Phoenix Mayor Phil Gordon gave advice to Veolia Transportation on how to play hardball with the city. And it paid off.

Cash-strapped Phoenix agreed to pay $27.5 million over the next five years to Veolia, the company that operates city buses and has Elissa Mullany — Gordon's girlfriend — on its payroll.

The mayor stepped into the fray from late March to early April, when the company wasn't getting its way during contract negotiations with the city. Gordon advised Veolia executives to tell city transit officials that it would walk away from its city bus contract, a Veolia insider tells New Times.

That's exactly what the company did, prompting Phoenix's city manager to fly to Chicago and make nearly $30 million worth of concessions to the company, a city source also says.

Gordon's actions raise questions about whose interests he was putting first: The city's? The company's? His girlfriend's?

Gordon wasn't supposed to be involved in discussions about Veolia; he already had declared publicly a conflict of interest regarding the company — which makes sense, given that his girlfriend helped the transportation firm win its contract.

City ethics policy dictates that an elected official cannot participate in city business in "any manner" once he's declared a conflict.

When the public was watching, Gordon abstained from voting and discussing Veolia. But behind the scenes, he was engaged.

Several council members confirmed that Gordon participated during City Council closed-door executive sessions when Veolia was discussed.

The city and Veolia were at odds because company executives wanted Phoenix transit officials to pay Veolia employees' pensions, which had become under-funded because of economic downturns, and to pay for unused sick leave.

At the time, Veolia was operating city buses for Phoenix under a contract set to expire on June 30. The unresolved sick leave and pension issues were tied up with the contract. Phoenix already had awarded Veolia a new contract to continue operating city buses starting July 1.

It was supposed to be a seamless transition from one contract to the other.

Since they had dual contracts on the table, Veolia executives and city officials agreed that the pension and sick-leave issues from the old contract wouldn't interfere with the new bus contract.

But Veolia negotiators weren't getting the city to budge on those issues, so they turned to Billy Shields, the company's lobbyist and a longtime friend of Gordon's.

Erica Swerdlow, spokeswoman for Veolia Transportation, denies that Gordon spoke directly to Veolia executives but concedes that the mayor suggested to the company how contract negotiations should be handled.

"He did indicate to our lobbyist, Billy Shields, that he had removed himself from any involvement in negotiations over the old contract but suggested that in order to get the matter resolved with the city, which was in everyone's interest, we needed to get it elevated to the city manager level," Swerdlow says.

Apparently, Veolia's threatening to walk away from a city bus contract — leaving Phoenix with only two months of guaranteed bus service and the immediate need to find another transportation company — was an effective way of getting the city manager's attention.

After Gordon made his suggestion, the company told the city it was pulling out.

David Leibowitz, Gordon's hired spokesman, also confirmed the mayor's involvement but said Gordon did nothing wrong, much less illegal. He described Gordon's role as "minimal."

The mayor refused to speak directly to New Times on any matter related to this story, at one point insisting that all questions be submitted in writing to Leibowitz.

In a statement to New Times, Leibowitz says: "What the mayor did do in reference to Veolia is affirm their belief that, in order to resolve the matter, they should elevate the negotiation conversation up the city's chain of command, to the city manager. The mayor's thinking was, getting this resolved was in everyone's best interests and that the time had come to 'go upstairs,' so to speak."

After Veolia fired off its written notice rejecting the five-year, $386 million contract Phoenix had awarded the company, Phoenix transit officials started negotiating with First Transit, the company that placed second in the city bus-contract bid.

That didn't go anywhere.

City Manager David Cavazos flew to Chicago with several employees to strike a deal with Veolia. To settle the old contract, Cavazos made $27.5 million worth of concessions to Veolia for the pension and sick-leave payments and agreed not to recoup $681,000 that the Phoenix Public Transit Department already had mistakenly paid for Veolia employees' sick days between 2000 and 2009. Despite the fact that sick-leave payments were Veolia's responsibility — not the city's — nobody in the city's transit department had noticed that the firm was billing Phoenix for the cost for almost nine years.

Still, the company wanted more — so city officials also rewrote part of the new contract.

Not only did Phoenix eliminate a $50,000-a-day fine if workers went on strike and postpone all fines (for such problems as late buses, employees out of uniform, or customer complaints) for four months, it also slipped a clause in the updated contract that essentially allows Veolia to wiggle out of future fines if it concludes they are unfair.

When Veolia first bid on the city bus contract, it objected to all fines the city planned to assess. City transit officials told Veolia that unless it withdrew the objections, they could not bid on the contract. Company officials withdrew them and were awarded the new contract in January.

