A recent letter sent to the City of Scottsdale by a lawyer for activist Jason Alexander called out a supposed “glaring flaw” in a City Clerk review of alleged campaign finance violations by Alexander and others associated with the NoDDC movement.
Former Scottsdale City Councilman David Smith filed a complaint with the city in May alleging that Alexander, Rebecca Holmes and Mike Norton violated state campaign finance laws by misusing funds controlled by an Arizona nonprofit and political action committee operating under the NoDDC name.
The NoDDC groups were active in support of Proposition 420, which was passed by voters in November 2018.
The City Clerk reviews all such complaints to determine if there is reasonable cause to refer the allegations to the city attorney’s office.
After reviewing the complaint, Jagger concluded there was reasonable cause to refer some of the complaint to the City Attorney for further investigation.
It also is looking into allegations that donations to the NoDDC Inc. nonprofit were combined with donations made to NoDDC PAC after the non-profit was dissolved in November 2018.
That would constitute a violation of state law requiring corporate donations to remain in an account separate from individual donations.
Alexander and Norton are listed as directors of the now-defunct NoDDC Inc. non-profit in Arizona Corporation Commission records.
Alexander’s attorney Thomas F. Galvin Jr. sent a letter to acting City Attorney Joe Padilla on July 3, arguing that some of City Clerk Carolyn Jagger’s analysis was flawed.
He said it operated under the premise that the NoDDC grassroots community group and NoDDC Inc. were one and the same.
The response details a complicated web of entities all operating under the NoDDC name and calls into question whether the city properly treated each organization as a separate organization.
In the letter, Galvin argued that the Jagger’s current interpretation that NoDDC and NoDDC Inc. are the same contradicts a previous settlement between the city and Alexander to resolve a campaign finance violation complaint filed in 2018.
“The City Attorney should no longer investigate NoDDC, because the determination by the clerk has blurred the distinction between NoDDC, NoDDC PAC, and NoDDC Inc. This mistake could make the entirety of the investigation by the City of Scottsdale questionable,” Galvin wrote.
Under that previous agreement, Alexander agreed to pay a $5,000 fine because “NoDDC” failed to register as a political action committee, according to a letter written by former City Attorney Bruce Washburn.
That fine was based on the over $9,000 raised by NoDDC and monies expended in favor of candidates in the 2018 election, according to the letter.
Alexander’s attorney argued that the previous fine was levied against the NoDDC community group – not NoDDC Inc. – for failing to register as a PAC.
Washburn’s letter summarizing the previous settlement only referred to NoDDC, without specifying which group the fine was being levied against.
Galvin argued that the amount of the previous fine – $5,000 – proves that the city intended to punish the NoDDC community organization.
“If NoDDC and NoDDC, Inc. were the same entity, then the only money that should have been subject to fines was NoDDC’s approximately $300 in spending,” Galvin wrote.
He argued that if the city is going to treat NoDDC and NoDDC Inc. as the same entity then the city should largely refund Alexander’s $5,000 fine because “the remainder of the funds were corporate funds and had no relation to the PAC, as it was not PAC money.”
Otherwise, if NoDDC and NoDDC Inc. are separate organizations, Galvin argued the city should drop the current complaint.
“By levying a fine of $5,000, the City Attorney and Clerk was (sic) implicitly assuming all finds raised were the property of the PAC, not the corporation. This untenable conclusion by the City is akin to fining Mr. Alexander and his associates twice for the same series of events,’ Galvin wrote.
Essentially, Alexander’s lawyer has told the city that the most recent complaint is an attempt to punish NoDDC Inc. for improperly operating as a PAC when it already punished the community group for the same violation.