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Scottsdale councilman’s role in Southbridge referendum scrutinized

Packs of political operatives duke it out in Old Town Scottsdale

Posted 1/20/20

In a matter of days since Scottsdale campaign finance documents have been released, an ethics violation has been filed alleging wrong doings by a Scottsdale City Council member. Also, further …

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Scottsdale councilman’s role in Southbridge referendum scrutinized

Packs of political operatives duke it out in Old Town Scottsdale

Posted

In a matter of days since Scottsdale campaign finance documents have been released, an ethics violation has been filed alleging wrong doings by a Scottsdale City Council member. Also, further payments to fight the opposition of Southbridge Two have emerged.

On Jan. 21, resident Mike Norton filed the complaint with Scottsdale City Attorney’s office alleging wrongdoings by Councilman Guy Phillips.

Mr. Norton asserts in his complaint that Mr. Phillips accepted cash or cash benefits from “Save Old Town” advocates who opposed the Southbridge Two project; and a GoFundMe page seeking to raise $20,000 for Mr. Phillips following a physical injury has gathered financial support of 18 anonymous donors, which has allegedly not been reported.

“I insist that this matter be taken out of the court of social media and brought back to the court established by our city’s ethics code,” Mr. Norton wrote in an email to Independent Newsmedia, including a copy of his complaint.

“Only if we live and operate by the letter and spirit of our own rules, laws, and codes do we maintain the dignity of our city government.”

The ethics complaint is the latest iteration of an ongoing public battle stemming from proponents and opposition of Southbridge Two, a mixed-use development planned along Fifth Avenue in Old Town Scottsdale.

Two sides of the political coin

Earlier this month, a referendum petition was turned in to Scottsdale City Clerk Carolyn Jagger to attempt to overturn the City Council’s 4-3 approval of the project. Then, campaign finance documents were released showing funding of two political action committees fighting both sides of the project.

In addition to the PAC, “Stand Up for the Preservation of Old Town Scottsdale” opposing Southbridge Two, a PAC supporting the project “Protecting Scottsdale’s Future” also raised significant funds.

Scottsdale proprietor Bill Crawford is the identified chairman for Protecting Scottsdale’s Future, while Spring Creek Development President --- the entity behind Southbridge Two --- Carter Unger is the treasurer.

Public campaign finance documents show the PAC raised $133,460 in in-kind contributions from corporations and LLCs.

The listed donations came from two entities:

  • The Hermosa Inn Restaurant LLC: $25,000;
  • Scottsdale Canal Project LLC: $108,460;

Jennifer Unger is listed as one of the members of the Hermosa Inn Restaurant LLC through the Arizona Corporation Commission; and Frederick R. Unger and Robert W. Scharar are listed as members of the Scottsdale Canal Project LLC.

Fred Unger, the former figurehead of Spring Creek Development, passed away on Jan. 20, 2018.

The campaign finance documents further show the PAC paid AZ Petition Partners LLC the total $133,460 across six payments between Dec. 1-30.

According to Mr. Crawford, the decision was made to pay the petition company in an attempt to “offer resistance to the opposition of the SB2 project.”

“This was a project that took 20 years to assemble the properties; it’s a $750 million project that would have advanced downtown Scottsdale forward for future generations,” Mr. Crawford explained.

Southbridge Two is a project that needs to be saved, Mr. Crawford said.

“Above politics, I wanted to do what I could to help this development succeed and to weather this assault and this attack,” he said, adding that the project shouldn’t be counted out yet. “There’s other ways.”

Mr. Crawford says he has asked to be released as the chairman of the PAC as he pursues political endeavors.

“A few days ago I asked Carter to take me off as chairman because of my next political endeavor,” Mr. Crawford said. “I’ve been asked by lots of supporters to run again for council because our business community and development community is under attack. There were some real shenanigans in the last election. They want me to be there to protect them --- I’m giving it very careful consideration.”

Ethics complaint

Mr. Phillips declined to comment on the reported complaint, stating he had not yet received a copy of the complaint.

“I haven’t received any ethics complaint as of late and if and when I do I will need to review it before considering what if any action to take including answering media questions,” Mr. Phillips said in a text message to the Independent.

The complaint outlines three counts, Mr. Norton believes, to be sworn complaints against Mr. Phillips:

  • Count one: Official reports made to the City Clerk’s office by the “Committee for the Preservation of Old Town Scottsdale” identify cash payments made to Mr. Phillips’ wife, Cora.
  • Count two: Cash gifts of more than $2,000 made to Mr. Phillips by the 18 anonymous GoFundMe donors is a violation of state statutes and Scottsdale ethics code; and
  • Count three: As a result of the gifts received by Mr. and Mrs. Phillips, a conflict of interest was created.

The complaint alleges the two pipelines of cash directed at the Phillips family is in violation of state statues and city ethics code.

On Jan. 16, the Independent reported Mrs. Phillips was paid $3,192 to collect signatures for the Old Town Scottsdale PAC.

The Scottsdale ethics policy outlines the city is to uphold, promote and demand the highest standards of ethical behavior from its mayor, members of City Council and individuals appointed to serve on the city’s boards, commissions, committees, tasks forces and other appointed advisory groups.

“Honest, integrity, fairness and transparency of action are the hallmarks of public service in Scottsdale. Use of one’s office or position for personal gain or inappropriate influence will not be tolerated,” the policy reads.

The conflict-of-interest laws outline that when a city official, a relative of that official or an entity whereas a city official has a substantial interest and is actively engaged in an activity that involves the city’s decision-making processes, a conflict of interest arises.

“‘Decision-making processes’ is broader than just voting and includes being involved with any aspects of any decisions the city makes, such as contracting, sales, purchases, permitting and zoning,” the code reads.

Next steps

According to Scottsdale’s City Code, the city shall use an independent, non-city personnel to handle ethics complaints against members of the City Council.

City Attorney Sherry Scott shall select from a pool of 10-12 individuals who could serve as the city’s independent ethics reviewers to handle ethics complaints lodged against the mayor and council.

Ms. Scott shall immediately transfer any complaint filed against members of the council to the city’s independent ethics officer, who will conduct the initial screening of the complaint and within 15 days issue a report of findings and conclusions.

They will recommend the city attorney handle the complaint to include:

  • Return it for being incomplete;
  • Dismiss it for being untimely;
  • Dismiss it if the complaint on its face fails to state allegations that, if true, would violate a mandatory requirement or prohibition as opposed to an aspirational or administrative provision of the ethics code or any laws;
  • Dismiss it as being without merit;
  • Refer alleged violations of Arizona or federal laws to an appropriate law enforcement agency if the complaint states on its face allegations that, if true, would constitute a violation of Arizona or federal law; or
  • If the complaint states on its face allegations that, if true, would constitute a violation of a mandatory requirement or prohibition of the City’s Code of Ethical Behavior or a city law, refer the matter to an independent ethics panel for further action.

If the complaint ascends to the ethics panel for further review, then the panel shall investigate the complaint and report to City Council its findings of fact and conclusions within 60 days. The council would then consider the ethics panel’s report at a public meeting and accept or reject the report as submitted.