Our system of government relies on checks and balances not just in order to check power, but to ensure that each branch is operating in a transparent manner for all citizens. When one branch is surreptitiously working to undermine another or the citizens, balance is at peril.
Naturally friction and harmony exist between the branches. The friction, like most human relationships, centers on money. In Arizona, the executive and judicial branches have traditionally complained that the legislative branch is stingy and does not nearly dole out enough cash.
While that may be true, the voters have not changed the majority in the Legislature in years.
According to the American Bar Association, “public corruption in any form is the misuse of a public or government office for private gain. Its existence is an indication that something has gone wrong in the management of the government office, whether it be federal, state, or local.”
That private gain can be keeping your public office, or obtaining a higher office, by misappropriating monies or other resources with which you are entrusted, as it was in the case of Pinal County Attorney Lando Voyles and Pinal County Sheriff Paul Babeu. And Pinal County voters had determined that “something has gone wrong” in the management of the government offices Voyles and Babeu held.
The subject of a lawsuit by the ACLU and the Institute for Justice, and an investigation by the FBI, Voyles and former Pinal County Sheriff Paul Babeu had become the poster boys for abusing RICO funds.
So it was surprising to find emails referring to working with Voyles from Attorney General staff member Don Conrad after the lawsuit was filed. Conrad had contacted fellow AG staff member Michael Bailey about a conversation he had with fellow AG staff member Paul Ahler about his concerns with AG Brnovich’s position on RICO funds and working with Voyles to “jointly oppose mischief in the legislature that might harm our RICO efforts.”
From the Arizona Attorney General’s Office to county attorneys and other law enforcement agencies across the state funding is tight. Rather than effectively convincing the Legislature, or local voters that more funds are essential, too many law enforcement entities are justifying the misuse of RICO to supplement office expenses.
In May 2016, RICO expert Aaron Ludwig, Managing Director of The Counterracketeering Group, told the ADI that there is an inherent conflict of interest in using RICO funds for employee related expenses (ERE). Ludwig argued that that RICO money shared from the federal government can only be used for employee related expenses (ERE) in very limited situations. “As such, I’ve always advised that fed-shared RICO money may not be used for ERE. Furthermore, since fed-shared RICO can’t be used for ERE, I’ve always advised that state RICO may not be used for ERE.”
The State has argued that because statutes allow RICO funds to be used to investigate and prosecute racketeering crimes, it’s okay to spend them on police and prosecutor ERE.
Ludwig has stated that a conflict of interest exists because ERE includes salary and benefits and thus, it is in a police officer’s and/or prosecutor’s personal, economic interest to confiscate property, according to the ADI report.
Using RICO funds to cover employee related expenses was not an issue for Babeu and Voyles.
Selling candidates with criminals’ money
A glossy promotional mailer sent out by Pinal County Sheriff Paul Babeu created controversy well after it was delivered to over 8000 registered voters in January 2016. The mailer, which appeared to feature the Sheriff on the national scene in support of his congressional run, was paid for with RICO funds.
The Sheriff’s use of RICO funds first came under scrutiny after details emerged from the ACLU lawsuit for the “unconstitutional scheme” by the Sheriff’s Department against a Pinal County resident, whose truck had been used by her adult son, while in possession of drugs.
In an article for the Casa Grande Dispatch, dated February 11, 2016 Brian Wright reported in part:
“Some leading Pinal County Democrats and Republicans say a mailer sent out recently by the Sheriff’s Office is nothing more than political propaganda promoting Sheriff Paul Babeu, who is running for Congress.
The mailer touted accomplishments of the Pinal County Sheriff’s Office but also prominently featured several photographs of Babeu, including one on the front page of the four-page mailer. The front-page photo includes a personal statement from the sheriff and purported accomplishments listed below his statement.”
Photos of Babeu testifying before Congress and also meeting with Republican presidential candidate Ben Carson were included in the mailer. The mailer was produced by the printing division of Casa Grande Valley Newspapers Inc., the parent company of the Casa Grande Dispatch.
Babeu, a Republican, was running for an open seat in Congressional District 1, which includes most of Pinal County and much of the eastern and northern portions of the state.
Multiple sources had told the Dispatch that it appears the mailer was mainly sent to registered Republicans in Pinal County — a point a spokesman for the Sheriff’s Office disputed.
That spokesman, Tim Gaffney, in an email response to Wright’s questions for his article, made many questionable claims. Claims he would have to explain, dismiss, and otherwise offer convoluted rationalizations for later.
RICO Fund abuse
RICO (Racketeer Influenced Corrupt Organizations) funds “are generated by law enforcement activities that result in asset forfeiture proceedings,” according to the Arizona Criminal Justice Commission. Once forfeited, proceeds are deposited into government accounts and are to be spent in accordance with state and federal laws and guidelines.
