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PHOENIX -- A county prosecutor on Monday accused Arizona Attorney General Tom Horne of illegally coordinating his 2010 election campaign with a separate group supposedly operating independently and said he'll demand that hundreds of thousands of dollars of contributions be returned.

Maricopa County Attorney Bill Montgomery said his office will use administrative proceedings to demand that Horne's 2010 campaign and the other group, Business Leaders for Arizona, return up to $513,000 of contributions. There also could large civil fines, he said.

Because of the alleged coordination, the contributions made to a group headed by a Horne ally who now works in his office actually were contributions that exceeded campaign finance limits on money given to candidates, Montgomery said.

Candidates cannot discuss strategy or other matters with so-called independent expenditure committees, but there's evidence that Horne was involved in both raising money and deciding how to spend it on advertising by Business Leaders for Arizona, Montgomery said.

Horne, a lawyer who is the top-elected law enforcement official for the state, denied any coordination. ``It will be fully and completely proven that the claims are false,'' Horne said.

Horne defeated Democrat Felecia Rotellini, a former prosecutor and bank regulator, by approximately 63,000 votes out of a total of 1.6 million ballots cast in the 2010 general election for attorney general.

Rotellini did not immediately respond to a request for comment.

Democratic Sen. Steve Gallardo said Horne should resign because he ``considered himself above the laws he sought to enforce,'' and the state Democratic Party said Horne not only broke the law but also ``violated the trust of every Arizona citizen.''

Kathleen Winn, who heads Business Leaders for Arizona and is now community outreach and director for Horne's office, denied that her group coordinated its fundraising or spending with Horne.

Horne told Winn in an Oct. 27 email cited by elections officials to ``try again for the 100 k,'' while the final 2010 campaign-finance report filed by Winn's group listed a contribution of that amount on Oct. 29 by Horne's brother--in-law, Richard Newman of Santa Monica, Calif.

Winn said that was the only communication that she had with Horne about the separate group's activities, and she said it occurred after its money was raised and spent on a single television ad targeting Rotellini.

The state election law prohibiting coordination between candidates' campaigns and independent spending groups says violations are punishable by civil fines of three times the amount of the spending involved.

With Winn's group raising and spending $513,000, a penalty could reach as high as $1.5 million, but Montgomery said the $100,000 contribution from Horne's brother-in-law might have to be subtracted because it involved a relative, lowering the potential maximum to $1.2 million.

The law also permits campaigns and groups that violate the coordination ban to refund the money and avoid triggering the penalty and individuals could not be held liable, Montgomery said during a news conference.

However, Montgomery's office later issued a ``clarification'' saying that state law still permits a fine of three times the amount of the violation and that violators could be held personally responsible.

The Horne campaign's latest report listed cash on hand of only $11,304. Business Leaders for Arizona said it had $8.18.

Montgomery said his office considered whether to file criminal charges, but the prosecutor said he couldn't justify doing that when the campaign-finance violation is only a civil matter.

``That was the biggest hurdle that I saw in trying to characterize this as a criminal action,'' he said, adding that he was ``not looking to the criminal justice system to make up for deficiencies in other laws.''

However, Montgomery said he will urge Arizona legislators to toughen, clarify and tighten Arizona election laws.

Montgomery said there was no indication that the Arizona political consulting firm used by Winn's group, Lincoln Strategies, was involved in improper coordination.

Lincoln Strategies is headed by Nathan Sproul, a former executive director of the Arizona Republican Party. Another Sproul firm is the subject of a recently launched voter registration investigation in Florida.

James L. Turgal, head of the FBI's Phoenix division, said the FBI also provided the results of its investigation to the U.S. Attorney's Office. That office, which is responsible for federal prosecutions in Arizona, responded to inquiries by saying only that it does not have an open investigation.

Montgomery said the FBI investigation also unearthed information about a hit-and-run.

He declined to provide any details, but Phoenix police said they are investigating a March 27 hit-and-run crash involving Horne. Police said nobody was injured and the investigation continues.

Rick DeBruhl, a spokesman for the State Bar of Arizona, said the attorney group likely would wait for the outcome of Montgomery's case before considering whether Horne should face attorney ethics proceedings.

Montgomery, a Republican, said he does not want people to think that political calculations motivated him to act against Horne. He said he will not run for attorney general or other statewide office in 2014 nor accept appointment as a midterm replacement if Horne leaves office early.

Associated Press,

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