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Our letter to
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Ethics complaint alleges group failed to disclose donors, connection to prominent New Mexico lobbyist

August 7, 2020

Reprinted from New Mexico in Depth

Over the course of May and early June this year, a new group called the “Council for a Competitive New Mexico” (CCNM) spent over $130,000 on a media campaign supporting a group of incumbent state senators, most of whom would go on to lose as part of a progressive wave in June’s Democratic primary.

The media campaign included several negative mailers and automated phone-calls against candidates opposing the incumbents while the public was left in the dark about who organized the group and who funded the media campaign.

Now, an ethics complaint filed this week with the Secretary of State’s office alleges that CCNM broke New Mexico’s election code by not disclosing its donors.

Neri Holguin, campaign manager for two of the candidates who won during the June primary, Siah Correa Hemphill and Pam Cordova, writes that the group may have violated the New Mexico Elections Code by not reporting who paid for the negative advertising and phone calls against those candidates as well as others.

“It was a deliberate attempt to make it as difficult as possible for voters to know who’s behind these hits on our candidates,” said Holguin in an interview. “They knew the rules enough to file as an independent expenditure (IE) and to list their expenditures, and so why not list contributors?”

“Voters need to know that, and we have no way of knowing that right now,” said Holguin.

At the core of Holquin’s complaint is a new state law that triggers certain groups to disclose publicly and quickly who the donors are that paid for their electioneering activities if the costs are larger than a state-prescribed threshold.

Holguin said she believes CCNM was created by a group of people, including prominent New Mexico lobbyist Vanessa Alarid–whom she mentioned by name in the complaint–that have used similar tactics in recent years to influence elections at the local and state level without disclosing publicly who is funding the activities in a timely fashion.

Chevonne Alarid, the president of the nonprofit group, however, said disclosure isn’t necessary until it files its annual report to the Internal Revenue Service. In addition, she and Vanessa Alarid both denied Vanessa’s involvement. An unnamed representative of the Council for a Competitive New Mexico said in an email the group was in compliance with state law.

The disagreement offers a glimpse into an ongoing debate over how to ensure the public knows who is behind negative political messaging at a time when vast amounts of political spending is going undisclosed across the country.

Lack of disclosure

CCNM’s media campaign during the primary included a mixture of negative ads targeting challengers and positive ads supporting the incumbents they opposed. A search of the Secretary of State’s independent expenditure portal shows that while the group did report its expenditures, it didn’t disclose the donors behind the effort, leaving the public in the dark about the interests of those behind the media campaign.

An image of one CCNM report on the searchable state portal, with no donors listed.
The group filed registration documents on March 11 with the Secretary of State listing three individuals associated with the organization: Chevonne Alarid, Adam Silverman, and Kelli Monnheimer. The group hired Lincoln Strategy Group, an Arizona-based campaign firm aligned with the Republican Party. Nathan Sproul, founder of the group, previously served as the Executive Director of the Arizona Republican Party.

But otherwise, there is little information about the group on its website or elsewhere, about who is responsible for or funding its electioneering activities.

“We must actively explore continued economic diversification, drive increased job growth and demand reforms to our tax structure,” reads the website, alongside references to New Mexico’s oil and gas sector and “key policy leaders” who have “wisely fought for fiscal discipline.”

Sen. John Arthur Smith, D-Deming, the chair of the Senate Finance Committee and generally regarded as a fiscal conservative, was defeated by progressive challenger Neomi Martinez-Parra in June.

The Council for a Competitive New Mexico campaigned in favor of Smith and Democratic incumbents Richard C. Martinez, Gabriel Ramos, Joseph Cervantes, and Clemente Sanchez.

Simultaneously, the group spent money, according to its reports, on negative attacks against those hoping to unseat Smith, Martinez, Ramos and Sanchez — Martinez-Parra, Leo Jaramillo, Siah Correa Hemphill and Pam Cordova, respectively. The group also ran negative automatic phone calls to voters, or “robo-calls”, with one call claiming that “outside groups dedicated to tearing down other Democrats,” were supporting Correa Hemphill against her opponent, Sen. Gabriel Ramos.

