State Ethics Commission sues Apodaca’s dark money operation

The State Ethics Commission on Friday sued a dark money group and its president, Jeff Apodaca, to force disclosure of the sources behind the money paying for political advertising in support of legislative candidates running in the June 4 primary election. 

The New Mexico Project registered as a domestic nonprofit corporation in New Mexico last fall, and has since spent thousands of dollars on political advertising. But the group hasn’t identified its donors. In its 49-page complaint to the state’s Second Judicial District in Bernalillo County, the commission wrote that it is bringing the action to “stop Defendants’ ongoing efforts to frustrate the public’s right to know,” citing 2019 reforms to the state’s Campaign Reporting Act that attempt to eliminate “dark money.” 

Those changes specifically targeted “independent expenditures” for disclosure – money that groups spend on political advertising without input from candidates. 

To make its case, the commission draws heavily upon Apodaca’s own words made through numerous media outlets, including the KKOB radio shows of Bob Clark and T.J. Trout, and a column by Apodaca published in The Santa Fe New Mexican. 

It noted that Apodaca used the term “independent expenditure” to describe the group’s spending, on Clark’s May 1 radio show: ​​“We’re an educational independent expenditure. So we’re going in and educating the voters on what we need to do to get out and vote and vote for the right candidates.” 

Citing Apodaca’s statements on that same show that his group can raise as much as it wants without having to disclose donors, the commission disagreed: “TNMP is mistaken; the Campaign Reporting Act requires TNMP to give New Mexicans basic information about the sources of the money TNMP is using to influence their votes.”

The complaint points to $10,000 paid to Cumulus Media for radio ads, noting that the memo line on the image of the check filed with the Federal Communications Commission by the radio stations states “Radio Ad – Primary.” The complaint also describes 33 Facebook ads placed by the group to support candidates. 

The commission asks that the court order the group to register as a political committee, which under state law must disclose donors, or alternatively, that either the group or Apodaca be ordered to simply report the sources of the money spent on the political advertising.  

New Mexico In Depth attempted through phone and email to reach Apodaca two weeks ago to ask why he had not disclosed the New Mexico Project’s donors. On Friday afternoon, it emailed and used social media to ask if he would disclose those donors now that the State Ethics Commission has sued him and the group.  As of Friday afternoon, he had not responded to New Mexico In Depth. 

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Political spending transparency bill clears Senate

The Senate approved a bill Wednesday that would close a “loophole” in the state’s transparency laws, and would require legislators running for federal office to disclose their contributions every 10 days during the legislative session. The loophole allows nonprofit organizations to avoid disclosing donors behind political spending if those giving the money requested in writing that their donations not be spent for political purposes, even if the group decides to use the money for politics anyway. The amended SB 387 ultimately passed the Senate on a 35-3 vote after clearing the Senate Judiciary Committee last Friday, where State Ethics Commission Executive Director Jeremy Farris spoke in favor of the bill. The bill now heads to the House for consideration. “I think it closes the gap,” said Farris, noting that Wirth’s bill was similar to recommendations the commission made in its 2020 annual report.

Lawmakers running for Congress don’t have to disclose fundraising during session. We asked them to.

Legislators are barred from soliciting campaign contributions while the Roundhouse is in session– unless they happen to be running for Congress. 

During the state’s prohibited fundraising period, lasting from January 1st to the end of the session, lawmakers may not solicit any campaign contributions and lobbyists may not donate to any state campaigns. But federal campaigns aren’t subject to state law. This means four Democratic state lawmakers running for an open congressional seat may fundraise at the same time they’re conducting state business during the 2021 legislative session. New Mexicans won’t officially know who contributed to them until after the session. 

“The original intent of having a prohibited period for state lawmakers was so that the public wouldn’t have the perception that lobbyists were literally giving our elected officials money for their state campaigns while they’re in the middle of a legislative session,” said Heather Ferguson, executive director of Common Cause New Mexico. On Wednesday, the Senate Rules Committee unanimously endorsed a bill sponsored by Sen. Jacob Candelaria, D-Albuquerque, that would require state elected officials running for federal office to disclose their donors every ten days during the prohibited period.

