Ralph Heap, a Republican candidate for Arizona Corporation Commission, is facing a second complaint alleging he violated state campaign finance laws.
West Valley Republican Lisa Everett filed a complaint with the Arizona Secretary of State’s Office, accusing Heap of failing to disclose who paid for campaign signs during this year’s primary election, which would violate state law.
Everett pointed out that Heap only reported spending $644.47 on signs, which she says could not have covered the costs to purchase and install 184 signs she documented throughout the Valley.
“Upon information and belief, this modest sum does not plausibly approximate the fair market value of the hundreds of Heap Campaign signs that are known to be in circulation,” she wrote in the complaint.
Records reviewed by KJZZ show that signs similar to the ones backing Heap’s campaign can cost candidates upwards of $30 each for larger orders — a cost that does not include installing the signs on street corners.
Everett accused Heap of either failing to report sign purchases or failing to disclose “in-kind contributions,” which refer to goods or services donated to a campaign by a business or individual.
Everett already filed a similar complaint with the Arizona Citizens Clean Elections Commission, which provides public funding to candidates like Heap who agree to forgo large donations and outside money.
During a commission hearing, Heap’s attorney downplayed the allegations.
“What Dr. Heap's been accused of is sort of commonplace in campaigns where sometimes you know, at least just taking the accusations as if they were true, it's certain parts of the campaign get ahead of themselves, so it's very much a garden-variety accusation,” Timothy La Sota said.
Heap is at risk of losing out on hundreds of thousands of dollars in Clean Elections funding, because he won’t sign a sworn affidavit affirming his campaign finance reports are accurate.
Both the Secretary of State’s Office and the Clean Elections Commission are empowered to investigate violations of state campaign finance laws.
If Heap’s campaign is found to have violated state campaign finance laws, he could face substantial fines.
Full conversation on The Show
LAUREN GILGER: ... There's controversy brewing for one Corporation Commission candidate and Turning Point favorite, Ralph Heap. And now it's dragging in another mega-leader in the Arizona state Legislature, too. The big question is: Who paid for Heap's campaign signs?
A complaint points out he only reported spending about $650 on signs — not nearly enough to pay for the at least 184 of them documented around the Valley. Our own Wayne Schutsky with KJZZ's Politics Desk has been covering it all, and he joins me now in studio to tell us more. Good morning, Wayne.
WAYNE SCHUTSKY: Good morning.
LAUREN GILGER: OK, so Heap is running as a Clean Elections candidate, right? Which means he agreed to forego money from big donors like PACs, corporations, donors like that, in exchange for public funding from the Arizona Clean Elections Commission. But now there are questions about him maybe taking other funding to pay for those unaccounted-for signs?
WAYNE SCHUTSKY: Yeah, so in addition to those 184 that were documented in a complaint, you know, he's a statewide candidate. I've seen plenty of his signs around the state when I've been traveling around doing some reporting. So yeah, signs typically cost — from some records I reviewed, invoices that candidates have been provided — they can cost anywhere from $20, $30 a sign up to $50 a sign, plus how much it costs to go install them.
So if you do the quick math there, $650 isn't going to get you much. You know, we're looking at thousands of dollars for the amount of signs we've seen out there. So yeah, the allegation is that someone paid for these signs. Who was it? Was it Heap's campaign and they didn't report it, or was it some outside person who paid for them on his behalf? Which again would have to be reported as what's called an in-kind contribution.
LAUREN GILGER: He asked Clean Elections to kind of let him withdraw as a Clean Elections candidate to raise money otherwise. They said no?
WAYNE SCHUTSKY: That's correct. Yeah, he had this situation where he won't sign a required document in order to release that Clean Elections funding that he's qualified for. This is hundreds of thousands of dollars for his campaign. So instead he said, "Hey, just let me out, and I'll go back to being a regular candidate where I can go to those PACs, I can go to individual donors for larger amounts of money than is allowed under Clean Elections." But they came back to him and said, "No, sir."
Which really puts him in a financial pickle, I think is how I put it in a social media post, because that means he's not getting his Clean Elections money, but he's also barred from going out and doing a lot of that private fundraising. So he's kind of stuck in between a rock and a hard place at the moment.
LAUREN GILGER: So can't raise any money on either front right now?
WAYNE SCHUTSKY: Outside of these small donations that qualify under Clean Elections.
LAUREN GILGER: OK, OK. Tell us more, Wayne, about this complaint. It was filed by a fellow Republican, right?