The group flooded mailboxes with mailers. For instance, in May, CCNM sent negative mailers to voters comparing Martinez-Parra to President Donald Trump.

Other mailers were more positive, casting incumbent Democratic state senators as advocates for local businesses and families.

A positive mailer that was mailed to voters by CCNM. Image from Holguin ethics complaint..
All told, the group spent roughly $134,000 on its campaign.

Asked numerous times via phone and email, representatives of the Council for a Competitive New Mexico declined to disclose who had funded the campaign.

“As a newly formed 501c(4), we will follow all applicable laws, public disclosure requirements and filing timelines, as outlined by the Internal Revenue Service and the Secretary of State, as applicable,” wrote a representative of the organization in an unsigned email.

Reached by phone, Chevonne Alarid, who is registered as the President for the organization, said she didn’t have much information about the group.

“I am titled the President, but I likely don’t have the information that you’re requesting,” she said on Friday. She later referred New Mexico In Depth to Adam Silverman, secretary of the group, for further information.

Silverman, who is the Vice President of the Albuquerque-area real estate developer Geltmore, LLC, declined to talk on the phone for this story, instead redirecting inquiries to an email account set up by the organization.

“The Council for a Competitive New Mexico has complied with the requirements of NMAC 1.10.13.11(C) in its filings,” the group subsequently stated in an unsigned email from that account.

Chevonne Alarid said the group would file an annual report required of nonprofits. “It’s an allegation that would likely have no basis,” she said of the ethics complaint.

While Alarid was referring to federal IRS rules governing disclosure by 501(c)4 organizations, the ethics complaint alleges the group violated state election laws. Those laws require groups not registered with the state as political action committees that spend over a certain amount of money to influence elections to disclose their expenditures and donors within days of the activity.

Citing the state laws, the ethics complaint emphasizes that the nonprofit group’s spending falls under the state’s definition of such independent expenditures, and that because the spending exceeded $3,000, donor disclosure is required.

“Over $100,000 got spent on these elections, very close to the election, and in ways that are not easy for voters or campaigns to know who was behind them,” said Holguin.

Potential penalties named by the complaint include a civil penalty of up to $20,000– $1,000 per violation– as well as a misdemeanor if it can be shown that the group “knowingly and willfully” violated New Mexico’s election code.

“The Secretary of State takes allegations such as these very seriously and all complaints received by our Office go through an internal process to determine if a violation has occurred,” wrote spokesman Alex Curtas in an email. “We will review the allegations, pull any internal documentation or reports we may have and do a thorough analysis.”

Curtas said that if the complaint required further investigation, the Secretary of State will make a referral to the State Ethics Commission.

Special Interests

In her ethics complaint, Holguin wrote that she believed Vanessa Alarid is involved with CCNM. In a text message, Holguin pointed to close connections Alarid has with those running the CCNM group as well as similar groups that ran negative media campaigns in two other recent elections.

“Vanessa Alarid is a lobbyist who goes to great lengths to protect the interests of her corporate clients, namely the real estate conglomerate Western Albuquerque Land Holdings, the owners of the controversial Santolina development,” Holguin said in the text message. “It seems she is often separated by one degree to PACs or IEs (independent expenditure) that go aggressively after candidates that oppose Santolina’s wishes.”

A prominent New Mexico lobbyist, Vanessa Alarid has long advocated for development interests in Albuquerque. Currently she is a registered lobbyist with the state as a lobbyist for both Garrett and Winrock Partners, LLC. She denied her involvement in CCNM in a text message, and declined to comment further.

Vanessa Alarid and others in conversation at the conclusion of a presentation to the House Transportation, Public Works, and Capital Improvements committee in 2018 about proposed funding for Paseo del Volcan on the Albuquerque west side. Image: Danielle Prokop.
In the June primary and elections in 2016 and 2017 that Holguin referenced, new groups with generic, innocuous names abruptly appear near the end of an election period and run large negative media campaigns, and for a period of time the public is left in the dark about the interests behind the ads.

As New Mexico in Depth reported in 2016, a political action committee called “New Mexicans for New Mexico” spent hundreds of thousands of dollars on billboards, canvassing, mailers and robocalls to boost then-Bernalillo County Commission candidates Steven Michael Quezada and Robert Chavez while criticizing Adrian Pedroza.

