A high-profile Phoenix law firm did not properly register as a lobbyist with the city for two years, and recently filed falsely dated documents that made it appear the firm had followed the law, according to the Phoenix city attorney.
But the city of Phoenix can't do anything to penalize the firm or others that do not comply with its lobbyist regulations. That's because the law is toothless and there is no way to enforce it, city officials said they realized last week.
The firm, Burch & Cracchiolo, filed a signed affidavit with the City Clerk's Office Jan. 19 contending it had submitted nine separate filings over the past two years, which would have put the firm in compliance with the city. Attached were those filings, with various dates in 2015 and 2016. All bear the signature of a firm attorney and were notarized by a firm employee with those dates.
City Attorney Brad Holm said he looked at the documents and compared them with official correspondence sent to the city by Burch & Cracchiolo in previous years. He determined the cover letters submitted with the documents dated in 2015 and 2016 were written on the firm's 2017 letterhead.
Holm said representatives from the firm told him they determined the filings accompanying the cover letters also were inaccurate. They discussed resubmitting the past two years' forms, acknowledging they were created in 2017.
“We can tell that by looking at the stationary of the cover letters that were sent. In essence, the letters that were sent to us and backdated were created and digitally signed and sent in 2017, not in 2015 and 2016, the dates they bear.”
The firm withdrew all of the filings from the City Clerk's Office.
Ed Bull, the firm's president who often lobbies the City Council on zoning and land-use issues, released a statement Jan. 25, saying Burch & Cracchiolo originally thought its reports were lost in the mail or inadvertently misplaced, so it submitted an affidavit along with the missing filings. He said they later realized that wasn't the case.
"We discovered yesterday (Jan. 24) that, in fact, our office had made a mistake — our reports for 2015 and 2016 had not been submitted," Bull said in an email. "We met with City Attorney Brad Holm today (Jan. 25) and withdrew the affidavit and our filings for 2015 and 2016 so corrected reports can be filed as soon as possible."
Bull said in a statement that the law firm recognized the documents were not accurate and met with the City Attorney's Office and "admitted our office had made a mistake." The firm then apologized and withdrew the reports, he said.
The documents bear the signature of firm attorney Clare Abel, but Bull said she did not sign the documents "nor authorized anyone to sign her name to those reports." The firm says she was on family leave when the documents were created.
On Jan. 27, the firm filed new lobbyist registration forms for 2017 and a corrected expense and contribution report for the last quarter of 2016.
The city can't take action
Even though Holm determined that Burch & Cracchiolo was not properly registered, he said the city cannot not take action against anyone who violates the lobbyist registration ordinance.
Holm said that's because much of the city's lobbyist ordinance lacks an "enforcement mechanism" — a conclusion the city's law department reached last week.
He said he had asked the City Prosecutor's Office to review if a "specific person could legally be prosecuted for failing to register as a lobbyist." Holm said he referred the issue to the prosecutor after learning that political consultant Joe Villasenor was not in the city's registry since 2011 and hearing that Villasenor recently lobbied council members for a developer requesting a $1.2 million city subsidy.
Bull, the attorney from Burch & Cracchiolo, also lobbied elected officials concerning the same request for a developer subsidy.
Holm said the city ordinance doesn't say that failure to file proper lobbying documents is unlawful and it doesn't specify the penalty for failing to register. He had previously said noncompliance could result in a misdemeanor charge for a violator.
"There's some important language that is missing from our ordinance. ... With that language missing, (the city) can't prosecute," Holm said.
Under the state's lobbying law, a lobbyist who knowingly doesn't follow registration rules is guilty of a Class 1 misdemeanor. That law doesn't apply to people who lobby municipal officials.
Phoenix will still insist that all lobbyists register, Holm said, but any changes to the lobbying law to include sanctions for those who violate it would have to be made by the City Council.
When asked whether the city should have an enforceable lobbying law, Mayor Greg Stanton said that Phoenix needs to reform its rules. He released a brief statement, saying he will work to find a "a solution that restores confidence to the people we serve."
"It isn't worth having laws on the books that are unenforceable," Stanton said in an email.
Councilwoman Kate Gallego also called for changes. "All our laws should be enforceable, especially ones dealing with transparency in government," she said in an email. "We should take a look into what enforcement mechanism makes sense."
Several other council members didn't respond to requests for comment.
Councilman Sal DiCiccio wrote in a text message that the city's lobbyist-registration reports show "there are very few individuals or entities that have registered with the city of Phoenix."
More than 270 individual lobbyists registered with the city clerk last year, according to city records. The list includes many of the city's top political consultants and zoning attorneys.
A $1.2 million deal
Phoenix's law states that lobbyists must register and disclose their clients if they are paid to contact the mayor or council members to influence official decisions. Lobbyists must also report campaign contributions and money they spend on meals, gifts or other expenses that benefit elected city leaders, according to the ordinance.
The law was adopted more than two decades ago when city leaders decided they wanted more transparency about the work of paid lobbyists who influence land-zoning cases and other hot-button decisions before the council.
The ordinance rarely draws attention. City Clerk Cris Meyer said the last time the city received a complaint about noncompliance was at least 10 years ago, and city officials don't recall details.
But the city reviewed the lobbyist law recently after a council vote on a controversial proposal to pay a developer about $1.2 million for storm-water culverts built on its property in Ahwatukee Foothills.
The City Council denied the request — after city officials warned it could set a troubling precedent of paying developers for already completed work and using taxpayer money to pay owners for storm-water improvements on private land.
The developer, Investment Property Associates or IPA, had used Bull and Villasenor as lobbyists on the project, which went back several years, according to public records. IPA did not return calls and emails requesting comment.
The law firm had not registered since 2014, and Villasenor was last registered as a lobbyist in 2011, city officials stated.
Villasenor's attorney, Kory Langhofer, insists that Villasenor mailed lobbyist registration forms for 2016 and 2017, but said the documents were somehow lost or not properly logged by the city clerk. He said Villasenor was not compensated for his work for IPA before this year, which would not require registration.
"All you can do as a registrant is fill out the form properly and submit it," Langhofer said. "I think the City Clerk's Office is screwing this up. The City Clerk's Office is apparently the weak link here."
Villasenor told The Republic that he mailed the 2017 registration forms in early January.
Holm said the city has "no reason to believe" the original documents were received by either the clerk's office or the attorney's office.
Layers of concern
Experts questioned multiple aspects of the city's lobbying rules and the backdated documents filed by Burch & Cracchiolo.
David Yosifon, an associate professor of law at Santa Clara University, said he wanted to know who at the law firm created the documents filed with the city, and why.
"The real curiosity is how the documents were generated," said Yosifon, who teaches legal ethics.
He said it is unethical for lawyers to knowingly make a false statement to anybody, so "everything hinges on whether the lawyers where truthful." Knowingly filing a false document would be a violation for a lawyer, while a mistake made in good faith would not be, Yosifon said.
Meanwhile, Joel Edman, executive director of the Arizona Advocacy Network, an open-government watchdog group, said the situation with the city's registration ordinance is distressing.
Edman said if lobbyists aren't required to be transparent about their clients and activity, there's no way for voters to know who is affecting decisions at City Hall. He said the city needs an enforcement mechanism so the ordinance is taken seriously.
"There really should be some kind of a penalty or it's really just advice at the end of the day," Edman said. "It's not a rule."