"Tempe Cesspool for the Arts"

aka "Tempe Center for the Arts"

Fiesta Bowl Corruption

  Former Tempe City Councilman Ben Arredondo who is currently Arizona Representative Ben Arredondo has has his hand in this Fiesta Bowl corruption and received more than $12,000 in tickets to professional and college football games.

"The 276-page report, ... details a culture of excessive spending on bowl employees, politicians and business associates despite rules barring it from using its money to benefit individuals; a system of campaign contributions that could run afoul of state and federal campaign laws; and accounts of efforts by bowl staffers to mislead government investigators ... The bowl's political activities ... were directed toward public officials who could help the bowl maintain its position with favorable legislation and ward off unfriendly laws"


Fiesta Bowl report: Lavish expenses, questionable activities

by Craig Harris and Dennis Wagner - Mar. 29, 2011 11:48 AM

The Arizona Republic

Fiesta Bowl investigators have found evidence of potentially illegal employee conduct and spending irregularities that could jeopardize its non-profit status and prestigious role in college football's national championship series.

As a result of the five-month internal probe released today, the Bowl fired its longtime public face, Chief Executive John Junker, and accepted the resignations of two other top bowl officers.

The 276-page report, commissioned by a special Bowl committee last October, details a culture of excessive spending on bowl employees, politicians and business associates despite rules barring it from using its money to benefit individuals; a system of campaign contributions that could run afoul of state and federal campaign laws; and accounts of efforts by bowl staffers to mislead government investigators.

Junker declined immediate comment. However, his lawyer said that the Fiesta Bowl had posted the report on its website before it had given a copy to Junker.

"The report will now be studied in detail," attorney Stephen Dichter said. "If Mr. Junker has any additional comments, they will be made after the review has been completed."

The independent, out-of-state investigators hired by the bowl found:

- Lavish expenses. A review by investigators showed Junker was reimbursed $4.85 million for expenses over the past decade, of which more than half could not be verified as legitimate. Items expensed by Junker and other executives, the report said, included a $1,200 night at a strip club, $13,000 in travel to an employee's wedding in Missouri, a $30,000-plus birthday party for Junker in Pebble Beach, Calif. and thousands of dollars in golf-club memberships.

- Questionable political activities. Employees told investigators that the bowl reimbursed 11 staffers for more than $40,000 in political donations under a system first described in a 2009 Arizona Republic report. If true, the reimbursements would be a violation of state and federal campaign finance laws as well as a potential violation of Internal Revenue Service regulations that bar non-profits from making political campaign contributions. The bowl's political activities, according to employees interviewed in the report, were directed toward public officials who could help the bowl maintain its position with favorable legislation and ward off unfriendly laws. Those activities extended to coordinating and hosting fundraisers for candidates, also a potential violation of IRS regulations for nonprofits, giving politicians free tickets and sending them on out-of-town football junkets with lobbyists.

- Contract irregularities. A half-dozen contracts with people or organizations, including several board members, also came under investigators' scrutiny for their cost or seeming lack of oversight.

Blue Steel Consulting, a security contractor run by a full time Maricopa County Sheriff's Office employee, was paid $182,000 for services that current bowl Chairman Duane Woods said are not needed. A past chairman called the expense "excessive." Investigators also uncovered a secret bowl contract with an unidentified individual who annually is given six free Fiesta Bowl tickets and paid 10 percent of the amount of the Fort McDowell Yavapai Nation's sponsorship contract for the Fiesta Bowl Parade - or an average of $40,000 a year - for undisclosed services. Fiesta Bowl employees told investigators it was a mystery even to employees who the person was or why the payment was made.

The Scottsdale-based Fiesta Bowl operates through four non-profit organizations that together held $22.3 million in net assets as of March 2010.

As a non-charitable non-profit, its stated mission is to sponsor football games and related events in a way that promotes the state's higher education and economy while serving as a "source of national pride for all Arizonans." Its articles of incorporation state, among other things, that no part of its earnings or assets shall "inure to benefit of any private shareholder or individual," and that the bowl shall not "engage in any business activity or transaction which would cause it to lose its status as a nonprofit corporation."

Two dozen board members, most drawn from Arizona business or political circles, oversee the bowl's four nonprofits. But its thousands of local volunteers are the heart of the bowl's operations during bowl season - volunteers the bowl can use because of its nonprofit status.

The report, which cost the organization more than $1 million, attributes numerous spending irregularities to Junker and some top staffers.

The bowl's special committee report supports the findings of a December 2009 story in The Arizona Republic in which current and former employees said they were reimbursed for making campaign contributions. Junker and bowl officials for months denied the practice occurred.

