Norton: Scottsdale ethics code system flawed, broken and thus failed

Scottsdale must tighten up our process --- not subvert it. It starts with finishing the Phillips hearing. But it also means that code drafters must go back to the drawing board to tighten up gaps and erase ambiguities. This is not how Scottsdale voters want to see our city run.”

Mike Norton, Scottsdale resident & complainant

Despite being adopted almost 14 years ago, the investigation and enforcement provisions of the Scottsdale ethics code had never been put in to action.

They’d never been stress tested in a real world scenario.

The ethics code complaint involving Councilman Guy Phillips was reviewed at multiple levels. Some processes worked well. Some were structurally flawed and failed. Others were subverted.

• The sworn complaint was reviewed as to form and content, by the city attorney who accepted the complaint and forwarded it to the city’s independent ethics officer. This level of review is designed to filter out incomplete or unsubstantiated claims. It worked well.

• The IEO found that the facts, as alleged, stated claims that could reasonably lead to the conclusion that Phillips had violated one or more state statute or city code Section. This level of review is designed to protect city staff, commission members and council members from frivolous claims. It worked well.

• Based on the finding of the IEO, a panel of three retired judges was formed and outside legal counsel to the panel was appointed. The purpose of independence and outside parties is to assure that city officials do not interfere in the process of investigations of their fellow workers or supervisors. That structure seemed to be appropriate, but other flaws caused it to fail.

• Our city attorney was required to establish rules of procedure for the hearing panel. Here the process failed. The hearing panel was not given the authority to subpoena witnesses or documents. The hearing panel was not authorized to allow cross examination of witnesses. The hearing panel was not allowed to prevent ex parte communications. Those who contacted the hearing panel or its legal counsel could and did do so without others knowing who communicated or what was said. Notably, over 2000 documents discussing the Phillips matter were identified during a public records request search and then withheld. Obviously a lot of background discussion was going on and obviously we will not know what was said --- for now.

• Importantly, the city attorney’s office allowed our former City Attorney, Bruce Washburn, to intervene in the background apparently representing the interests of Guy Phillips but perhaps acting on behalf of others. Despite a serious question about conflict of interest, the city allowed him to proceed --- all in the background. Never in public. Arizona Bar Association Ethics Rule 1.11 prohibits activities of this sort without the consent of the city. The city took no action to stop Washburn. I think the process failed here. A former city attorney should never be allowed to fight to stop the enforcement of an ethics code that he, himself, had participated in enforcing at its fullest for years and amending in 2017.

• Aided by Washburn, Phillips filed a motion to dismiss with affidavits. I responded. The hearing panel denied that motion and set the hearing date. Witnesses were listed including Guy Philips and Susan Wood, the creator of the GoFundMeAccount that caused much of the controversy. Proposed questions of witnesses were submitted.

• Desperate to avoid that hearing, Phillips filed a last minute motion for reconsideration of the motion to dismiss. The hearing panel relented, applying the lowest standards and the most lenient definitions it could find, it created the Philips loophole --- something that the panel itself suggests is a serious problem for the city in the future.

• A fact we know --- the hearing panel concluded that mayoral candidate Bob Littlefield jumped in to the GoFundMe matter a few days after the account was created. The account originally showed the names of cash donors. Littlefield counseled Wood to hide the names to conceal the sources of cash. (An aside – I hope voters remember in November that Littlefield thinks it is a good idea to hide the source of cash gifts funneled to elected officials. I doubt that’s the concept of “ethics” and “transparency” most voters will find comforting.)

• The hearing panel concluded that if the Protect Old Town Scottsdale PAC had donated to Phillips a violation of the ethics code would have occurred. It then found that since POTS PAC had not yet been created, POTS PAC could not have donated.

• It ignored, however, the obvious. POTS PAC founders, donors, principles and affiliates certainly could have been the donors. Had the hearing been conducted today, May 14, 2020, as scheduled voters would probably have known the truth about who paid $2,400 to Phillips and whether that cash donation was politically motivated or purely a gracious showing of care for Phillips’ needs after his injury.

• The timing of payments of cash benefits for Phillips raises eyebrows. The morning of the scheduled October Southbridge 2 hearing, two payments were made. Just days before the November scheduled SB 2 hearing three more payments were made.

• Susan Wood knows who the 18 donors were. Guy Philips was provided notice of who they were but claims he never read the notice --- on purpose. Bob Littlefield probably knows some of the names and perhaps all since he worked with Wood. But none of those three people ever offered to tell the hearing panel who paid $2,400 into the account for Phillips.

Tuesday our City Council will be briefed on the hearing panel’s findings. It can reject or accept those findings. I have asked our City Council to do the following:

1. Reject the finding and remand with instructions to examine the witnesses to determine the identities of the 18 donors who are anonymous to the public but not to Wood, Phillips or Littlefield. If there are no persons who may have had nefarious intent, that record can be sealed. If questionable motives are found, the names should be made public.
2.  Amend the rules of procedure to allow subpoenas and cross examination to prohibit ex parte communications.
3.  Order Bruce Washburn to abstain from involvement due to his conflict of interest which has not been waived.

If the City Council does not take action our city’s ethics code is left in shambles.

Quite literally anyone who wants to curry the favor of a city staff member, officer, commission member or elected official can do so through a GoFundMe account as long as a decent excuse for setting it up is made and the names of donors are kept anonymous.

Let’s reverse the roles and consider the implications.

The next time a major project is headed to council with a close vote expected, what would we say if someone set up a $20,000 GoFundMe account for the anticipated “swing votes” on City Council? If those “swing votes” who were the beneficiaries of thousands of dollars approved 150-foot buildings downtown, how loud would the howling be?

Scottsdale must tighten up our process --- not subvert it. It starts with finishing the Phillips hearing. But it also means that code drafters must go back to the drawing board to tighten up gaps and erase ambiguities. This is not how Scottsdale voters want to see our city run.

Editor’s Note: Mike Norton is a resident of Scottsdale, and the complainant who filed the ethics code complaint against Mr. Phillips.