Dark Money Disclosure

Tempe, AZ

Population: 1-500,000 | Government type: City | Topic: Expanding Democracy

Photo: The Republic

The POLICY

Arizona has become the poster child of preemption -- state legislative interference in local decision making. As a councilmember in Tempe, “a blue island in a red sea,” Lauren Kuby grew increasingly frustrated with the Arizona legislature’s intent to limit home rule as they overturned more and more of her local initiatives. The Arizona Supreme Court, packed by the Republican Governor, has used SB1487, the “mother of all preemption bills'' to narrow the authority of Arizona’s 19 charter cities to the “disposition of city real estate” and the “method and manner of local elections.” 

Councilmember Kuby turned her focus to the method and manner of local elections, expecting that the state could not redact reforms so clearly defended in case law. With voter approval in 2016, Tempe limited individual campaign contributions to $500 (down from $6,250), reduced total PAC limits to $10,000 ($1000 for a PAC; $5000 for a Super PAC), required lobbyists to register with the city, and adopted a transparent campaign finance disclosure system detailing lobbyist contributions. In 2018, Kuby championed, and the city passed, a ballot initiative to require that dark money groups reveal their original donors, in an effort to expose the corruptive influence of corporate interests on their electoral system.

Not a lot of money is spent in Tempe’s local elections, but as a city that “makes waves in the desert,” they aimed to be a model for other cities, both large and small, in Arizona. Tempe’s ballot initiative passed with a whopping 91.4% of the voters. Phoenix soon followed suit and passed the exact same ballot initiative—with the support of 86% of the voters.

The Dark Money Disclosure law did spark a “SB1487” challenge with inconclusive results. The law still stands, but advocates of reform seek an Arizona “Outlaw Dirty Money” ballot initiative to take Tempe’s law statewide and to deter future attempts at legislative interference.

The next steps for the city of Tempe are to strengthen its campaign contribution limits (although this measure is complaint-based, a resident should not have to notarize a complaint and should be able to file an anonymous complaint) and to bring a citizen-led clean elections initiative to the ballot. Tempe has never had a citizen-led initiative, and it will take grassroots power to bring public financing of elections to the ballot as most councilmembers do not want to offer public financing to insurgent candidates who pose a threat to their incumbency and the entrenched system.

Collaborative Governance

After vested interests stopped the “Outlaw Dirty Money” initiative from its rightful place on the statewide ballot in 2018, Tempe councilmembers, intent on systemic election reform, felt compelled to refer a local version of the initiative to the city ballot. Arizona Advocacy Network (AzAN), a non-profit devoted to defending and deepening Arizona’s commitment to democracy, were valued allies in moving the rest of the council to refer the initiative to the ballot and, later, to garner voter support. 

AzAN, working to protect and strengthen disclosure requirements and other rules that curtail the rapidly-increasing influence of mega-donors and special interests, organized support for the ballot initiative. Tempe voters were receptive and responded with the largest outpouring of support for a ballot initiative in the city’s history. Voters decided that they had a right to know who was trying to interfere in their local elections and 91.4% voted in support of “Keeping Dark Money Out of Tempe Elections” in March 2018.

Emphasis on equity

Dark money and institutionalized players hugely influence the composition of the state legislature and the Arizona Corporation Commission, which sets renewable energy standards for the state (often referred to as Arizona’s fourth branch of government). Due to the influx of money from outside interests into both the legislature and the Corporation Commission, the policies they pass are largely skewed in favor of those interests. 

Councilmember Lauren Kuby’s fight against dark money garnered national attention when, in 2020, the inaugural episode of MSNBC’s “American Swamp,” hosted by Katie Tur and Jacob Soboroff, highlighted her efforts and spotlighted the corruptive influence of utilities spending millions of dollars to elect the commissioners that regulate them.

For a city council to represent the diversity of its community, it is important to open up the electoral process. This initiative helps shed light on the influence of a donor base largely composed of big monied interests. Campaign finance reforms that emphasize transparency and accountability also help build the public’s trust in candidates, as they have a true understanding of who is influencing the race and how much they spend doing so. It also enables community residents to push back against decisions they feel cater to wealthy donors, particularly developers who often play a significant role in local politics.

With campaign finance reform enacted and a clean elections system instituted in the future, younger and BIPOC candidates can hop over the fundraising barrier and instead spend their time knocking on doors to win elections. Lower campaign contribution limits and the exposure of dark money expenditures are two of the three pegs of campaign finance reform. Publicly funded elections via a Clean Elections system are the next step. 

In March 2020, Tempe voters challenged the status quo and elected the city’s first Black mayor, Corey Woods. A progressive soundly defeated the two-term incumbent mayor, a 20-year veteran of the city council closely aligned with developers and large-donor campaign funders. Woods would have been hard-pressed to challenge the incumbent mayor without the donation limits and prohibition on dark money expenditures. He outraised the incumbent, who could only draw $500 donations from his base supporters, compared to the $6250 contributions he raked in during previous elections. 

Following Tempe’s first transparent elections, the city council opened up its budget process to public scrutiny as well.

Analysis

• Preemption: Elections are regulated at the state level to varying levels of openness. Localities may have significant latitude—such as Maryland—or be significantly preempted such as in North Carolina or Texas.  

• Local government dynamics: The Tempe City Council is a moderately progressive body, and is growing more progressive. The state legislature was firmly opposed to this policy. 

• Policy impact: Dark money disclosure helps the broader public understand the role money plays in their municipalities’ local politics and decision-making. Greater transparency can lead to increased accountability and scrutiny for local officials, although It is more effective when packaged with a broader set of statewide reforms.

Last updated: January 19, 2021

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