Concealment of donations is a felony, and the findings could result in criminal charges. A copy of the bowl report was handed over Monday to the Arizona Attorney General. , It also could jeopardize the bowl's non-profit status with the IRS, which is looking into the activities.

The Fiesta Bowl is a member of the lucrative Bowl Championship Series, which generates tens of millions of dollars in annual tourist revenue for greater Phoenix. It hosts one of the country's top four college football bowl games each January, and every four years hosts the national championship game.

The agreement that gives the Fiesta Bowl its spot in the system is renewable every three years. While no immediate effect on that contract is likely, negotiations on a new contract were expected to begin next year and the negative fallout from the report's findings will give rivals material to use against the Fiesta Bowl in a bid to replace it.

"I'm disappointed, disgusted and devastated by everything," said Fiesta Bowl Chairman Duane Woods, who requested the internal investigation last fall.

Along with noting Junker's firing, Woods said Chief Operating Officer Natalie Wisneski resigned on Friday, and Jay Fields, vice president of marketing, quit on Thursday. . Fields was one of the executives reimbursed for trips to a strip club.

Woods said the bowl currently is conducting a national search for a new executive director.

Wisneski and Fields could not immediately be reached for comment today.

Probe's Origins

The Republic first reported in December 2009 that five former and current employees said they had been directed to contribute to political candidates and then were reimbursed for those donations. The practice, which employees said dated back to 2000, could violate state and federal campaign laws making it a crime to circumvent prohibitions on direct corporate political donations.

It also could be circumvention of IRS regulations barring nonprofits from "directly or indirectly" being involved in political activities. Violation of the IRS code could result in revocation of the bowl's tax-exempt status, opening it up to taxation for past and future financial activities and jeopardizing the bowl's reliance on an army of volunteers to carry out the Valleywide effort surrounding the annual event.

Fiesta Bowl officials and their lobbyist vehemently denied The Republic's report. And while they launched a short, cursory investigation, the special committee's subsequent independent probe - launched 10 months later - revealed that the first investigation was considered by many - including employees and the bowl's own outside lawyers - to have been suspect. The Arizona Secretary of State pressed the bowl and its consultants for more detailed information, and the lack of satisfactory answers from the bowl about the campaign donations led the Secretary of State to turning the matter over to then-Attorney General Terry Goddard, who launched a criminal investigation based in part on The Republic's report. That criminal probe has never been closed.

The bowl eventually created a special committee and launched a second, independent internal investigation after Junker's assistant, Kelly Keogh, told Woods in September 2010 that a cover-up was underway and that some employees had, in fact, been reimbursed for campaign contributions.

"I personally believed he (Woods) really didn't have any idea that there was a cover-up or that he was being snowed," Keogh states in the subsequent report. "I felt that he should have the truth."

Lawyers conducting the new internal probe reviewed email and electronic payroll and financial records and roughly 10,000 documents, interviewing 52 individuals with ties to the bowl over a four-month period.

The findings were compiled in a report completed March 21, and Woods said the information was provided Monday to Arizona Attorney General Tom Horne and Jim Keppel, the state's criminal division chief.

'Bonuses' Paid

More than half of the report deals with the campaign donations reported by The Republic in December 2009 and the bowl group's response to the article. The special committee report corroborated earlier employee allegations that they had been reimbursed by the bowl for political donations, though the report also made clear that donation recipients ranging from U.S. Sen. John McCain to Gov. Jan Brewer were unaware of the reimbursements.

The report said employees told investigators the bowl tried to hide the reimbursements by repaying employees through "bonuses." The political contributions were sometimes delivered by lobbyists, including the bowl's former top lobbyist, Gary Husk.

Husk has repeatedly said he never delivered campaign contributions from the Fiesta Bowl.

The bowl's investigators identified 11 individuals, including Wisneski, who said the bowl repaid them and seven of their spouses for making political contributions. In total, at least $46,539 was reimbursed; most of the money went to Republicans.

The report also details how Junker and Husk repeatedly tried to discredit The Republic's initial story, and how efforts were made to keep the activities under wraps. For example, the report says Wisneski told investigators that Husk told her to delete records and not to disclose that reimbursements had occurred. Wisneski told investigators she told another employee to alter records, but that employee refused. Husk in the report denies those accusations.

"I absolutely did not ask or instruct Ms. Wisneski or any others at the Fiesta Bowl to not keep, to delete, to destroy or otherwise dispose of documents," Husk wrote to the special committee.

