Arizona Attorney General Opinion Embraces Taxpayer-Funded (Political) Advocacy: Potential Pitfalls for Businesses and Nonprofits

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The Office of the Arizona Attorney General recently sparked debate by issuing an opinion advising two county attorneys that they may use public resources to disseminate messages about the dangers of marijuana use ahead of the state’s much-anticipated vote on legalization in 2016. Obviously, the rationale behind this opinion is not limited to the marijuana legalization debate, and it is all but certain to affect other initiatives and races during the next election. Specifically, this opinion may create new opportunities for public and government relations engagement by businesses and nonprofits that either (1) seek for public officials to expend public resources on advocacy for select political positions or (2) by contrast, are recruited by public officials to expend public resources on a particular cause. As the Attorney General’s actual opinion is relatively narrow or silent on the scope of such collaborative activity, nonprofit organizations, businesses, political activity organizations and even individual donors and consultants will need to be wary before relying on the opinion in how they interact with public officials in support of, or oppositions to, public issues.

Arizona law generally prohibits public bodies and officials from using public time and resources “for the purpose of influencing the outcomes of elections.” Maricopa County Attorney Bill Montgomery and Yavapai County Attorney Sheila Polk asked the Attorney General for clarification of this prohibition in light of their plans to use state resources for a public “education” campaign about marijuana. On May 4, 2015, the Attorney General’s Office issued Opinion 15-002, which advised that a public official could use taxpayer money to disseminate communications that reach the merits of electoral issues – even if the communication is clearly positive or negative on one side of an issue – so long as “reasonable minds can differ as to whether the communication was made to influence the outcome of an election.”

The Arizona Attorney General relied on Kromko v. City of Tucson (Ariz. App. 2002) in support of the opinion. That case concerned whether the bar on taxpayer-funded electioneering required Tucson officials to present public service announcements paid for by the city in a “fair and impartial manner.” The Arizona Court of Appeals resolved that it did not, but in doing so framed the legal test for whether an official’s communication is “intended to influence the outcome of an election” to hinge on a then-prevailing definition of “express advocacy” – a term of art in election law that separates the political “advocacy” that the government may regulate from the political “speech” that it may not. The Kromko Court borrowed its “reasonable minds could differ” standard from California and Ninth Circuit cases that analyzed what communications constitutionally could be regulated as “express advocacy” beyond those communications that used the Supreme Court’s “magic words” from the seminal decision of Buckley v. Valeo, such as “vote for,” “elect,” “support” and the like.

The issue here is, in the 13 years between Kromko and A.G. Opinion 15-002, the Supreme Court and the Arizona Legislature have significantly revised both the constitutional parameters of “express advocacy” and the state’s statutory definition of the term. The result is that Arizona’s public officials are now advised they may spend public funds on arguable political advocacy, and that their activities will be subject to less nuanced legal scrutiny because their “express advocacy” is governed by a test that is frozen in time from 2002. Put another way, taxpayer-funded messages that embrace electoral issues are subject to a different, and perhaps more permissive, set of rules than those funded by private parties.

While the Attorney General’s opinion is not necessarily the law, this development creates multiple issues for the organizations (nonprofit or business), consultants or even donors that are supporting the public official and the public advocacy message that is paid for by public funds. Using the marijuana case example, there are multiple nonprofit political groups, trade grades, businesses and individuals that are also against a proposed initiative legalizing marijuana. This will be a major issue for the politicians who are going to be campaigning on the issue in support of their election to office. The major issue during any election season is illegal coordination between candidate campaigns and outside groups. The opinion does not discuss or diminish the prohibitions on such indirect or direct coordination and, thus, private organizations should thoroughly evaluate such issues prior to becoming associated with a taxpayer-funded public advocacy campaign.

Even when there are clear delineations, private organizations should ensure it is protected if there are any efforts to have the public campaign supported by a “public-private venture” where public and private monies are comingled in support of the political objective. As noted above, the Attorney General’s opinion only deals with “public” money. If “private” money is comingled, a higher legal scrutiny as to “express advocacy” is still likely to apply and the private organization could be held liable for any related violations of applicable law or referenced by the Attorney General’s opinion. Thus, a private organization must ensure that it understands that the conditions upon which any donations are made to governmental agencies are in support of the public message.

It is possible that political consultants and media advisors may be contracted by the governmental agency in support of the public message campaign. These professionals are in the best position to run marketing campaigns, such as handling targeted marketing and having the vendor contacts maximize the use of the public monies. However, these consultants will be “government contractors” and will be required to sign the onerous government contracts that other service providers to the government must sign. These terms usually contain “contract terms” against lobbying or using public monies in certain ways. Such contract terms are separate from the statutes that were at issue in the Attorney General’s opinion and can still restrict certain conduct in support of government procurement. It is unlikely that a government procurement officer will appreciate the nuances of what is trying to be obtained with the public campaign and just include the standard terms and conditions. As such terms may actually contractually prohibit what the Attorney General’s opinion was attempting to legally allow, it is important for such contracts to be fully vetted to avoid unwary pitfalls.

This issue is sure to evolve in the 2016 cycle. It would be prudent for nonprofit and business organizations to develop policies and procedures related to this issue prior to the scramble that occurs when the opportunity to collaborate or participate arises. Organizations that know the legal parameters of their own action are in the best position to explain the best course of action for an elected official seeking support for their individual public message. In addition, consultants, donors and organizations may consider using specific contractual terms to govern participation and ensure no misunderstanding occurs with regard to the actual and acceptable parameters of a relationship with a public officer. Carefully crafted contractual arrangements can permit these entities and individuals to keep a close eye on the project and ensure that applicable laws are complied with by all parties, including the public agency. Time will tell how this newly available mode of political participation will affect the law of elections in Arizona.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations. Attorney Advertising.

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