Cyber Ninjas faces daily $50K fine over Arizona election audit records

Lawyer says Cyber Ninjas, company that led controversial Arizona election audit, is now defunct

A judge has imposed a daily $50,000 fine on the company over records from the controversial audit, and the judge warned that if necessary, the fine will be applied to individuals. FOX 10's Nicole Garcia reports.

PHOENIX - A judge said Thursday he will fine Cyber Ninjas, the contractor that led Arizona Republicans’ 2020 election review, $50,000 a day if the firm doesn’t immediately turn over public records related to the unprecedented inquiry.

The judge found Cyber Ninjas in contempt for its failure to turn over documents, which two Maricopa County judges and the state Court of Appeals have ruled are subject to the public records law.

The $50,000 daily fine imposed by Maricopa County Superior Court Judge John Hannah far exceeds the $1,000 levy suggested by a lawyer for The Arizona Republic newspaper, which filed the public records lawsuit in 2020. Hannah said the lower amount would be "grossly insufficient" to coerce Cyber Ninjas to comply with his orders.

A lawyer for Cyber Ninjas, Jack Wilenchik, said the company is insolvent, has laid off all employees, including former CEO Doug Logan, and can’t afford to sift through its records to find those related to the audit.

Hannah said the $50,000 daily fine would begin accruing on Friday and warned that, if necessary, he will apply the fine to individuals, not just the Cyber Ninjas corporation.

"The court is not going to accept the assertion that Cyber Ninjas is an empty shell and that no one is responsible for seeing that it complies," Hannah said.

He said there’s been no evidence submitted showing that Cyber Ninjas is actually insolvent and noted that millions of dollars were donated to the election review. He also said the company could comply for very little cost by turning its records over to the Senate and allowing legislative lawyers to determine which must be publicly released.

Wilenchik maintains Cyber Ninjas is not subject to the Arizona public records law because it’s a private company. Trial and appellate judges have disagreed, ruling that the documents must be released because the firm was performing a core government function on behalf of the Senate. The Arizona Supreme Court declined to take the case on appeal.

Wilenchik has asked to quit as the Cyber Ninjas lawyer because he hasn’t been paid, but Hannah refused to approve until new local attorneys are in place to represent the firm. Two out of state lawyers, Jonathan Miller of Georgia and Mike Smith of Michigan, said they’ll represent Logan as the former CEO, but Hannah said they couldn’t participate in the hearing until they’re given temporary approval to practice in Arizona.

Hannah’s refusal to release Wilenchik prompted a tense exchange in which the lawyer said the judge has "shown an intemperate attitude towards me and my firm" and was biased against conservatives. He vowed to appeal.

A spokesman for Cyber Ninjas, Rod Thomson, declined to comment on the judge’s ruling. He confirmed that the company no longer has employees and said "Cyber Ninjas is being shut down."

The review began with a sweeping subpoena issued by Senate Republican leaders in late 2020 as Trump and his allies searched in vain for evidence to support his claim the election was stolen. The subpoena demanded access to all 2.1 million ballots, the machines that counted them and troves of digital election data from Maricopa County, home to 60% of Arizona voters.

Boxes filled with ballots are delivered to the Arizona State Fairgrounds for the 2020 election audit.

Senate President Karen Fann hired Cyber Ninjas, a Florida-based company with no election review experience, to lead what she described as a "forensic audit." Logan previously worked with attorneys and Donald Trump supporters trying to overturn the 2020 election and appeared in a film questioning the results of the contest while the ballot review was ongoing.

A second public records lawsuit filed by the watchdog group American Oversight is seeking similar records.

Maricopa County Superior Court Judge Michael Kemp on Thursday denied Wilenchik’s request to withdraw from that case as well. He said he won’t consider granting the request until, at a minimum, Cyber Ninjas turns over records and Logan gives a deposition.

"The Court and the public would be denied prompt and reasonable resolution of an important public matter," Kemp wrote.

A legal analyst has weighed in on the current situation.

"Just because it’s in a private entity’s possession, doesn’t mean per se it's not a public record," said Tim La Sota. "Otherwise, it would be easy for a government agency to hire an outside vendor and have them keep everything."

La Sota said the Arizona State Senate should step in and resolve the issue.

"This audit was undertaken pursuant to the powers of the Arizona Senate," said La Sota. "I think ultimately, these records will be produced one way or another, but it may take the Senate getting involved. It’s one of those situations that the buck does stop there."