AzScam Redux: The Fiesta Bowl Scandal Report Released

Posted by AzBlueMeanie:

Introduction: AzScam

In February 1991 a major political scandal rocked the state of Arizona as a grand jury charged seven legislators, five lobbyists and five others with felonies including bribery, money laundering and filing false campaign statements. Scandal In Phoenix – TIME:

The product of a 16-month, $1.4 million investigation by the Phoenix police and the Maricopa County attorney's office, the indictment charged the accused with accepting $370,000 from an undercover agent posing as a Las Vegas "gaming consultant" building support for casino gambling. Police say the sting began as an investigation of an illegal gambling network that had attracted the interest of organized crime. "We didn't know at the time how earth shattering it would be," said Phoenix Police Chief Ruben Ortega, "until the evidence began to grow."

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At the center of Arizona's sting operation — quickly dubbed AzScam — was a flamboyant Las Vegan who called himself J. Anthony Vincent. According to the indictment, Vincent assuaged the legislators' fears about hidden cameras and once reportedly stripped in front of a lobbyist to show he wasn't concealing a microphone. In fact, Vincent was an undercover agent named Joseph C. Stedino. Ortega says that 95% of the evidence comes from audio-and videotapes. In one police videotape, state representative Don Kenney, who faces 28 counts, is seen stuffing $55,000 in cash into a gym bag and joking about cameras being in the room.

AzScam eventually resulted in seven legislators indicted. Six reached plea deals; a seventh was convicted of conspiracy to commit bribery and filing false campaign statements. Several other legislators resigned or chose not to seek reelection.

(h/t open.salon.com for the graphic)

Today: The Fiesta Bowl Scandal Report (h/t graphic Arizona Guardian)

Craig Harris of the Arizona Republic dropped a bombshell with an investigative report into the Fiesta Bowl back in 2009. Fiesta Bowl employees say bowl repaid political contributions:

Over the past decade as the Fiesta Bowl worked to maintain its elite position as one of the top postseason college-football games, employees made contributions to politicians friendly to the bowl, including some donations that may violate campaign-finance laws.

Past and present Fiesta Bowl employees have told The Arizona Republic they were encouraged to write checks to specific candidates and were reimbursed by the bowl.

Such reimbursement would violate state and federal laws that prohibit funneling corporate campaign contributions through individuals. Participants could be charged with misdemeanors and felonies.

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The Arizona Republic, acting on a tip that Fiesta Bowl workers were reimbursed for campaign donations, pulled 10 years of local, state and federal campaign-contribution records and contacted 10 past and present employees who have had high-level positions with the bowl.

Five said employees made contributions at the urging of Junker and were reimbursed a few weeks later. The reimbursements, they said, came in the form of bonus checks.

Three of the five said they received bonuses after making contributions to specific candidates. Records show those donations were made.

An investigation was commenced by former Republican Attorney General Grant Woods. His investigation is being called "half-hearted" and a "white-wash" to protect "pillars of this community" by the Arizona Republic in an editorial opinion today We must not let corruption kill a tradition following the release of a subsequent Special Committee investigative report by an independent panel on Tuesday.

The New York Times also reports on the investigation today. Fiesta Bowl Spending and Donations Questioned – NYTimes.com:

Top executives at the Fiesta Bowl funneled campaign contributions to local politicians, flew other Arizona elected officials around the country at the bowl’s expense, racked up a $1,200 bill at a strip club and even spent $30,000 on a birthday party for the chief executive, according to an investigative report commissioned by the bowl’s board of directors.

The most serious revelations involve nearly a dozen employees who told investigators that the chief executive and others working for the bowl, the host of one of the nation’s pre-eminent college football games, encouraged them to make political contributions, then reimbursed them with sham bonus payments. Some said they were then pressured to lie about the practice.

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The report was made public Tuesday (.pdf – 283 pages) after The New York Times published an online article about the investigation’s findings. Many of the people cited in it either would not comment or did not respond to messages seeking comment.

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The Fiesta Bowl executives did not limit their political activity to campaign contributions. The Fiesta Bowl sometimes paid to cater political fund-raisers at the Fiesta Bowl Museum, including one in 2007 for State Representative Jim Weiers, who was then the speaker of the Arizona House of Representatives, and one in 2009 for W. J. Lane, the mayor of Scottsdale, who is known as Jim. Junker apparently knew that hosting such events was forbidden because he warned his assistant against sending out invitations using a Fiesta Bowl e-mail address, the report said.

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The report highlighted several trips to Chicago, Boston and elsewhere that the Fiesta Bowl hosted for several Arizona politicians and their families… A beneficiary of the trips was Russell Pearce, the State Senate president, a Republican who has gained a national profile over the past year for writing Arizona’s controversial immigration law. Pearce and his wife, LuAnne, traveled to Chicago in 2005 to attend a Northwestern-Michigan game and stayed at the Ritz-Carlton. He and his wife also traveled to Boston on a similar trip with his son in 2008, according to the report.

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The report uncovered many new details about the campaign contribution practice. Most of the contributions were to Arizona state lawmakers and local city councilors, although Junker and his wife, Susan, were reimbursed for two contributions totaling $4,200 to Senator John McCain of Arizona in 2007, investigators found.

