Campaign contributions – and where they come from – are taking center stage in the 2020 Scottsdale City Council and mayoral races as some candidates and residents allege developers are pumping money into the campaigns to curry favor.
But the candidates call the movement little more than a political ploy to distract from other more pressing concerns by wrongfully maligning legal contributions.
Councilman Guy Phillips, who is running for re-election, wrote a letter to the Progress challenging all candidates to return campaign contributions from developers with business before the city – and committed to do the same.
“I have reviewed the donors to my campaign, and I am in the process of returning those contributions from those givers that have, have had or will have an interest in City decision-making or permitting processes,” Phillips wrote. “I challenge not only my Council colleagues, but those running for the Council to do the same.”
But when asked by the Progress, Phillips reversed course and said he has no plans to return contributions, stating:
“I have gone through my contributions list and I don’t have any contributors who are or will be coming to the council or engaged in city decisions.”
The Phillips letter appeared to be aimed at a number of candidates running against Phillips – including Tammy Caputi, Bill Crawford and John Little – as well as council members Virginia Korte and Suzanne Klapp, who are running for mayor.
All those candidates have received thousands of dollars in contributions from the development community during this election cycle, campaign finance reports show.
But those candidates have noted the contributions as legal under state law and several have dismissed criticism.
“These efforts are nothing more than a clever tactic by self-funded, elitist candidates attempting to deprive other candidates from raising money to get their message out,” Crawford said.
Korte said, “It is offensive to suggest that my decisions would be influenced by one donor when I have a responsibility to all of my supporters and all voters. My promise is to listen to the points of view of the citizens of Scottsdale and our business community to make decisions that serve in the best interest of all Scottsdale.”
Klapp said the contributions reflect her wide support from area businesses and the larger Scottsdale community.
“They have a right and freedom to contribute to the candidates of their choice…My votes are not for sale.,” Klapp said. “I use campaign contributions for campaign purposes only, not for personal use.”
Mayoral candidate Bob Littlefield and Council candidates Betty Janik and Tom Durham have also floated proposals that echo Phillips.
“There is an appearance of impropriety when money is contributed to Scottsdale elected officials from developers with business before the city,” Janik said.
Janik, Durham and Littlefield submitted a letter to City Council arguing that those types of contributions are barred under the city’s current ethics code, which bans gifts from anyone “engaged in a general practice or a specific situation that involved the city’s decision-making or permitting processes.”
The trio argued that because the code’s definition of “gifts” does not specifically exclude campaign contributions, they should be considered banned.
When asked if he thinks the city should adopt a new rule banning these contributions, Phillips replied, “So the city doesn’t need to add a new rule; we just need to enforce the one we have.”
Some candidates have criticized Phillips’ proposal as a way to draw attention away from the ethics complaint that had been filed against him that was dismissed by a three-judge independent panel.
The panel found Phillips did not violate the city’s ethics code when he accepted around $2,400 in anonymous donations from a GoFundMe account set up by a resident after he was hurt while working as an HVAC contractor.
The panel recommended that city amend the code to account to ban such anonymous donations because the loophole could “allow unscrupulous elected officials and their benefactors to disguise quid pro quo vote buying as personal gifts.”
Korte said, “Councilman Phillips’ proposal to return campaign contributions does nothing more than deflect attention from the key issue behind the ethics complaint against him.”
“If Mr. Phillips’ intention is to avoid any appearance of a conflict of interest and get a ‘do over,’ then I suggest that he return the $2,400 in anonymous personal gifts that he received,” Korte said.
Caputi also said the city should close the GoFundMe “loophole” rather than focusing on legal campaign contributions.
“There is no equivalency between lawful disclosed campaign contributions and anonymous cash gifts,” Caputi said.
Phillips, Durham, Janik and Bob Littlefield have argued that campaign contributions from developers are not exempt under the current ethics code.
The city – and an independent ethics officer – disagree.
Resident Jim Bloch filed an ethics complaint with the city on June 15 against Klapp and Korte, alleging the campaign contributions from various zoning attorneys and developers/business violated the city’s prohibition on gifts from individuals with business before the city.
City Attorney Sherry Scott referred the complaint to the city’s independent ethics officer Hon. Ken Fields, a retired judge, who quickly dismissed it.
Fields wrote that the contributions were allowed under state law and were properly documented on campaign reports.
