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'Whether by design or through sheer incompetence.'
The first major campaign complaint is here.
Good morning, Alaska! It’s been a while!
In this edition: The 2024 election is a ways away, but we got our first major, headline-grabbing campaign finance complaint on Wednesday. It’s a doozy, even by author Scott Kendall’s standards, alleging that the group pushing for the repeal of the state’s ranked-choice voting system is rotten with violations of Alaska’s campaign finance laws, which includes standing up a phony “church” for the purposes of laundering campaign contributions to the effort. Also, the reading list.
Current mood: 🌶️🌶️
‘Whether by design or through sheer incompetence’
“It is certainly their right to oppose those improvements and to advocate for a return to closed-party primary elections and plurality winners. However, it is not their right to deceive Alaskans by running roughshod over our campaign finance laws. Yet that is precisely what they have done,” argues a complaint filed by Alaskans for Better Elections against the campaign to repeal ranked-choice voting with regulators on Wednesday.
For months, the campaign targeting Alaska’s ranked-choice voting has publicly projected confidence in its mission to repeal the voter-approved measure via its own voter initiative. It has raised hundreds of thousands of dollars, its backers boasted, from their own pockets and from Outside groups like the Heritage Foundation. We’ve heard a steady beat of updates about how they’re gathering signatures and nearing their goal to get a measure that would effectively return the state to the semi-closed partisan primaries that favored partisan candidates.
It appears that at least the fundraising and spending are much smaller than claimed and, as a new campaign finance complaint lodged on Wednesday details, the sprawling campaign appears to be riddled with violations that seem to be designed to hide the true nature of the campaign from Alaskans. Either that, as the complaint muses, or they really have no idea what they’re doing.
Alaskans for Better Elections, the group that spent heavily in supporting the passage of Ballot Measure 2 in the 2020 elections and is currently working to defend the system (and run its own initiative dealing with campaign finance limits), brought the complaint, which Attorney Scott Kendall authored. It’s a particularly scathing complaint, even by Kendall’s standards.
“Whether by design or through sheer incompetence, the scope and scale of respondents’ violations are staggering, and has kept the public from knowing who is financing this confederation of opponents of Ballot Measure 2,” argues the complaint. “Complainants respectfully request that APOC staff thoroughly investigate these violations along with any others that come to light during an investigation.”
Here’s the rough essence of the complaint: Alaskans for Better Elections alleges that key campaigners Art Mathias and Phillip Izon have used Wellspring Ministries, the Ranked Choice Education Association (which is registered as a church under Wellspring Ministries’ IRS tax-exempt status), Alaskans for Honest Elections and Alaskans for Honest Government as a complicated scheme to limit public oversight into who is funding the effort to recall Alaska’s ranked-choice voting system and how that campaign is being run. They also accuse them of using the Ranked Choice Education Association to mask contributions while also making them tax-deductible.
The 25-page complaint details several run-of-the-mill campaign finance violations like the groups attempting to influence an election without being properly registered with the state, improper contributions, insufficient disclaimers on campaign materials and failure to file regular reports.
Tax-exempt status: What’s really interesting, though, is what the group appears to be doing with the “church” that is the Ranked Choice Education Association. Apparently formed as a church in Washington state, the organization appears to be there for the purpose of warning of the dangers of ranked-choice voting and calling for its repeal.
Churches in Alaska have typically toed a blurry but seemingly legitimate-enough line regarding their involvement in politics. I’ve heard of more than a few conveniently timed sermons extolling the horrors of Forrest Dunbar fly by without raising much more than an eyebrow, but this takes it to a new level with a church that appears to be nothing more than an arm of the campaign.
As the complaint notes, much of the organization’s online presence was clearly aimed at repealing Ballot Measure 2, with much of the materials directly borrowed from Alaskans for Honest Government and Alaskans for Honest Elections (which is the only group of the bunch that is registered to campaign, though it hasn’t kept up with its disclosures). When scrutiny landed on the “church,” however, much of the material from the other campaigns quickly disappeared, and some language was softened so as not to appear to be such a clear call to action.
While the involvement of a church so overtly into the political realm ought to raise some red flags at the IRS, the complaint notes tax-exempt statuses aren’t within the purview of Alaska’s campaign regulators. Using the “church” to mask the true source of the contributions, however, is well within the purview of the regulators.
“The RCEA also appears to have been formed as an ‘auxiliary’ of Wellspring for the purpose of using Wellspring’s IRS status to provide donors with potentially unlawful tax deductions for political donations,” the complaint argues. “Wellspring’s support of this overt political activity is not only contrary to the federal and local tax benefits that Wellspring benefits from; this behavior also amounts to, at a minimum, unreported and undisclosed ‘in kind’ contributions from Wellspring to RCEA.”
Valuable time: A major piece of the claimed fundraising totals for the Alaskans for Honest Elections claim is a $200,000 in-kind contribution from Mr. Izon for his time running and operating the campaign. The complaint points out that the timing of when the contribution was reported—two weeks after the campaign started—meant that he was apparently valuing his time at something like $100,000 per week, a “fantastical assertion” in the complaint’s assessment of the compensation.
It continues in a particularly scathing manner noting that even if it was an error and that the rate was set to cover the entirety of the campaign, “there is nothing in Mr. Izon’s background or expertise indicating that his management time would be worth anywhere near $70,000 per month. In short, Mr. Izon’s ‘contribution’ appears to have been concocted for the purpose of falsely inflating the public’s perceptions regarding support for (the ballot initiative).”
The response: The Anchorage Daily News’ Iris Samuels got some great responses from Mathias and Izon in her write-up of the complaint. It’s about as discordant as this messy web of a campaign appears. Mathias essentially denies any wrongdoing while refusing to explain where Alaskans for Better Elections is actually wrong, while Izon appears to concede that there were many errors and that they’re trying to get everything into compliance. A particularly funny example:
The website for Alaskans for Honest Government advocates for the repeal of ranked-choice voting and directly links to the Alaskans for Honest Elections website, but Mathias claimed the groups are separate and that the “Honest Government” group is not directly working on the ballot initiative.
“Is it illegal to have a link? APOC says we’re fine,” said Mathias.
Izon said that the link “shouldn’t be there” and that he would “make sure it’s deleted.” He also said that Alaskans for Honest Government is not acting as a separate ballot group because no money has been spent on it.
One more thing: There’s a lot raised by the complaint that is outside the reach of the Alaska Public Offices Commission, including this accusation that Izon and his wife and business partner Diamond Metzner, the owner of one of the companies getting paid a sizable chunk of whatever real dollars are flowing into the campaign, of essentially running a scam.
“In short, (Alaskans for Honest Elections’) entire operation appears to have been set up by Izon and Metzner as a grift—and a clumsy one at that—to funnel every dime AHE raises back to them, and them alone,” the complaint alleges.
What’s next: First, the Alaska Public Offices Commission will need to decide to take up the complaint, which I would expect given that the group is already on the radar with the regulators and doesn’t appear to have paid its existing fines or corrected its already-identified errors. Then we have a process where the groups are supposed to respond to the allegations raised in the complaint, and then a hearing gets set 45 days after that complaint is filed. During that time, regulators will conduct an investigation and provide a recommendation to the commissioners. That’s potentially a resolution within 60 days, but as things are with the understaffed and underfunded APOC, that could take a bit longer. They’re allowed to extend and delay deadlines.
Alaskans for Better Elections is seeking a longer process, noting that “a thorough investigation is more important than a rapid (but perhaps incomplete) outcome.”
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The reading list
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