A sizable donation to a recall committee that went unreported for months has raised some questions about whether the donor is following state law.

The Arizona Free Enterprise Club contributed $21,000 to the Recall Councilman Gary Sherwood Committee between March 25 and April 16, according to the report the committee submitted to the Glendale City Clerk June 30.

Those funds allowed the committee to collect signatures to force a recall election for Sherwood that will occur the first Tuesday in November.

If authorities investigate and decide the club broke the law by not reporting an independent expenditure within one business day, it could owe the government three times what it gave the recall committee.

Rapid reporting

During the 2014 city council election, the club wasted little time in reporting its independent expenditures to the city clerk.

The independent expenditures and reports for the club that election cycle, according to records on the clerk’s website, occurred in pairs: Aug. 5 and 6, Aug. 6 and 8, Aug. 13 and 14, Oct. 7 and 8, Oct. 15 and 17, Oct. 24 and 27, Oct. 28 and 29, and Oct. 31 and Nov. 3.

Those independent expenditures usually paid for mailers the club wanted sent to Glendale voters, to support or oppose candidates running for the council.

State law requires groups making independent expenditures, who seek to influence a candidate election, to report that spending within one business day. In local races, any independent expenditure that exceeds $1,000 has to be reported quickly to the city clerk.

Recent differences

If the recall committee had received more than $2,500 from the club within 20 days of the recall election, state election law would have likely required similar expeditious reporting.

The clerk’s office has not listed any expenditure reports on its website for 2015 because it has not received any this year.

The groups that make those expenditures are supposed “register and notify the appropriate filing officer not later than one day after making that expenditure,” according to state law.

The club registered with the city as an independent expenditure group in 2012, according to the filer identification number the clerk assigned it. In 2010, the club registered as an independent expenditure group with the Secretary of State.

Contribution claim

Scot Mussi, president of the club, said in a July 13 email that his group “has not made any candidate related expenditures in 2015.”

He drew a distinction between the activities of his club this year and last.

“We made contributions to the recall committee. A contribution to a committee by its very nature is not an expenditure,” he explained.

Another portion of the state’s election code seems to agree. It says independent expenditure cannot include coordination between a candidate and the group making the expenditure.

Considering context

Political committees that give money to or coordinate with candidates have to regularly report their contributions and expenditures.

Independent expenditure groups, which include Super PACS and non-profit social welfare groups, usually spend their funds without assistance from a political committee and are said to deal in dark money because they do not have to disclose their donors.

The expenditures by those groups are considered independent even if they do not own a printing press or production studio, but instead rely on outside entities to mass produce or distribute the communication they want sent to voters.

It is unlikely either the club or the recall committee has coordinated with Sherwood. They have invested time and money in their effort to remove him from office.

Any determination of whether the expenditure that paid for petition signatures counts as independent would likely have to figure out if the club and committee were collaborating.

Legal definitions

The definitions in the election section of Arizona Revised Statutes provide additional details on the kind of expenditure that requires rapid reporting.

It says an independent expenditure “expressly advocates the election or defeat of a clearly identified candidate” and “is made without cooperation or consultation with any candidate or committee or agent of the candidate.”

In March and April, Sherwood was the only candidate running in the anticipated recall election. In early June, Ray Malnar emerged as a challenger for the Sahuaro district seat.

Arguably, the club was advocating against Sherwood when it gave tens of thousands of dollars to the recall committee.

Whether the club did so “expressly” depends on which definition is intended in state law. The club likely gave the money to the committee for a particular purpose, but there might not be any proof they did so in a definite manner or explicitly.

Possible penalties

Whether the club violated state law carries some consequences. The club, if found guilty, could be liable “for a civil penalty of up to three times the total amount of the expenditure,” which could cost the group as much as $63,000.

That same portion of state statute says “local election jurisdiction and filing officers may make their own reasonable cause determinations for violations of this section.”

If the city clerk chooses to produce that kind of determination, “the attorney general, county attorney or city or town attorney” can, if warranted, pursue “a civil or criminal enforcement action.”

The chairman of the recall committee did not respond to questions, submitted by email July 13, about its campaign finance report. Instead, the chairman filed paperwork July 14 with the city clerk to terminate the committee.