Arizona Corporation Commission candidate Ralph Heap is facing another campaign finance complaint. Now he’s accused of failing to disclose who paid to collect thousands of voter signatures his campaign used to qualify for the primary election ballot.
Many of the allegations mirror those made in two separate complaints that accuse Heap of hiding who paid for hundreds of signs his campaign installed across the state.
Heap secured one of two nominations in the Republican Corporation Commission primary after turning in more than 15,000 signatures. That’s well above the 7,588 signatures all statewide candidates needed to qualify for GOP races.
The newest complaint
Clean Elections candidates like Heap agree to forego large donations and contributions from businesses and PACs in exchange for public funding for their campaigns.
Under those rules, Heap was limited to fundraising a maximum of $76,880 through small donations during the primary election and could not spend more than the available cash amount reported on his campaign finance disclosures.
Heap’s official campaign finance reports showed he raised a total of $19,136 this cycle as of July 22 and paid Mesa-based Uncle Sam Petitions a total of $6,880 for signature-gathering efforts.
But the Arizona Public Integrity Alliance, a Mesa nonprofit run by Republican activist Tyler Montague that focuses on election issues, claims that would only cover a fraction of the campaign’s signatures.
In Arizona, campaigns can use unpaid volunteers to collect signatures, which would not show up on campaign finance reports.
But, after analyzing the petitions turned in by Heap’s campaign, the group claimed it found evidence that only about 14% of the signatures were collected by Heap, his family or volunteers.
In a complaint filed with the Arizona Citizens Clean Elections Commission, the group asserts about 46% of Heap’s signatures were collected by individuals with direct ties to the paid petition industry. That includes thousands of signatures collected by individuals who have registered with the Arizona Secretary of State’s Office as paid circulators employed by Uncle Sam and other businesses working a variety of political campaigns.
The complaint alleges another 40% of Heap’s signatures were collected by individuals whose signed affidavits “carry the marks of a managed operation.” That includes “machine-printed,
pixel-identical affidavit fields across long runs of sheets; affidavits completed by rubber stamp with the address boxes left blank; pre-printed identity blocks; county-routed volume.”
The Arizona Public Integrity Alliance looked at campaign finance reports filed by other candidates who used Uncle Sam or Grace Petitions, another company that offers paid signature collection services, and found those candidates paid between $1.91 and $5.17 per signatures.
“At the same vendors' documented range…Mr. Heap's drive was worth $28,791 to $77,933 — most likely about $66,000 — against $6,880 disclosed,” according to the complaint.
The Arizona Public Integrity Alliance accused Heap of either failing to disclose additional payments to petition circulators or accepting undisclosed contributions from outside sources.
Both scenarios would violate Clean Election rules.
Thomas Collins, the commission’s executive director, said violations of those rules could expose Clean Elections candidates to significant civil penalties, including large fines and, in some cases, removal from the ballot.
State law gives the commission the authority to fine Clean Election candidates up to ten times the amount of a violation.
Loans, credit or expenditures
Heap’s attorney denied the allegations made in Arizona Public Integrity Alliance’s complaint.
“This complaint and the other are a product of the complaining parties’ ignorance of how both campaigns and campaign finance work,” attorney Timothy La Sota said, though he did not refute specific allegations.
But, in response to a separate complaint accusing Heap of failing to disclose who paid for his campaign signs, La Sota said the campaign utilized a “lawful extension of credit” from Mesa Sign Shop to acquire the signs, according to a response filed with the Clean Elections Commission. La Sota did not respond to a question about whether Heap received a similar line of credit to pay for signatures.
According to the Arizona Citizens Clean Elections Commission, that extension of credit should have been reported.
A guide for candidates created by the commission states that all expenditures must be reported during the period they were made, including any “promise or agreement to make an expenditure resulting in an extension of credit.”
But La Sota argued Heap didn’t have to disclose the campaign sign transaction immediately.
He cited state laws that exempt lines of credit from the definition of a campaign contribution or expenditure.
Under that law, a candidate must report the transaction as a contribution if the campaign does not repay money within six months.
In his response to the commission, La Sota included a signed affidavit from Mesa Sign Shop owner Jim Torgeson, who said he did extend a line of credit to Heap in “late April.” The affidavit did not include the size of the credit line and there appears to be no paper trail to back up the claim.
“I did not require a signed contract prior to printing these signs, and do not have a signed contract with Dr. Heap or his campaign committee to this day…I have prepared an invoice for these signs, but it has not yet been sent to Dr. Heap and Dr. Heap has not yet remitted payment,” according to Torgeson’s declaration.
Collins, the Clean Elections executive director, declined to speak specifically about La Sota’s argument.
But, speaking generally, he said lines of credit do qualify as expenditures under Clean Election rules.
“I'm not applying this to a particular circumstance, but the general rule is that an expenditure is made as of the date that the agreement for the expenditure occurs,” Collins said.
Collins said Clean Elections candidates agree to abide by many rules that don’t apply to traditional candidates, like foregoing all donations from corporations or political action committees.
“So all of these limitations that you agree to in return for funding from the Clean Elections Fund are important, because the Clean Elections Fund is not there for everyone,” Collins said. “It is there for those candidates that have made the choice that they would prefer to run through a mechanism that is centered on voter interest and not centered on their ability to raise money from PACs or large individual contributions.”
And, he said, prior to qualifying for Clean Elections funding, candidates are not allowed to incur debt that exceeds the campaign’s cash on hand. Instead, they must rely on small individual donations that are allowed under the program.
“So if you didn't backstop that by making clear you cannot go into debt beyond those dollars, those limits would not be meaningful,” Collins said.
What’s next?
It’s still unclear what — if any — penalties Heap could face.
That’s because state law provides for a lengthy hearing process when a person files a complaint with the Arizona Citizens Clean Elections Commission that includes investigations by commission staff and multiple votes by the commissioners over whether there is sufficient evidence that a violation occurred.
Complaints can end with settlements, candidates agreeing to take corrective action or a commission vote to determine whether there is probable cause that a violation occurred, which could result in fines or removal from the ballot.
But, even at that point, the process may not be over, because candidates can appeal decisions to the Arizona Office of Administrative Hearings and, later on, a superior court judge.
And Clean Elections can’t disburse more than $100,000 in public funding to his campaign without that document.
Heap recently asked the Clean Elections Commission to let him withdraw as a Clean candidate, so he could begin fundraising through traditional means. But the commission denied that request, leaving him with less than $10,000 on hand and few avenues to fundraise with just three months left until the general election.
