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Ethics panel files lawsuit seeking disclosure of group’s donors

Copyright © 2020 Albuquerque Journal

SANTA FE – The New Mexico Ethics Commission on Friday filed a lawsuit aimed at forcing a group that spent more than $130,000 on political advertisements in hotly-contested Democratic legislative primary election races to disclose its donors.

The lawsuit – the first of its kind filed by the Ethics Commission since its creation this year – could be a test case for a law amended in 2019 that requires more “dark money” disclosure for election-related expenditures.

Jeremy Farris, the Ethics Commission’s executive director, said Friday the lawsuit was filed in state District Court after the Council for a Competitive New Mexico refused to comply with a demand letter sent by the commission a day earlier.

“I think this is dark money … and that’s exactly what’s required to be disclosed under the Campaign Reporting Act,” Farris told the Journal.

However, the Council for a Competitive New Mexico has argued its donors do not have to be disclosed since their donations do not meet the state’s Campaign Reporting Act’s definition of a contribution.

“The Secretary of State’s office acknowledged that an ambiguity in the law prevents them from forcing donor disclosure here, so it is unfortunate that the Ethics Commission is taking an aggressive position contrary to the secretary and the commission’s approach to other similar organizations,” the group’s Washington, D.C.-based attorney Charles Spies said in a Friday statement.

He also said the Council for a Competitive New Mexico was reviewing the lawsuit and evaluating its legal options.

The group publicly reported spending nearly $131,000 on campaign mailers, radio ads and phone calls in May and early June in support of five incumbent Democratic senators, with some of that money also being spent on mailers that targeted four of their primary election opponents.

But it did not disclose its funding sources for the campaign-related expenditures.

Four of the incumbent senators – Richard Martinez of Ojo Caliente, Clemente Sanchez of Grants, Gabriel Ramos of Silver City and John Arthur Smith of Deming – ended up being ousted in the June primary election.

The fifth senator, Joseph Cervantes of Las Cruces, turned back a primary challenge and won reelection to a new four-year term in last month’s general election.

Meanwhile, the 2019 changes to New Mexico’s campaign finance laws were aimed at requiring more disclosure from independent expenditure groups, or those that spend money on political ads but do not coordinate with candidates or campaigns.

Secretary of State Maggie Toulouse Oliver’s office previously directed the group to disclose its donors in September, after a complaint was filed by Neri Holguin, the campaign manager for two of the progressive Democrats who were targeted by the campaign ads.

But the Secretary of State’s office later rescinded the order and referred the matter to the Ethics Commission in October after the Council for a Competitive New Mexico argued such disclosure was not required under state law.

In its 14-page Friday lawsuit, the Ethics Commission argued the Council for a Competitive New Mexico’s primary purpose appears to be political spending in support or opposition of certain candidates.

For that reason, the commission’s attorneys said the group should be required to register as a political committee and disclose its contributors.

The lawsuit also claims the Council for a Competitive New Mexico had, in fact, registered as a political committee with the Secretary of State’s office in May, but later backtracked and asked for reimbursement of its $50 filing fee.

That correspondence allegedly came from Laura Sanchez, who identified herself as the group’s legal counsel. Sanchez is also the chief of staff for public policy at Public Service Company of New Mexico, or PNM.

No hearing dates have yet been set in the disclosure lawsuit, which has been assigned to District Judge Lisa Chavez Ortega in the Albuquerque-based 2nd Judicial District.

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