POLICYreport Goldwater Institute No. 209 I March 28, 2006

Campaign Promises: A Six-year Review of ’s Experiment with Taxpayer-financed Campaigns by Allison R. Hayward, Campaign Finance Attorney

EXECUTIVE SUMMARY

When Arizona’s Clean Elections Act was passed in 1998, proponents hoped it would mark the beginning of a new era in elections: one of improved voter turnout, increased candidate participation, and less special interest influence. But just how has the Clean Elections Act changed Arizona campaigns? This policy report finds Arizona’s Clean Elections system has largely failed to live up to its stated goals.

Clean Elections was trumpeted as a means to improve citizen participation. However, since the law was passed in 1998, voter turnout has not improved. Likewise, Clean Elections promised to increase the number of candidates in each election and help reduce the incumbency reelection rate. A review of election cycles shows that since 1998, incumbency reelection rates have remained near 100 percent, and in the most recent primaries, the number of candidates fell substantially. In fact, from 2002 to 2004, the number of primary candidates for office fell from 247 to 195. Moreover, the law has not increased minor or third-party participation in politics, and Arizona campaigns remain every bit as hard-edged under Clean Elections as they were when traditionally funded.

Clean Elections comes at a cost. The state loses ten dollars every time a taxpayer marks the $5 tax check-off. Additionally, the program requires a confusing and frustrating regulatory regime that threatens constitutional liberties. The obligation to monitor abuse of public funds requires a level of invasive investigation that is simply not necessary in traditionally funded systems.

There is little evidence that the Clean Elections law has fulfilled its goals. Instead, it imposes real burdens on political speech and on the ability to run for office. This study concludes that Arizona’s Clean Elections system may actually harm the political process while imposing significant costs on the public. GOLDWATER INSTITUTE I policy report

Campaign Promises: A Six-year Review of Arizona’s Experiment with Taxpayer-financed Campaigns by Allison R. Hayward, Campaign Finance Attorney Introduction rigorous to resist unscrupulous manipulation?7 What spending activity With the recent passage of a “clean is “political” enough to count? Will there elections” law in Connecticut, public be exemptions, and, if so, can they be financing reforms are enjoying a fair—for instance, would the media and renaissance of attention and their owners be at an advantage?8 What Almost from the first, commentary. The idea that the remedies are appropriate to deal with the challenges posed by government should subsidize campaigns cheating? Moreover, is there democratic public funding were with taxpayer money—rather than allow value to political fundraising—in evident. How do we voluntary private funding to run a requiring politicians to appeal to the know how much campaign—has a long pedigree. people for support—that is lost when spending is right? Can President Theodore Roosevelt called for campaigns are publicly funded?9 the law be sufficiently public financing of elections in 1907, supple to respond to proposing a congressional appropriation Today, Connecticut, Maine, New changing circumstances, to defray political party expenses Mexico (for corporate regulators), North yet sufficiently rigorous coupled with a contribution limit and Carolina (for judicial candidates), and to resist unscrupulous publicity of party accounts.1 In 1909, Vermont, as well as Arizona, provide full manipulation? Colorado enacted a program to subsidize public financing to candidates who agree Moreover, is there parties based on their success at the to abide by spending limits and forgo democratic value to 10 polls, but the Colorado Supreme Court private contributions. Vermont’s law political fundraising— declared the law unconstitutional only contains a mandatory spending limit in requiring politicians one year later, albeit without a written and is currently before the U.S. Supreme to appeal to the people 11 opinion explaining its reasoning.2 Puerto Court in a First Amendment challenge. for support—that is lost Rico enacted the next public funding A number of other states subsidize when campaigns are law in 1957, which paid party expenses politics in other ways—by providing publicly funded? out of a commonwealth Election Fund.3 financial support to candidates or parties, for instance.12 Almost from the first, the challenges posed by public funding were evident. On what basis should funds be granted?4 Will the law discourage new or “third” How the Clean Elections parties?5 If everyone is funded, would Act Operates there be a way to avoid having the program swamped by “political Arizona’s Citizens Clean Elections faddists?”6 How do we know how much Act created a Clean Elections Fund.13 spending is right? Are we spending too Candidates for statewide and legislative much or not enough? How can program offices may participate in the program funding be maintained? Can the law be and receive funding for their campaigns sufficiently supple to respond to from this Fund, or they may raise changing circumstances, yet sufficiently campaign funds privately. The 2000

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election was the first election cycle in widely from one legislative district to which legislative and statewide office another. Under the Act, if a legislative candidates could use the Clean Elections candidate is running in a district law to finance a candidacy. Clean dominated by one political party— Elections funding is available only to where the election may well be resolved “participating candidates.” Participating in the primary—the candidate can candidates qualify by gathering $5 reallocate some general election funding contributions from in-district registered to that race. voters and observe strict spending and contribution limits.14 The Act does not allow candidates to carry forward money from one period to For example, in the 2006 election, a the next. At the end of each of the three qualifying candidate for will periods—the privately funded need 4,200 “qualifying contributions” of qualifying period, the primary election $5 from in-district voters (who period, and the general election themselves must file reporting slips in period—candidates must return unspent triplicate for the money to count); a money to the Fund.20 Participating legislative candidate must collect 210.15 candidates may also receive additional During the “exploratory” and “matching funds” of up to three times “qualifying” periods, candidates can the relevant spending limit if a raise private money for their efforts to nonparticipating opponent spends over qualify—the individual contribution a certain threshold.21 limit is $120 per donor, and the overall limit for outside private contributions is The Act also restricts $46,440 for governor and $2,980 for the “nonparticipating candidates,” or those legislature.16 The Act also limits the candidates who are funding their amount of personal money a candidate campaigns the traditional way by raising can use at this time to $1,160 for their own campaign money. It requires gubernatorial candidates and $580 for nonparticipating candidates to observe legislative candidates.17 campaign contribution limits and prohibitions on contributions by The 2006 primary election spending corporations and unions, and to adhere limit is $453,849 for gubernatorial to reporting requirements. The 2006 candidates and $11,945 for legislative contribution limits to statewide offices candidates.18 The general election are $760 per individual or political spending limits will be $680,774 and action committee (PAC); $3,784 per $17,918, respectively.19 These limits certain “super-PACs” and political party work out to about $0.25 per active committees, with a combined cap of Arizona voter statewide, but given the $75,624 from all PACs; and a separate vast differences in registration and $75,624 from all political parties and turnout among legislative districts, the political organizations.22 The limits for money-per-active-voter ratio varies legislative offices are $296 per individual

