Stanton cleared of conflict-of-interest suggestion in dual public role

Paradise Valley councilman also serves as Scottsdale Area Chamber of Commerce CEO

My assessment is that Mr. Stanton does not have a disqualifying conflict of interest in voting on matters as a Paradise Valley Town Councilmember that may or may not impact a Scottsdale Chamber member, when the member or members do not serve on the compensation or executive committees of the Chamber.”

Lynda Shely. The Shely Firm

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Paradise Valley continues to grapple with short-term rental prevalence, mitigation

By Melissa Rosequist
Twitter: @mrosequist_

Questions previously raised about a perceived conflict of interest for Paradise Valley Councilman Mark Stanton, who serves as Scottsdale Area Chamber of Commerce president and CEO, have been thwarted by legal officials.

In December during a study session discussion evaluating House Bill 2672, a question was raised about Mr. Stanton’s position at the Chamber in regards to supporting short-term rental businesses in local municipalities.

Councilmembers had a lengthy discussion about the potential conflict of interest, and Mr. Stanton --- who remained steadfast that he did not have a conflict of interest --- requested an official opinion from Town Attorney Andrew Miller.

Citing a press release, which had previously run in the Scottsdale Independent, Mayor Jerry Bien-Willner referenced a quote he understood to be Mr. Stanton lauding the efforts of a short-term rental operator.

As the Town Council desires to be united in its fight against short-term rental units, the news item was troubling for the mayor and other members of council.

HB 2672, adopted last spring and signed by Gov. Doug Ducey on May 21, says legislation is now providing cities and towns the ability to adopt regulations requiring short-term rental property owners to provide contact information, and to respond promptly to complaints, as well as limiting the use of short-term rentals to residential uses.

Mr. Miller initially brought the option forward to council at its Dec. 5 meeting, and the council unanimously adopted an ordinance on Jan. 9.

During the January Town Council meeting, Mr. Stanton asked for the outcome of the conflict-of-interest inquiry to be shared with the public.

“I did receive a request from you for an opinion, that’s allowed by state statute, on whether you had a conflict of interest. In this case, I’ve also brought in independent counsel Lynda Shely --- a former ethics attorney for the state bar association --- to do an analysis on this,” Mr. Miller said.

“She did render an opinion earlier today. The gist of the opinion was that she did not believe you had a conflict of interest that would prohibit you from voting on the short-term rental ordinance that was before the council tonight.”

No substantial interest

Ms. Shely’s official opinion states Arizona State Statute 38-503, pertaining to conflict of interest, pertains to any public officer or employee of a public agency who has, or whose relative has, a substantial interest in any contract, sale, purchase or service of such public agency shall make their interest known in official records, and refrain from voting upon or participating in any matter as an official.

The determination of whether there is a conflict of interest for Mr. Stanton depends on whether his role as president and CEO of the Scottsdale Area Chamber of Commerce constitutes a “substantial interest” in the contract the town may approve.

Ms. Shely’s understanding of the general facts in the matter are based on discussions with Mr. Miller, Mr. Stanton, review of emails from Councilman Paul Dembow, the Scottsdale Chamber CEO job description, a Chamber webpage regarding public policy advocacy, a summary of the compensation process for the Chamber CEO and a description of the East Valley Chamber of Commerce Alliance.

“I was asked to determine whether Mr. Stanton, as an elected member of the Town Council and separately employed as the president and chief executive officer of the Scottsdale Chamber of Commerce, has a conflict of interest in voting on Town matters involving short-term rental regulations, when one or more members of the Chamber are in the short-term rental industry,” Ms. Shely wrote in her opinion.

The Chamber is a 501(c)6 organization with over 1,000 members, and a board of directors comprised of over 40 directors, with an executive committee and compensation committee. The two committees would determine Mr. Stanton’s employment contract and salary, Ms. Shely’s document states.

“My understanding is that none of the Chamber members who are in the short-term rental industry serve on the executive or compensation committees of the chamber,” she stated.

Ms. Shely based her opinion on defining a “substantial interest.” She cited various case law to make her decision.

“My assessment is that Mr. Stanton does not have a disqualifying conflict of interest in voting on matters as a Paradise Valley Town Councilmember that may or may not impact a Scottsdale Chamber member, when the member or members do not serve on the compensation or executive committees of the Chamber,” Ms. Shely stated.

“While Mr. Stanton’s Chamber discretionary bonus may be based, in part, on increasing revenue for the Chamber (including obtaining new and retaining existing members), the potential conflict of interest in any Paradise Valley vote affecting one or more Chamber members is too remote an alleged interest for it to be a disqualifying conflict of interest for Mr. Stanton.”

Ms. Shely says, based on her understanding of Mr. Stanton’s job description for the Chamber and how is compensation is calculated, those job requirements do not materially limit or control Mr. Stanton’s position on short-term rental issues in Paradise Valley.

“I have seen nothing to indicate that Mr. Stanton is required by his Chamber employment to take a specific position (or not take) on this issue,” she stated.