Today, Husk added, "I am proud of my outstanding reputation that has been built over 28 years as a prosecutor, private attorney and businessman. In my entire career, I have never been accused of engaging in any impropriety and I am deeply honored that numerous people from all walks of life can attest to my unquestionable ethics. Although I have not seen a copy of the report, I am certain that it reflects my full cooperation in this investigation and that I provided documentation and information that assisted the investigators. I have also provided evidence that clearly demonstrates that the accusations that have been made against me are not credible. Given these circumstances, it is regrettable that the Fiesta Bowl Board of Directors would decide to recklessly publish these allegations. My integrity is extremely important to me and I would never do anything to jeopardize it."

In addition to the campaign contributions, Arizona politicians received free tickets to the Fiesta Bowl, were taken on out-of-state trips to football games, and were assisted in coordinated fundraising efforts by bowl employees, the report alleges. Politicians are not barred from accepting those gifts, but are required to disclose them in personal financial disclosure statements.

The Special Committee's investigation describes several bowl-sponsored political fundraisers, even though such events appear to violate the bowl's tax-exempt status.

The bowl also used its money to purchase more than $12,000 in tickets to professional and college football games from 2007 to 2009 for current Arizona Senate President Russell Pearce, R-Mesa, and state Rep. Ben Arredondo, a Democrat and former Tempe city councilman.

Pearce has sponsored legislation to help the Fiesta Bowl host the BCS championship and to help the bowl in legal tussles with the Arizona Sports and Tourism Authority. Arredondo, as a resident of the bowl's original home in Tempe, has been a longtime supporter.

Pearce and Arredondo could not be reached immediately today.

Lavish Spending

Politicians were not the only recipients of generous spending by the bowl, according to the investigators' report. The findings detail extravagant spending on bowl staffers, colleagues and sports figures close to the organization, despite IRS prohibitions on personal enrichment.

The bowl group maintains close ties with the Big 12 Conference, which typically sends its champion to the Fiesta Bowl. According to the report, the bowl paid the conference's former commissioner an annual $48,000 retainer fee and created a $16,000 college savings accounts for his grandchildren.

College football coaches, athletic directors and conference commissioners from around the country also were regularly provided gifts from the Fiesta Bowl, which relies on their support to stay in the BCS.

According to the report, Fiesta Bowl employees received gifts paid for by the bowl's four non-profit organizations. For example, when Junker turned 50 in 2005, it says, the Fiesta Bowl paid for his birthday party in Pebble Beach, Calif. Total tab: $33,188.96.

The report says the bowl also spent at least $13,000 in 2007 for the wedding and honeymoon of Junker's assistant, and Wisneski took a trip to Paris in 2009 at the bowl's expense.

It also says Junker gave employees gifts and bonuses totaling more than $97,000 since 2000. Examples listed include a $1,000 "wedding bonus" to one employee, a $2,000 bonus to another for her daughter's wedding, and a $5,000 bonus when one employee's husband was in an accident.

Junker also had the bowl reimburse him for tens of thousands of dollars for what investigators believe were personal expenses, and the bowl paid thousands for Junker's four memberships to expensive private golf clubs - including two out of state.

Since 2000, Junker took at least 27 trips where one or more members of his family travelled with him at Fiesta Bowl expense without any specific authorization from the bowl. One in 2008 to Santa Barbara and San Diego spanned 16 days and included his entire family, the report said. Junker told investigators there was no written policy allowing it, the report states, but he considered it "standard practice" as understood by senior board members over the years. However, the past nine board chairmen told investigators they did not recall ever having such an understanding, the report said.

Woods said Junker and other executives hid most of the excessive spending from board members and that much of the inner workings were not publicly revealed until a Special Committee was created in October 2010 to conduct an investigation with outside lawyers and investigators.

Strip club

The report also describes expense reimbursements for staffers even in cases where there was little plausible explanation for their legitimacy.

On Sept. 12, 2008, for example, Junker, former bowl executive Shawn Schoeffler and Lt. Aaron Brown of the Maricopa County Sheriff's Office spent more than $1,200 of Fiesta Bowl money at Phoenix's Bourbon Street. The report indicates the money was spent on dances by strippers, food and drinks at the self-proclaimed "World Famous Strip Club."

The $1,241 charge on Junker's credit card included a hand-written note of explanation: "security site planning."

Asked about that expense, Junker told investigators he visited the strip joint with Brown, whose private company provided security for the bowl, and Schoeffler to check out a venue that might appeal to college football players.

"We are in the business where big strong athletes are known to attend these types of establishments," he noted. "It was important for us to visit and we certainly conducted business."

According to investigators, Junker acknowledged that some of the bill "in all likelihood" covered payment for private dances by the strippers.

Schoeffler, the former vice president of media relations, resigned in September 2009. Investigators said in the report that Schoeffler was reimbursed for six other trips to the strip club, while Fields, who the report said recently quit, was reimbursed for two charges at the club.

