State Integrity 2012

Published — January 6, 2013 Updated — May 19, 2014 at 12:19 pm ET

Arizona still waiting for Fiesta Bowl fixes

Stanford's Stepfan Taylor takes the ball during the second half of the 2012 Fiesta Bowl. A scandal involving gifts from bowl officials to state legislators has yet to bring about changes in lobbying or disclosure laws. Matt York/AP

Bowl game scandal has yielded headlines and outrage, but no changes — yet


The Fiesta Bowl game and its many related events have become a football extravaganza that kicks off the new year for the Phoenix area with national publicity and a hefty economic boost.

But over the past three years, the Fiesta Bowl has also become the source of continuous embarrassment in the Valley of the Sun, for bowl officials, civic boosters and state legislators, as well. And it isn’t over.

The parade of bad news began in December 2009, when the Arizona Republic exposed the Fiesta Bowl’s scheme of urging employees to make campaign contributions and then illegally reimbursing them. In March 2011, a special investigative committee revealed that the bowl had showered elected officials, mostly legislators, with lavish gifts.

That May, the Fiesta Bowl was fined $1 million by the organization that runs the biggest bowls, and put on one-year probation by the National Collegiate Athletic Association. Fiesta Bowl CEO John Junker, who was fired, and five other bowl employees have pleaded guilty to involvement in the illegal reimbursements. A lobbyist pleaded guilty to disclosure violations over a trip by legislators.

Now, as the 2013 state legislative session approaches, many Arizonans believe the Legislature has not one Fiesta Bowl scandal, but two.

The first is the tale of freebies: tickets to high-profile football games and bowl-paid jaunts around the country that dozens of legislators took from at least 2003 to 2010, often with family members in tow. The second is whether lawmakers intend to do anything about the behavior that was uncovered, or just carry on as if nothing ever happened.

Rules, loopholes and history

At first glance, Arizona would seem to have one of the nation’s strictest gift laws: a $10 annual limit on gifts to public officials from lobbyists or any entity that employs lobbyists.

But critics say you could drive a Fiesta Bowl float through the exemptions. In nearly every case, the tickets, flights, luxury hotel rooms and pricey meals that were part of the Fiesta Bowl scandal were all perfectly legal because of quirks in the law.

What tripped up many legislators was failing to meet state reporting requirements —requirements that critics say themselves are inadequate. When the goodies came to light, legislators scrambled to amend their financial filings and reimburse questionable expenses.

Lawmakers maintained that they weren’t swayed by gifts like a 2008 trip to see a football game in Boston, which included a contingent from the Fiesta Bowl and cost more than $65,000.

Fiesta Bowl officials described the trips, which usually included an hour-long presentation on bowl-related topics, as educational. But former bowl CEO Junker admitted to investigators that the gifts were meant to curry favor. The Legislature has handled at least nine pieces of legislation related to the Fiesta Bowl since 2002, including a bill that threatened construction of the football stadium that the bowl ultimately came to share with the Arizona Cardinals. The measure was killed in committee.

Lawmakers can argue that they support the Fiesta Bowl on its own merits, but “whatever they think of themselves, the perception of the public is that there’s something going on that shouldn’t go on,” said David Berman, senior research fellow at the Morrison Institute for Public Policy at Arizona State University. “It isn’t healthy.”

Waiting for action

Indeed, many Arizonans are puzzled by the Legislature’s failure to do any sort of ethical house cleaning. Last session, more than a half-dozen reforms were proposed to restrict gifts and strengthen reporting requirements. None passed.

“I was stunned that in the wake of the Fiesta Bowl there wasn’t some sort of comprehensive gift-ban reform,” said Deb Gullett, a lobbyist with Gallagher & Kennedy and a GOP legislator from 2001 to 2005.

Lawmakers and observers cite several reasons why nothing happened: an election year, potential embarrassment for the one-in-three legislators who had taken Fiesta Bowl-funded trips and the lack of any strong push from outside public-interest groups, which were caught up in other issues. Some legislators argued for better training, not legislation.