WAYNE SCHUTSKY: Yeah, Lisa Everett, who's a West Valley Republican. She filed this complaint basically saying, "I've seen these signs all over the state, and how did he pay for them? I think Clean Elections should look into this."
They have purview to enforce campaign finance laws, both for participating and non-participating candidates. So yeah, she filed a complaint with them, later filed a complaint with the Secretary of State's Office, who also enforces some campaign finance laws, making very similar allegations.
LAUREN GILGER: OK. Now, one of his opponents in this race, sitting corporation commissioner and also a fellow Republican, Nick Myers, is also weighing in. Heap beat him in the primary by just two points. What did he have to say about this, Wayne?
WAYNE SCHUTSKY: He basically said, "Yeah, the Clean Elections Commission needs to look into this because if the allegations are true, it gave him an unfair advantage."
Now, I know a lot of political consultants who would dispute the effectiveness of campaign signs on street corners. ... A lot of people think it's kind of a waste of money, it's not switching anyone's minds. But what Myers said is that this Corporation Commission, not a high-profile race, not a race a lot of people pay attention to, so name ID is key here. And so if you have — the more signs you have, the more times people might see your name as they're driving down the road and see, you know, Republican Nick Myers or Republican Ralph Heap. And so he said that gave him an advantage if in fact he was skirting the rules to get these signs up.
LAUREN GILGER: What's Heap saying about this? His attorney seemed to sort of play it down?
WAYNE SCHUTSKY: Yeah, his attorney basically said, "You know, this is a —" if the complaint is true, you know, he's not conceding that any of these allegations are true. But he said, "Even if they are, this is kind of commonplace. You know, it's just a campaign maybe getting out in front of its skis and getting some signs out there before they've reported it, but it's — there's nothing salacious here." You know, this can be resolved, downplaying that this is really a big deal.
LAUREN GILGER: Is it commonplace, Wayne?
WAYNE SCHUTSKY: I mean, we do see questionable campaign finance reports and they typically do get resolved either via like an amended report before they rise to the level of a complaint. But in this case, we've seen Heap in various reports over the past year refile seven, eight times and still not disclose where these signs came from. So I'd say this one's a little bit different.
LAUREN GILGER: OK. I want to talk more about what Nick Myers had to say because he went beyond the issues with Heap and this election cycle. What did he say happened in his election four years ago?
WAYNE SCHUTSKY: So during a Clean Elections hearing regarding some of the stuff involving Heap, he spoke during public comment and he basically said, "Some of this sounds like a situation I found myself in four years ago when I first ran for the Corporation Commission."
You know, Nick Myers is an incumbent, he's the current chairman of the commission. He accused both the Arizona Free Enterprise Club and Jake Hoffman of approaching him and saying, "You know, you can't get your signs out there because you don't have your Clean Elections money yet."
You know, for these candidates, sometimes that money doesn't come through until later in the primary cycle. And they were like, "Well, we have a few ideas about how you could do it. You know, you could — ... we could buy it for you and then once that money comes through, we, you know, fudge the numbers and backdate that and get reimbursed."
And he told me, "... I believe that was illegal, and so I said, 'No, sir, I'm not going to do that.'"
LAUREN GILGER: OK. What has Hoffman had to say about those allegations?
WAYNE SCHUTSKY: They fully denied it. He called Nick Myers basically a sore loser because Hoffman
is backing Heap. He recruited him, he was involved in his campaign, so he basically said, "I didn't — he's making stuff up and I had nothing to do with that."
LAUREN GILGER: OK, so a lot still up in the air in terms of who might end up in what position on this Corporation Commission race right now, Wayne. What's next in all this? What are you watching for?
WAYNE SCHUTSKY: Well, I'm going to watch how this complaint plays out at the Corporation Commission and whether Ralph Heap ends up signing that document that I mentioned that would release his funding.
What that document asks him to do is affirm that under penalty of perjury that he did file all of his campaign finance reports and that they were accurate. And so it's notable that he is refusing to sign that document given all of the other allegations.
So I want to see how these complaints are playing out. I want to see whether he decides to stay in the race at all. You know ... he can't fundraise right now, so he could potentially drop out. We have a fast-approaching date where maybe he could be replaced on the ballot by Republicans. Because if he isn't, then we have one Republican, Kevin Thompson, running against two Democrats, which guarantees Democrats a pickup on the Corporation Commission.
LAUREN GILGER: All right, lots at play here. KJZZ's Wayne Schutsky with our Politics Desk. Wayne, thanks as always.
WAYNE SCHUTSKY: Yep, thank you.