A bowl employee manual says the nonprofit organization "will not reimburse expenses incurred in ladies or gentlemen's clubs."

Brown and Schoeffler both declined comment when contacted today.


In addition to lavish parties, questionable gifts and political contributions, spending issues at the Fiesta Bowl include half a dozen notably costly contracts.

According to the Special Committee report, those contracts cover security work, public relations, lobbying and other services.

Among the contractors is Brown, a Maricopa County Sheriff's Office lieutenant who receives $182,000 a year to moonlight as security consultant for the Fiesta Bowl. Although Brown is a full time sheriff's employee, he also works year-round for the bowl.

Brown started his company, Blue Steel Consulting, in 2005, a year after he began working for the Fiesta Bowl.

When asked by investigators about his contract, Brown initially claimed he was paid only $50 per hour, but later acknowledged the higher compensation.

Besides arranging motorcycle escorts for football teams and handling security functions for events, the report says Brown supplied an off-duty deputy to chauffeur Junker's daughter to her prom and its after-party. Brown denied to investigators that he had billed the service to the Fiesta Bowl.

Junker was questioned about that, but was uncertain if the bowl picked up the expense. His explanation, according to the report: "I don't think anybody would have a problem with someone doing that for my daughter as a measure of my daughter's security."

In 2009, the report says, Junker agreed to pay Blue Steel $351,000 in advance "deposits" because Brown needed up-front capital to provide security for the national championship game, which was played in January. Junker told investigators the arrangement resulted in a "substantial savings" for the Fiesta Bowl. The total payment for fiscal 2010 was $508,776.

Maricopa County Sheriff's policy forbids conducting personal business with department resources while on the county's time. In February, sheriff's officials announced they were investigating whether Brown used county resources to conduct private business.

Because the Attorney General's Office continues its probe, a copy of the Fiesta Bowl's investigative report has been turned over for its use. Duane Woods said the bowl also is cooperating with the IRS investigation in a bid to save its tax-exempt status. Retaining that status would allow the bowl to avoid paying taxes, potentially retroactively, on its income.

Woods said the bowl also would seek reimbursement from employees who received improper benefits.

The bowl's board also is hoping the recent high-level of transparency and the departure of executives engaged in the alleged corruption will convince college football officials to keep the Fiesta Bowl in the exclusive BCS rotation.

The Fiesta Bowl spent $18,454 on a weekend trip to Chicago for state Sen. Russell Pearce.

Tempe City Councilman Ben Arredondo received tickets worth $6,240, including $4,000 worth of tickets for the 2009 Super Bowl.


Fiesta Bowl executives lavished gifts on politicians

by Dennis Wagner and Craig Harris - Mar. 29, 2011 11:41 PM

The Arizona Republic

While Fiesta Bowl executives were spending generously on themselves, a probe launched by the organization's Special Committee found they also lavished gifts on elected officials.

Over the past eight years, investigators say, the bowl sponsored candidate fundraisers, flew politicians on football junkets and provided game tickets worth thousands of dollars. In some cases, the benefits may violate regulations governing tax-exempt non-profit organizations. In others, the gifts and services may create conflicts or statutory violations if elected officials failed to declare them.

For at least five years, the report says, the Fiesta Bowl has whisked "dignitaries" to out-of-state football games.

Chief Executive John Junker and Fiesta Bowl board members said the idea was to educate elected leaders on the economic significance of the bowl games in an extremely competitive sports market.

In October 2005, for example, the bowl spent $18,454 on a weekend trip to Chicago for state Sen. Russell Pearce, R-Mesa, and several other lawmakers, including Democrats, some of whom brought family members or friends as guests. They attended a University of Michigan football game.

The report says the business agenda for that trip consisted of a one-hour presentation by Big Ten Conference officials on Arizona's bowl impact.

Pearce, other lawmakers and lobbyists were joined by family members on a similar trip to Boston in October 2008 at a cost of more than $65,000. According to the report, they attended a dinner presentation on "BCS Football: An Economic Engine for Arizona." They also saw Boston College play Virginia Tech.

Fiesta Bowl records contain no evidence that any lawmaker reimbursed the airfare, hotel costs or other expenses from those junkets.

Elected officials also sought free tickets to college and pro games.

A chart in the report shows Fiesta Bowl reimbursements totaling $6,486 for football tickets purchased on behalf of Pearce to games like the Navy-Air Force matchup. Then-Tempe City Councilman Ben Arredondo received tickets worth $6,240, including $4,000 worth of tickets for the 2009 Super Bowl, the report says.