Most of that money came from Western Albuquerque Land Holdings and its asset manager, Jeffrey Garrett, but the public didn’t know that until final disclosure reports were filed a month after the election. And a lobbying report she filed more than three months after the election clarified Vanessa Alarid donated the bulk of the money to New Mexicans for New Mexico on behalf of Garrett Development Corporation.

Pedroza, an opponent of the controversial Santolina development, was ultimately defeated by Quezada.

The group’s treasurer, Donna Madrid-Taylor, told New Mexico In Depth in 2016 that the group had “accomplished what we were setting out to do” and was shuttered.

In 2017, a group called Make Albuquerque Safe began running negative TV ads and prominent billboards against Tim Keller, then a candidate for Albuquerque mayor. New Mexico in Depth reported in 2017 that Garrett Development Corporation contributed half of the $60,000 spent by the group. At that time, Vanessa Alarid was registered with both the City of Albuquerque and the state of New Mexico as a lobbyist for Garrett.

The group ran the ads about a week before campaign disclosure statements were due, and over the course of that week did not provide any information about who was behind the group, leaving the public in the dark initially.

Holguin has found herself on the opposite side of those efforts. A longtime Democratic campaign manager, she headed up an independent group called ABQ Forward Together that supported Tim Keller in the 2017 Albuquerque mayoral election. In 2016, Holguin was the campaign manager for Pedroza, Quezada’s primary opponent for a seat on the county commission.

Beyond her role as a lobbyist for Garrett, and in the case of the 2016 election, donating money to a committee on his behalf, Vanessa Alarid had other connections to the groups.

Madrid-Taylor, listed as the treasurer for both Make Albuquerque Safe and New Mexicans for New Mexico, worked at the time as a paralegal in the law offices of Jason Alarid, Vanessa Alarid’s first cousin (In a brief phone call Wednesday, Madrid-Taylor emphasized that she is no longer involved with the groups and now works solely as a realtor).

Alarid has similar family connections to the Council for a Competitive New Mexico.

The ethics complaint filed this week states that Vanessa Alarid is Chevonne Alarid’s sister-in-law.

In a text message, Vanessa Alarid clarified her relationship with Chevonne and denied any involvement in CCNM.

“She married my cousin and I know absolutely nothing about the CCNM. Neverheard [sic] about it,” she wrote. That cousin is Jason Alarid, who shares a downtown Albuquerque office space with his wife Chevonne’s own consulting firm, CLA Consulting.

Jason Alarid did not respond to a request for comment for this story. Chevonne denied Vanessa’s involvement in the group, as well.

Holguin said she hopes an investigation by the Secretary of State will shed light on who funded the political advertising. As for Alarid’s denial, she seemed skeptical. “The treasurers or listed agents for several PACs have been relatives or friends of relatives of Alarid’s,” she said. “Is it a coincidence? Maybe. But probably not.”

What We Are Currently Doing About Government Corruption

By John House

RepresentUs New Mexico is a member of the Declaration for American Democracy (DFAD), a national coalition of more than 150 national, state and local member organizations working on various aspects of democracy reform. DAFD engages in a variety of activities, including lobbying our members of Congress in Washington, D.C., attending and speaking at congressional hearings, letter writing campaigns, phone banking on federal, state and local issues and joint letters that individual coalition member organizations may choose to joint sign. Below is the latest coalition letter pertaining “closing the revolving door” between industry professionals and government administrative positions.

SIGN-ON LETTER: To Rebuild Public Trust, Close the Revolving Door

We, the undersigned organizations, call on the winner of the next presidential election to commit not to appoint any individual to a senior policy role in an agency or department with authority over any industry in which that individual held a senior position or served in an advisory capacity within the last five years. We also urge that, if applicable, such individuals be excluded from positions with jurisdiction over personnel matters during the transition.

Trust is a fundamental precondition for effective governance. Yet, Americans’ trust in their government — already frighteningly low prior to Donald Trump’s rise to power — has fallen even further since his inauguration. This should hardly come as a surprise. Throughout the last four years, the public has been subjected to a never-ending parade of conflicted appointees who have enthusiastically set about rolling back the regulations that once restrained their former (and likely future) employers’ most destructive impulses. While corporate interests benefit from this regime, the American public suffers.

