Republican files complaint against PAC promoting Kari Lake campaign, says finance form masks its donors

A Republican consultant filed a complaint Wednesday against a political action committee that has spent $2.1 million to promote the gubernatorial campaign of former television anchor Kari Lake, saying its financial reports served to mask the source of its donations, in violation of state law.

Tyler Montague, a Republican political consultant who heads the Public Integrity Alliance, filed the complaint against Put Arizona First with the Arizona Secretary of State’s Office, asking it to forward the matter to the Arizona Attorney General’s Office for possible prosecution.

The $2.1 million, according to the financial disclosure form, was used to hire state Rep. Jake Hoffman to create ads and other materials promoting the candidacy of Lake and advocating against her chief rival for the Republican nomination, Karrin Taylor Robson.

In its financial disclosure form filed on Friday, Put Arizona First said that it was funded entirely by an entity called SPH Medical LLC, whose address, according to the form, was a UPS store in north Phoenix.

It is the same UPS store address used by Put Arizona First itself.

No such entity called SPH Medical exists in Arizona, according to corporate filings with the Arizona Corporation Commission. A Google search shows one entity with that name, a medical supply company in Orange County, California.

But the owner of that business, Tony Coleman, told The Arizona Republic on Monday that he didn’t make the contribution.

Source of donations unclear: Who paid $2M to promote Kari Lake campaign?

In the complaint, Montague called the situation a “dubious constellation of facts.”

The complaint suggests there are two possibilities: Either Put Arizona First has “negligently or willfully misrepresented its funding sources” or it has created an unregistered entity called SPH Medical as a shell company.

The second possibility would mean, according to the complaint, that the entity was serving as a “conduit of funds to obscure the identify of a third party.”

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The complaint notes that federal election authorities prohibit independent expenditure committees, such as Put Arizona First, from “camouflaging contributors’ identities in a corporate artifice.”

The complaint also notes that Put Arizona First had not provided a physical address for its chairman and treasurer, as mandated in state law.

The listed chairman of the political action committee, Chris Marshall, did not return phone calls or an email on Wednesday, nor last week, seeking comment.

The campaign finance records for Put Arizona First show that, through June 30, it contracted with Hoffman’s Queen Creek company, 1Ten, to create $1 million worth of materials promoting Lake and $1.1 million against Taylor Robson.

Hoffman started a company called 1Ten Management in June 2021, corporate filings show. Previously, he had a company called Rally Forge.

That company was banned from Facebook during the 2020 election cycle after the social media company accused it of posting misinformation from phony accounts. A Washington Post story told of teenagers hired by Rally Forge to post continually under fake accounts, something experts told the Post amounted to a troll farm.

In campaign reports, 1Ten is listed as working out of a different address in Queen Creek than the one filed with the state in its statement of organization. The address on the campaign reports is the same used by another Hoffman business, Forged Public Affairs.

Hoffman also has not returned requests for comment from The Republic.

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Filing with the Secretary of State’s Office is the first step outlined in a complaint procedure contained in the 544-page manual governing election procedures in Arizona. According to the procedure manual, the Secretary of State’s Office has jurisdiction in this matter.

The Secretary of State’s Office, under the outlined procedure, is supposed to send Put Arizona First a notice of the complaint within five days and ask for a response. The procedure manual says the deadline should be 30 days, although it may be extended for good cause.

The Secretary of State’s Office has no subpoena power, nothing that would compel the production of documents or other evidence, the procedure manual says.

That Secretary of State's Office will make an initial determination if there has been a violation of the law, known as a “reasonable cause” finding.

If the Secretary of State’s Office decides there is evidence to move forward, it would send the matter to the state Attorney General’s Office for additional investigation.

The penalty, outlined in the procedure manual, would be a presumptive fine equal to the money raised. Though, if the Attorney General's Office found the conduct egregious, the fine could triple.

In September, Public Integrity Alliance sent a letter to the directors of Turning Point USA suggesting it was risking its nonprofit status by having an “unusually close relationship” with Lake’s campaign. Montague signed that letter, just as he did Wednesday’s complaint to the Secretary of State’s Office about Put Arizona First.

The letters, and the political spending, point to infighting within the Arizona Republican Party. Lines are drawn between a wing devoted to the political style and policies of former President Donald Trump and candidates in the more traditional Republican mold.

The battle between Lake and Taylor Robson for the Republican nomination for governor serves as the chief battle over the direction of the state’s party. Both candidates will hold events on Friday featuring high-profile endorsers.

Taylor Robson will host an event in Phoenix with Arizona Gov. Doug Ducey and former Vice President Mike Pence, who ran on the 2016 and 2020 tickets with Trump.

Meanwhile, Lake will be at an arena in Prescott Valley in an event headlined by the former president.

This article originally appeared on Arizona Republic: Pro-Kari Lake PAC accused of masking donors