Arredondo could not be reached for comment Tuesday. Pearce declined comment but said as he walked away from TV reporters that he "never took anything they didn't offer everybody."

Pearce's financial-disclosure statements for a four-year period, from 2008 through 2011, show Pearce disclosed a gift from the Insight Bowl on his 2008 disclosure, covering a period from May 2007 through May 2008, and listed the recipients as "me and my wife." The same entry appears on Pearce's disclosure forms from 2009 through 2011, but the item is scratched out. There is no other detailed accounting of the tickets or trips, and the Secretary of State's Office could not immediately provide Pearce's disclosure forms before 2008.

Arredondo, meanwhile, disclosed no such gifts in financial-disclosure reports filed with Tempe.

The Special Committee's investigation describes bowl sponsorship of several political fundraisers, even though such events appear to violate the bowl's tax-exempt status.

In 2007, an event was held at the Fiesta Bowl Museum for House Speaker Jim Weiers, a Republican. Mike Allen, a former bowl director, said the purpose was "to raise money for Mr. Weiers" while also showing him around the offices.

Another fundraiser was scheduled in 2006 on behalf of former U.S. Rep. J.D. Hayworth, R-Ariz.

Kelly Keogh, a Fiesta Bowl administrative aide, provided investigators with a planning e-mail sent to her by Junker. Under the subject, "Hayworth Fundraiser," Junker allegedly instructed: "DO NOT send any emails frm (sic) office. U and I will discuss shortly."

Keogh said board members rather than bowl employees were asked to send invitations to the Hayworth event. As volunteers, board members could do so without violating IRS requirements for non-profits. Similar arrangements were made for a fundraiser for Scottsdale Mayor Jim Lane to get around IRS rules, according to employees in the report.

The Special Committee report says Fiesta Bowl charitable contributions were directed to organizations "that appear to be aligned with Junker's political views."

In 2007 and 2008, the report says Junker expensed a donation totaling $7,825 to the Bio-Ethics Defense Fund, an anti-abortion public-interest law firm.

Reporter JJ Hensley contributed to this article.

Will these government rulers be charged with crimes for accepting illegal Fiesta Bowl gifts? I doubt it. Sadly that's how the system works. If you or me commit a crime we go to jail. If the government rulers commit the same crime they usually get a slap on the wrist at most!


Fiesta Bowl report: Trouble may lurk for Arizona officials

by Ginger Rough - Mar. 31, 2011 12:00 AM

The Arizona Republic

Arizona lawmakers who accepted tickets from Fiesta Bowl lobbyists to attend football games in Chicago, Boston, Pasadena and other cities may have violated state law.

Since 2000, state statutes have included an "entertainment ban" that prohibits state employees and elected officials from accepting tickets or "admission to any sporting or cultural event" for free.

The law includes an exception allowing lawmakers to attend "special events" if broad categories of lawmakers, such as the entire Arizona Senate, or a committee, were invited. However, a 276-page investigative report into the Fiesta Bowl's financial, political and lobbying activities, and interviews with lawmakers themselves, suggest that that loophole may not apply to out-of-state games attended by legislators in recent years.

The report says Fiesta Bowl employees went on at least seven trips with politicians in recent years and lists more than a dozen former and current state lawmakers, including Sen. President Russell Pearce, R-Mesa, who joined lobbyists and bowl representatives for football weekends in Chicago and Boston.

The Fiesta Bowl spent $18,454 on the October 2005 Chicago trip and more than $65,000 on the October 2008 Boston trip.

Many lawmakers who went also took spouses, children or other family members on the junkets, which included stays at the Ritz-Carlton or other pricey hotels.

It is unclear from the Fiesta Bowl's internal investigative report whether lawmakers received free game tickets as part of those excursions. Fiesta Bowl records contain no evidence that any lawmaker reimbursed the airfare, hotel costs or other expenses from those junkets. If they did get free tickets, that would seem to violate state statutes.

The Fiesta Bowl investigative report clearly states, however, that Fiesta Bowl employees paid for and were reimbursed for non-Fiesta Bowl tickets given to Pearce in 2007 and 2008.

The September 2007 tickets for the Navy/Air Force matchup were valued at $2,140. The September 2008 tickets to the University of Southern California/Ohio State matchup were valued at $4,060, the report said.

Lawmakers are required to report any single gift or accumulated gifts in excess of $500 or more in personal financial-disclosure statements. However, in many cases they did not appear to properly follow those reporting rules.

Pearce, for example, stated on a financial-disclosure statement covering May 2007 through May 2008 that he received a gift from the Insight Bowl. But more recent reports do not list any such line items. Pearce's older reports were not immediately available for inspection, according to the Secretary of State's Office.

