Free Enterprise Club Responds to IRS-Style Targeting by the Secretary of State

The Arizona Free Enterprise Club (the Club) today responded to the baseless accusations from the Arizona Secretary of State’s (SOS) office concerning the Club’s constitutionally protected first amendment rights.  These charges, made without any evidence of wrongdoing, unfortunately appear to be no more than IRS-style political targeting and harassment from a government agency run amok.

After seemingly non-stop media stories accusing the Club of spending too much money during the election, the Club’s ten-year reputation as a voice for taxpayers and history of good work and advocacy has been sullied. It is time to set the record straight. For more information on the targeting and frivolous complaint, click here.

The Arizona Free Enterprise Club, a recognized 501(C)(4) social welfare organization founded in 2005, has a long and proud history of issue advocacy, lobbying for the passage or defeat of legislation and policy research—all within the confines of the rules established by the Internal Revenue Service and the state of Arizona.

In addition to issue advocacy and lobbying, the Club challenged in a landmark US Supreme Court ruling an Arizona election law provision that curtailed constitutionally protected speech. In a 5-4 ruling, the Club’s challenge of the matching funds provision under the Clean Elections Act prevailed and the unconstitutional provision was struck down.

Despite these facts, the Arizona Secretary of State has singled out the Free Enterprise Club with harassing scrutiny. In an attempt to build a case to require the Club to file as an Arizona political committee, the Secretary of State initiated a “random” audit of the Club’s income and expenditures, an action that the Secretary has no statutory authority to conduct. The attempted illegal audit was overly broad, accusatory and without merit. Because the Club’s tax documents are publicly available, an attempt to seek guidance and clarification on how to comply with the audit was requested.  The Secretary of State refused.

Additionally, just days after the surprise audit request, a complaint was filed against the Club.  Again, we sought guidance from the Secretary and any evidence of wrongdoing by our group, yet none was provided. We responded to the complaint as requested on August 15, Just mere hours after submitting our response, however, we were notified by the Secretary of State that they were referring the matter to the Attorney General’s office.

“As one of the most effective lobbying organizations at the State Capitol, it is no surprise that from time to time we ruffle some feathers,” said Club President Scot Mussi. “The Secretary of State however, should be above blatant political targeting.  Instead, they took actions beyond their authority, made accusations without a shred of evidence, and exploited them for media attention.”

Due to the unprecedented nature of these actions, the lack of evidence of wrongdoing and the Secretary’s effort to overturn federal law, the Club has filed a public records request with the Secretary of State’s office to obtain information that could shed light on this investigation.

“Politicians trying to silence their critics is nothing new,” Mussi continued, “The abuse of a public office, however, to infringe on first amendment rights and chill speech should not be tolerated.”

“We intend to vigorously fight these baseless accusations and to protect our rights under federal law and the constitution, even if it means going back to the Supreme Court.”

Phoenix Can’t Afford Stanton’s Light Rail Boondoggle

Metro Light Rail, the slow-moving, unsightly train system that cost $1.4 billion to build in 2008 and costs taxpayers tens of millions in losses each year, may be expanding soon if Phoenix Mayor Greg Stanton has his way.  In fact, his goal is to triple it over the next 30 years.

At a time when resources are still scarce, and there are so many pressing transportation needs around Arizona, this is just a terrible idea.  The City of Phoenix alone recovers less than half of what it spends each year to operate and maintain the system, not unlike other East Valley cities.  Further, as the Arizona Republic noted, tax revenue for the project could be $1 billion short of projections due to the tanking economy.

So how are Mayor Stanton and other city leaders going to fund an expansion of a system that is already hemorrhaging money, while trying to make up for a $1 billion shortfall? There’s only one way: More taxes.  Specifically higher taxes both before Transit 2000 expires in 2020, and after if voters approve.

So join the Club in fighting this horrible idea, and let Mayor Stanton know that we can’t just can’t afford this scheme – especially with so many of our roads in need of repair.  You can make your voice heard through, and let your elected representatives know just how you feel about expanding Light Rail, and its effect on both your taxes, and the financial future of Phoenix.