Scottsdale Councilman Guy Phillips’ reelection campaign must return $2,525 in donations after a review found it violated campaign finance regulations by passing donations through a PayPal account attached to his private business.
But the review concluded the violation was a result of sloppy bookkeeping and not a willful attempt to circumvent state law.
“The two violations are technical, arising from (Arizona law’s) strict liability prohibition along with slack administration of Mr. Phillips’ and the candidate committee’s various PayPal accounts,” according to a Notice of Violation filed by the Tucson City Attorney’s Office.
The review stemmed from a campaign finance complaint filed with Scottsdale City Clerk Carolyn Jagger by Scottsdale resident Mark Greenburg.
Jagger referred the complaint to Tucson City Clerk Roger Randolph to avoid the appearance of a conflict of interest.
Greenburg alleged that donation buttons on two websites connected to the Phillips’ campaign linked to a PayPal account for Budget Mechanical LLC, Phillips’ HVAC contracting business.
Greenburg filed the complaint after making donations to the campaign via the links.
He provided email receipts from PayPal to the Progress that stated “You donated $20.00 USD to Budget Mechanical Llc” and “You donated $90.00 USD to Budget Mechanical LLC.”
Phillips later refunded those donations, according to the notice of violation.
Randolph determined there was reasonable cause to believe the campaign violated an Arizona campaign finance law that prohibits businesses from contributing to campaign committees because two contributions totaling $2,525 made via Budget Mechanical’s PayPal account were then transferred to the campaign’s bank account.
Phillips called the complaint an “attempted political hit job that failed miserably.”
“The complaint was literally staged by my opponents in an attempt to hurt my campaign. But it was lacking in substance…” Phillips said, citing the fact that the Tucson officials found the violations were technical in nature and that there was no evidence that he willfully violated state law.
The Notice of Violation specified that violation was likely the result of sloppy bookkeeping and that the “paper trail” for contributions was documented and the campaign cooperated with the investigation.
“While the Committee or Mr. Phillips could certainly have taken more timely and effective action to ensure resolution of the confusing organization of the PayPal accounts that eventually caused the violations, there is no indication whatsoever here of a severe, extensive or willful violation of the statute,” according to the notice.
Tucson City Attorney Michael Rankin, who acts as the enforcement officer in these cases, ordered Phillips’ campaign to refund the $2,525 in contributions and to file an amended campaign finance report with the Scottsdale City Clerk’s office.
Despite the resolution in the campaign finance case, there is the possibility of further litigation between Phillips and Greenburg, who has been a frequent critic of the Councilman in recent months.
Phillips’ attorney Timothy LaSota sent a cease-and-desist letter to Greenburg on Aug. 10 alleging Greenburg is defaming the Councilman in online social media posts.The letter demanded Greenburg retract posts claiming Phillips is a Nazi or member of the Ku Klux Klan or that he has pilfered campaign funds.