The next president must treat this trust deficit like the crisis it is. This moment calls for bold commitments to build an administration that is devoid of serious conflicts of interest and unequivocally committed to advancing the public interest above all else.

Trump did not write the current playbook, even as he has pushed it to new extremes. Steven Mnuchin is, after all, far from the first Treasury Secretary to hail from Goldman Sachs.

Instead of being treated with the care they deserve, appointive positions of public trust have most often been used as political bargaining chips, as rewards for particularly prolific fundraisers, or as if they were reserved for representatives of certain regulated business sectors. As a result, the upper echelons of the executive branch have more often been filled with corporate insiders, many of whom are only months removed from lucrative positions in the industries they are subsequently tasked with regulating (and, indeed, only a few years from a return to those same profitable posts), than with individuals who are unimpeachably committed to advancing the public interest.

The consequence of this practice is that the interests of elites and industry are over-represented in Washington. Ordinary Americans understandably feel they lack a seat at the table. In an administration dominated by revolving door appointees, policies challenging powerful interests face a harder road to enactment, and government priorities tend towards those of well-connected elites. Adherence to this status quo has contributed to the perception that all politicians, no matter their party, are corrupt and actively working to uphold a system that is rigged against regular people.

There should no longer be any dispute: this is a failed model. We need a new vision for executive branch leadership, one that takes building and maintaining public trust as a central imperative. Whichever candidate wins the presidential election this fall must overcome their party’s recent past and build public trust through their choice of appointees. There should be no room for doubt that their selections serve no interest but the public’s.

That must start with the candidate’s choice of stewards for the presidential transition. Too often, the teams crafting incoming administrations have been stacked with figures who work for corporate interests, undermining the frameworks that make way for collective prosperity. Unsurprisingly, the resultant administrations overwhelmingly reflect this inherent conflict of interest.

Past administrations have relied on compliance and mitigation regimes to manage these conflicts of interest, producing a web of disclosures, ethics agreements, and recusals. Even when perfectly applied, these strategies leave gaping loopholes that allow former members of industry to materially advance the interests of former and future employers. While these scenarios might not legally qualify as conflicts of interest under our overly lenient laws, the public is not fooled by the supposed propriety of these relationships.

The next president must, therefore, move from appointing officials who must manage their conflicts of interest to elevating conflict free individuals into senior roles in their transition and in their administration. As such, we call upon the winner of the next presidential election to commit not to appoint any individual into a senior policy role with responsibility over an industry in which, within the last five years, they held a senior position or from which they were compensated in a consulting or advisory capacity.

John House is a retired attorney from Los Angeles, CA who has made his home in Santa Fe since 2007. He is President of RepresentUs New Mexico.

Disclosing and Limiting Political Contributions and Expenditures by Businesses

By David Burling


Photo by Chris Barbalis on Unsplash

Several advocacy groups are seeking to persuade companies of all sizes to limit their political contributions and disclose their political expenditures. Of these, some are urging these companies to adopt shareholder resolutions supporting these positions. There is even a rating system for governance of major corporations that includes, as one factor, how they handle political contributions. For example, The Center for Political Accountability publishes an annual report called the CPA-Zicklin Index, which includes that information. It is part of a coalition that since 2003 has pushed for each company to develop and disclose guidelines on political contributions directly and through trade associations and other tax-exempt organizations used for political purposes. Part of the requested disclosure includes the identities of the corporate officers making the decisions and the amounts donated. Other organizations involved in this arena include The Public Interest Research Group, Public Citizen, and, more recently, American Promise, one of the organizations RUNM works closely with.

American Promise has organized a group to create a well-defined set of resolutions for corporations to adopt, including such fundamental goals as improving the wellbeing of the community, the workers and shareholders over the long term and no longer making profitability the sole purpose of the corporation’s existence. American Promise calls this its Corporate Statement Project.

American Promise also promotes an initiative to get business professionals to sign an Individual Statement of Principles in support of these broader and more inclusive corporate goals. These principles would include commitments to full disclosure of political contributions and expenditures. They would also commit the companies to support a well-functioning and representative government.

