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Updated Oct 1, 2012 - 4:47 pm

Arizona AG Horne faces campaign finance allegations

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

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

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

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.


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