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State election chief wastes half a million of taxpayer funds

by  | Mar 22, 2017 | ElectionsPolitics

Arizona Secretary of State Michele Reagan campaigned on making it easier for people to see how money flows into political campaigns, and she has a plan for a website that will help.

But after spending $494,000 in 2015 and 2016 to create a new campaign finance reporting website that never saw the light of day, her office is now asking the Citizens Clean Election Commission to pay $200,000 of an estimated $462,000 cost to develop a new campaign finance website, plus $50,000 per year in maintenance.

Matt Roberts, a spokesman for the Secretary of State’s office, said the proposal is not a restart of the project, but rather a continuation.

“We would have preferred if it came out in 2016, but we had our hands full with a hectic election cycle,” Roberts said.

He also said that the Secretary of State’s Office always expected to spend roughly $1 million developing the new campaign finance reporting system.

Mindnest, a Scottsdale software company, was hired in September 2015 to build a web portal that would both make it easier for campaigns to file reports and allow the public to more easily view and track money in political campaigns. Costs for the project were not to exceed $497,000.

In accordance with a 2015 law that was one of Reagan’s top legislative priorities that year, the campaign finance portal would be designed to centralize political filings, and would include reports from county, city and local races, not just statewide and legislative candidates.

Mindnest’s contract called for it to develop a prototype by late October 2015 and launch a final project by June 1, 2016.

In November 2015, State Election Director Eric Spencer boasted to the Arizona Capitol Times that the new campaign finance website “will blow away every other secretary of state website in the country,” and he predicted the site would launch before May 2016.

On March 30, 2016, the Arizona State Library, a division of the Secretary of State’s Office, purchased seethemoney.com to house the new campaign finance system. In an April 2016 interview on KTAR, Reagan said “See The Money” would launch in early May. By mid-May, she was promising a launch target of early June. However, in mid-June, Reagan said the project wouldn’t be ready until 2017.

And in an August 2016 interview by lobbyist Jenn Woods, Reagan said that the website “is being transferred onto our servers right now… We will do some testing after the November general election, and go live in 2017.”

 

But according to a proposal prepared by Reagan’s office March 17 in support of its request for money from the Clean Elections Commission, the Secretary of State’s Office is now designing an entirely new campaign finance portal, and the earliest the new campaign finance system can be up and running is January 2018.

The Clean Elections Commission will discuss the proposal from the Secretary of State’s Office at its March 23 meeting.

CCEC Executive Director Tom Collins said he will recommend that his office continue working with the Secretary of State’s Office to see if a deal can be reached.

“It is clear from the secretary’s public statements previously that the office intended to spend a half-million dollars on this system,” Collins said. “There’s not any evidence I’ve seen that that (spending) yielded something that they’re using.”

The new proposal calls for design to be completed by the end of March, a proof of concept by late June and a public beta release in early October. The final site would be launched by Jan. 2, 2018.

“In 2017, there is a sustained and growing demand from the public and interested parties to make government data as accessible and transparent as possible. The project team decided that a new Campaign Finance Public Reporting Application (herein as See The Money) that uses the most up to date best practices for site user experience is the most effective way for the state of Arizona’s elections agencies to answer that demand,” Reagan’s office wrote in its proposal to the Clean Elections Commission.

The proposal doesn’t mention Mindnest or disclose that the office has already spent nearly $500,000 on the See The Money project, nor is there any indication that Mindnest’s work will be incorporated into the new project.

Invoices and payment receipts show the Secretary of State’s Office paid Mindnest $170,000 in October 2015 to begin work, then recurring payments until July, 2016, totalling $494,000.

Mindnest CEO Dan Kennedy said his company delivered a “slick piece of technology” to the Secretary of State’s Office.

“There were certain requirements, we met them, they reviewed it,” he said.

At the same time, Mindnest was shedding employees. The company shrank in November 2015, and continued to contract in the spring of 2016. The company no longer maintains a website and its social media accounts haven’t been active since 2014. Kennedy said the company is not doing business anymore.

“We are not actively working on projects right now,” Kennedy said. “We’ve taken down the website. Our intention is to go out and build new projects, but we’re not really out there selling the Mindnest services anymore.”

Kennedy said he was told that a 2016 change in law created complications for the project, but he maintained that the product his company delivered worked.

Roberts said Senate Bill 1516, which was authored by the Secretary of State’s senior staff and made sweeping changes to campaign finance reporting laws, affected the project.

“Yes, it did have an impact. That wasn’t the only concern of ours,” Roberts said. “Mindnest was tasked with the initial development. We got what we anticipated getting from them.”

Roberts said that, at some point during the project, “the office made a decision that our campaign finance experts should be a part of the development of the site and the platform itself.”

The Secretary of State’s Office said AZCIR could not review the software source code or have a copy because of the licensing agreement with Mindnest.