Similarly, the Shareholder Commons is another organization involved with American Promise on this project and working on its own set of “guardrails” for corporations to adopt, which includes support for a constitutional amendment to overturn the landmark U.S. Supreme Court Citizens United decision, which opened the door to “dark money” donations – that is, donations from certain political action committees that do not have to be disclosed.

These efforts will probably prove challenging, and many of them will probably be directed at large shareholder groups such as pension funds and mutual fund companies. Unfortunately, as the New York  Times recently disclosed (https://www.nytimes.com/2020/07/21/business/dealbook/corporate-political-donations.html), some companies often profess values that are then undercut by contributions to parties and candidates who don’t support those values.

The next step is to develop and implement guidelines acceptable to corporations that will create a more socially beneficial outcome while helping their corporate bottom line.

David Burling is a retired lawyer and a member of RepresentUs New Mexico. He lives in Lamy, New Mexico.

 

The Biggest Dark Money Case Since CREW v. FEC

By John House


Photo by Pepi Stojanovski on Unsplash

Without a doubt, the most important Dark Money case to come along since CREW v. FEC is Lieu v. FEC. CREW v. FEC challenged the Federal Election Commission’s own interpretation of its rule regarding disclosure of expenditures. The court’s decision resulted eventually in the current rule, which requires persons other than political committees who make political expenditures greater than $250/year to report to the commission. Lieu is of far greater import, challenging the 2010 SpeechNow.org v. FEC, which enabled the creation of Super PACs. Please read this July 22 press release by Free Speech for People, which filed the appeal, for more.

Press Release

WASHINGTON, D.C. (July 22, 2020) – Sixteen states, led by Washington State, today filed an amicus brief before the Supreme Court, urging the nation’s highest court to review a landmark case seeking to end super PACs in U.S. elections. Six U.S. Senators, led by Senator Sheldon Whitehouse of Rhode Island, filed a separate brief in support of Supreme Court review of the case. The case, Lieu v. Federal Election Commission, brought on behalf of members of Congress and congressional candidates, directly challenges the 2010 federal appeals court ruling in SpeechNow.org v.FEC. That decision, which struck down a longstanding contribution limit in the Federal Election Campaign Act, led directly to the creation of super PACs.

The states joining the amicus brief include Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Mexico, Pennsylvania, Rhode Island, Vermont, Virginia, and Washington State, as well as the District of Columbia.

The U.S. Senators joining the amicus brief include Senator Richard Blumenthal of Connecticut, Senator Mazie Hirono of Hawaii, Senator Patrick Leahy of Vermont, Senator Thomas Udall of New Mexico, Senator Chris Van Hollen of Maryland, and Senator Sheldon Whitehouse of Rhode Island.

Other parties filing amicus briefs today in support of Supreme Court review of this case include former FEC Commissioner Ann Ravel; election law scholars Abby Wood, Richard Briffault, Rebecca Brown, Yasmin Dawood, Michael Gilbert, Burt Neuborne, Bertrall Ross, Douglas Spencer, and Franita Tolson; political scientists Stephen Weissman, Robert Boatright, Anne Baker, Diana Dwyre, Anthony Corrado, John Green, and Clyde Wilcox; and appearance-of-corruption researchers Christopher Robertson, Kelly Bergstrand, and D. Alexander Winkelman.

The national public interest organization Free Speech For People, which launched Lieu v. Federal Election Commission as lead counsel for the plaintiffs, is serving as co-counsel in the petition for Supreme Court review, alongside a bipartisan group of distinguished legal scholars, which includes Professor Jeffrey Fisher (Stanford Law School; lead counsel for the Supreme Court phase of the litigation), Professor Laurence Tribe (Harvard Law School), Professor Albert Alschuler (University of Chicago Law School, emeritus), and Professor Richard Painter (University of Minnesota Law School and former chief ethics counsel to President George W. Bush). The legal team also includes the law firm of Foster Garvey.