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or PAC, $1,512 per super-PAC, and the of the Clean Elections Act.28 overall cap from PACs and parties is $7,568. Arizona law also limits the total Originally, the Clean Elections Act an individual can give to candidates and imposed a $100 fee on certain classes of to committees that give to candidates— registered lobbyists.29 An Arizona trial an individual cap that is presently court declared that section $3,530 per year.23 unconstitutional because it violated the First Amendment.30 The court later The Citizens Clean Elections severed it from the remainder of the Commission may impose civil penalties Clean Elections Act. for violations of the limits and reporting requirements. If a candidate exceeds the applicable spending limit by over 10 percent, the penalty is disqualification as Goals of the Clean Elections Act: a candidate or forfeiture of office, if Fulfilling the Promise? elected.24 As of this writing, one legislator who allegedly overspent his This paper will consider how primary campaign limit by $6,000 has successful the Arizona Clean Elections been removed from office.25 law has been at achieving its goals as expressed by the Act’s supporters. What The Clean Elections Fund obtains was Arizona’s Clean Elections law its revenue from several sources. It intended to accomplish? Because the law receives a surcharge of 10 percent passed by initiative, there are no imposed on all civil and criminal fines legislative committee reports or floor and penalties.26 It also receives a $5 statements to consult. However, the Act voluntary contribution per taxpayer does contain a “declaration,” reading: when filers mark an optional check-off box on the first page of their tax return. The people of Arizona declare our Through the check-off, the taxpayer’s intent to create a clean elections taxes are reduced by $5, and $5 goes to system that will improve the the Clean Elections Fund.27 The Fund integrity of Arizona state also receives tax-preferred donations government by diminishing the from individuals or business filers. influence of special-interest money, Donors receive a dollar-for-dollar tax will encourage citizen participation credit of up to 20 percent of the tax in the political process, and will amount on the return or $550 per promote freedom of speech under taxpayer, whichever is higher. The Fund the U.S. and Arizona constitutions. also receives the excess qualifying Campaigns will become more contributions of participating candidates issue-oriented and less negative (i.e., those private funds raised but not because there will be no need to used during the qualifying period) and challenge the sources of campaign civil penalties assessed against violators money.31

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In the words of the Clean Elections Elections law has fulfilled its stated Institute, an organization dedicated to goals. Moreover, it imposes real burdens promoting the Clean Elections law, on political speech and on the ability to “Arizonans promoted and passed the run for office. Since Arizona’s Clean Clean Elections law to increase Elections system has not reached its participation in the electoral process, goals, reformers should be advised to reduce the influence of big money in seriously reconsider fundamental aspects campaigns and government and increase of the law. competition among candidates.”32 Participation Admittedly, some of these aspirations are more easily measured One claim made by supporters of than others. This paper separates the the Clean Elections Act is that it will Clean Elections imposes Act’s goals into three broad categories: increase political participation. We real burdens on might measure “citizen participation” in political speech and on • Participation: Since the passage the political process in a variety of ways. the ability to run for of the Clean Elections Act in 1998, are The most common indicator of office. Since Arizona’s there indications of greater citizen participation is voting: we can observe Clean Elections system participation in the political process? whether voter turnout rates have has not reached its increased since the passage of the Clean goals, reformers should • Competition: Clean Elections Elections law. Another form of be advised to seriously claims to make it easier for citizens to participation is providing financial reconsider fundamental become candidates, thereby encouraging support to political activity. Since one aspects of the law. more competitive elections. Is there purpose of the law is to reduce reliance evidence that the Clean Elections law on private contributions, it would not has made candidacy more accessible and make much sense to measure the law’s elections more competitive? participatory success in that way. Rather, we can look at Arizona Department of • Tone: Has the tone of Revenue statistics to observe whether campaigns improved? Are they less there are improvements in participation negative and more “issue-oriented”? in Arizona’s various check-off programs, both for the Clean Elections Fund itself The paper then considers the and for other political beneficiaries. burdens created by the Clean Elections Finally, we can also see whether more law. Has the law’s complexity created people participate in politics by running additional burdens for candidates for office, although this is a much running for office? Has it chilled the narrower path of participation open only political speech of candidates and other to those with the time and temperament groups? to be a candidate.

In brief, we find little evidence to Figure 1 depicts the turnout for support any argument that the Clean elections from 1992 to 2004.

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Figure 1: Voter Turnout Percentages, 1992-2004

90 80 70 60 50 40 30 20 10 0 These numbers indicate little beyond the fact that turnout improves in presidential election 1992 Primary 1992 General 1994 Primary 1994 General 1996 Primary 1996 General 1998 Primary 1998 General 2000 Primary 2000 General 2002 Primary 2002 General 2004 Primary 2004 General 2000 Pres. Pref. 2000 Pres. years; they show no voter turnout Candidates were able to use Clean (VAP). These statistics show that in improvement that can Elections funds starting in the 2000 1998, turnout as a percentage of VAP be attributed to Clean election. As the chart shows, the highest was 28 percent; in 2000, 40.2 percent; Elections. recent turnout election year in Arizona in 2002, 30.7 percent; and in 2004, was in 1992 for both the primary 39.2 percent.34 These numbers indicate election (29%) and the general election little beyond the fact that turnout (77.2%), unless one counts the 2000 improves in presidential election years; presidential preference primary as a they show no voter turnout “primary” (35%). The next highest improvement that can be attributed to turnout for a general election was in Clean Elections. 2004 (77.1%), and for a primary, in 1994 (28.6%).33 Turnout statistics show Another form of citizen no effect from the 1998 passage of the participation is providing financial Clean Elections law. support to various candidates and political groups. The law encourages The way most people participate in taxpayers to make a $5 contribution to elections is by voting. Yet nothing in the the Clean Elections Fund in exchange voter turnout trends in Arizona elections for a $5 reduction in tax liability. In suggests that the Clean Elections law has 2001, out of 2,210,747 returns, an effect here. 315,395, or 14 percent, made the $5 check-off contribution.35 This per- The Public Interest Research Group centage has been growing, as Figure 2 (PIRG) compiled its own Arizona voting indicates, so that by the end of the 2004 statistics, measuring voter turnout as a tax year, out of 2,368,223 tax returns, percentage of voting age population 583,719, or 25 percent, marked the

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Figure 2: Clean Elections Check-off Participation

30 25 20 15 10 5

Percentage of Tax Filers Tax of Percentage 0 19972001 19982002 19992003 20002004 check-off.36 Yet, tax return check-offs Revenue records show that the may be more an illustration of taxpayers number of returns in which taxpayers acting on economic interests than any designate contributions to the degree of increased political Republican and Democratic parties have The experience in other participation. The $5 reduction in tax grown recently by a greater percentage states has been that liability provides a sufficient financial than the number of returns generally. check-off systems incentive for citizens to “participate.” The total number of returns designating become less popular and party contributions grew from 1,511 in yield fewer dollars as The experience in other states has 2001 to 1,922 in 2004, an increase of 27 the programs mature. been that check-off systems become less percent. The bulk of this increase was in popular and yield fewer dollars as the returns designating contributions to the programs mature.37 Political scientists Democratic Party.39 At the same time, Michael Malbin and Thomas Gais noted the number of total individual returns in their study of check-off programs that increased by only seven percent. To be from 1980 to 1994 the “typical check- sure, this period overlaps with the off state went from 20 percent approach of the 2004 presidential participation to 11 percent election, an event that typically captures participation.”38 If Malbin and Gais’s more public attention than other analysis holds, it suggests that Arizonans’ elections, and would be of particular participation in the Clean Elections interest to Democrats, who lacked an check-off program may drop as well. incumbent standard-bearer or even a presumptive nominee. Scholars have To judge whether the check-off’s also observed that there is a partisan cost is justified, it might be useful to effect in public funding programs. know whether other indications of Simply put, Democrats are more participation have improved. Arizona congenial to public funding, as tax forms also allow taxpayers to policymakers and as participants, than contribute to other causes. In particular, Republicans are.40 taxpayers can designate contributions to political parties. The participation trend for party- designated contributions appears to be

