Update on Fiesta Bowl Scandal: Let’s Play Legal Jeopardy

Posted by AzBlueMeanie:

The Arizona Republic today continues its reporting on the legal fallout from the release of the Fiesta Bowl Scandal Report on Tuesday. Fiesta Bowl report: Trouble may lurk for Arizona officials:

Arizona lawmakers who accepted tickets from Fiesta Bowl lobbyists to attend football games in Chicago, Boston, Pasadena and other cities may have violated state law.

Since 2000, state statutes have included an "entertainment ban" that prohibits state employees and elected officials from accepting tickets or "admission to any sporting or cultural event" for free.

The law includes an exception allowing lawmakers to attend "special events" if broad categories of lawmakers, such as the entire Arizona Senate, or a committee, were invited. However, a 276-page investigative report into the Fiesta Bowl's financial, political and lobbying activities, and interviews with lawmakers themselves, suggest that that loophole may not apply to out-of-state games attended by legislators in recent years.

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It is unclear from the Fiesta Bowl's internal investigative report whether lawmakers received free game tickets as part of those excursions. Fiesta Bowl records contain no evidence that any lawmaker reimbursed the airfare, hotel costs or other expenses from those junkets. If they did get free tickets, that would seem to violate state statutes.

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Lawmakers are required to report any single gift or accumulated gifts in excess of $500 or more in personal financial-disclosure statements. However, in many cases they did not appear to properly follow those reporting rules.

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Chuck Coughlin, whose firm HighGround lobbied on behalf of the Fiesta Bowl, said trip participants from both political parties were selected based on their support of the Fiesta Bowl and the bowl's legislative priorities and plans, among other criteria.

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The Fiesta Bowl report documented a scheme to improperly reimburse Fiesta Bowl employees for more than $46,000 in campaign donations to 23 candidates since 2002. However, there was no indication that politicians who received the donations knew of the reimbursements, the report said.

Coughlin said he also was unaware of the practice. "I had no knowledge of that," he said. "I never knew about it."

Chuck Coughlin and HighGround are the "shadow governor" of Arizona. He and his lobbying firm run the governor's office. That is a scandal in its own right. Coughlin's denial of any knowledge in this report appears to be questioned by this report from the AP in the East Valley Tribune. Arizona politicians figure in Fiesta Bowl scandal:

In another political tentacle of the scandal, the report identified several lobbyists and political consultants who are close associates of Brewer [i.e., HighGround] as shepherding the officeholders on the out-of-state trips. The lobbyist-consultants until recently worked as retained lobbyists for the Fiesta Bowl.

The report linked a different Fiesta Bowl lobbyist to the contribution reimbursement arrangement [i.e., Husk Partners].

Chuck Coughlin has his fingers on the pulse of everything political in Arizona. I don't accept his denial at face value. Investigators and reporters should keep digging.

What kind of legal jeopardy do lawmakers face? Experts: Fiesta Bowl misconduct could bring felony charges:

Political and financial misconduct at the Fiesta Bowl could produce a plethora of criminal prosecutions, not to mention lawsuits and regulatory actions, according to experts who analyzed the bowl's internal report.

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At least two law-enforcement agencies – the Arizona Attorney General's Office and Internal Revenue Service – have acknowledged investigations of the Fiesta Bowl for alleged violations of laws governing political-campaign contributions and tax-exempt organizations. According to the bowl's report, FBI agents also have conducted at least one interview of a bowl employee regarding federal-campaign donations.

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[E]xperts said misconduct described in a 276-page investigation for the bowl's special committee could bring serious felony charges from federal, state and tribal prosecutors.

Depending on what evidence and testimony are produced, they said, the list of possible offenses might include: conspiracy, wire and mail fraud, obstruction of justice, unlawful political donations, tax evasion, kickbacks, money-laundering, and bribery of public officials.

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Aside from criminal violations, experts said they can envision the IRS and other government regulatory agencies cracking down. The Fiesta Bowl could lose its non-profit status. Employees, contractors and politicians might face back taxes and penalties if they failed to declare bonuses, gifts and personal expenses charged to the bowl. Politicians may be fined for failing to declare benefits in financial-disclosure statements.

Meanwhile, the scandal almost guarantees a slew of civil actions. The Fiesta Bowl could sue employees or contractors who unlawfully benefited, or who failed to fulfill fiduciary duties. The attorney general could sue bowl directors for a breach of duty.

There are, of course, ethics complaints which can be filed in the House and Senate Ethics Committees when the investigations lead to charges being filed.

This is just the legal jeopardy. The political jeopardy lawmakers will face has only just begun.

h/t graphic Arizona Guardian