Pearce did not respond to multiple requests for comment Wednesday.

In another example cited in the bowl report, state Rep. Ben Arredondo, a Democrat and former Tempe City Council member, received Super Bowl tickets in January 2009 valued at more than $4,000 and attended an Air Force/University of Minnesota game at the Fiesta Bowl's expense in summer 2009. Arredondo was serving on the Tempe council at the time he accepted the gifts; he was elected to the House in November.

Arredondo did not disclose the gifts on his financial-disclosure statements.

He also declined to comment.

State Sen. Rich Crandall, R-Mesa, who joined the Fiesta Bowl's 2008 Boston junket with his daughter, on Wednesday called himself a "moron" for participating.

Crandall said he was approached about it by Fiesta Bowl lobbyists as a freshman lawmaker. He said he was told that junkets were "tradition" and that the bowl annually asked a select group of lawmakers to participate. Crandall said he asked "if it was legal" and was told that it was because the organization took "several" lawmakers and that it was "not an individual gift to anyone."

"Looking back now, what a naive, first-term lawmaker move," Crandall said of his decision to attend.

However, state Sen. Linda Lopez, D-Tucson, who went on both the 2005 and 2008 trips defended her participation, saying Wednesday that she felt it was important to show support for the bowl.

"The Fiesta Bowl is a huge economic engine for this community and for the state of Arizona," said Lopez, who added that she was told she would have to pay for her game-day ticket.

But Lopez added that had she known about the other Fiesta Bowl activities detailed in the recently released report, she "probably would not have gone."

Other trip attendees, among them state Sen. Robert Meza, D-Phoenix, declined to comment. But Meza did stop by the Secretary of State's Office on Wednesday afternoon to amend his personal financial-disclosure reports, said Matt Roberts, a secretary-of-state spokesman.

Chuck Coughlin, whose firm HighGround lobbied on behalf of the Fiesta Bowl, said trip participants from both political parties were selected based on their support of the Fiesta Bowl and the bowl's legislative priorities and plans, among other criteria.

"The bowl has always received tremendous bipartisan support because of all the great works they do throughout the state," Coughlin said. "We were always conscientious of making sure that Republicans and Democrats who had expressed support for the bowl were acknowledged, either with thank-you notes, personal thank-yous and briefings, or, in the case where there were competitive campaigns, with contributions."

The Fiesta Bowl report documented a scheme to improperly reimburse Fiesta Bowl employees for more than $46,000 in campaign donations to 23 candidates since 2002. However, there was no indication that politicians who received the donations knew of the reimbursements, the report said.

Coughlin said he also was unaware of the practice. "I had no knowledge of that," he said. "I never knew about it."

In recent years, the Arizona Legislature has considered more than half a dozen pieces of legislation that have or could have affected the Fiesta Bowl. The most significant was House Bill 2035, a 2005 measure amended the Fiesta Bowl's use agreement at what is now University of Phoenix Stadium, essentially carving out a spot for a national-championship game.

Senate Ethics Committee Chairman Ron Gould, R-Lake Havasu City, said Wednesday that no one had filed a complaint regarding lawmakers' relationships with the Fiesta Bowl and that there are no plans to investigate.

"We probably need to let it shake out a bit more and see if someone files a complaint," Gould said.

Reporter Mary Jo Pitzl contributed to this article.

Ben Arredondo takes the 5th when questioned about Fiesta Bowl pork he received!


2 officials stand out in Fiesta Bowl gifts scandal

Pearce, Arredondo had close Fiesta Bowl ties

by Craig Harris and Ginger Rough - May. 13, 2011 12:00 AM

The Arizona Republic

When the Fiesta Bowl wanted public subsidies from the state and the city of Tempe in 2005, the college football organization turned to a pair of friendly politicians: Russell Pearce and Ben Arredondo.

Interviews and examinations of public records show that Pearce, a Republican, was influential in passing legislation that gave the bowl a state subsidy worth $263,000 and additional money to run a national championship game at Glendale's University of Phoenix Stadium.

Arredondo, a Democrat, was closely involved in negotiations that led Tempe to give the Fiesta Bowl a $6.45 million subsidy to shift the Insight Bowl from Phoenix to Tempe.

Those findings may help explain why, according to an investigative report released in late March by the Fiesta Bowl, both men appear high on the list of those plied with bowl gifts.

Pearce, a powerful budget writer in the Legislature, and Arredondo, a longtime Tempe city councilman who is now a state lawmaker, have been identified in the Fiesta Bowl's investigative report as recipients of gifts. The report is also full of details about other spending irregularities and possibly illegal campaign donations by the bowl.