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doing better than contributions to other 2004, the number of statewide causes. From 2001 to 2004, returns candidates dropped from 39 to 7, and designating contributions to what has legislative candidates from 208 to 188. been the most popular charitable cause The numbers of both Democrat and listed on the Arizona return—child Republican candidates declined during abuse prevention—fell from 12,302 in this period. However, the number of 2001 to 10,502 in 2004, a 17 percent candidates participating in the Clean decrease.41 The tax form designation for Elections program remained stable, so parties is admittedly a form of political the percentage of participating activity very few Arizonans use—only candidates in primaries rose from 56 about 2,000. So, whatever participation percent to 61 percent and in legislative trends we might see, they involve a tiny races from 54 percent to 58 percent, number of people and may not be even though the number of candidates reflective of political participation by fell in absolute terms.42 From 2002 to 2004, Arizonans as a whole. the number of One explanation for the decline in statewide candidates Another measure of participation the number of primary candidates in dropped from 39 to 7, that necessarily involves a small fraction 2004 may be the uncertainty of the and legislative of the state’s citizens is the number of state’s legislative district lines. According candidates from 208 to people who decide to become to the Clean Elections Institute, a 188. candidates. In Arizona statewide and number of candidates dropped out of legislative primary elections held after primary races after courts ruled that the the passage of the Clean Elections law, state had to use a precleared 2002 223 candidates total ran in 2000, 247 in legislative map for the 2004 elections 2002, and 195 in 2004. From 2002 to instead of a more “competitive” 2004 map.43

Table 1: Numbers of Primary Election Candidates, 2002 and 2004 2002 (Clean Elections 2004 (Clean Elections participants) participants)

Primary candidates 247 (139) 195 (118)

Legislative primary 208 (113) 188 (111) candidates Democrats 110 (71)82 (57) Republicans 124 (60) 101 (58) Other 13 (8) 12 (2)

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Since the candidate drop-off numbers are largely determined by the occurred before nominating petitions number of seats up for election and were due, and rarely do all purported relatively few races include libertarians candidates file their papers, it is not clear or independent candidates. whether the change in redistricting plans in fact suppressed candidates who might An important subsidiary aspect of have otherwise gone forward or whether the law is the partisan breakdown of the uncertainty might have inflated the Clean Elections candidates. Democrats number of tentative candidacies of remain more likely to use the program, people who might not otherwise have but the difference between Democrat explored running in a more stable and Republican participation is environment. Whichever the case, the narrowing. Figure 3 shows the 2004 situation makes it difficult to say percentage of candidates from both anything definitive about the effect of parties who participated in the Clean the Clean Elections law on the number Elections Fund from 2000 to 2004. of candidates in primary elections, but Most indicators reveal there is certainly no evidence to support When looking at these percentages, no changes in political the contention that more candidacies it is useful to remember that Arizona participation as a result will necessarily occur under Clean remains a Republican state: Republicans of the Clean Elections Elections. Data supporting the goal of lead Democrats in statewide registration program. increased participation remain un- by 5.5 percent and have a 6-to-2 convincing in this regard. advantage in the U.S. Congress, a 17-to- 13 advantage in the State Senate, and a In general elections there is, as 39-to-21 advantage in the State House.44 would be expected, less fluctuation in the number of candidates since their In summary, most indicators reveal

Table 2: Numbers of General Election Candidates, 2002 and 2004

2002 (Clean Elections 2004 (Clean Elections participants) participants)

General election candidates 170 (89) 156 (88)

Legislative candidates 147 (73) 149 (82)

Republicans 76 (30) 74 (44)

Democrats 77 (51) 66 (46)

Other 17 (8) 16 (2)

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Figure 3: Percentage of Democrats and Republicans Participating in Clean Elections, 2002 and 2004

80% 70% 60% 50% Democrats 40% 30% Republicans 20% 10% 0%

2000 Primary2000 General2002 Primary2002 General2004 Primary2004 General no changes in political participation as a substantially in the last cycle. In short, The most direct form of result of the Clean Elections program. the data do not reveal any trend of participation—turning While the funding of Clean Elections greater political participation by out to actually cast a itself has increased, it is not clear that Arizonans since the passage of Clean vote—shows no this is an accurate measurement of Elections. improvement from the political participation since taxpayers law’s passage. receive a financial incentive to reduce Competition their tax liability under the program. Likewise, larger portions of candidates Success for the Clean Elections are participating in the Clean Elections program cannot be claimed merely program. Other measures of broader because it has been able to perpetuate political participation seem itself by attracting funding and unaffected—most significantly, voter participants. The program should have a turnout. salutary effect on other aspects of politics. As we have seen, the data do not Advocates of clean elections reforms reveal an overall improvement in assert that the system will “encourage political participation. Yet another stated citizen participation in the political promise of the Clean Elections law is process,” but the most direct form of increased electoral competition. As one participation—turning out to actually prominent researcher described this cast a vote—shows no improvement goal: “It is difficult to argue with the from the law’s passage. One of the other position that, other things being equal, articulated goals of the Act is to more competition is preferable to less. encourage more people to run for office. Our view is that in a state with truly Achievement of that goal remains competitive elections, many other elusive, too, as the number of primary problems—whether corruption, insul- candidates—the key point of entry into ation, or undue interest group any campaign for office—fell influence—will take care of them-

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selves.”45 Competitiveness, while term limits on legislators affected the difficult to measure, seems on the wane ability of some incumbents to run for in Arizona. reelection. While it may be that this effect has now stabilized, the term limits Two factors complicate our ability to law should be kept in mind when evaluate the effect of the Clean Elections comparing data from the last three law on electoral competition. First, election cycles with pre-2000 races. Arizona’s 30 legislative districts each send one state senator and two state Incumbent Reelection Rates representatives to the Capitol. At the House level, “competitiveness” in terms In May 2003, the U.S. General of election vote margins is difficult to Accounting Office (now the evaluate, since candidates do not run Government Accountability Office) head-to-head. Instead, each party released a study of clean elections According to the GAO, nominates up to two candidates for the programs, including Arizona’s.49 access to public funding general election race, and the top two According to the GAO, access to public in 2000 and 2002 did not affect incumbent general election vote-getters serve in the funding in 2000 and 2002 did not affect reelection rates, and House. So, a House district might be incumbent reelection rates, and extending the GAO’s represented by two Republicans or split extending the GAO’s approach to 2004, approach to 2004, it between the parties, assuming that the it would seem incumbent reelection would seem incumbent two major parties are fielding the rates actually rose for House seats.50 reelection rates actually successful contenders. rose for House seats. The GAO’s calculations were called Second, as noted briefly above, into question in a paper authored by Arizona’s legislative district map remains Kenneth R. Mayer, Timothy Werner a work in progress. As provided in and Amanda Williams, political Proposition 106, passed in November scientists from the University of 2000, an Independent Redistricting Wisconsin affiliated with the Wisconsin Commission (IRC) draws Arizona’s Campaign Finance Project.51 They noted legislative boundaries.46 However, that the GAO only looked at challengers attacked the initial map incumbents who lost in general drafted by the IRC, and the Department elections, and did not include of Justice denied preclearance of the incumbents who lost in primaries.52 Had legislative plan under Section 5 of the the GAO altered its methods, the Mayer Voting Rights Act.47 The IRC crafted an team contends that the numbers would interim plan for use in the 2002 have shown a drop in incumbent election. It crafted another plan based reelection rates in 2002 to 70 percent for on the 2002 map that was successfully House races and 81.3 percent for Senate pre-cleared by the federal government races, after having been in the mid- for the 2004 election.48 ninetieth percentile from 1994 to 2000. The Mayer group’s analysis also The year 2000 was also the first year recalculated the reelection rates after

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Table 3: Incumbent Reelection Rates, 1996 to 2004

Senate incumbents House incumbents retained (%) retained (%)