And there was reluctance to give up perks, according to Phoenix Democratic Sen. Steve Gallardo, whose reform proposals were shot down.

“You have legislators who look forward to the fancy dinners, they look forward to the little freebies,” said Gallardo, who had been on Fiesta Bowl trips.

Whatever the reason, the lack of action left Arizonans fuming.

“By doing nothing,” said The Arizona Republic, “legislative leaders virtually have ensured a return engagement of the Fiesta Bowl game-ticket scandal. And they clearly are fine with that.”

In fact, more than a third of lawmakers accepted the Arizona Diamondbacks’ offer of free tickets to opening day on April 6.

“It is preposterous,” said Diane E. Brown, executive director of the nonprofit Arizona Public Interest Research Group, “that while legislators are striking out on necessary gift ban reform, they are scoring on tickets to a high-profile baseball game.”

Between the tickets and a meal at Coach & Willie’s sports bar and grill, the Diamondbacks shelled out $4,908 to host state officials. Who attended? State reporting law doesn’t require that detail.

Or a lot of other details, either. The comprehensive State Integrity Investigation, released in March, gave Arizona an F in lobbying disclosure and a D-plus in legislative accountability. The state ranked 30th overall, with a grade of D-plus, in the 50-state assessment, a joint project of the Center for Public Integrity, Public Radio International and Global Integrity.

Window dressing?

What now? Many reform advocates aren’t optimistic, but the door may not be closed. At least one Republican lawmaker is taking up the issue, and the minority Democrats have included gift reform on their list of legislative initiatives for 2013.

Their big emphasis this time around is on disclosure. And that could hook up with broader legislation to increase transparency in campaign finance, a hot-button issue for some legislative leaders. If the Legislature fails to act, there are rumblings of a citizens’ ballot initiative.

There’s potentially plenty to fix. Under current Arizona law, that $10 gift limit doesn’t cover food, beverages, travel or lodging. There’s a Draconian-sounding ban on entertainment, including sports tickets. It doesn’t apply, though, if the freebie is offered to all members of a legislative committee or house — regardless of how many attend.

The disclosure requirements for gifts, meanwhile, are short on detail, with different rules for lobbyists and legislators.

Lobbyists, who file quarterly, must list the names and amounts spent on meals and other permissible gifts for individual lawmakers (there’s a $20 threshold). But they don’t have to disclose who attended “special event” functions, which can include everything from dinners to ball games.

Legislators have to list gifts worth more than $500 to themselves and immediate family, with some personal exceptions, as part of their annual financial disclosure reports. But all they have to put is the name of the donor. No date, purpose or actual amount.

The regulations are just “a lot of window dressing,” said Maricopa County Attorney Bill Montgomery. He blames vague laws for hamstringing his investigation of 28 legislators and three other public officials who had gone on Fiesta Bowl-funded trips. Montgomery wrapped up the probe in December 2011 without filing any charges. Instead, he recommended a list of reforms to state gift and disclosure laws.

Drawing the line

Going forward, the issue boils down to two basic questions: Where should Arizona draw the line on gifts? And what kind of disclosure should be required?

Tim Hogan, executive director of the Arizona Center for Law in the Public Interest, is categorical: No gifts. “This should be a black and white rule,” he said, “and I guarantee that life as we know it will not end.”

Florida adopted that approach in 2005 — the notable exception is flowers on the Legislature’s opening day — and got top marks in the State Integrity Investigation in the sub-category of regulating gifts and hospitality to lawmakers. But legislators have found a way around the restrictions through political committees that are allowed to accept unlimited money.

In Arizona, the debate remains vigorous on where to set the boundaries on entertainment, meals and travel.

Rep. Gallardo is calling for a “straight-up ban” on entertainment. “We get quite a few invitations,” he said. “You’d be amazed. A lot of these are events that the general public would have trouble getting tickets to.” They include the Waste Management Phoenix Open golf tournament, NASCAR events at Phoenix International Raceway and season tickets to university football games.