While numerous elected officials received Fiesta Bowl gifts over the past decade, those given to Pearce and Arredondo stood out in the bowl's investigation because of the large amount of money spent.

After the report was released, Pearce and Arredondo amended their financial disclosure forms to report gifts previously received from the bowl. By state law, elected officials are supposed to report gifts to them annually; the gifts Pearce and Arredondo reported were made years earlier.

A state conflict-of-interest law prohibits public officials from using their positions to obtain anything of value if that benefit is to "manifest a substantial and improper influence." Penalties for violating the law range from a high-level misdemeanor to a low-level felony.

Pearce said there was nothing improper about what he accepted from the bowl.

"I accepted nothing that was not legally offered to every other member of the Legislature," Pearce, now the state Senate president, wrote in response to questions posed to him by The Arizona Republic. "I never asked for anything from Fiesta Bowl employees or board members - never."

Arredondo, a minority member in the House, did not return calls seeking comment.

Pearce and Arredondo also were among at least 21 local, state and federal candidates who received campaign contributions from Fiesta Bowl employees during the past decade, according to campaign-finance records compiled by The Republic.

Fiesta Bowl employees have admitted to being reimbursed for most of the campaign contributions, a potential felony. There is no indication, however, that any politicians who received the campaign contributions knew of the scheme.

'The blessing of legislators'

The bowl, a non-profit organization, sought public subsidies in 2005 despite having $12.8 million in net assets at the time, according to its publicly filed tax returns. In the most recent fiscal year, the bowl had $22.3 million in net assets.

The bowl provided game tickets and out-of-state trips to elected officials to curry favor with them, as the bowl relied on them to pass laws and contracts favorable to its interests. That practice, which could hurt the bowl's non-profit status with the Internal Revenue Service, has stopped.

The bowl is now combing through records to determine how much was spent on gifts, and the bowl plans to ask politicians to reimburse the organization.

The Fiesta Bowl report said it was common for people to come to John Junker, who was fired March 29 as the bowl's chief executive, to ask for game tickets. He would obtain them at a price above market value from various ticketing brokers, and the bowl would reimburse him.

Though Junker declined to comment for this story, he told bowl investigators during an interview that the "only place" the bowl could find support was from legislators. When asked why the bowl wanted support from lawmakers, Junker said: "It was a lesson in learning that it is always best to have the blessing of legislators."

Attorney General Tom Horne is now investigating potential wrongdoing exposed during the bowl's probe. Citing a conflict of interest, however, Horne turned over to Maricopa County Attorney Bill Montgomery that portion of the investigation relating to elected officials who took gifts from the Fiesta Bowl.

Neither Montgomery nor Horne has identified specific politicians as targets.

David Schindler, a former federal attorney who prosecuted ex-Gov. Fife Symington in the 1990s on charges of filing false financial statements, said elected officials would keep out of trouble by not accepting gifts.

"Any time a public official receives a gift or other money in the context of being in a position to vote on some kind of benefit for a third party, a prosecutor will want to understand the circumstances of that gift and whether the gift was intended to secure a vote that ultimately would have benefitted a third party," said Schindler, now in private practice in Los Angeles and specializing in defending suspects accused of white-collar crimes. "A good elected official worries about the appearance of a conflict as well as an actual conflict. When public officials take gifts, it raises substantial questions." Pearce and gifts

Pearce entered the Legislature in 2001 and was named a member of the powerful Appropriations Committee. He has since become one of the most influential politicians in Arizona. After stints as the budget writer in both the House and Senate, Pearce became Senate president this year.

On April 1, a few days after the Fiesta Bowl report was released, Pearce told The Republic he had never accepted free tickets to football games from Fiesta Bowl representatives, and that he paid for all his tickets "immediately, at the time" he received them.

Yet three weeks later, Pearce amended eight years of financial disclosure forms - 2002 to 2010 -to reflect gifts from the "Fiesta Bowl Committee." He also said he paid $272 to the bowl because he did not have "physical proof of payment" for tickets he received.

His relationship with the bowl dates at least to the year after he was elected to the Legislature, when he took a trip to Denver at bowl expense to watch a college football game. In 2004, he and his wife joined other legislators on a bowl-sponsored trip to Berkeley, Calif., to catch a college football game.

In 2005, Pearce pushed through legislation giving the Fiesta Bowl a public subsidy worth $263,000, as well as more control over operations during the 2007 national championship game at University of Phoenix Stadium.

Pearce, in a written response to questions from The Republic, said the 2005 legislation passed with overwhelming support. There was just one "no" vote, and it was signed into law by then-Gov. Janet Napolitano.

The bill "was not in my control," Pearce wrote. "I did not sponsor the bill."

