Ducey campaign deflects on issue of $500K donation
PHOENIX — Gov. Doug Ducey won’t say whether he knows who is behind the single largest contribution to his re-election campaign.
And he won’t even say if he asked who is actually funding Blue Magnolia, the limited liability company that had been incorporated in Delaware just two weeks before it put $500,000 into the Ducey Victory Fund.
“I’m going to leave this to the lawyers that are working through this,’’ the governor said in response to questions by Capitol Media Services.
But J.P. Twist, who managed Ducey’s re-election effort, has deflected questions about the donation in the wake of a complaint filed with the Secretary of State’s Office by the Campaign Legal Center. That organization alleges that the newly formed Blue Magnolia was simply a front for someone else — in this case they believe Larry Van Tuyl, manager of the Berkshire Hathaway Automotive Group, which owns more than two dozen dealerships in Arizona.
The complaint itself is against Blue Magnolia and Van Tuyl. Brendan Fischer, director of the CLC’s federal reform program, said he has no evidence that Ducey or his campaign team were aware of who was actually behind the money from Blue Magnolia which, as a 2-week-old company, had no assets to make that size of a contribution.
But Fischer told Capitol Media Services it “would be prudent to inquire further about the source of a contribution from a mysterious LLC with no public footprint.’’
“Our campaign followed the law,’’ Ducey said. “If there’s an issue through this contribution it’ll be figured out through this process.’’
Ducey, however, would not answer questions about whether he even asked who put that much money into his campaign.
The question of what the governor knew is crucial: If Ducey was aware that Blue Magnolia was simply laundering campaign contributions from someone else he would be guilty of a felony.
Van Tuyl, who owned the Arizona dealerships before selling them to Berkshire Hathaway in 2014, is no stranger to Ducey or Republican politics.
Just days before the general election this year he gave $250,000 of his own to the Ducey Victory Fund. That is a separate campaign committee set up by the governor and his supporters that can take not only donations above the $5,100 individual limit but also corporate dollars.
Van Tuyl was less generous with Ducey in his first gubernatorial run, giving him just $2,000 in his bid for the Republican nomination.
But Van Tuyl also provided $90,000 to the Arizona Republican Party in 2010.
At the heart of the issue is a state law that makes it a crime to make a contribution in the name of another person. Violations are a Class 6 felony, which carry a one-year prison term and a $150,000 fine.
The CLC complaint alleges that the money given to the Ducey Victory Fund by Blue Magnolia actually came from Van Tuyl.
As proof, Fischer points out that Blue Magnolia gave $100,000 to DefendArizona, a political action committee set up to help Martha McSally in her unsuccessful bid for the U.S. Senate.
After CLC filed a complaint with the Federal Elections Commission, which oversees federal races, DefendArizona filed an amended report listing Van Tuyl as the contributor.
Fischer said he only became aware of the donation to the Ducey Victory Fund and filed his complaint with the state after a story by Capitol Media Services about contributors to the governor’s re-election efforts.
Van Tuyl has not responded to messages left with his Berkshire Hathaway office in Texas.
But the same Arizona law that makes hiding the true source of dollars a felony also makes it a crime for a candidate or committee to knowingly accept a contribution made by someone in the name of another person.
That, then, gets to the question of what did Ducey know — or should have known — about the single largest contribution to his re-election campaign.
“I don’t have anything more to say on that,’’ Ducey said when asked directly.
Technically speaking, Ducey did not get to use the $500,000 directly to ensure another four years in office because of the prohibition on corporate donations to candidate campaigns. Instead, the Ducey Victory Fund was set up so that any donations that Ducey could accept — meaning non-corporate dollars of less than $5,100 — would be transferred to the governor’s own campaign committee.
Anything else the governor could not accept personally was given to the Arizona Republican Party which, under current state law, not only can accept unlimited and corporate dollars but also is free to spend as much as it wants on behalf of any candidate — and without disclosing the amount. That’s why there is no record of how much the state GOP spent to help Ducey.
That exception may be going away.
Earlier last week, Maricopa County Superior Court Judge David Palmer voided changes in campaign finance laws approved by the Republican-controlled Legislature and signed by Ducey.
One of those changes created a new exception for political parties for expenses that have to be publicly disclosed when they spend money on behalf of candidates. Palmer ruled that lawmakers were powerless to make that change because the reporting requirement had been approved by voters in 1998 as part of creating the Citizens Clean Elections Act.
An appeal of that ruling is anticipated.