Sen. Michele Reagan, a Scottsdale Republican who took trips, has a new philosophy in the wake of the Fiesta Bowl: “If the public has to pay for it, we should have to pay for it, as well.”

John MacDonald knows the gift issue up close and personal. A former Fiesta Bowl lobbyist, he entered into an agreement in September to plead guilty to a misdemeanor charge of failing to report expenditures.

“As a lobbyist, I will tell you, lobbyists have far too much influence at the state capital,” said MacDonald, now a partner in Policy AZ.

He takes aim, in particular, at the expensive meals that some lobbyists lavish on legislators.

Steakhouses, such as Durant’s and the Capitol Grill, and the private University Club in Phoenix are favorite destinations.

“It’s just human nature for somebody to be indebted to you when you give them something,” MacDonald said. “The lobbyists who use the wining and dining, they know that full well. For the majority of lobbyists who are down there doing the grunt work every day, it is annoying to watch people take shortcuts.”

MacDonald notes, however, that it works both ways. “I have literally seen legislators hang around the Capitol at the end of the day,” he said, “and look for a lobbyist to take them out to drinks and dinner.”

Senate Majority Leader John McComish contends that the issue isn’t the meals, but the disclosure. “Much business in this country is conducted over lunch,” the Ahwatukee Republican, who took Fiesta Bowl trips, said via email. “I view lunch with a lobbyist as an efficient use of time rather than some type of gift or treat; and would have no problem reporting that on a monthly or even weekly basis.”

Scores of groups, from nonprofits to trade organizations, invite lawmakers for meals. The Arizona Chamber of Commerce and Industry gives legislators a free seat at eight to 12 major events a year, many of them educational, such as the annual legislative forecast lunch.

Legislators make $24,000 a year for a regular session that runs four to six months, with the possibility of special sessions and committee meetings in the off season. On that salary, “it would be fairly challenging to go to all of these different events,” said Chamber president and CEO Glenn Hamer, “and I think you want public officials out there and among the public.”

The Inter Tribal Council of Arizona, a nonprofit with 20 member tribes, holds an annual lunch and breakfast for legislators and wants to catch incoming freshmen with a lunch during their orientation.

“They’re so bombarded with issues, it’s hard to get their time unless you feed them,” said the group’s lobbyist, Norris Nordvold.

That’s just the point to John Loredo, a partner in Southwest Policy Advisors consulting firm and a Democratic legislator from 1997 to 2005. He would forbid all meals outright. If you want to see lawmakers, do it the official way: “There’s a reason why taxpayers pay for them to have an office and a secretary to schedule meetings.”

Is this trip necessary?

While free travel was a focal point of the Fiesta Bowl debacle, there’s little pressure to shut off all funding for legislators to attend conferences. Instead, there are calls to weed out the junkets and examine the funding sources.

Sam Wercinski, executive director of the Arizona Advocacy Network, a public-interest group focused on transparency, uses his own experience as a yardstick. He’s received funding for Washington, D.C., forums on issues like voter protection and judicial independence, valuable sessions that were beyond his group’s budget.

“We don’t want to impact the ability of these underpaid lawmakers to seize the opportunity to be educated on issues,” he said.

Arizona lawmakers seized a lot of opportunities in 2011. They went to gatherings sponsored by at least 50 groups, from the American Federation for Children to Young Elected Officials. The trips crossed the political spectrum, from GOPAC (a new generation of Republican leaders) to NewDEAL Leaders (pro-growth progressives).

The destinations and costs, however, are mostly mysteries — legislators aren’t required to report that information, and the form has nowhere to put it.

The disclosure statements indicate twenty-eight legislators received scholarships in 2011 to attend conferences of the American Legislative Exchange Council, which advocates limited government, free markets and federalism. ALEC held a major meeting in the Phoenix area that year, as well as sessions in New Orleans; Santa Barbara, Calif.; Cincinnati; and Washington, D.C.

