. 16-919, Section A, which reads: “It is unlawful for a corporation or a limited liability company to make any contribution of money or anything of value for the purpose of influencing an election, and it is unlawful for the designating individual who formed an exploratory committee, an exploratory committee, a candidate or a candidate's campaign committee to accept any contribution of money or anything of value from a corporation or a limited liability company for the purpose of influencing an election.” This is backed up further in 16-914.01: Reporting of contributions by committees acting on ballot measures; civil penalty; definition, which States in section E. “For the purposes of this section, "single source" includes principals of the same partnership, corporation, limited partnership, limited liability company, limited liability partnership or association.”

Of the numerous donations to note (and there are several but of the two biggest so far in the campaign), Yesformarriage.com reports on the Arizona Secretary of State’s website for Notifications of Contributions to Ballot Measure Committees (online at azsos.gov/election/2008/Info/ballotmeasurenotificationsPage29.htm), that on August 20, the Pete King Corporation (Arizona Corporation Commission File Number: -0068559-8), mailing address - P O Box 9158, Phoenix, AZ 85068, made a $100,000 contribution and on September 5, the Crisis Pregnancy Centers of Greater Phoenix (Arizona Corporation Commission File Number:-File Number: -0181891-5), mailing address - P.O. Box 60336, Phoenix, AZ 85082, made a $100,000 contribution.

Neither the Pete King Corporation or the Crisis Pregnancy Centers have formed a political committee or are a “Super PAC” (Arizona Revised Statutes 16-902, 16-902-01 or 16-902-02), avenues corporations, non-profit, limited liability or otherwise can form and register, if they want to influence elections.

For the Crisis Pregnancy Centers (CPC) of Greater Phoenix donation, there are even more legal questions since according to the Arizona Corporation Commission (ACC) website, they’re not in good standing since they have not filed an annual report for the past three years, as stated in A.R.S. 10-1630, required by corporations, non-profit or otherwise to do so to be in good standing in Arizona. According to their website, cpcphoenix.org, the Crisis Pregnancy Centers of Phoenix are “a non-profit, life-affirming ministry whose mission is "saving lives and protecting futures." Our goal is to impact the community by offering programs and services that boldly speak the truth in love while offering choices, support, and hope.”

If the CPC is a “non-profit organization,” classified as 501©3 under federal tax law, then that brings into question their status since federal tax laws state that such entities, “ ... with this classification are prohibited from conducting political campaign activities to influence elections to public office. Public charities (but not private foundations) are permitted to conduct a limited amount of lobbying to influence legislation.”

The questions on these matters are being forwarded with the Arizona Secretary of State, the Arizona Corporation Commission, the Arizona Department of Revenue, the Arizona Attorney General’s office and the federal Internal Revenue Service.