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Sen. Wirth seeks to close dark money loophole

Sen. Majority Leader Peter Wirth, D-Santa Fe, is seeking to tighten a so-called “loophole” in New Mexico’s campaign finance laws that allowed a dark money group to hide its donors during the 2020 election. “I do think we need to continue our work to be sure that voters know who’s donating to independent expenditure committees,” Wirth said during a hearing today before the Senate Rules Committee. “This bill is a baby step.”

In 2020, the nonprofit Committee to Protect New Mexico Consumers (CPNMC) argued it didn’t have to disclose who funded $264,000 spent on mailers sent to voters, taking advantage of an exception in the campaign reporting act that allows a group to keep donors secret when they request in writing that their contributions not be used for political spending. 

Underlined language that SB 387 would add to the Campaign Reporting Act. Wirth’s Senate Bill 387 would require outside spenders to separate those kinds of contributions from money given for political spending, keeping them in a segregated bank account in order to be legally shielded from disclosure, leaving less room for groups to use that exemption to their advantage. “It’s an attempt to just figure out where the dollars are coming from,” Wirth said about the fix to outside spending transparency laws that Wirth championed for more than a decade and that became law in 2019

Secretary of State Maggie Toulouse Oliver spoke briefly in support of the bill, praising Sen. Wirth’s prior work on bringing more transparency to political spending.

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PRC commissioner urges PNM to “come clean” on dark money

New Mexico Public Regulation Commissioner (PRC) Joseph Maestas on Wednesday demanded that Public Service Company of New Mexico disclose whether it contributed to a dark money group that supported a November ballot measure seeking to overhaul the agency charged with regulating the utility. “I’m just simply calling on PNM to come clean, you know, disclose whether or not you donated to this dark money PAC [sic],” Maestas said during a PRC hearing, referencing the nonprofit group Committee to Protect New Mexico Consumers. PNM may not be under legal obligation to disclose its involvement, Maestas said, but it had a “moral obligation” to do so. “I agree, we’d love to hear,” Stephen Fischmann, the PRC commission chairman, said. “I think there’s a strong possibility that it’s the case that they did donate to it.” 

New Mexico In Depth received no response Wednesday from PNM spokesman Ray Sandoval despite multiple requests for comment, continuing weeks of silence on whether or not the utility contributed to the nonprofit.

Why should we care about dark money?

If there’s one thing that’s dominated my reporting over the eight months I’ve spent with New Mexico in Depth, it’s dark money; it was the subject of my first story, and almost half the stories I’ve reported since then. Bryan Metzger

For the uninitiated, “dark money” typically refers to outside spending by nonprofit entities that are not obligated to disclose their donors, at least under federal law. In 2019, New Mexico passed a law to force these kinds of organizations to disclose their donors, but in 2020, two groups challenged the law rather than comply with it, underscoring the difficulty in bringing to light what special interests are behind political spending. 

This morning, we published a story that took a deep dive on one of these groups– the “Committee to Protect New Mexico Consumers”– which spent $264,000 advocating for the passage of a constitutional amendment to change the state’s Public Regulation Commission (PRC) from a five-member elected body to a three-member appointed body, beginning in 2023. It was the first time I’d really attempted to get to the source of a dark money group’s funds, rather than simply report on a lack of disclosure. What we found were some strange bedfellows.

Dark money group pushing PRC reform tied to major oil company

Exxon Mobil Corporation contributed to a dark-money group that supported a successful November referendum reforming the state’s Public Regulation Commission (PRC), according to a campaign finance report filed by one of its lobbyists. One of the largest oil and gas producers in New Mexico, the multinational conglomerate gave at least $10,000 to the “Committee to Protect New Mexico Consumers,” a nonprofit that spent a quarter of a million dollars touting the merits of a constitutional amendment, which eventually passed handily. The contribution can be found in an Oct. 7 report filed by Exxon Mobil lobbyist Deanna Archuleta. The Committee to Protect New Mexico Consumers refused to disclose its donors when the State Ethics Commission (SEC) demanded it do so despite new campaign disclosure laws requiring groups like it to say where the money they spend on political campaigns comes from.