1996 100 95 1998 96 98 2000 (term limits effective) 100 94 2002 100 90 Another important 2004 (calculations by author) 100 92 measure of competitiveness is whether incumbent victory margins have removing incumbents who were running “competitive” districts as those with a narrowed under the against each other because of margin of 15 percent or less between the Clean Elections Act. redistricting, and the reelection rates winner and the next runner-up, the Looking independently increased but slightly.53 GAO determined that 10 percent of the at the numbers for Senate races were competitive in 1996, 2004, we see that only Looking independently at 2004 29 percent in 1998, and 40 percent in two of 24 incumbent results through the Mayer prism, of the 2000, but only 33 percent were election contests in the 48 incumbents running in the House, competitive in 2002.55 Arizona Senate made eight lost either in the primary or in the the GAO’s “compe- general election, for a reelection rate of Looking independently at the titive” criteria of a 83.3 percent. Out of 25 Senate numbers for 2004, we see that only two margin of 15 percent or incumbents running, one lost (in a of 24 incumbent election contests in the less. primary, no less), for a reelection rate of Arizona Senate made the GAO’s 96 percent. Using the Mayer formula, it “competitive” criteria of a margin of 15 appears that both these retention rates percent or less between the winner and are substantially higher than those in the next runner-up (when there was 2002, indicating that incumbent one). The incumbent in District 12 won reelection rates are increasing again even with 54.1 percent of the vote, and an under the Clean Elections Act.54 incumbent in District 25 won with 56 percent of the vote. Meanwhile, 10 Incumbent Victory Margins incumbents were uncontested in the 2004 general election. Two out of 24 Another important measure of seats would lead to a competitiveness competitiveness is whether incumbent percentage of about 8 percent, seemingly victory margins have narrowed under back to 1996 levels.56 the Clean Elections Act. The GAO studied Arizona Senate races only, thus In their analysis, Mayer, Werner, and avoiding the issue of how to evaluate Williams disputed whether the GAO’s multimember House districts. Defining approach was appropriate. They

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concluded that only studying the Senate campaigns by an array of political “jettison[ed] valuable data.” In their parties. Since the passage of the Clean study, they created “pseudo-pairs” to Elections law, the Green Party is no simulate single-member contests out of longer officially recognized in Arizona multimember Arizona House seats. and no longer fields candidates. The They paired the top vote-getter of one demise of the Greens probably has more party with the weakest of the other, and to do with the rise and fall of their the second best with the highest vote- presidential nominee Ralph Nader in getter of the opposite party. They also 2000 than with any effect of the Clean defined competitive as a winning total of Elections law. At the same time, the law under 60 percent, rather than the 15 does not appear to have assisted in the percent margin the GAO used. With development of minor or third-party this different approach, the Mayer team participation or success in Arizona determined that 36 percent of elections. incumbents were in competitive races in Incumbent retention 2000 and 47 percent in 2002, but then Funding Adequacy and victory margin only 36 percent in 2004.57 numbers are moving Some scholars argue that providing higher, indicating that Whichever method one adopts, “adequate” funding of candidates is competitiveness, clean elections reforms do not seem to another element necessary for however measured, may have a lasting effect on competitiveness. competitiveness. It may be that the one- be on the wane. Under both measurement approaches, size-fits-all spending limits under the competitiveness appears to be on the Clean Elections law burdens some retreat after peaking in 2000 and 2002. candidates more than others. Moreover, Given the abundance of other factors Arizona’s spending limits are lower than that would affect the hardiness of those of other states with similar laws. incumbents—from the shakeout This may not be healthy in a fast- following the term limits law to the growing state where it is necessary for passage of a redistricting act that candidates to attract the attention of mandates “competitiveness” as a factor new residents who are unfamiliar with, in redistricting—it is hard to see how the and possibly apathetic to, local politics. clean elections law could have affected competitiveness in a manner measurable The Arizona Clean Elections law in these circumstances. Even so, the fails to account for the vast differences in incumbent retention and victory margin voter registration among Arizona’s numbers are moving higher, indicating legislative districts. For instance, as of that competitiveness, however meas- October 2005, District 4, a spacious ured, may be on the wane. district including portions of Maricopa and Yavapai counties, currently One might argue that real represented by Tom Boone and Judy competitiveness comes from having a Burges in the House and Jack W. Harper rich variety of viewpoints represented in in the Senate, has 123,059 active

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registered voters. District 13, a more general, State Senate candidates $0.18 in compact Tucson district represented by the primary and $0.46 in the general, Steve Gallardo and Martha Garcia in the and State House candidates $0.16 in the House and Richard Miranda in the primary and $0.48 in the general. Time Senate, has 49,061 active voters. will only exacerbate the gap between Candidates in both districts run with the Arizona and Maine, since Arizona is one same expenditure limit—$17,918 in of the fastest growing states in the 2006—so District 4 candidates who opt nation, expected to add 2.2 million for the Clean Elections system have people in the next three decades, while about $0.14 to spend per active voter, Maine is one of the nation’s slowest while District 13 candidates have about growing states.60 One of the stated goals $0.36 per active voter.58 of the Clean Elections Issues of sufficiency have law was to increase In defense of the current system, implications for competitiveness. Noted competition among supporters might say that it is not one Arizona activist in October 2005, candidates. It would be appropriate to evaluate the expenditure “The simple reality is that with any ironic if, over time, the limits based on “active voters.” Instead office that doesn’t have a pressing set of Clean Elections they should be evaluated based on newsworthy issues, it’s going to be very spending limits helped resident population. Districts with many hard to beat an incumbent on a Clean solidify the campaign nonvoting residents should not be seen Elections budget.”61 If that is true, then finance advantages as unfairly advantaged—in fact, only particularly controversial or incumbents already spending in such areas might be more vulnerable incumbents need fear their enjoy in the form of necessary, for instance, to increase constituents at election time. Since we staff, state office interest in Arizona politics among new are already observing that the number of budgets, outside office (not yet voting) residents. candidates has fallen, that incumbent accounts, and “free” retention rates are rising, and that media. Looking at Arizona’s spending limits incumbent reelection margins are ample on a per-resident basis, however, calls and growing, perhaps we are witnessing into question their sufficiency. In a study a larger combination of effects released in 2005 by the Center for correlating with the Clean Elections law Governmental Studies (CGS), Arizona’s that work together to insulate per-resident spending limit ranks at the incumbents. bottom.59 According to CGS, Arizona limits candidates for governor to $0.08 One of the stated goals of the Clean per resident in the primary and $0.11 in Elections law was to increase the general elections, and legislators to competition among candidates. It would $0.12 in the primary and $0.18 in the be ironic if, over time, the Clean general elections. Maine, overall the next Elections spending limits helped solidify lowest among states with spending limits the campaign finance advantages in per-resident spending allowances, incumbents already enjoy in the form of gives gubernatorial candidates $0.16 per staff, state office budgets, outside office resident in the primary and $0.31 in the accounts, and “free” media.

