Judge orders 'dark money' group back to court for failure to register, disclose donors

Sep. 16—A state District Court judge is considering holding a "dark money" group in contempt for failing to comply with an order to register as a political committee and disclose its donors.

The New Mexico Project, a fundraising organization led by businessman and former gubernatorial candidate Jeff Apodaca, aims to "empower the moderate Latino electorate," according to its website, and supported a slate of legislative candidates in the Democratic primary election.

Second Judicial District Judge Joshua Allison issued a preliminary injunction last month requiring the group to register with the Secretary of State's Office no later than Sept. 4 and report its expenditures and contributions no later than Sept. 9.

The group has done neither.

"Thus, the Court further finds that [The New Mexico Project] should be required to appear and show cause, if any it has, as to why it should not be held in contempt of court for violating this Court's Preliminary Injunction," Allison wrote in an order Friday.

The hearing, scheduled Sept. 23, is the latest salvo in an ongoing dispute between the State Ethics Commission and the group, which has argued it doesn't meet the definition of a political committee and doesn't have to disclose its donors.

The commission filed a lawsuit against the group and Apodaca in May to force the disclosure of the group's expenditures and contributors.

"In 2019, the Legislature amended the [Campaign Reporting Act] to shine light on 'dark money' in New Mexico's elections, requiring groups that pay for advertisements or advocacy in support of candidates to be minimally transparent about who funded those efforts," the commission wrote in a news release after filing the lawsuit.

Apodaca incorporated The New Mexico Project in September 2023 to support "pro-moderate" and "pro-business" Democratic legislative candidates in the June 4 primary. The group's website has a "get involved" link that leads to a donation page.

Attorney A. Blair Dunn, who is representing the group and Apodaca, said The New Mexico Project is a 501(c)(4) nonprofit.

"There's a disagreement about the statute, and there is some amount of ambiguity about disclosure of donors and what is an independent expenditure under the statute and whether or not we qualify for having made independent expenditures," Dunn said.

He contends the lawsuit against Apodaca is personal.

"They didn't like what he was saying on the radio; they didn't like that he was supporting moderate candidates, so they retaliated against him," Dunn said.

A spokesperson for the State Ethics Commission did not return messages seeking comment.

Apodaca didn't return a message, either. But in a "My View" published in The New Mexican last month, Apodaca wrote The New Mexico Project engages in "social welfare" activities, or what he described as independent expenditures to get out the vote, "for the public good."

"The commission lawsuit against us, complete with a paid media campaign, is a misuse of state funds to suppress our moderate coalition movement that aligns with New Mexico's beliefs and values," he wrote.

Apodaca also alleged the Ethics Commission is "controlled by ultra-liberal progressive leadership within" the Democratic Party and "has been weaponized."

"The SEC, whose board is made up of 78% Anglos (appointed by progressive leadership) and eight of the nine State Ethics Commission employees of Anglo descent, [is] led by an East Coast-educated liberal Harvard elite," he wrote. "Talk about fair representation in a state with a 50% Latino population and 60% minority population."

Dunn noted The New Mexico Project has three officers, but Apodaca was the only one named in the lawsuit.

The attorney filed a motion asking Allison to reconsider his orders Sept. 4 — the deadline the judge had imposed for the organization to file as a political committee with the state.

Dunn argued, among other things, the judge had denied his clients "the fair opportunity to present evidence" in court.

He also claimed a "broad reading of statutes," which he said is unconstitutional.

"This Court's disregard for whole sections of statute designed to provide procedural statutory due process protections to citizens is clearly erroneous and perpetuates the manifest injustice of utterly out of control gestapo trampling rights," the motion states.

The State Ethics Commission filed a motion Sept. 10 asking the judge to require the organization "to show cause why it should not be held in contempt or otherwise sanctioned for refusing to comply" with the court's orders. The commission also asked the judge to order Apodaca to do the same.

"Any further delay in requiring TNMP to comply with the Campaign Reporting Act would irreparably harm the electorate by allowing TNMP to buy and place advertisements for candidates without requiring TNMP to explain who is paying for them," the commission's motion states.

The commission asked Allison to deny Dunn's motion to reconsider.

In response to the motions, the judge ordered the organization to appear and show cause but excluded Apodaca individually.

"He was not ordered to do anything in the Preliminary Injunction," the judge wrote. "Thus, holding Mr. Apodaca in contempt of court for TNMP's violations of the Preliminary Injunction would therefore be inappropriate, at least as things stand right now."

Follow Daniel J. Chacón on Twitter @danieljchacon.