Arizona Will Audit Certain Organizations

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Last week, the Arizona Secretary of State’s office announced that it will begin auditing statewide and legislative “independent expenditure committees,” that engage in political activism without registering as political action committees (“PACs”). If the Arizona Secretary of State determines there is reasonable cause to believe an organization improperly failed to register as a PAC, it will refer the matter to the Arizona Attorney General for enforcement.

Arizona law generally requires an organization to register as a PAC if its “primary” purpose is to influence elections. In identifying an organization’s primary purpose, authorities consider all the facts and circumstances rather than fixating on any one factor. Authorities consider, for example, the percentage of expenditures devoted to political advertising, the topics discussed at organizational meetings, the amount of time and attention the organization invests in non-political activities and the goals listed in the organization’s founding documents. No one factor, taken alone, determines whether an organization is required to register.

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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.

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