A former Scottsdale city councilman has filed a campaign finance complaint that could impact the upcoming $319-million bond election and the 2020 council race.
The complaint by David Smith is tangentially tied to a previous one filed in September 2018 against NoDDC, a community group supporting Proposition 420 last year.
City Attorney Bruce Washburn ultimately found that NoDDC failed to register as a political action committee (PAC) with the city and levied a $5,000 fine against the group.
The new complaint alleges a number of campaign finance violations by NoDDC and its PAC.
The complaint also names potential 2020 City Council candidate Jason Alexander as well as Mike Norton, who currently co-chairs the “For the Best Scottsdale” PAC that is supporting passage of the bond package in November.
Alexander and Norton are both listed as directors of the now inactive NoDDC nonprofit, according to Arizona Corporation Commission records.
Alexander is also chairman of the NoDDC PAC and was the chairman of the now-disbanded No DDC PAC, which is also named in the complaint.
Rebecca Holmes, treasurer of NoDDC PAC, is also named in the complaint.
Smith, who said he is not planning another run for public office, explained he was concerned after what he saw as irregularities in campaign finance reports filed by NoDDC PAC in December 2018 — backdated to March 7, 2018 — and January 2019.
“I took seriously the accountability I had to individuals who donated to my campaigns and I believe others should exhibit that same sense of accountability,” Smith said.
The first filing did not set off alarm bells for Smith but the second filing did.
“The NoDDC PAC 2018 fourth Quarter Campaign Finance Report filed Jan. 14, 2019 was the first indication of questionable expenditures charged against NoDDC PAC, particularly since most of the charged expenses postdated the Nov. 6, 2018, election and had escalated to almost 80 percent of total contributions in the election cycle,” Smith said.
That prompted Smith to file public records requests with the city, consult with his attorney and ultimately file the complaint.
Among his allegations is that contributions made to the original NoDDC PAC may have made their way into Norton or Alexander’s personal bank accounts during a period in which the PAC was dormant from late 2016 through early 2018.
The complaint also alleges that the second NoDDC PAC still has not reported all campaign contributions and that funds and contributions may have been transferred between the nonprofit and the PAC without proper documentation.
Smith also expressed concern that donations were used long after the election for expenses likely unforeseen by donors, such as legal costs stemming from the 2018 complaint.
Smith said he felt those donors were “innocent pawns who needed someone to protect their interests.”
Alexander had made public statements in the past indicating he paid the $5,000 fine personally.
However, the PAC’s 2018 fourth quarter filing lists the $5,000 campaign fine as well as $2,122 in associated legal fees as a PAC expense.
“Probably none of these donors knew their contributions were being used, primarily, to pay legal fees and fines incurred because of campaign finance violations,” Smith said.
“Nor would they have suspected their contributions were paying for a myriad of expenses long after the election was over,” he added. “Maybe they would argue they didn’t care, but that’s not the point.”
Neither Norton nor Alexander put much stock in the complaint.
Norton called the events alleged in the complaint “a complicated series of events which may or may not have culminated in a violation of some sort.”
But he said nothing in the complaint implicates him in wrongdoing.
“What both (Smith and his attorney) cautiously avoid discussing, however, is any nexus between the various allegations and either me or any entity I helped manage or control,” Norton said. “The reason they ignore those discussions is that I’m quite certain they realize that I was uninvolved in the various alleged events.”
Alexander used stronger language, dismissing the complaint as harassment and characterizing Smith as bitter due to his loss in the 2018 election.
“This is what happens when grassroots activists threaten the establishment,” Alexander said, adding:
“We voted out Smith, stopped (Councilwoman) Virginia Korte. Now they are attacking me with lawyers, twisting campaign finance laws to silence us. We beat them at the polls, and they are trying to destroy us with lawsuits.”
Alexander said City Attorney Bruce Washburn already had access to all NoDDC financial records stemming from the previous settled complaint.
“I have detailed records of all our spending since the election, which I will share with the City Clerk,” Alexander said. “NoDDC continues to work for Scottsdale residents on a shoestring budget, thanks to the generosity of our many small donors. Smith and Korte are trying to take every dime, and are coming after my personal finances to punish me.”
Neither Alexander nor Norton plan to step back from the public eye in light of the complaint.
“This is making me more motivated than ever to run for City Council,” Alexander said. “I’m going to bring the voice of the residents back to City Hall.”
Norton said the complaint will not impact his support for the bond or his involvement with the “For the Best Scottsdale” PAC. He said he is cooperating with the city to resolve the matter.
In his official response to the city, Norton requested financial sanctions be imposed on Smith and his attorney for what he characterized as a frivolous complaint.
The bond PAC also appears to be solidly behind Norton.
Jason Rose, speaking on behalf of the “For The Best Scottsdale: Vote Yes on Questions 1, 2 & 3” PAC, said “Mike and his fellow co-chairperson, Paula Sturgeon, have been doing a superior job on and for the campaign” and the complaint does not affect his confidence in Norton.
Though Rose has resisted calls by some to remove Norton from the co-chair position, he has named several new co-chairs to share duties with Norton and fellow co-chair Paula Sturgeon, including community activists Andrea Alley and Dana Close as well as Scottsdale Charros Executive Director Dennis Robbins.
Smith, for his part, said he hopes the complaints “will be a wake-up call to future candidates and political action committees to be sure their actions are in full compliance with Arizona election laws.”
City Clerk Carolyn Jagger has received official responses from both Alexander and Norton. She said there is not a timeline for her decision whether or not to refer the complaint to the City Attorney.