Budget Mechanical LLC

A Paypal receipt that allegedly shows a campaign contribution to Councilman Guy Phillips was directed through an account run by his company, Budget Mechanical LLC.

With the Aug. 4 Primary election less than three weeks away, campaign finance complaints are flying in from all corners of Scottsdale’s City Council and mayoral races.

Resident Mark Greenburg filed a complaint July 8 against Councilman Guy Phillips, who is running for re-election, alleging his campaign improperly funneled contributions through a PayPal account connected to his business.

Greenburg has been a vocal critic of Phillips and has made dozens of social media posts in recent weeks, including some criticized by the councilman supporters as over the top for including photoshopped pictures showing Phillips with swastikas and KKK regalia.

But Greenburg said his complaint was motivated by what he sees as legitimate campaign finance issues.

The complaint centers on three campaign websites run by the Phillips: electguy.homestead.com, scottsdaleadvocates.com and electguyphillips.com.

The first two sites have since been redirected to electguyphillips.com.

Greenburg alleges that prior to the deactivation, the donation pages on the first two sites linked to a PayPal account for Budget Mechanical LLC, Phillips’ HVAC contracting business.

Greenburg made donations through all three websites on July 1 and recorded video of his computer screen during the process.

According to the videos, the donation buttons on electguy.homestead.com and scottsdaleadvocates.com linked to Budget Mechanical’s account but included “Committee to Elect Guy Phillips” under a header titled “purpose.”

Email receipts for the transactions stated “You donated $20.00 USD to Budget Mechanical Llc” and “You donated $90.00 USD to Budget Mechanical LLC.”

A donation through the third website, electguyphillips.com, went to an account run by the “Committee to Elect Guy Phillips,” according to a receipt viewed by the Progress.

Phillips did not respond to a request for comment from the Progress.

But emails and communications sent to Greenburg give some insight into his side of the story.

The same day the donations were made, Phillips told City Clerk Carolyn Jagger to expect a campaign finance complaint from Greenburg, according to emails obtained through a public records request.

In the email, Phillips said he used to have an account for Budget Mechanical but switched it to an account for his campaign and called the situation an “anomaly” that he did not know how to fix.

“Budget Mechanical does not have a Paypal account,” Phillips wrote. “Yet, for some reason when donating it says to Budget Mechanical even though it goes to electguyphillips acct. I’m trying to fix this but can’t find a way to do it.”

“Just wanting to give you a heads up because I know that’s what he is up to,” Phillips added.

Phillips told Greenburg the next day that he did not know how the donation made its way into the Budget Mechanical account.

“Hello I noticed this in my account. not sure why. If you are donating this is the wrongaccount (sic),” read a note attached to a refund sent on July 2

The second refund carried a similar note: “Hello Mr Greenberg (sic) I am returning this money as this is not an account for donations. I dont (sic) know why you sent it here.”

Phillips also refunded Greenburg’s third donation to the legitimate campaign account.

But that night, Phillips again changed his story in communications with Jagger. 

Just a day after saying Budget Mechanical no longer had a PayPal account because it was converted to campaign use, Phillips said the opposite.

He said the company did have an account that was converted from campaign to business use after the 2012 election and that Greenburg must have found his old website in a Google search.

“If you go to my old website from 2012 electguyphillips.homestead.com and click on the donate it goes to my budget mechanical PayPal account which was changed to that after the election and is now currently used for my eBay purchases and sales,” Phillips wrote Jagger.

Phillips said he asked his website administrator to fix the issues and the old websites have since been redirected to his new website, which is connected to a campaign PayPal account.

The Progress asked Phillips in an email why he left the old campaign website active for eight years with an active donation option, but he did not respond.

Likewise, he did not respond to a question about whether or not any other individuals had mistakenly donated through the wrong website and if he had to issue any other refunds. 

The Greenburg complaint is currently being reviewed by Tucson City Clerk Roger Randolph after Jagger recused herself to avoid the appearance of a conflict of interest.

Phillips has until July 20 to submit a response to Randolph.

If Randolph determines there is reasonable cause to investigate the allegations further, the case would be referred to Tucson City Attorney Mike Rankin due to a conflict of interest by the Scottsdale City Attorney, who represents council members in their official capacity.

Jagger weighed in on another complaint filed with her office on July 15 by resident activist John Washington.

That complaint alleged dark money text messages urging voters to vote against Council candidates Betty Janik and Bill Crawford.

Dark money refers to legal campaign contributions where the source is made secret by funneling the money through entities like nonprofits that are not required to disclose donors, according to the Brennan Center for Justice.

In a screenshot viewed by the Progress, one message appears addressed to “Scottsdale Republicans” and points out that Janik is not a Republican and supports Planned Parenthood and a vacancy tax.

Janik, who is an independent, told the Progress another text went out addressed to Scottsdale Democrats that stated she donated to Phillips’ campaign.

Janik, who had been a supporter of Phillips prior to the rally, criticized his comments during an anti-mask rally that made nationwide headlines because of his use of the words “I can’t breathe” – a rallying cry for protestors seeking widespread police reforms.