However, legislative records show Pearce was the sponsor of the bill. While the bill was amended by another lawmaker, it was done so with Pearce's knowledge, and he has publicly taken credit for helping the Fiesta Bowl.

In 2007, the bowl said, it paid $2,140 for tickets for Pearce for a Navy football game.

Pearce, however, said he did not have to pay for those tickets because the Fiesta Bowl asked him to attend a speaking engagement at the game in Annapolis, Md. At the event, he said, he presented a check from the Fiesta Bowl. He said he was not required to reimburse the bowl because state law allows a legislator to accept gifts when performing a "ceremonial function."

A Navy spokesman said he was unable to determine if Pearce attended a speaking engagement. Terry Fahn, a Fiesta Bowl spokesman, said to the best of his knowledge there was no record of the bowl asking Pearce to make a presentation at the Navy game.

In 2008, the bowl said it paid $4,060 to provide Pearce tickets for a Los Angeles game between Ohio State and the University of Southern California. Pearce, however, said the tickets went to a family member.

Pearce wrote that his adult son, Justin, "contacted his personal friend Gary Husk (who also was Justin's attorney) about purchasing tickets to this game." The bowl said it was never paid for the tickets.

Husk is the bowl's former lobbyist, now facing a State Bar of Arizona investigation after Fiesta Bowl employees accused him of being involved in a scheme to reimburse employees for campaign contributions. Husk could not be reached to discuss Pearce's explanation. But he previously denied any wrongdoing.

Justin Pearce also could not be reached for comment.

In 2009, the bowl said it made available for Russell Pearce $923 worth of Fiesta Bowl tickets. Pearce later that year got involved in concessions-contract discussions involving University of Phoenix Stadium. The senator questioned the Arizona Sports and Tourism Authority, which ran the stadium, about why it awarded a deal to the Arizona Cardinals, which for years had numerous stadium-related disputes with the Fiesta Bowl.

Last year, after taking $1,025 in campaign contributions in November 2009 from Junker and two other Fiesta Bowl executives, Pearce sponsored legislation calling for an audit of the sports authority. At the time, the sports authority was embroiled in a lawsuit with the Fiesta Bowl, and had just come off a state audit in 2009 that found no significant violations. Gifts to Arredondo

Arredondo, a former teacher and coach, was running for Tempe City Council in 2001 when seven Fiesta Bowl employees made $875 in contributions to his campaign. Three years later, four employees made another $1,200 in contributions.

At that time, the Fiesta Bowl was headquartered in Tempe and played its game in ASU's Sun Devil Stadium.

In 2005, the Fiesta Bowl was looking to move its sister game, the Insight Bowl, out of downtown Phoenix. Negotiations began with Tempe, which was looking to replace the Fiesta Bowl at Sun Devil Stadium since the Fiesta was moving to Glendale. One of the key negotiators was Arredondo, according to Tempe Mayor Hugh Hallman.

"It's fair to say Ben Arredondo was intimately involved with ASU, Insight and the Fiesta Bowl," Hallman said. "Ben Arredondo was continually involved in negotiations."

Hallman said Arredondo also was close to Husk, who, in addition to lobbying for the Fiesta Bowl, had been a paid consultant for Tempe.

After reaching a memorandum of understanding in July 2005, the city the following year agreed to give the Fiesta Bowl a $6.45 million subsidy to host the Insight Bowl through 2013. The subsidy for each of the next two years is $850,000, while the final year's payment is $900,000, according to the contract.

In 2007, 2008 and 2009, the Fiesta Bowl said it provided Arredondo with expensive National Football League tickets, including 2009 Super Bowl tickets worth $4,000. In summer 2009, the bowl said, he called saying he wanted to go on a trip. The bowl paid all expenses for Arredondo and his wife, Ruthann, to travel to Minnesota to watch a college football game.

"We paid for everything: the game, the hotel, the meals and the airfare," Anthony Aguilar, the bowl's director of community and corporate relations, told Fiesta Bowl investigators.

Arredondo did not return calls to his house, where messages were left with his wife. Ruthann Arredondo declined to answer questions.

On April 1, after the Fiesta Bowl investigative report had been released, Arredondo amended his financial disclosure forms for 2007, 2008 and 2009 to show he received a gift worth more than $500 from the Fiesta Bowl. The amended 2009 form indicates his wife also received a gift. The nature of the gifts was not disclosed.

John Zidich, CEO and publisher of The Arizona Republic, is a former member of the Fiesta Bowl's board of directors and was on the bowl's five-member executive committee from January 2010 to April 2011. The Arizona Republic is a Fiesta Bowl advertising sponsor.


Tempe Center for the Arts

Tempe Cesspool for the Arts