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Tone of Campaigns Franciosi observed:

The Clean Elections law was also Receiving clean elections money intended to improve the tone of certainly did not make candidates campaigns. The theory is that once clean campaigners. One challenger candidates need not appeal to special mailed several scathing and interest donors, they will turn their misleading flyers that distorted her attention to rank-and-file voters. This opponent’s record. One flyer will, some say, lead to more substantive contained several negative and less combative campaigns. newspaper headlines that either had Moreover, the Clean Elections law nothing to do with her opponent, In 2002 some of the provides a voter guide for candidates to or were completely made up . . . harshest election use to get their message to voters and Such abuses led the Clean Elections communications were requires candidates to participate in Commission to contemplate asking made by participating debates. These venues for voter candidates to take an oath swearing candidates—among communication are promoted as being not to smear opponents . . .64 them mailers accusing a more responsible and informative than candidate of defending privately funded advertising. In 2002, as the same analyst child molesters, another observed in a later study, some of the of sympathy with a Clean Elections rules attempt to harshest election communications were radical homosexual regulate indirectly that which may not made by participating candidates— agenda, and be regulated directly. In 1993, Arizona’s among them mailers accusing a advertisements stating legislature attempted to remedy candidate of defending child molesters, that a candidate was “negative campaigning” by requiring another of sympathy with a radical “soft” on polygamy. persons or groups making independent homosexual agenda, and advertisements expenditures in the closing days of a stating that a candidate was “soft” on campaign to provide an advance copy of polygamy.65 the communication to the candidates named in it. The courts struck down the Hard-edged campaigning has law, concluding that it impermissibly continued. Reportedly, in 2004 burdened political speech.62 The Clean candidates for the first time used the Elections law attempts to improve the Clean Elections statewide voter guide as tone of campaigns in a more indirect, a vehicle to attack opponents.66 One and legally sustainable, manner. veteran Arizona politician speculated that the Clean Elections law allowed “Tone” and “negativity” are more negative attacks to “prosper” notoriously slippery concepts to because of the lack of accountability measure.63 But in general, there is no publicly funded candidates owed to indication that the Clean Elections Act donors. Former State Rep. Mike improved the tone of Arizona Gardner noted in a newspaper interview, campaigns. In a study prepared for the “In traditional campaigns, the people Goldwater Institute in 2001, Robert who contribute to your campaign are

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like your regulators. If they don’t like the complicated regulations, and complaints message you’re delivering, they will stop under the Act can lead to invasive giving you money and your funding enforcement matters that impose real dries up.”67 costs on participants and their supporters. Finally, it would seem naïve to expect that a move to public funding First, the cost of the program takes would result in kinder and gentler funding away from the state’s General campaign messages. Why would the Fund. In a state where the General Fund simple presence of “clean election” budget is over $8 billion, the Clean money change the dynamics of modern Elections Fund’s expenditures of just campaign advertising? Studies under $8 million in 2004 might seem demonstrate that negative campaign trivial. But recall that the Clean messages work. Relevant negative Elections funding mechanism has a information about a candidate used in double-edged impact on state finances. Clean Elections requires advertising that identifies the risks It takes $5 from a taxpayer’s taxes and a web of complicated associated with electing a specific credits each taxpayer another $5. regulations, and opponent are among the most effective complaints under the techniques for swaying public opinion.68 Although the Clean Elections Fund’s Act can lead to invasive expenditures are a small part of overall enforcement matters Clean Elections money will not state spending, they are not trivial. The that impose real costs ameliorate the “tone” of campaigns. more than $4.3 million distributed to on participants and Candidates will use whatever resources candidates in 2004 would almost cover their supporters. they have to best serve the cause of the $4.6 million operating budget for winning. We should expect that the Arizona Department of Health “negative” messages will persist as part of Services in that same year and would the mix. easily cover the department’s vaccination and immunization spending ($2,903,800 and $406,700, respectively) or its Emergency Medical Services expenditures ($4,020,300). The Costs of Clean Elections The $7,992,868 total Clean Elections Fund expenditures for 2004 (which While there is some admitted includes the Clean Elections ambiguity in measuring whether the Commission’s administration, enforce- Clean Elections Act has lived up to its ment, and voter education expenses as promises, overall the evidence suggests well as funds to campaigns) would have that the Act has not led to increased covered the “personal services” of the participation or competitiveness and has state’s Department of Water Resources not improved the tone of campaigns. in 2004 ($6,994,400).69 Furthermore, the Clean Elections program is not without costs. The Act’s The nonmonetary costs of the implementation also requires a web of program are more difficult to quantify.

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One concern is the complexity of the campaign would accurately report a program. Seemingly technical and payment to a consultant for “literature,” picayune accounting details take on but by failing to track, pay directly, and enormous significance when the law report the expenses and final providers imposes an expenditure limit. Violations of all goods, services, postage, designers, of seemingly trivial proportions, such as graphic artists, etc., that were part of the failing to report food and supplies “literature,” it had violated the Act.74 purchased by family members of a candidate on the day they were made, In a publicly financed system, it also become material for administrative becomes necessary to evaluate whether investigations and enforcement.70 In a candidates are squandering public The Commission’s world of spending limits, managing money or enriching their friends and obligation to monitor simple post-election refunds of deposits associates, or paying for frolicsome abuse of public funds placed during the campaign becomes a goods and services not related to the requires a level of matter requiring “informal settlement” campaign. For example, three invasive investigation with the state government.71 participating Libertarian Party into campaigns that is candidates running in 2002 were simply not necessary in Some Clean Elections policies seem ordered to repay $104,237 in Clean traditionally funded to lack adequate justification. For Elections funding after the Clean systems. When a instance, although it is a common Elections Commission found that those candidate raises his practice to hire a consultant to manage funds had been improperly spent on own funds, many of a campaign’s activities, under food, alcoholic beverages, and other squandering campaign the Clean Elections law this vendor may goods and services arguably of a festive dollars is its own not be the reported recipient of and personal nature.75 This enforcement punishment. campaign payments; rather, the matter presents an extreme example, campaign must pay directly and report admittedly, but there are other, less the subvendor or whomever is the final extreme examples of “abuse.” For provider of services.72 The Clean example, Democratic House candidate Elections Commission’s stated rationale Ed Ableser received some $7,000 in is that if campaigns are allowed to report “matching funds” on election day, when “lumped” expenditures, this may hide it was too late to spend them on the fact that the underlying goods or campaign ads. Instead, Ableser threw a services in fact cost more than what was party for campaign volunteers where he charged by the consultant, obscuring the rented a $287 frozen drink machine and existence of an illegal in-kind reimbursed his father $1,118 for food contribution.73 Yet, this is information and drink costs. Ableser also made one that the campaign may not have, and of his campaign volunteers a paid does not reflect the long-standing consultant and paid her $3,628.76 practice of using consultants to provide unified direction for campaigns. A Even in less colorful contexts the number of recent enforcement matters Commission’s obligation to monitor have involved this very fact pattern: a abuse of public funds requires a level of

17 GOLDWATER INSTITUTE I policy report

invasive investigation into campaigns There are costs, too, in the that is simply not necessary in interference the program imposes on traditionally funded systems. When a politics. One more obvious case of this is candidate raises his own funds, the subsidy system’s bias toward squandering campaign dollars is its own participating candidates.80 In a race punishment. featuring a participating candidate and a traditional candidate, independent Strict compliance with the expenditures supporting the particip- complicated limits and reporting ating candidate or opposing the requirements is necessary for the Clean traditional candidate provoke no Elections system to “work,” so penalties matching payment. Since the are stiff. Under the law, the civil penalty nonparticipating candidate has chosen for a violation of a reporting to fund his campaign with private requirement is $110 a day, and the money, the Fund will not step in and penalty for violation of an expenditure “compensate” for independent spending limit is 10 times the amount exceeding against him. Expenditures touting the the limit.77 In a system limiting traditional candidate or criticizing his legislative candidates to $11,945 for a subsidized opponent will result in a primary race and $17,918 for a general matching payment to the subsidized election campaign, penalties so candidate. The Fund will “level” the calculated can quickly dwarf the expense field, but only for participants. allotment for an entire election. Perhaps in light of this, the Commission has This imbalance might be defended adopted a rule capping penalties at by observing that a candidate knowingly $10,000, unless the violation is accepts these rules when he chooses “knowing and willful,” in which case the whether or not to participate and should cap is $15,000, a figure that is still well not be heard to complain when he faces over the primary limit and approaching the consequences of that choice. Yet, this the general election limit.78 unequal treatment might actually push candidates to enter the system. Instead Yet, there is broad agreement that of freely choosing to participate, some of the law’s onerous requirements candidates may come to the realization are not necessary. Even advocates of the that Clean Elections confers so many Clean Elections law, and the one-sided benefits that it is Commission’s own executive director, impracticable to run without its have recommended that the rules support. When this happens, candidates requiring frequent, sometimes daily, are coerced into participating in Clean filing of campaign reports by candidates Elections, forcing them to surrender in campaigns with no participating their First Amendment right of free candidates are overly burdensome, speech. But campaign finance spending unnecessary, and should be removed.79 limit systems must be voluntary under prevailing case law.81 A system that