The report outlined several ways in which executives at the bowl attempted to disguise the reimbursements. Wisneski, the chief operating officer, told investigators that Junker would instruct her to also give bonuses to employees who had not donated. For those who had made contributions, Junker asked her to give them a false explanation of why they were receiving a bonus[.]

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Investigators also raised questions about an initial inquiry that was conducted by the Fiesta Bowl in December 2009, which concluded there was no credible evidence of campaign reimbursements. The board hired Grant Woods, a former Arizona attorney general, to conduct the investigation, but asked that it be completed quickly, before the Fiesta Bowl game took place in January. Woods hired as his assistant Gary Husk, a lobbyist who had been working for the bowl and who, investigators now say, had played a key role in collecting political contributions from employees.

Six Fiesta Bowl employees later told investigators that Husk approached them before their interviews and discussed the issue of campaign contributions with them. Wisneski told investigators that Husk invited her to his house and coached her on how to answer the questions that Woods would ask.

Husk denied any knowledge of the reimbursements and said he never discussed the issue with the employees or steered employees away from Woods, according to the report.

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Woods has since said he believes he may have been misled during his initial investigation.

The Arizona Republic has full coverage today, but this report stands out. Fiesta Bowl executives lavished gifts on politicians:

Over the past eight years, investigators say, the bowl sponsored candidate fundraisers, flew politicians on football junkets and provided game tickets worth thousands of dollars. In some cases, the benefits may violate regulations governing tax-exempt non-profit organizations. In others, the gifts and services may create conflicts or statutory violations if elected officials failed to declare them.

In October 2005, for example, the bowl spent $18,454 on a weekend trip to Chicago for state Sen. Russell Pearce, R-Mesa, and several other lawmakers, including Democrats, some of whom brought family members or friends as guests. They attended a University of Michigan football game.

Pearce, other lawmakers and lobbyists were joined by family members on a similar trip to Boston in October 2008 at a cost of more than $65,000. According to the report, they attended a dinner presentation on "BCS Football: An Economic Engine for Arizona." They also saw Boston College play Virginia Tech.

Fiesta Bowl records contain no evidence that any lawmaker reimbursed the airfare, hotel costs or other expenses from those junkets.

* * *

A chart in the report shows Fiesta Bowl reimbursements totaling $6,486 for football tickets purchased on behalf of Pearce to games like the Navy-Air Force matchup. Then-Tempe City Councilman Ben Arredondo received tickets worth $6,240, including $4,000 worth of tickets for the 2009 Super Bowl, the report says.

Arredondo could not be reached for comment Tuesday. Pearce declined comment but said as he walked away from TV reporters that he "never took anything they didn't offer everybody."

Yeah, the last time I checked "everybody does it" isn't a legal defense. Just ask all those New Jersey politicians the FBI has been busting for exactly this kind of thing for years.

Pearce's financial-disclosure statements for a four-year period, from 2008 through 2011, show Pearce disclosed a gift from the Insight Bowl on his 2008 disclosure, covering a period from May 2007 through May 2008, and listed the recipients as "me and my wife." The same entry appears on Pearce's disclosure forms from 2009 through 2011, but the item is scratched out. There is no other detailed accounting of the tickets or trips, and the Secretary of State's Office could not immediately provide Pearce's disclosure forms before 2008.

Arredondo, meanwhile, disclosed no such gifts in financial-disclosure reports filed with Tempe.

The Special Committee's investigation describes bowl sponsorship of several political fundraisers, even though such events appear to violate the bowl's tax-exempt status.

In 2007, an event was held at the Fiesta Bowl Museum for House Speaker Jim Weiers, a Republican. Mike Allen, a former bowl director, said the purpose was "to raise money for Mr. Weiers" while also showing him around the offices.

Another fundraiser was scheduled in 2006 on behalf of former U.S. Rep. J.D. Hayworth, R-Ariz.

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The Special Committee report says Fiesta Bowl charitable contributions were directed to organizations "that appear to be aligned with Junker's political views."

This latest lobbyist scandal in Arizona is going to have both economic consequences and hopefully legal consequences for those individuals involved in the scandal.

The Fiesta Bowl organization may lose its federal tax-exempt status as a non-profit organization, and the Bowl Championsip Series (BCS) may end its relationship with the Fiesta Bowl as a BCS Bowl game and National Championship game. NCAA could take Fiesta Bowl's license to operate. This will deprive Arizona's economy of millions of dollars in revenue every January, and cost us jobs.

The candidate contributions from Fiesta Bowl employees violated state campaign finance law. The politicians who did not report gifts of tickets, travel and hotel accommodations on their financial disclosure statements — and possibly on their tax returns — also violated state campaign finance law, and possibly state and federal tax law.

Remember, Al Capone was not convicted for his felonious crimes, he was convicted for tax evasion. (Oooh, you can almost hear the collective butt pucker over that suggestion).

The Special Committee report names names. There are many Republicans and a few Democrats thrown in for good measure named in the report. There is going to be political fallout from this scandal. We are about to begin a long hot summer of scandal in Arizona.