She also said she supports Planned Parenthood due to the medical services they provide to both men and women, and she supports a vacancy tax to discourage overbuilding of luxury apartments.

Washington’s complaint also included a screenshot of an anti-Crawford text message that alleged he is “bought and paid for” by developers.

In the past, Crawford has defended the contributions he received and criticized calls to ban developer contributions.

 Washington said he called the numbers that sent the texts and received a recording noting the numbers are not enabled for voice calls.

He alleged that the texts violate campaign finance law because they included no “paid for by” disclosure.

But Jagger disagreed after consulting with the City Attorney, noting state law exempts text messages from those disclosure rules.

“Because the sender of the text messages that are the subject of your complaint was not required to include the ‘paid for by’ statement in the message, there is no reasonable cause to believe there has been a violation of campaign finance laws and the complaint is dismissed,” Jagger wrote to Washington.

Still, Washington said he believes the anonymous texts violate the federal Telephone Protection Consumer Act, which bans the use of automated text messages by political campaigns without the recipient’s express consent.

Even if the texts are legal, Janik called them little more than an anonymous smear campaign and called for disclosure of whoever launched the attacks.

“Anybody who does this is a coward who has no courage,” Janik said. “There should be disclosures. It is another black eye for Scottsdale when people go to this extreme to tip an election.”

Meanwhile, mayoral candidate David Ortega filed a finance complaint with the city July 16 against the Rose to Rise RMA PAC.

Sometime in early July, small signs reading “He opposed the preserve” started popping up around Scottsdale next to his campaign signs.

Then, as quickly as they appeared, the signs vanished.

The anti-Ortega signs started disappearing “literally the day after we started,” said Jason Rose, the Scottsdale-based public relations and election consultant behind the Rose to Rise PAC that purchased the signs.

Ortega’s complaint alleged that the PAC failed to include legally-required disclosures.

The signs did include “Paid for by Rose to Rise RMA PAC” and a statement indicating it was not approved by a candidate. Both are required by state law.

The PAC, which is completely funded by a $100,000 contribution from Rose, filed a police report over its missing signs.

Ortega said he has no knowledge of who took the signs.

Rose said he started the campaign to remind voters of Ortega’s position on a 2004 sales tax increase in Scottsdale that funded land purchases to expand the McDowell Sonoran Preserve.

Ortega, a one-term councilman, was running for mayor against Mary Manross at the time and opposed the tax. Ultimately, voters approved the sales tax and elected Manross.

Rose said Ortega’s position on the tax is one reason he is not qualified to be mayor.

“There are a lot of great candidates for mayor, a lot,’ Rose said. “He’s not one of them.”

Ortega said Rose is twisting the truth and that he has always supported the Preserve but did not approve of a plan to tax residents indefinitely to expand it.

“I’ve always supported the McDowell Sonoran Preserve…the only question I had was what is the full plan…and it’s not taxes after taxes after taxes,” Ortega said.

But news articles from the time show Ortega opposed the tax for other reasons as well.

At a debate with Manross in April 2004, Ortega suggested the tax would “suck the vitality” out of southern Scottsdale. He suggested creating a special district to tax only the homeowners in northern Scottsdale who live nearest to the Preserve, according to reporting in the East Valley Tribune.

At a community forum later that year, Ortega argued that voting down the tax would force the city to less expensive ways to protect land intended for the preserve through zoning or withholding city services from areas it did not want to see developed.

The latter idea was challenged at the time by then-Councilman Bob Littlefield – who is now running against Ortega for mayor. He noted that the city cannot legally refuse to provide public safety, water and other services to new developments.

Ortega said Rose’s signs are not actually about his position on the Preserve but because he has opposed major developments by some of Rose’s clients in the past.

“They’re obviously threatened by me, because they want to make millions and they don’t care what type of fall out when Scottsdale gets gridlocked, when Scottsdale gets pummeled with more subsidies,” he said.

Ortega was a vocal opponent of several recent projects represented by Rose that were rejected by the City Council, including a proposed medical marijuana dispensary downtown and a mural of the late Senator John McCain.

Ortega confirmed that property owner Dewey Schade paid him for representation before the city on the mural issue.

Rose said there “good arguments on both sides” related to the dispensary fight but that he did take issue with Ortega’s opposition to the McCain mural, saying the city needs more public art pieces.

Ortega said he opposed the mural for several reasons, including that the artists had to trespass in parking lot owned by Schade when they began to put it up.

"I have always respected Senator John McCain and Veterans," Ortega said. "Rose promoted the graffiti artists who illegally trespassed at night...and were stopped by the Scottsdale Police."

Ortega said he also disliked the mural's design. Schade and Ortega petitioned the Council to review the Scottsdale Development Review Board's original approval of that design, which ultimately led the artists to pull the project from consideration.

"In fact, the perpetrators' failed twice to present their application and left the wall defaced," Ortega said. "I opposed lawlessness and the horrible image of an honorable man."

But Rose disagreed with Ortega's arguments at the time.

“I thought his opposition to the John McCain mural was sickening, absolutely sick, and I thought his arguments were convoluted,” Rose said.