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provides additional money for afforded under the law may coerce participating candidates based on the candidates to surrender their First independent political speech of Amendment right to free speech by unrelated outside groups could become limiting their expenditures. For citizens, unduly coercive. the system creates disincentives to speak, impairing their First Amendment rights. In Buckley v. Valeo, the U.S. Supreme Court upheld the right of citizens under Third-party candidates can invoke the First Amendment to spend additional complexities. During the unlimited amounts of money for 2002 gubernatorial campaign, Richard political speech.82 As the Court noted, Mahoney, an independent candidate For candidates, the being “free to engage in unlimited participating in the Fund, requested unequal treatment political expression subject to a ceiling matching funds to counter expenditures afforded under the law on expenditures is like being free to drive made by the Democratic Party for Janet may coerce candidates an automobile as far and as often as one Napolitano. His request was denied, to surrender their First desires on a single tank of gasoline.”83 despite the fact that the two candidates Amendment right to Maintaining a system of unequal were both running for the same seat, on free speech by limiting treatment under Clean Elections that the grounds that the pro-Napolitano their expenditures. For coerces candidates into participating in advertisement attacked the Republican citizens, the system the program infringes on their protected challenger only.84 creates disincentives to First Amendment rights. speak, impairing their History teaches us that any scheme First Amendment Clean Elections matching funds of campaign regulation will encourage rights. might also seem to invite manipulation. activists and partisans to use An ally of a publicly funded candidate enforcement against political adver- could direct an outside group to spend saries. In fact, the Clean Elections funds on expensive but ineffective Institute in its 2002 report on the advertisements “against” the candidate Arizona system recommended that “the with the intent that additional resources process must be adjusted so that be directed to that candidate. complaints cannot be used as campaign Conversely, some outside groups may weapons.”85 Yet, in October 2004, the forgo political expression supporting a same Institute filed a complaint asserting nonparticipating candidate because they that six Republican candidates had do not want to indirectly fund the illegally coordinated expenditures with opposition candidate by increasing his the Club For Growth, a national state funding through matching funds. political group dedicated to supporting conservative candidates. After Thus, Arizona’s Clean Elections considering the complaint and responses system may burden constitutionally from the accused, the Commission protected activity of candidates and concluded that there was no reason to citizens’ grassroots organizations. For believe the alleged violation had candidates, the unequal treatment occurred. This resolution, naturally,

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came after the election, in April 2005. 86 Disclosure laws probably do not The Clean Elections Institute, despite its reduce overall campaign spending, avowed mission limiting it “to so they do not reduce the positive promoting, enhancing and defending aspects of political advertising. On Arizona’s unique Clean Elections law,” the other hand, public financing and despite the lack of any connection schemes are typically devised to to the Arizona-specific questions, also limit overall expenditures, so they felt moved to file a similar complaint may have a greater negative impact against U.S. Rep. Trent Franks and the on the beneficial aspects of political Club For Growth with the Federal expenditures. In addition, public Election Commission (FEC). In financing may be predicated on Public funding laws September 2005, the FEC similarly false promises for a better have a statistically found no reason to believe that the democratic process. When the significant negative respondents had violated the law.87 smoke clears and “politics as usual” effect on public views returns after reform, individuals about whether “people may become even more dis- have a say” in their enchanted with their government. government or whether Clean Elections and Democracy Therefore, the apparent counter- “officials care.” By intuitive finding that disclosure and contrast, disclosure laws Finally, moving beyond the specific public financing work in opposite appear to have a data from Arizona, there may be reason directions on political efficacy is positive effect on public for concern about the effect of public quite plausible.89 views of political financing on public confidence in efficacy. government. In a pathbreaking study, Despite the fact that campaign professors Jeffrey Milyo and David finance reform is assumed to improve Primo examined a variety of state-level public confidence in government, for election laws, including those related to many reforms the connection is lacking. public financing and spending limits, Certain reforms, such as public and whether the presence of these laws financing and spending limits, may even enhances public views of political do harm. In an era when reform is efficacy. assumed by courts and policymakers to improve public confidence in Their conclusion was that public government, the implications of this funding laws have a statistically study are profound.90 If Milyo and significant negative effect on public Primo’s theory holds true, Arizona’s views about whether “people have a say” Clean Elections system may do more to in their government or whether “officials harm the electoral process in Arizona care.”88 By contrast, disclosure laws than to help it. appear to have a positive effect on public views of political efficacy. The authors This study examined whether explain: Arizona’s Clean Elections Act met its listed goals, such as increasing

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competition, participation, and public comes to understand these trends, improving the tone of campaigns. None it will, as Milyo and Primo predict, of these goals seems to be affected by the become more disenchanted with its Clean Elections Act. Instead, the law government, which could further imposes costs on the political process by suppress participation. No doubt a new making it more complicated and set of “reformers” will say that the law is litigious. It also creates significant insufficiently rigorous, and will agitate burdens on constitutionally protected for yet additional restrictions or rights of candidates and citizens. While programs to “level the playing field.” the First Amendment fully protects the right to speak, and to spend money on Instead, reduced competition in Reduced competition in speech, Arizona’s Clean Elections system politics may be a result of politics may be a result stands in direct contradiction to that overregulation. Eliminating Clean of overregulation. guarantee, potentially dampening what Elections funding and spending limits, Eliminating Clean otherwise could be a vibrant political liberalizing the complex matrix of state Elections funding and exchange in Arizona. contribution limits, and opening up spending limits, politics to more private financial liberalizing the complex participation would encourage matrix of state participation and competition, and contribution limits, engage the public more effectively than Conclusion and opening up politics the Clean Elections program. As Milyo and Primo’s “smoke” clears to more private in Arizona, there may be reason to think financial participation that the Clean Elections system is not would encourage reaching its stated goals. The evidence participation and today suggests that the system fails to competition, and deliver on its promises, while costing engage the public more Arizonans more than just money. Data effectively than the indicate that voter participation has Clean Elections been unaffected by the enactment of program. Clean Elections and that the number of candidates has actually fallen. Incumbent reelection rates are returning to previous levels, as are incumbent victory margins. More Arizonans are choosing to support Clean Elections in the tax check-off, but one has to wonder whether that will persist or, as in other states with check-off programs, will taper off with time.

