Americans for Responsible Leadership

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Americans for Responsible Leadership

Basic facts
Location:| Scottsdale, Arizona[1]
Type:| 501(c)(4)
Top official:| Steve Nickolas
Year founded:| 2011

## Contents

* 1 Mission
* 2 Background
* 3 Political activity
* 3.1 2012 expenditures
* 3.2 Ballot measure activity
* 3.2.1 Overview of ballot measure support and opposition
* 3.2.2 California ballot measure contributions
* 4 Leadership
* 5 Noteworthy events
* 5.1 2012 disclosure lawsuit
* 5.1.1 Superior court ruling
* 5.1.2 California appellate courts
* 5.1.3 U.S. Supreme Court
* 5.1.4 Resolution
* 6 Recent News
* 7 See also
* 8 External links
* 9 Footnotes

Americans for Responsible Leadership (ARL) is an Arizona-based 501(c)(4) nonprofit social welfare organization that, according to the groups's tax documents, aims to educate the public regarding "concepts that advance government accountability, ethics and related policy issues." The group has not reported political activity since 2013.[2][3]

ARL contributed $11 million to the Small Business Action Committee in 2012, which resulted in a lawsuit that compelled the organization to disclose the identity of its donors. After the disclosure revealed that ARL had violated California campaign finance law by functioning as a funding intermediary between other nonprofits, the California Fair Political Practices Commission (FPPC) ordered ARL to pay a $1 million fine and forfeit its $11 million contribution to the state.[4][5]

## Mission[edit]

According to the organization's tax documents, Americans for Responsible Leadership (ARL) has the following mission statement:

“  | Further the common good and general welfare of the citizens of the United States by educating the public about concepts that advance government accountability, transparency, ethics and related policy issues.[2][6] | ”

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## Background[edit]

Americans for Responsible Leadership (ARL) was established as a 501(c)(4) nonprofit social welfare organization in July 2011 in Phoenix, Arizona. According to the group's articles of incorporation, ARL aims to educate the public about "government accountability, transparency, ethics, and related public policy issues."

ARL was involved in a 2012 lawsuit that stemmed from an $11 million contribution that the group made to the Small Business Action Committee. The lawsuit compelled the organization to disclose the identity of its donors. After the disclosure revealed that ARL had violated California campaign finance law by functioning as a funding intermediary between other nonprofits, the California Fair Political Practices Commission (FPPC) ordered ARL to pay a $1 million fine and forfeit its $11 million contribution to the state.[4][5]

The group has not reported political activity to the Internal Revenue Service since 2013. However, ARL remained active and in good standing with the Arizona Corporation Commission as of July 2016.[3][1]

## Political activity[edit]

As a 501(c)(4) social welfare organization, Americans for Responsible Leadership (ARL) can engage in certain lobbying and political campaign activities. The IRS does not consider direct or indirect political influence to be in the domain of promoting social welfare. However, ARL can legally participate in political activity to support or oppose candidates for office as long as the political activity is not the organization's primary activity. The group cannot make direct donations to a candidate for office or a candidate's committee.[7][8]

### 2012 expenditures[edit]

ARL made the following expenditures to support or oppose political candidates during the 2012 election cycle:

* In April 2012, ARL spent $5,3211.15 for get out the vote telephone calls to support U.S. Senator Orrin Hatch (R) in his 2012 Republican primary contest against Tea Party activist Dan Liljenquist.[9]

* In August 2012, ARL gave a total of $57,000 to two Arizona groups, the Republican House Victory and Republican Victory Fund.[9]

* In August 2012, the group paid $11,502.60 for mailers supporting former Arizona State Representative Andy Tobin (R) in his successful Republican primary battle against Lori Klein.[9]

* In October 2012, ARL spent more than $576,000 to hire Headway Workforce Solutions and Angler, LLC to conduct voter telephone calls in opposition to President Barack Obama's (D) 2012 campaign.[9]

### Ballot measure activity[edit]

#### Overview of ballot measure support and opposition[edit]

The following table details ARL's ballot measure stances available on Ballotpedia:

Ballot measure support and opposition for Americans for Responsible Leadership

Ballot measure  | Year  | Position  | Status
Arizona Sales Tax Renewal Amendment, Proposition 204 (2012) | 2012 | Opposed[10] | d Defeated
Arizona "Open Government Act" Initiative, Proposition 121 (2012) | 2012 | Opposed[10] | d Defeated

#### California ballot measure contributions[edit]

During the 2012 election cycle, ARL gave $11,000,000 to the Small Business Action Committee, which campaigned against California Proposition 30, Sales and Income Tax Increase (2012) and in support of California Proposition 32, Ban on Political Contributions from Payroll Deductions Initiative (2012).[11]

