PHOENIX - An Arizona administrative law judge concluded Monday there is not enough evidence to find Attorney General Tom Horne broke civil campaign finance law during his 2010 election campaign.
Prosecutors didn't prove Horne illegally coordinated campaign spending with an aide who was running an independent group during his 2010 election bid, Judge Tammy Eigenheer ruled.
Yavapai County prosecutors had argued that they showed during a civil hearing in February that Horne and aide Kathleen Winn broke the law by working together on outside ads targeting Horne's Democratic opponent in the weeks before the November 2010 election won by the Republican attorney general.
Prosecutors wanted Horne to repay $400,000 to donors and up to three times that amount in civil fines.
Yavapai County Attorney Sheila Polk has 30 days to accept, reject or modify the ruling and could reinstate the civil violation order.
"The judge's decision is lengthy and detailed," Polk said in a statement. "I will carefully review it and make my decision within 30 days."
Horne called the decision a complete victory.
"I think it vindicated what we've been saying all along, that there was no coordination," Horne said.
He also said he did not settle the case despite its potential political consequences as he seeks re-election because Polk would have required an admission of guilt, which he would not do.
"The fact is I did not do anything wrong, so even if I decided intellectually that it was in my interests to settle, I would not have been able to get those words though my throat," Horne said.
Winn was ecstatic.
"I'm very happy. This is the outcome we were hoping for," she said. "I have been pretty steadfast from the beginning that I didn't coordinate with AG Horne and I'm elated with the ruling."
Winn said she has worked with Polk, respects her, and hopes she accepts the judge's findings.
"She had her attorneys in the courtroom ... and I would hope that she stands with what this administrative law judge says," Winn said.
Lawyers for Horne and Winn said prosecutors failed to show any real evidence that the pair broke campaign finance laws.
They also argued that an FBI agent who investigated the case committed perjury and his testimony should be thrown out. Eigenheer rejected that request, but she did find that there was no record of a third call the agent testified he made to a key witness.
"I think that's pretty significant that she says an FBI agent didn't tell the truth in his testimony," Horne said.
Horne himself testified that he "absolutely never" had illegal communications with Winn.
"We absolutely never coordinated or violated any of the laws," he said. "I absolutely never did coordinate with Kathleen Winn."
Eigenheer, a judge in the Arizona Office of Administrative Hearings, oversaw the three days of testimony in February. She found prosecutors didn't show by a "preponderance of the evidence" that Horne and Winn worked together illegally. That's the lowest standard in a legal case.
Polk determined in October that Horne violated the law and ordered the repayments and the filing of amended campaign-finance reports. Horne and Winn appealed the finding
Horne and Winn could appeal any possible decision by Polk reinstating the case, dragging any final conclusion into the election season, when Horne faces a challenger in August's Republican primary as he seeks a second term. If he wins the primary, he'll likely face the same Democrat he narrowly defeated in 2010, Felecia Rotellini, a former prosecutor and bank regulator.
Horne and Winn were accused of working together on a campaign ad targeting Rotellini that was paid for by an independent group Winn was running, Business Leaders for Arizona. Such coordination would be illegal in Arizona.
Prosecutors said a series of phone calls and emails in the weeks leading up to the election showed that Horne was having material input on the campaign ads and strategy that Winn was overseeing. Horne and Winn acknowledged the calls and emails but said they were either speaking about an unrelated real estate deal or engaged in legal campaign fundraising.
Eigenheer said there just was no smoking gun and the prosecutors' circumstantial case was not strong enough.
"While there are inferences that can be made, there are also reasonable explanations that the communications related to Mr. Horne's real estate transaction that was pending at the same time," the judge wrote.