1. Chair Lemon called the meeting to order at approximately 9:30 a.m.

   Chair Lemon announced that he has been invited to speak at the League of Women Voter's annual meeting in Sun City.

2. Approval of Minutes of March 25, 2003 Meeting

   Commissioner Jolley moved to approve the meeting minutes for March 25, 2003.
   Commissioner McKay seconded. Motion carried.

3. Executive Director's Report
   • At approximately 4:45 p.m. yesterday, Yuri Downing, Paul DeDonati, and Trevor Clevenger filed a response to the Executive Director's recommendation on MUR 02/0058, 02/0059, and 02/0060. The complaint against the three Libertarian candidates alleged that they used campaign funds not for direct campaign purposes
   • Chair Lemon, Executive Director Connor, and former Commissioner Jones met with representatives from the United States General Accounting Office to discuss the report on clean elections. The report will be finalized May 9, 2003
   • Staff has began working on proposed rules and policy statements regarding accounting and reporting requirements
   • Fund balance at the end of March was $7,245,484
   • Executive Assistant Paula Ortiz, and Executive Director Connor have reviewed resumes and interviewed three applicants for the Deputy Director position
   • Paula Ortiz, Executive Assistant, will be organizing the strategic planning project
   • The Candidate Handbook (participating and nonparticipating) and the Candidate Timelines (participating and nonparticipating) have been compiled by Autumn Southard, Voter Education Manager, and Rebecca Hecksel, Campaign Finance Analyst. A copy of the revised handbook will be ready for Commission consideration at a future Commission meeting
   • Staff is working with the State Procurement Office to renew the contract with L3 Creative. L3 Creative is in the process of looking for a new public relations firm
   • Autumn Southard, Voter Education Manager, continues to meet with civic organizations regarding clean elections
   • A group has been established to discuss debate contracts and make improvements to the debate program. The group includes Commissioner Detrick, Autumn Southard, Paula Ortiz, Executive Director Connor, Neil Guiliano and Lori Briese from ASU, Gini McGirr from the League of Women Voters, Barb Lubin from the Clean Elections Institute and Bernie Ronan for the Community College Association
   • The Salmon for Governor Committee filed a Notice of Claim. Arizona Department of Administration has assigned an adjuster and the Attorney General's Office has assigned an attorney to this matter. An attorney from the Attorney General's Office, Liability Management Section, will give the Commission legal advice regarding this matter. The lead attorney will be Jay Zweig, who is employed with Gallagher and Kennedy
   • The Matt Salmon administrative hearing will be held May 6, 2003. The hearing officer will issue a recommendation to the Commission within 20 days of hearing the matter. The Commission will then have 30 days to accept, reject, or modify the hearing officer's recommendation

4. Consideration of the following Enforcement Matters:
   1. Finding of Probable Cause and Assessment of Penalty or Repayment:
      1. MUR No.: 02-0058, 0059, and 0060- Trevor Clevenger, Yuri Downing, and Paul DeDonati

         Based on the totality of the circumstances, there was little evidence that Clean Elections funding given to the three candidates was used for direct campaign purposes. Commissioner McKay moved to accept the Executive Director's recommendation to order repayment of all Clean Elections funds. Commissioner Jolley seconded. Motion carried.

         Public Comment: Yuri Downing addressed the Commission regarding all three campaigns and monies spent. Mr. Downing asserted that the candidates ran non-traditional campaigns but followed the rules and regulations of the Clean Elections Act.

         Barb Lubin, Executive Director of the Clean Elections Institute, expressed that the Institute expects candidates and their campaign staff to respect the laws governing the use of campaign monies provided by the Clean Elections funds. In full accordance with the operations of the private sector, all expenses should be accounted for with receipts and reviewed to ensure each dollar that was spent was done so as it should be. The use of public funds does not allow a person to keep inadequate records of expenses nor to take a casual approach to accounting for how funds are spent.

   2. Executive Director's Recommendation:
      1. MUR No.: 02-0076- Ray Barnes

         Rebecca Hecksel, Campaign Finance Analyst, explained that Mr. Barnes, a candidate for the House of Representatives District 7, originally appeared to not have returned unspent general funding to the Commission. After further review it appeared that Mr. Barnes exceeded his general election spending limit by about $600. Furthermore, Mr. Barnes failed to maintain accurate campaign records. Executive Director Connor recommended that the Commission find reason to believe that Mr. Barnes had violated the general election spending limit. Commissioner Detrick moved to accept the recommendation. Commissioner McKay seconded. Motion carried.

   3. Proposed Settlement Agreement:
      1. MUR No.: 02-0046- Ed Farnsworth Assistant Attorney General Todd Lang explained that Mr. Farnsworth was late filing his original report by 15 days and one day late filing his supplemental report. The delays did not affect his opponents matching funds. Because there have been no prior enforcement, Mr. Lang recommended a settlement of $500. Commissioner McKay moved to accept the proposed settlement. Commissioner Detrick seconded. Motion carried.

   4. Reconsideration of MUR No.: 02-0040 Carolyn Allen and 02-0049 Gabrielle Giffords

      Due to the Commission's decision to dismiss MUR 02-0043- Robert Blendu, Executive Director Connor recommended that the Commission reconsider the settlement in the Giffords and Allen matters. Commissioner Busching moved to dismiss the two matters and refund the penalties. Commissioner Jolley seconded. Motion carried.

5. Consideration of Rules and Policy Statements for Proper Reporting of Expenditures and Matching Funds for Independent Expenditures

   The Commission decided to postpone consideration on this matter until the next meeting. Commissioner Busching moved to accept the postponement. Commissioner McKay seconded. Motion carried.

6. Discussion of Survey Results and Proposed Changes to Campaign Finance Software for 2003-2004 election cycle

   Rebecca Hecksel, Campaign Finance Analyst, reported on the results of a survey to candidate and committees. 22% of the candidates responded to the survey. The results of the survey along with recommended changes to the software were sent to the Secretary of State's Office.

7. Discussion of Advertising and Public Relations Contract

   Chair Lemon suggested postponing discussion on the advertising and public relations contract until the next Commission meeting when the U.S General Accounting Report was available. Commissioner Busching moved to accept Chair Lemon's proposal. Commissioner Detrick seconded. Motion carried.

8. Legal Report from Assistant Attorney General Todd Lang

   Mr. Lang reported that he continues to review public records requests, draft rules, and settle cases. The open primary case has been scheduled to be heard by the Ninth Circuit. There has been no new information from the court regarding the challenge to the Express Advocacy definition.

9. .Commissioner McKay moved to proceed into Executive Session to receive legal advice from Rick Albrecht, Assistant Attorney General, regarding the Notices of Claim filed by Matt Salmon and Matt Shaffer. Commissioner Busching seconded. Motion carried.
    
   
10. Adjournment

    Commissioner McKay moved to adjourn the Commission meeting. Commissioner Jolley seconded. Motion carried.

    Next Meeting: May 20, 2003 at 9:30 a.m., Citizens Clean Elections Commission, 1616 W. Adams, Suite 110, Phoenix AZ 85007.

Dated this 14^th day of May, 2003

Citizens Clean Elections Commission