The contribution triggered a response from California Governor Jerry Brown. Regarding the group's contribution to the Small Business Action Committee in opposition to Proposition 30, Brown stated, "California students are being hit by a money bomb tossed at them by a shadowy out-of-state Super PAC. Crossing the Arizona border and spending $11 million of secret money to hurt California students is an extreme act. We're going to draw a line in California. We're going to stand and fight in defense of our schools."[11]

Derek Cressman, the regional director of California Common Cause and opponent of Proposition 32, responded to ARL's contribution, saying, "We think it's clear as day that this is money that knows what it's doing, that was given for a specific purpose that is part of a national agenda aimed at reducing taxes and weakening labor unions."[11]

## Leadership[edit]

According to Americans for Responsible Leadership's (ARL) 2016 annual report, which was filed with the Arizona Corporation Commission on July 20, 2016, Steve Nickolas served as the group's only officer and director.[1]

The following individuals held leadership positions with ARL during the 2012 election cycle:[9]

* Kirk Adams, President
Adams formerly served as the president of ARL, a position he assumed in mid-September 2012.[9] In 2012, he unsuccessfully sought the Republican nomination for Arizona's 5th Congressional District. From 2007 to 2011, he served as a Republican member of the Arizona House of Representatives, during which time he served a term as Speaker of the House.
* Robert Graham, Director
Graham owns a wealth management company based in Scottsdale, Arizona. He was elected chair of the Arizona Republican Party in 2013.[10]
* Eric Wnuck
Wnuck is the CEO and President of Enhanced Medical Imaging.[12]
* Steve Nickolas, Director
Nickolas is a businessman who has been described as "a bottled water entrepreneur."[10]
* Taylor Searle, Director
Searle is a CPA for The Wolff Company, a private equity firm based in Scottsdale, Arizona.[9]

## Noteworthy events[edit]

### 2012 disclosure lawsuit[edit]

In October 2012, ARL attracted national attention after it contributed $11,000,000 to the Small Business Action Committee in California. The California Fair Political Practices Commission (FPPC) filed a lawsuit against Americans for Responsible Leadership (ARL) in Sacramento County Superior Court on October 26, 2012.[13][11][14][15]

The lawsuit aimed to compel ARL to reveal the identity of its donors.[13] Specifically, the FPPC sought access to all "text messages, emails, letters, notes from phone calls, minutes -- between the group's board of directors, donors, attorneys and the Small Business Action Committee" in order to conduct an audit.[16]

A court hearing was scheduled for October 30, 2012.[13] However, the Virginia-based ARL attorneys were unable to reach Sacramento, California, in time for the hearing due to Hurricane Sandy. As a result, judge Shelleyanne Chang delayed the hearing for 28 hours.[17]

Brad Benbrook represented ARL in the lawsuit. In papers filed with the court, Benbrook claimed that there is a "legitimate interest that donors to nonprofits have in maintaining their privacy." In response to statements made to the press by former FCCP Chair Ann Ravel, Benbrook also stated that the FPPC had "demonstrated willingness to prejudge this matter and litigate in the press."[13]

#### Superior court ruling[edit]

Judge Chang issued a tentative ruling on October 30, 2012, that gave ARL 24 hours to turn its books over to the FPPC for an audit.[18] On the afternoon of October 31, 2012, Judge Chang confirmed her tentative ruling and ordered ARL to turn over the requested documents to the FPPC.

According to Judge Chang's ruling, "Without the FPPC's audit and review of appropriate records, potential disclosure of information prior to the general election critical to the public in deciding how to vote for Propositions 30 and 32 may not be made."[18]

#### California appellate courts[edit]

A spokesperson for ARL indicated that there was a "high probability" that they would appeal Judge Chang's ruling to a higher court.[18] On November 1, 2012, ARL filed a request for an appeal.[19] The FPPC almost immediately filed a petition with the court asking that the request for an appeal be denied.[20]

On November 2, 2012, the appeals court declined to order ARL to immediately hand over its records. In response, former FPPC Chair Ann Ravel announced that she would request that the California Supreme Court order the appeals court to lift the stay it had placed on Judge Chang's superior court ruling. However, Ravel doubted that going to the California Supreme Court would lead to her agency obtaining the ARL records before the election on November 6, 2012.[21]

At 3:00 p.m. on November 4, 2012, the California Supreme Court convened on an emergency conference call and unanimously ordered ARL to release its documents to the FPPC by 4:00 p.m.[22]

#### U.S. Supreme Court[edit]

ARL requested a stay of the order to release its documents to California election authorities. Matt Ross, an ARL spokesperson, said, "While we are working to deliver the records we still believe that the FPPC does not have the authority to take such action and have filed a request for immediate stay with the United States Supreme Court."