Section 1. Section 13-2314.01, of the Arizona Revised Statutes covers state level civil forfeiture rules:
Monies in the fund may be used for the funding of gang prevention AND INTERVENTION programs, substance abuse prevention programs, substance abuse education programs and witness protection pursuant to section 41-196 or for any purpose permitted by federal law relating to the disposition of any property that is transferred to a law enforcement agency. Monies in the fund may be transmitted by the attorney general on behalf of a department or agency of this state or any political subdivision of this state to the Arizona drug and gang policy council for the funding of gang prevention AND INTERVENTION programs, substance abuse prevention programs and substance abuse education programs. AT LEAST TEN PER CENT OF THE MONIES IN THE FUND SHALL BE PROVIDED TO PRIVATE, NONPROFIT COMMUNITY BASED ORGANIZATIONS AND GANG PREVENTION AND INTERVENTION PROGRAMS. Monies in the fund may be used for the investigation and prosecution of any offense included in the definition of racketeering in section 13-2301, subsection D, paragraph 4 or section 13-2312, including civil enforcement.
The Department of Justice guidelines created in 2012 are very clear on the inappropriate uses of RICO monies. The guidelines read in part:
e. Non-official government use of shared assets—Any use that creates the appearance that shared funds are being used for political or personal purposes is not permitted. For example, the use of shared funds for a sheriff’s campaign paraphernalia is impermissible.
Just the facts
On or about January 8, 2016, a promotional “newsletter” titled “Keeping you, your family and our communities safe” was order produced and paid for by the Pinal County Sheriff’s Office (PCSO). The documents were paid for by PCSO utilizing a Pinal County Credit Card referred to as a “P Card” on January 11, 2016. (See Casa Grande Dispatch Invoice dated 1-11-16 Print Job Number 18834, in the amount of $2,148.30)
Wright emailed Gaffney on February 9, 2016 at 2:33 pm:
”A Maricopa resident showed me a PCSO mailer that was sent to their house. I have also heard from other people across the county who have received the mailer. While this mailer is branded as a promotional pamphlet for PCSO, some hold the opinion that this is a thinly-veiled disguise for a political mailer for the sheriff, who is running for Congress. Based on the feedback I’m getting, it appears this mailer was only sent to certain registered Republicans in Pinal County, and possibly other areas in Congressional District 1. The Pinal County Democrats say they don’t know of any Democrats who have received the mailer.
My questions are as follows:
Who was this mailer sent to?”
”The newsletter is being sent initially by mail to approximately 8,175 Pinal County residents (note: there are less than 50 that are being sent outside of Pinal County because they were PCSO job applicants.)
The list of addresses was obtained from Pinal County voter registration files. The Pinal County Sheriff’s Office serves all citizens and therefore a list was com piled which includes a proportionate number of all political parties (Democrats, Republicans and Independents) from throughout the County. No voter files outside of Pinal County were used.
The newsletter as indicated above is being sent to 123 Pinal County Sheriff s Office job applicants who have tested during the past 6 six months. Less than half of these individuals on this list that tested were from outside of Pinal County and Arizona. None of the applicants are currently employed with our office.
The newsletters are located in our lobby and the lobby of every sheriff’s office substation. They are also given to our Citizens on Patrol and Posse to provide to Pinal County residents.
They have also been handed out at community events.
At the time, Gaffney also told Wright, “The Capitol Times also inquired about this same issue and in their opinion the newsletter, was not political. The goal of the newsletter is clearly to provide community outreach and education just as other government offices do for the citizens they serve.”
In response to a question from the ADI as to whether Gaffney’s claims about the Capitol Times’ opinion on the glossy newsletter, Jim Small advised: “That would not be an accurate characterization of our position, as we have no position on the matter. When we saw the mailer, we asked questions about it because it had the appearance of a political mail piece. You’d have to ask PCSO why they attributed that to us, as we never communicated any such assertion to them.”
A day after Wright’s inquiry, Irving E. Scott, Advertising Representative for Casa Grande Valley Newspapers Inc. wrote Gaffney:
From: Irving Scott
Sent: Wednesday, February 10, 2016 2:04 PM
Subject: RE: Mailer
Thanks for keeping me in the loop as to what is going on, I’m ashamed that Brian Wright is trying to make a political issue out of this. I want to thank you for giving me a chance to do the printing for PCSO and the nice words on the way I handled the account, hopefully your letter will put to rest any political issue he is seeking to find and exploit.
I hope that I will have the chance to quote future jobs and will always try to give the best price and service possible.
