Pro-Lake PAC didn’t fabricate its source of $2.1 million, officials concluded last year

A campaign finance complaint accusing a super PAC that spent $2.1 million boosting Kari Lake of inventing the source of its funding was quietly dismissed last year after elections officials determined that a media report questioning the money’s origin was inaccurate.

In July 2022, the Arizona Republic reported on the mysterious source of more than $2 million that had been spent on television ads to help Lake win her Republican gubernatorial primary contest against wealthy developer Karrin Taylor Robson.

Campaign finance reports showed the money was given to the Put Arizona First PAC by a company named SPH Medical LLC, which listed its address as a UPS Store in north Phoenix. The Republic could not find any company with that name in Arizona, but did find one in California. Its owner said he never gave the money to the Arizona committee.

“Oh my gosh, no,” Tony Coleman, owner of SPH Medical, told the Republic. “I wouldn’t even spend that on the California governor’s race.”

The news story prompted Public Integrity Alliance President Tyler Montague to file a campaign finance complaint with Secretary of State Katie Hobbs alleging that Put Arizona First had either fabricated SPH Medical LLC or was illegally using a shell company to hide the true source of the money.

But neither was true, as the Arizona Mirror learned from public records tied to the complaint.

Because Hobbs was running for governor, her office declared a conflict of interest and sent the complaint to the Maricopa County Recorder’s Office to evaluate and decide whether it appeared any laws had been broken.

County officials sent Put Arizona First a copy of the complaint and asked the committee to respond. In September, attorney Alexander Kolodin wrote a letter explaining that SPH Medical LLC was, in fact, a real company that had made the contributions to the PAC. (Kolodin was elected to the state House of Representatives in November.)

The Republic’s “investigative journalism has seen better days,” Kolodin wrote, noting that the paper apparently only looked for the company in Arizona Corporation Commission records and via a cursory Google search that turned up the California firm. One thing the newspaper failed to do, he noted, was to search corporate records in Delaware, where the company has been registered since 2017.

“The Republic’s failure to check Delaware records is particularly egregious in light of the fact that more LLCs are organized there than in any other state because of its low taxes and sophisticated commercial courts,” Kolodin wrote.

It is unknown who owns SPH Medical LLC or where the money it gave to help elect Lake came from. Delaware law shrouds almost all corporate details, including the identities of company owners and directors. And Arizona law in 2022 did not require political committees to determine the original source of campaign contributions from corporations, though voters in November did pass a ballot measure that will require such disclosure in future elections.

On Dec. 29, Maricopa County told Montague that it was dismissing the complaint because there was no reason to believe any laws had been broken, but it did not explain to him what its investigation had found.

“We filed a complaint in reaction to the story and are glad to hear there wasn’t a violation in this case,” he said when the Mirror informed him that SPH Medical LLC was registered in Delaware.