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August 18, 2014

Ariz. Scrutinizing Nonprofit Group's Election Spending

Arizona officials say they have reasonable cause to believe political activity by a nonprofit group that spent more than $1-million to influence voters in state races violated elections laws, The Arizona Republic reports.

The Arizona Free Enterprise Club is one of five organizations whose politicking is being investigated by the Arizona secretary of state's office. Under state law, entities whose primary purpose is influencing elections must file as political-action committees and, unlike nonprofit groups, disclose their donors.

Officials allege the club, which states its purpose as promoting a vibrant Arizona economy, failed to report campaign contributions and expenses and should register as a political-action committee. The group reported devoting $1.3-million, or 37 percent of its expenditures, to campaign activity but did not provide a breakdown of the other 63 percent, election officials wrote in a reasonable-cause review issued Friday.

The case is being referred to the Arizona attorney general's office for review. Michael Liburdi, the club's lawyer, said he believes the group and state officials "will be able to work these issues through." He added, "It's a stretch to conclude their primary purpose is electioneering when you consider [the group's] 10-year history."