Irving E. Scott
Casa Grande Valley Newspapers Inc.
Casa Grande Valley Newspapers Inc., publishes the Casa Grande Dispatch. To the organization’s credit, Wright’s piece was published and was powerful. So powerful – in fact that it appeared to spark a flurry of activity at PCSO.
It appears from the records, that the “Wright/Gaffney inquiry prompted the PCSO to cover their tracks with regards to utilizing County funds from the general coffers to pay for the production and mailing of newsletter while claiming that it was paid for by seized “RICO” money. At the same time, it appears to early everyone that the newsletter meets the government requirements for their utilization of RICO funds.
If it quacks like a duck, walks like a duck, and tastes like a duck; it is likely a duck. The mailer looked like a campaign brochure, was mailed out to likely voters – not your average Pinal County resident – and smacked of campaign collateral. By any standard, using County resources – RICO or not – during a congressional race is either hubris or very poor judgment. That poor judgment was not isolated to the creation of the pamphlet.
A letter dated January 11, 2016 from PCSO to Pinal County Attorney Lando Voyles, with an attached Agency Application for Rico Funds requested $2,148.30, for the production of the newsletter. The letter on its face indicates that it was executed on January 11, 2016, received by the addressee on February 12, 2016, and approved for payment on February 16, 2016.
The letter specifies that the funds were for “Informational newsletter publication; burglary prevention, helpful links, resources, and volunteering.” The Agency Application for Rico Funds, Section A specifies that the intended use of funds was for “Gang and Substance.” Section C indicates that the application was accompanied with supporting documentation which included “A supplemental memorandum is attached and contains an explanation for each category.” Those documents were not turned over. Neither was “A letter of request for funding from a community based program is attached and contains the information necessary to comply with applicable statutes” referred to on the documents. The letter is signed by Babeu and the dated indicates it was done so on January 11, and was approved for payment by an agent of the County Attorney’s office on 2-16-16.
On February 16, Gaffney requests that a second letter just like the aforementioned be produced for postage:
From: Tim Gaffney
Sent: Tuesday, February 16,2016 8:09 AM
To: Deborah Lopez
Cc: Paul Babeu; Paula Pollock; Teresa Eierdam
Subject: RICO Letter for Postage
Can you please do a RICO request letter similar to the one you did for the printing of the newsletter so that we can reimburse for postage? There were a total of 8,175 sent out via mail and the postage was .48 cents per piece. Please do the RICO request for $3,924. Once complete can you email me a copy for my records. Thanks, Tim
PCSO did not provide a request by Gaffney to Lopez or any other staff requesting the original a RICO request letter referred to in the email. That is not surprising given the nature of the email exchange between Gaffney, Teresa Eierdam, and Mark Clark, regarding emails related to the newsletter:
From: Tim Gaffney
Sent: Wednesday, February 10,2016 12:28 PM
Subject: RE: Flyer
To: Teresa Eierdam, Tiffany Davila
Please see the below from Tiffany. This is regarding the newsletters we had printed at the Casa Grande Dispatch. Can you help her answer the questions she has? Also as the Sheriff has said the newsletter printing and the postage will be paid through RICO.
From: Mark Clark
Sent: Tuesday, February 16, 2016 10:23 AM
To: Tim Gaffney
Subject: FW: Newsletter files
I will send you any emails on the newsletter that I still have. Here is one.
It appears that the email he sent was from him to Gaffney:
From: Tim Gaffney
Sent: Friday, February 12, 20169:31AM
To: Mark Clark
Cc: Paul Babeu; Steve Henry Subject: Re: Newsletter files
At least two possible conclusions can be drawn; 1) PCSO purges emails rather quickly, and 2) PCSO staff spent less time than money putting together the glossy newsletter. Whatever the case may be, as soon as the press began inquiring about the newsletter, the PCSO finally saw the need to create a paper trail, including a back dated letter that would support the Sheriff’s bold claim that it was paid for by “seized criminal money.”
No one will ever really know why Gaffney asked Lopez to write a letter requesting reimbursement for printing on February 16, when the County Attorney approved the refund on that very date as indicated by the stamp on the January 11 letter. No one will ever really know, due to Gaffney’s multiple and conflicting claims, why he then had another letter drafted for printing on February 16, that was dated January 11, and approved on February 16. No one will how that same letter resulted in the creation of an Agency Application for RICO funds dated February 11.
What we do know is that when the ADI contacted Gaffney in June 2016, he changed his story several times. Then after ending a somewhat menacing phone call from Gaffney, he then tried to change the version of sequence of events in his story again.
We now know that the FBI visited the Pinal County Attorney and Sheriff’s offices last month. We do know that an investigation of Voyles and Babeu is ongoing.