Appeals court upholds Arizona's anti-dark-money law

Tucson voters will continue to have access to information about the people and organizations financing campaign advertising after a federal appeals court upheld Arizona’s anti-dark-money law. The 9th Circuit Court of Appeals ruled Wednesday that Proposition 211 does not violate the First Amendment, preserving disclosure requirements that apply when outside groups spend heavily to influence statewide races, legislative contests, ballot measures and other elections that affect residents across Southern Arizona.

The decision rejected a challenge brought by Americans for Prosperity, which argued that the law exposes donors to government scrutiny and public harassment simply because they support nonprofit advocacy groups. The organization said the First Amendment protects people who give money to such groups without requiring their identities to be revealed. A three-judge panel disagreed, concluding that Arizona has a legitimate interest in telling voters who is actually financing political messages.

Judge Johnnie Rawlinson wrote the majority opinion. She said voters need more than the name of the group that purchased a television commercial, mailed a flyer or funded online advertising. Knowing the people and interests behind a political organization, she wrote, helps voters evaluate the message and understand which candidates or elected officials may be responsive to its backers. Before Proposition 211, Arizona law generally identified only the organization making the expenditure, even when that group’s name revealed little about who created or financed it.

The measure, approved by Arizona voters in 2022 with 72% of the vote, requires an organization spending more than $50,000 in a statewide race, or more than $25,000 in other contests, to disclose donors who contributed at least $5,000. The group must also trace the money to its original source. That provision is intended to prevent political contributions from being routed through several organizations before being used to pay for campaign advertising, a practice commonly called dark money spending.

The law addresses independent expenditures, in which organizations spend money to support or oppose candidates or ballot measures without being part of the campaigns themselves. Such groups can spend large sums, but before Proposition 211, the public might see only an innocuous or broadly worded name attached to an advertisement. Direct contributions to candidates had already been subject to disclosure rules, but the separate system for independent spending allowed the original funders to remain hidden.

Arizona’s history provided a central argument for supporters of the measure. In 2014, groups spent $10.7 million helping elect Republicans Tom Forese and Doug Little to the Arizona Corporation Commission, which regulates utility rates. The commission later approved a 4.5% rate increase for Arizona Public Service. In 2019, APS parent company Pinnacle West Capital disclosed that it had sent $5.9 million to the Free Enterprise Club and $3.5 million to Save Our Future Now for spending connected to the commission race. The company also acknowledged giving nearly $1.4 million to the Arizona Cattle Feeders Association, which a company spokeswoman said was also used in the contest. Those revelations helped fuel the campaign for Proposition 211.

Americans for Prosperity argued that the disclosure mandate amounts to unconstitutional exposure, or what its attorneys described as government doxxing, for people who have done nothing more than support advocacy groups. The group also pointed to the First Amendment tradition of anonymous political expression. Judge Patrick Bumatay, the dissenting member of the panel, cited anonymous pamphlets and writings from the Revolutionary era, including Thomas Paine’s “Common Sense” and the essays published under the name Publius by Alexander Hamilton, John Jay and James Madison. He maintained that anonymous speech is constitutionally protected and that the law places an unjustified burden on donors.

Rawlinson drew a distinction between anonymous speech and anonymous campaign financing. The majority said the dissent did not establish a historical tradition of anonymous donations to political campaigns. The ruling also relied on the U.S. Supreme Court’s 2010 Citizens United decision, which struck down limits on independent political spending while leaving disclosure requirements in place. In Rawlinson’s reading, Proposition 211 regulates neither the amount people may spend nor the political views they may express. It only requires the original source of significant campaign spending to be identified, which the majority found substantially connected to Arizona’s interest in an informed electorate.

The 9th Circuit ruling follows earlier decisions by the Arizona Supreme Court upholding the core disclosure provisions. Those state cases are not entirely finished because they involve separate challenges. Republican legislators are contesting Proposition 211’s authorization for the Citizens Clean Elections Commission to create rules, arguing that voters cannot constitutionally remove that authority from the Legislature. Justice Clint Bolick has indicated that even if that provision were struck down, the rest of the disclosure law could remain in effect. The Free Enterprise Club and the Center for Arizona Policy are also seeking exemptions, arguing that identifying their donors could expose them to harassment. A ruling for those organizations would not necessarily eliminate the requirements for other groups.

The appeals court’s decision does not end every legal question surrounding the law, but it leaves the central transparency requirement standing for now. Americans for Prosperity had not issued an immediate response to the ruling. For Tucson residents trying to assess campaign claims during future elections, the practical effect is that a group’s public name may no longer be the final answer to who paid for its message. When spending crosses the statutory thresholds, voters can look for the donors behind the organization and the original source of the money used to influence their decisions.