Lieu v. Federal Election Commission was filed in federal district court in Washington, D.C., in November 2016 on behalf of a bipartisan coalition of members of Congress and 2016 congressional candidates led by Representative Ted Lieu (D-CA-33), Senator Jeff Merkley (D-OR), and the late Representative Walter Jones (R-NC-3). The lawsuit seeks the reversal of the March 2010 federal appeals court ruling in SpeechNow.org v.. FEC. In that decision, the U.S. Court of Appeals for the D.C. Circuit ruled that the federal law limiting contributions to political action committees to $5,000 per person per year could not, under the Constitution, apply to political committees that promised to make only “independent” expenditures, thus unleashing super PACs. Contrary to a common misconception, however, this result was not required by the Supreme Court’s earlier ruling in Citizens United v. FEC, and the Supreme Court can reverse the D.C. Circuit’s decision in SpeechNow without revisiting Citizens United.

SpeechNow has ushered in a decade of unprecedented contributions to Super PACs from a small pool of ultra-wealthy donors,” write the state attorneys general in the amicus brief spearheaded by Washington State Attorney General Bob Ferguson. “Super PACs have, in turn, spent billions of dollars in federal, state, and local elections. This torrent of undisclosed money has corroded public confidence in elected officials representing the states in Congress, the election process, and the very importance of voting, leading many Americans to believe that their individual votes cannot matter in the face of such massive contributions from a powerful few.”

“A tsunami of special interest money is drowning out Americans’ voices and corrupting our democracy,” says Senator Whitehouse. “At the center of the tidal wave are Super PACs through which corporations and billionaires run unlimited money to push their political agendas. With the ability to donate unlimited money comes the ability to threaten unlimited donations, allowing big special interests to control politics without ever donating a cent. That is a clear recipe for corruption. It’s time for the Supreme Court to uphold sensible contribution limits and overturn SpeechNow.”

“The Supreme Court has long said that money in politics could be regulated when it appears to be quid pro quo corruption. Our research with a broad panel of thousands of Americans shows that they see large contributions to super PACs to be exactly that,” says Boston University School of Law Professor Christopher Robinson. Robinson, Bergstrand, and Winkelman have conducted empirical research showing that large contributions to super PACs create the appearance of corruption, which the federal appeals court in SpeechNow maintained they could not.

“Since 2010, the assumptions on which SpeechNow relied have been proven incorrect. As a result, SpeechNow created a campaign finance system that Congress did not enact and which has made the majority of Americans believe is corrupt,” says former FEC Commissioner Ann Ravel.

“Super PACs accepting unlimited contributions spend nearly one in every four federal election campaign dollars, concentrated on the most competitive races,” says political scientist Stephen R. Weissman. “They enable million-dollar, even tens of millions of dollars, donors to support organizations marketing and conducting themselves as extensions of candidates’ and parties’ campaigns — regardless of federal contribution limits applying to those campaigns. Thus, Super PACs undermine the contribution limits that are the very basis of the federal campaign finance system.”

“In keeping with the Supreme Court’s typical practice, the Justices of that Court – not judges on a lower court – should decide the enormously consequential constitution question whether Congress has the power to regulate contributions to Super PACs,” says Professor Jeffrey Fisher, Co-Director of the Stanford Supreme Court Litigation Clinic and lead counsel on the petition for review. “The Court’s attention is all the more imperative here because the court of appeals has so plainly overread Citizens United. That decision established a new rule regarding corporate campaign expenditures, but it did not alter the Court’s long-standing jurisprudence allowing Congress to regulate contributions to candidates and closely related entities. We’re grateful for the groundswell of amicus support.”

“Super PACs weren’t created by Congress or the U.S. Supreme Court. They were created by a lower court decision, based on faulty assumptions, that has never been reviewed or revisited,” says Ron Fein, Legal Director of Free Speech For People. “It’s been a decade since the D.C. Circuit unleashed super PACs on our democracy, and it’s clear that the experiment has failed. We look forward to giving the Supreme Court the opportunity to reverse the SpeechNow decision so we can rebuild our democracy. We’re grateful for the support of these friends of the Court who recognize the importance of this case.”

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To read the amicus briefs, and for more information about the case, visit: freespeechforpeople.org/lieu.

John House is a retired attorney from Los Angeles, CA, who moved to Santa Fe, New Mexico in 2007. He is President of RepresentUs New Mexico