“The fact that the Council members were honest and transparent in their reporting of these contributions leads one to conclude that they were not engaged in unethical conduct under the Scottsdale City Code merely by accepting campaign contributions allowed under Arizona law,” Fields wrote.
According to Scott, the city has never considered campaign contributions gifts.
City spokesperson Kelly Corsette also said “that campaign contributions go to political committees, which are legally formed entities, and not to individual council members; therefore, they are not considered gifts.”
Scott had tried unsuccessfully to have that codified in proposed changes to the ethics code that Council rejected on June 16.
“We’ve never considered (campaign contributions) to be a gift controlled by the ethics ordinance but I thought it deserved some clarification,” she said.
That stipulation drew significant blowback from the community, some of whom argued it was an attempt to add a new exception, not clarify an existing one.
Bloch argued that Scott’s proposed addition proved that the contributions were not currently exempt under the existing code.
The Bloch complaint was also reviewed by City Clerk Carolyn Jagger, who also dismissed it.
“Arizona campaign finance laws govern campaign contributions, and do not prohibit contributions to incumbent councilmembers by constituents who may have business coming before them,” Jagger wrote.
Other states and cities have adopted so-called “pay-to-play” laws that limit or ban contributions from entities that do business with their elected officials.
According to the national law firm Venable LLP, 20 states and dozens of municipalities in the U.S. have adopted pay-to-play laws, but Arizona is not one of them.
Last December, the Los Angeles City Council unanimously adopted an ordinance that “barred from giving political contributions to Los Angeles city officials and candidates for council, mayor or city attorney while the city weighs key approvals for their building projects, including zone changes and allowing added height” for up to a year after their case is decided, according to the Los Angeles Times.
But it’s unlikely Scottsdale will see a similar ordinance.
Diane Brown, with the Arizona PIRG Education Fund, said her organization has advocated for measures to remove the influence of money in politics, but hasn’t seen any legislation on the horizon at the local or state level.
Arizona PIRG is a non-partisan group that works for consumers and public interest issues.
“Public interest advocates for quite some time have urged policy makers to go back to the tenet of America of a democracy of, by and for the people versus a system reliance on money interests.” Brown said.
“Unfortunately, at the legislative level and the congressional level, we have increasingly seen lax policies versus policies more stringent in favor of everyday citizens,” she said.
Janik said there are a number of solutions the city could adopt, including banning the contributions outright or limiting them to $500 for individuals and $1,000 for PACs.
Alternatively, she said, the city should require council members to recuse themselves from voting on cases involving campaign contributors.
But there is some question about whether or not Scottsdale could legally pass its own pay-to-play ban or restriction.
Arizona has a history of pushing back against local municipalities that pass ordinances that are more restrictive than state law.
An Arizona law passed in 2016 allows legislators to request an investigation by the Arizona Attorney General into “any ordinance, regulation, order or other official action adopted or taken by the governing body of a county, city or town that the member alleges violates state law or the Constitution of Arizona.”
That law, which empowers the state to withhold shared state funding from municipalities that are found in violation, was used to challenge local ordinances such as a ban on plastic bags approved by the Bisbee in 2013.
During discussion on the ethics code on June 16, Councilwoman Kathy Littlefield said Scottsdale could not pass a pay-to-play ban.
“We can’t declare accepting contributions from someone who has business before the City Council is illegal; (State of Arizona) says we can’t do that,” Littlefield said, arguing that the city could still make those contributions a violation of the ethics code.
Scott and a city spokesman did not respond to a request for comment on the legality of Scottsdale passing its own ban.
Brown anticipated pushback from the state if Scottsdale attempted to pass its own ordinance.
“Unfortunately, the State Legislature has been thwarting efforts from local municipalities to exercise their right for policies more stringent and in line with what local citizens want to see enacted,” Brown said.
The prospect of a ban on certain developer contributions received a mixed reaction from candidates.
“If on council, I would certainly be open to having that conversation,” Caputi said.
Little said if elected, “I’m open to a full review of our ethics code – after significant input from the community.”
But Korte said, “I do not believe we should deny people their right to engage in the political process because they work in industries that some don’t like. If we exclude developers today, who will we exclude tomorrow? We should not exclude anyone.”
Klapp said that she believes the contributions should be allowed in accordance with the law and should be “reported in the light of day.”
“I would not recommend modeling our city in any way after Los Angeles,” Klapp said. “Targeting a select group of contributions can lead to entities funneling money through “dark money” organizations.”