We can expect that, as the Arizona

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NOTES December 31, 2006, and will be available to candidates running for state 1. John S. Bottomly, Corrupt office in 2008. Practices in Political Campaigns, 30 B.U. L. Rev. 331, 380 (1950) (citing 11. Landell v. Sorrell, No. 04-1528 Congressional Record, December 3, (cert. granted September 27, 2005). 1907, p. 78.) 12. See Michael J. Malbin and 2. Ibid. (citing Colorado session Thomas L. Gais, The Day after Reform: laws, 1909 c. 141, and People v. Sobering Campaign Finance Lessons from Galligan, no citation); see also James K. the American States (Ithaca, NY: Pollock, Party Campaign Funds (New Rockefeller Institute Press, 1998): 52-62 York: Alfred A. Knopf, 1926): 90, n. 48 (discussing different forms of public (citing to an original writ of mandamus, financing). no. 7323, and “the petition was dismissed on October 10, 1910”); Earl 13. See Arizona’s Citizens Clean Sikes, State and Federal Corrupt Practices Elections Act, Ariz. Rev. Stat. §§ 16-940 Legislation (Durham, NC: Duke to 16-961 (2004). University Press, 1928): 144-145. 14. See Ariz. Rev. Stat. § 16-941. 3. Alexander Heard, The Costs of Democracy (Chapel Hill, NC: University 15. Ariz. Rev. Stat. § 16-946. of North Carolina Press,1960): 433. Different limits apply to intermediate offices, but these have been omitted in 4. Sikes, 250. the interest of brevity.

5. Ibid. See also Pollock, 99. 16. Ariz. Rev. Stat. § 16-945.

6. Ibid. 17. Ariz. Rev. Stat. § 16-941(A). These limits are adjusted for inflation. 7. Pollock, 92. See http://www.azcleanelections.gov/ ccecweb/ccecays/docs/2005-2006Limits 8. Pollock, 94, n. 49. .pdf.

9. Pollock, 102. 18. Arizona Citizens Clean Elections Commission, “Participating Candidates 10. Massachusetts had a clean Expenditure & Contribution Limits for elections system until its legislature 2006 Elections,” http://www.azclean rescinded it in 2004. New Jersey ran a elections.gov/ccecweb/ccecays/docs/200 clean elections pilot program in two 5-2006Limits.pdf state assembly districts in 2005. Connecticut’s system takes effect 19. Ibid.

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20. Ariz. Rev. Stat. § 16-953. Ropp, “Arizona Supreme Court Tells Smith to Vacate Office,” Arizona 21. Ariz. Rev. Stat. § 16-952. Republic, January 27, 2006, http://www.azcentral.com/community/s 22. A “super-PAC” is any PAC that cottsdale/articles/0127smith27.html. receives donations from 500 or more different individuals of at least $10 in 26. Ariz. Rev. Stat. § 12-116.01. the year prior to applying for super-PAC status with the Arizona Secretary of 27. Ariz. Rev. Stat. § 16-954. State. See Ariz. Rev. Stat.§ 16-905. Super-PACs so registered with the 28. The Citizens Clean Elections Secretary of State are listed at Commission summary of its funding http://www.azsos.gov/scripts/superpac.c sources is available online at gi. http://www.ccec.state.az.us/ccecweb/cce cays/docs/CCECRevenueSources.pdf. 23. These limits are adjusted for inflation also. See http://www.ccec.state. 29. See Ariz. Rev. Stat. § 16-944. az.us/ccecweb/ccecays/docs/20052006li mits.pdf 30. May v. Bayless, No. CV 2001- 006078 (Mar. Cnty. Super. Ct. April 2, 24. Ariz. Rev. Stat. § 16-942(C). 2002).

25. David Burnell Smith, Office of 31. Ariz. Rev. Stat. § 16-940. Administrative Hearings decision (MUR 04-0023), http://www.ccec.state.az.us/ 32. Clean Elections Institute, The ccecweb/ccecays/docs/ItemXIDavidBur Road to Victory: Clean Elections Shapes nellSmithOAHDecision.pdf. Smith 2002 Arizona Elections (Phoenix, challenged this decision. See Paul December 2002), Executive Summary, Davenport, “Smith Cites Constitutional http://www.azclean.org. Immunity in Plea to Put Ouster Case on Hold,” Arizona Republic, January 1, 33. The statistics are derived from data 2006, http://www.azcentral.com/arizona available online from the Arizona republic/local/articles/0101campaignfin Secretary of State at http://www.azsos. ance01.html. On January 26, 2006, the gov/election/PreviousYears.htm. Arizona Supreme Court affirmed the decision that found Smith had violated 34. See “State-By-State Turnout Rates the Act and thus should face ejection. 1998-2004 by Voting Age Population,” See Smith v. Arizona Citizens Clean http://www.nypirg.org/election04/VAP. Elections Commission, No. CV-06-0021 pdf. (January 26, 2006) (Order), http://www.supreme.state.az.us/clerk/s 35. Arizona Department of Revenue, mith%20order.pdf. See also Thomas December 2001 Tax Facts.

23 GOLDWATER INSTITUTE I policy report

36. Arizona Department of Revenue, 42. Statistics from the Citizens Clean December 2004 Tax Facts. Data for the Elections Commission, http://www. chart were also obtained from the ccec.state.az.us/ccecweb/ccecays/docs/2 Arizona Department of Revenue “Tax 0002004DEMOGRAPHICS.pdf. Facts” for December of each year. In addition, Arizona also offers taxpayers 43. Clean Elections Institute, 2004 the opportunity to make tax-preferred Election Statistics, http://azclean.org/ gifts to the Fund. Gifts are reported documents/2006WebPrimaryCandidate month to month and are not cumulated Listing_022.doc. by year, so we looked at figures from April of each year, since that is the 44. Statistics available online from the heaviest month for tax filings. Arizona’s Arizona Secretary of State at taxpayers donated about $20,000 in http://www.azsos.gov. A roster of the April 2001 to the Fund—by State Senate is available online at comparison, in April 2004 it was http://www.azleg.state.az.us/MemberRo $12,633. As a percentage of total ster.asp?Body=S. A roster of the State revenue collected by the state, April House is available online at 2003 was the high point for this http://www.azleg.state.az.us/MemberRo program at 0.01 percent of revenue, or ster.asp?Body=H. Members of the U.S. $18,078. There is no apparent trend— House of Representatives are listed by either up or down—for the voluntary state at http://www.house.gov/ donations made to the Fund, and in any house/MemStateSearch.shtml. event it is a small fraction of activity. 45. Kenneth R. Mayer, Timothy 37. Malbin and Gais, 66-70. Werner, and Amanda Williams, “Do Public Funding Programs Enhance 38. Ibid., 70. Electoral Competition?” paper presented at the Fourth Annual 39. In 2001, filers made 724 Conference on State Politics and Policy contributions to the Democratic Party Laboratories of Democracy: Public and 524 to the Republican Party. In Policy in the American States, Kent State 2004, Democratic filers grew to 1,127, University (updated March 2005), while Republican filers grew only to http://campfin.polisci.wisc.edu/Wisc% 709. Arizona Department of Revenue 20Camp%20Fin%20Proj%20-%20Pub Tax Facts for December 2001 and lic%20Funding%20and%20Competiti December 2004. on.pdf.

