No Labels is getting on state ballots, drawing a lawsuit and concerns about a spoiler

PHOENIX — The centrist political group No Labels is getting on the ballot in individual states, causing consternation among members of the major political parties about the organization's endgame.

The group says it's not interested in running a presidential campaign. Nonetheless, the Washington, D.C.-based nonprofit is committed to raising roughly $70 million to gather signatures and qualify for the ballot in 2024.

"We're going for as many states as we can across the country," Ryan Clancy, lead strategist for No Labels, said in an interview.

So far, No Labels has gained access to the ballot in Arizona, Colorado, Alaska and Oregon.

In Arizona, rumors persisted that No Labels could offer Democrat-turned-independent U.S. Sen. Kyrsten Sinema a new platform for her seat.

But Clancy insists that No Labels is a one-ticket operation — a presidential "insurance project" for dissatisfied Republicans and Democrats.

"The only way this works is if in the view of the public, the major party nominees are unappealing enough, and a potential unity ticket is appealing enough, that there seems like a viable path to Electoral College victory," Clancy said.

That's left Republicans and Democrats alike concerned that No Labels could tee up a spoiler — especially as polls have shown broad dissatisfaction with both President Biden, who just made his reelection bid official on Tuesday, and former President Donald Trump, the clear front-runner for the GOP nomination.

Democratic voices, in particular, have warned that a third-party bid would help elect Trump to another term.

In an online FAQ, No Labels says it's "too early to know" whether a Biden-Trump rematch would lead the group to nominate a so-called "unity ticket." No Labels says it will rely on "rigorously analyzed polling data" to determine whether most Americans "want an alternative to the major party presidential nominees," and whether the group sees "a viable path" to winning election.

But for now, Clancy says No Labels is committed to facilitating the infrastructure for that ticket, just in case.

"If you want to use a NASA analogy, we're building the launching pad, for a potential unity ticket run," Clancy said. "If a ticket were to actually run, they would have to build the rocket ship to get to the White House."

No clarity on No Labels' donors

The secretary of state in Arizona now refers to No Labels in legal documents as the No Labels Party — a label that the organization rejects.

"We're not a political party. We've never claimed to be one," Clancy said, describing No Labels more as the facilitator of someone else's potential candidacy.

Legally, it's an important distinction.

Political parties and committees trying to influence the outcome of an election have to follow certain rules, like abiding by contribution limits and disclosing expenses.

No Labels is a registered nonprofit, so it's not required to disclose where its funding comes from.

"We have an organization that wants to be recognized as a political party, but it's simply not disclosing who their donors are," said attorney Roy Herrera, who's suing No Labels on behalf of the Arizona Democratic Party, which wants to bar the organization from the ballot.

Democrats acknowledge in their lawsuit that No Labels is a nonprofit corporation; instead, their case hinges on a technicality in how the group gathered enough signatures to qualify for the Arizona ballot. No Labels called the lawsuit "baseless" and defended the work it did to qualify for the ballot.

Eric Spencer, a former Arizona state elections director, said he assumed those signatures were paid for, and if so, that would raise potential financial issues for him. He says state rules make it clear that if No Labels paid money to gather them, the group should've registered as a political action committee even before it gained ballot access in Arizona.

"The Arizona Election Procedures Manual is reasonably clear that those qualification efforts are subject to campaign finance law," Spencer said.

Federally, No Labels exists in something of a gray area.

To the Federal Election Commission, No Labels doesn't yet have to register as a political party thanks to a 15-year-old court case dealing with a previous third-party contender.

Adav Noti argued the losing end of the case for the FEC. Now he's senior vice president and legal director at the nonpartisan Campaign Legal Center.

"The court allowed an organization in sort of similar circumstances to go forward without being subjected to contribution limits or disclosure," Noti said. "And so that's what No Labels is availing itself of now, sort of as we predicted at the time."

That allows No Labels to operate as what Noti calls the "epitome" of a dark money group.

"It's raising and spending money to influence elections," he said. "And it's raising and spending that money without being subjected to contribution limits, and without being subject to disclosure."

As for No Labels, they're not talking about their finances.

Online, they claim to have donors from across the country, but say they won't share the names because "agitators and partisan operatives" would try to attack their individual supporters.

The organization did not respond to a follow-up question about whether it has an obligation to voters to disclose its donors.

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