In October, Common Cause released a report criticizing ALEC’s use of corporate funding for scholarships and calling on states to bar them. “We’re not saying that legislators can’t go to ALEC conferences,” said Nick Surgey, staff counsel of Common Cause. “We’re saying that the use of corporate money in this way is inappropriate.”

Reagan, the Scottsdale senator, argues against singling out ALEC. Ultimately, she said, the public needs to help decide what’s appropriate and not.

Some maintain that the public should play a more active role — paying the bills if a conference is valuable enough for legislators to attend. “To maintain public confidence, it’s worth it,” said Bart Turner, head of the Clean Elections Institute, a now-dormant good government group.

The push for full disclosure

A year ago, Maricopa County Attorney Montgomery took a hard line on gifts in proposing changes following his investigation. He’s changed his mind. “I’ve since come to the conclusion that an outright gift ban doesn’t make sense,” he said. “It’s going to be a never-ending game to reclassify, redefine, recharacterize something” to create a loophole.

Now he argues for full, fast online disclosure of anything worth more than a minimal amount, say $25 or $50.

House Minority Leader Chad Campbell, another Fiesta Bowl trip recipient, agrees. “You’re never going to take the money out of politics…” said the Phoenix Democrat. “But what you’ve got to do is to give people the ability to know where the money’s coming from and connect the dots.”

California, which ranked fourth in the State Integrity Investigation, tries to does just that. Lobbyists and lawmakers must make detailed reports on gifts and trips, which are filed on websites. But making the connections is hard, because it’s not an electronic system that can be used to sort, analyze and cross-reference.

In October, Arizona Sen. Jerry Lewis proposed using technology to dramatically increase transparency in gift reporting. The centerpiece of his plan was an interactive online database to replace the state’s current “antiquated” system.

The Mesa Republican intended to lay the groundwork for legislation in 2013. But he lost his seat in November’s election and won’t be back to push it when the new session starts in January.

Sen. Reagan is interested in picking it up. “This will probably be a very bipartisan bill,” she said. “This doesn’t split down party lines.”

The idea could get lift from Democrats, who are expected to have more leverage in the GOP-dominated Legislature, since Republicans no longer have a two-thirds supermajority in both Houses.

Gov. Jan Brewer is leaving the ball in the Legislature’s court. But she’s “always interested in accountability and transparency,” her spokesman Matthew Benson said in an email.

The Arizona Chamber of Commerce is also open to greater transparency and more real-time reporting, as long as the rules are clear, fair and easy to comply with.

Even if nothing passes next session, the game isn’t over, Chamber CEO Hamer said: “When it comes to any kind of reform, it’s not unusual for things to take a few years to get through.”

But legislators should beware of going overboard in the reporting requirements, said Martin Shultz, senior policy director for Brownstein Hyatt Farber Schreck. If lawmakers have lunch with a lobbyist, will they have to pore over the bill and figure out who ate what?

“My view is that this is petty, petty, petty,” said Shultz, a Capitol veteran who worked previously for the electric utility Arizona Public Service. “It assumes, from cynics, that somehow a registered lobbyist can buy the vote of a lawmaker through a meal.”

Legislators have pushed transparency in other areas, particularly government spending. Now there’s a move from some Republicans to require more financial disclosure from independent expenditure committees. Gift reform could piggyback on that issue.

Lobbyist MacDonald is skeptical. Legislators, he said, “simply are too self-interested to enact anything that would be meaningful in terms of lobbying reform or gift ban.”

In his view, change will have to come from the outside, through a ballot initiative.

The Arizona Advocacy Network is starting to gear up. The group is working on a broad anti-corruption bill that would cover gifts, conflicts of interest and the Clean Elections public finance system.

If the Legislature fails to act on it, said executive director Wercinski, “there’s already discussions with national and state partners about doing a citizens’ initiative about this around 2014.”

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