Thad Davis, an ARL attorney, submitted a letter to the emergency application clerk of the U.S. Supreme Court claiming that the California courts had violated the group's "due process and equal protection rights" and that the infringement could not "be undone or redressed on appeal."[22]

The letter expressed concerns that the state of California had targeted ARL for political purposes. "Here, ARL contributed to an entity opposing the governor of California's top political priority -- Proposition 30. The chairwoman of the California Fair Political Practices Commission has made manifestly biased statements, politicizing ARL's contribution and compliance and the governor has compared ARL's donors to the Ku Klux Klan."[22] The letter continued, "This proceeding raises critical First Amendment issues regarding the ability of an organization to freely associate and speak on vital election-related matters without reprisal by government officials opposed to their view, during the midst of the election and in contravention of the government's own investigative procedures."[23]

#### Resolution[edit]

In spite of ARL's efforts to request a stay, the group did not appeal the case to U.S. Supreme Court and released the requested documents to the FCCP on November 5, 2012. The disclosure revealed that ARL had functioned as a funding intermediary between Americans for Job Security and the Center to Protect Patient Rights, nonprofit organizations related to political activists Charles and David Koch. ARL's failure to disclose thre source of its funding constituted a violation of California campaign finance law. The FPPC ordered ARL to pay a $1 million fine and forfeit its $11 million contribution to the state.[14][4][5]

## Recent News[edit]

The link below is to the most recent stories in a Google news search for the terms Americans for Responsible Leadership. These results are automatically generated from Google. Ballotpedia does not curate or endorse these articles.

Americans for Responsible Leadership - Google News

## See also[edit]

* California Fair Political Practices Commission
* Charles Koch
* David Koch

## External links[edit]

* Americans for Responsible Leadership homepage (archived)
* California Fair Political Practices Commission homepage

## Footnotes[edit]

1. ↑ 1.0 1.1 1.2 Arizona Corporation Commission, "Americans for Responsible Leadership," accessed December 21, 2016
2. ↑ 2.0 2.1 GuideStar, "Americans for Responsible Leadership," accessed December 21, 2016
3. ↑ 3.0 3.1 Center for Responsive Politics, "Americans for Responsible Leadership," accessed December 22, 2016
4. ↑ 4.0 4.1 4.2 End Citizens United, "Americans for Responsible Leadership," accessed December 21, 2016
5. ↑ 5.0 5.1 5.2 Huffington Post, "California Settles ‘Dark Money’ Case: Source," October 23, 2013
6. ↑ Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
7. ↑ Internal Revenue Service, "Political and Lobbying Activities," accessed July 10, 2015
8. ↑ Nolo, "What are Section 501(c)(4) Social Welfare Organizations?" accessed July 14, 2015
9. ↑ 9.0 9.1 9.2 9.3 9.4 9.5 9.6 Talking Points Memo, "What’s Behind The Arizona Dark Money Group Spending Millions In California?" October 25, 2012
10. ↑ 10.0 10.1 10.2 10.3 NBC Bay Area, "GOP Activist Leads Ariz. Group Pouring Millions Into Calif. Ballot Fight," October 22, 2012
11. ↑ 11.0 11.1 11.2 11.3 Mercury News, "California Common Cause wants state agency to investigate $11 million in anonymous contribution," October 19, 2012
12. ↑ Leadership of "Enhanced Medical Imaging"
13. ↑ 13.0 13.1 13.2 13.3 Arizona Daily Star, "Calif. suit targets anti-initiative group," October 26, 2012
14. ↑ 14.0 14.1 New York Times, "Arizona Group Says It Was Middleman for Donations to California Ballot Measures," November 5, 2012
15. ↑ KQED, "What’s Known About the Groups Behind the $11 Million ‘Money Laundering’," November 5, 2012
16. ↑ Mercury News, "California judge signals she'll allow investigation of shadowy Arizona group," October 30, 2012
17. ↑ SCPR, "Hurricane delays hearing on $11 million Arizona donation to California campaign," accessed October 29, 2012
18. ↑ 18.0 18.1 18.2 KTVU, "Judge agrees to audit of $11M Arizona donation," October 30, 2012
19. ↑ San Francisco CBS Local, "Group Opposing Proposition 30 Appeals Order For Campaign Records," November 1, 2012
20. ↑ Mercury News, "Attorneys for shadowy Arizona group pack powerful political connections," November 1, 2012
21. ↑ New York Times, "Donors Remain Secret in California Proposition Campaign," November 3, 2012
22. ↑ 22.0 22.1 22.2 Vallejo Times Herald, "California Supreme Court orders Arizona group to hand over campaign records," November 5, 2012
23. ↑ Sacramento Bee, "California Supreme Court orders Arizona group to release campaign donor records," November 5, 2012

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