40. Malbin and Gais, 72-73. 46. Arizona Constitution, art. 4, pt. 2, sec. 1. 41. Arizona Department of Revenue Tax Facts for December 2001, 2002, 47. See Arizona Minority Coalition for 2003, and 2004. Fair Redistricting v. Arizona Independent

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Redistricting Commission, 121 P.3d 843 55. U.S. General Accounting Office, (Az. Ct. App. October 21, 2005) 42-43. (amended op.) (detailing redistricting). 56. Arizona Secretary of State, “State of Arizona Official Canvas, 2004 48. As of this writing, it appears that General Election,” http://www.azsos. the legislative plan used in 2002 and gov/election/2004/General/Canvass2004 2004 will be used in 2006. On January General.pdf. 4, 2006, the Arizona Supreme Court denied petitions to review the Court of 57. Mayer, Werner, and Williams, 19. Appeals decision of October 2005. See Paul Davenport, “‘06 Legislative Maps 58. Registered voter data from the Likely Won’t Change,” Arizona Daily Arizona Secretary of State, Star, January 5, 2006. http://www.azsos.gov/election/voterreg/. Expenditure limit data from the Citizens 49. U.S. General Accounting Office, Clean Elections Commission, Early Experiences of Two States That Offer http://www.ccec.state.az.us/ccecweb/cce Full Public Funding for Political cays/docs/20052006limits.pdf. Candidates, GAO-03-452 (Washington, DC: May 2003). 59. Center for Governmental Studies, State Public Financing Laws (Los 50. In 2004, 42 incumbents were Angeles, 2005): 13, http://www.cgs.org. running for reelection in the general There have been proposals to raise the election and three were defeated. baseline funding for legislators to $35,000, which have been opposed by 51. Mayer, Werner, and Williams. the and the Clean Elections Institute. See Minutes 52. When losses in primaries are of the Citizens Clean Elections included, the numbers change: instead Commission, November 30, 2004, Item of three losses out of 42, there were nine V (Discussion and Public Comment for losses out of 48 for House incumbents Proposed Legislative Changes). in 2004. 60. U.S. Bureau of the Census, State 53. Data supplied by Wisconsin Populations Rankings Summary. Campaign Finance Project, on file with the Goldwater Institute. 61. Robbie Sherwood, “Yawn! There’s a State Election Next Year,” Arizona 54. Arizona House and Senate data Republic, October 16, 2005, (quoting courtesy of the Wisconsin Campaign Fred DuVal). Finance Project, http://campfin.polisci. wisc.edu/ArizonaData.asp. 62. Arizona Right to Life PAC v. Bayless, 320 F.3d 1022 (9th Cir. 2003).

25 GOLDWATER INSTITUTE I policy report

63. See Lee Sigelman and Mark 70. See Jahna Berry, “ASU Instructor Kugler, “Why Is Research on the Effects in Spending Inquiry over ‘04 House of Negative Campaigning So Bid,” Arizona Republic, December 9, Inconclusive?” Journal of Politics 65, no. 2005. 1 (February 2003), 142. 71. See Minutes of Citizens Clean 64. Robert Franciosi, “Is Cleanliness Elections Commission, June 23, 2005, Political Godliness?” Goldwater Item IV.E (Murchison), http://www.cc Institute Arizona Issue Analysis 168 ec.state.az.us/ccecweb/ccecays/agmn/m (November 2001): 11. n050623.pdf.

65. Robert Franciosi, “Elections in 72. Ariz. Rev. Stat. § 16-948(c). Arizona, Clean and Unclean,” in John Samples, ed. Welfare for Politicians? 73. See, e.g., MUR 04-0029 Taxpayer Financing for Campaigns (Murphy), http://www.ccec.state.az.us/ (Washington, DC: Cato Institute, ccecweb/ccecays/docs/ItemIV(B)Murph 2005): 63. y.pdf. If someone intended to hide an illegal contribution, he or she could 66. Chip Scutari, “‘Clean’ Cash simply charge the candidate less than the Blamed for Mudslinging,” Arizona actual cost. While there would be no Republic, September 27, 2004. “lumping” in the report, it would be difficult for anyone, including the Clean 67. Ibid. Elections Commission, to detect from the report’s face that there is a violation. 68. Kim Leslie Fridkin and Patrick J. So it is not obvious how the “no-lump” Kenney, “Do Negative Messages Work? rule will better allow for the detection of The Impact of Negativity on Citizens’ illegal activity. Meanwhile, it makes for Evaluations of Candidates,” American additional compliance burdens and Politics Research 32, no. 5 (September confusion among candidates who are 2004): 570, 591. not bent on violating the law, but who may have trouble obtaining the 69. These figures are taken from the information from consultants. Commission’s 2004 Annual Report, issued March 2005. Other budget 74. See MUR 04-0025 (Mark Manoil figures from the Arizona Joint and Nina Trasoff); MUR 04-0028/37 Legislative Budget Committee. (Gorman). These matters were dismissed Department of Health Services figures once the candidates corrected their available online at http://www.azleg.gov/ reports. In MUR 04-0048 (Flora), the jlbc/06recbk/dhspub.pdf. Department Clean Elections Commission found no of Water Resources figures available “reason to believe” the law had been online at http://www.azleg.state.az.us/ violated and thus did not pursue jlbc/06recbk/wat.pdf. enforcement because the candidate

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amended her reports on receiving the (1976). complaint. 82. Ibid. 75. David Pittman, “Arizona Clean Elections Law: Trio Is in Hot Water over 83. Ibid., 19, n. 18. Meaning of Political ‘Party,’” Tucson Citizen, July 31, 2003. In settlement, the 84. Franciosi, “Elections in Arizona: candidates were ordered to repay less Clean and Unclean,” in Samples, 61-62. than this total due to their personal financial situations. See, e.g., Minutes of 85. See Clean Elections Institute, The Citizens Clean Elections Commission, Road to Victory. October 21, 2003, Item VII (Settlement of MUR 02-0058 [Clevenger],) 86. Minutes of the Citizens Clean (settlement of $15,000), http://www. Elections Commission, April 28, 2005, ccec.state.az.us/ccecweb/ccecays/agmnH Item IV.F. (MUR 04-0027), tml/mn031021.asp. http://www.ccec.state.az.us/ccecweb/cce cays/agmn/mn050428.pdf; see also Paul 76. See Robbie Sherwood and Chip Davenport, “Panel Clears Six Arizona Scutari, “A Toast to Questionable Republicans in Campaign Finance Campaign Expenditures,” Arizona Case,” Associated Press, April 28, 2005. Republic, January 1, 2006, http://www.azcentral.com/arizonarepub 87. Compliance Cases Made Public, lic/local/articles/0101polinsider01.html. Federal Election Commission, September 8, 2005 (MUR 5609). 77. Ariz. Rev. Stat. § 16-942(B) (reporting penalty); § 16-942(A) (limit 88. David M. Primo and Jeffrey penalty). Milyo, “Campaign Finance Laws and Political Efficacy: Evidence from the 78. Ariz. Admin. Code § R2-20-222. States,” working paper 0413, University of Missouri, Department of Economics 79. Clean Elections Institute, The (June 2005): 17. Road to Victory; see also Don Harris, “Lang on Clean Elections: “I Will Do 89. Ibid., 19. My Part to Make It Work,” Arizona Capitol Times, September 6, 2005. 90. See McConnell v. FEC, 540 U.S. 93 (2003). 80. See Chip Mellor, “Three Lessons from Arizona,” in Samples, 37; see also Franciosi, “Elections in Arizona, Clean and Unclean,” in Samples, 61.

81. Buckley v. Valeo, 424 U.S. 1, 19

27 The Goldwater Institute was established in 1988 as an independent, nonpartisan research and educational organization dedicated to the study of public policy in Arizona. Through research papers, commentaries, and events, the Goldwater Institute works to broaden the parameters of public policy discussions to allow consideration of policies consistent with the principles championed by the late Senator Barry Goldwater and fundamental to free societies—limited government, economic freedom and individual responsibility. The Goldwater Institute adheres to its educational mission and does not retain lobbyists or engage in partisan political activity. Consistent with a belief in limited government, the Institute neither seeks nor accepts government funds and is supported entirely by the generosity of its members.

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