But Veolia ended up getting its way after Gordon advised the company to strong-arm his city.

About the overall settlement, Assistant City Manager Ed Zuercher says, "It was a way to get this [new] contract signed."


Veolia spokeswoman Swerdlow contends Gordon made the suggestion to Veolia that it negotiate with top city officials. His spokesman, Leibowitz, claims that Gordon only affirmed what Veolia already was planning to do.

Either way, Gordon wasn't supposed to be involved in "any manner" in negotiations with Veolia.

If Gordon truly had removed himself from involvement, as Swerdlow maintains, how could he have known the status of negotiations? How did he develop the opinion that the city manager needed to get involved? And why was he discussing Veolia and ongoing negotiations with the company's lobbyist?

When New Times asked City Attorney Gary Verburg for his interpretation of the city's ethics policy and whether Gordon should have been involved in Veolia discussions, Verburg responded that he only provides legal advice to his clients. Apparently taxpayers aren't among them, if they're asking about a delicate matter involving the mayor.

He refused to answer any questions on Gordon and Veolia.

Verburg also refused to release a list of elected officials who attended executive sessions on April 27 and May 11 when Veolia issues were discussed.

But Councilwoman Thelda Williams tells New Times that though she missed the April 27 meeting, she recalls that Gordon participated in the May 11 meeting. Councilman Sal DiCiccio recalls that the mayor participated in both meetings.

Given that Gordon's suggestion to Veolia greased the wheels for the company's nearly $30 million payout, the mayor's participation in these sessions could expose the city to potential legal action, DiCiccio says.


The mayor's girlfriend has been on Veolia's payroll since 2007, the entire time the two have been dating.

Mullany, who handles public relations for Veolia, helped the firm land its latest Phoenix contract, which company officials call "one of the biggest of its kind in the United States."

Swerdlow confirms that Mullany was directly involved in the Phoenix contract, but she characterizes that role as "brief."

The Veolia spokeswoman says, "Part of Ms. Mullany's ongoing duties, among many, included helping with the oral-presentation preparation. She did assist our staff in oral-presentation training for the [proposal's] evaluation/interview panels. She had a brief role in a three-day preparatory meeting."

Mullany was on a team coaching Veolia executives in November 2009 on how to answer questions posed by a city panel evaluating the two bus-contract finalists — First Transit and Veolia.

The Veolia insider tells New Times that Mullany was advising company executives at that time on how to craft answers based on what the city wanted to hear.

Despite Mullany's role with the Phoenix contract and her romantic involvement with Gordon, the mayor still pulled strings behind the scenes.

But he didn't always try to shroud his involvement with Veolia from the public.

In June 2009, when City Council members talked about seeking bids from various transit companies to operate city buses, Gordon said his "intent was to vote for one contract awarded to Veolia," according to city records.

At that time, Gordon had been dating Mullany for more than a year, and Mullany already was working for Veolia. But his relationship with Mullany and her ties to Veolia were sailing under the public radar. They kept their romantic relationship mostly secret until December 2009.

By July 2009, a public request seeking Gordon's security-detail logs was filed in an effort to figure out Gordon's relationship with Mullany — whom he had appointed to city commissions and boards, taken overseas on economic-development trips, and paid exorbitant amounts of money.

Gordon realized that questions were mounting about their relationship, about her role in City Hall, and about the more than $300,000 he had paid her company over four years for managing and raising money for his political funds.

Gordon stopped publicly participating in Veolia matters that summer. He took care to publicly avoid any conflict, or any appearance of conflict, regarding Mullany. He even had her name placed on his conflict-of-interest list, a document containing the names of companies, organizations, and individuals that city elected officials file to show they are not voting on matters affecting their or their loved ones' financial interests.

But he continued to participate behind the scenes.

Rich Jarc, executive director of the nonprofit Josephson Institute of Ethics, tells New Times, "If . . . he in fact said one thing and did another, then it is very questionable behavior. He's calling into question his trustworthiness.

"As a civic leader, you want to be someone who — when you say something — people are going to trust that you're telling them the truth."


Under normal circumstances, a politician's love interest might not merit a headline.

But in Mullany's case, she works as a consultant for companies doing business with the city. She has earned a living from political donations made to Gordon and his political funds. Gordon has hired two of her business partner's family members to work in the Mayor's Office without posting the jobs or interviewing other candidates. She has traveled with her powerful boyfriend overseas as a city representative to stimulate the local economy.

Gordon paid Mullany lump sums as large as $20,000 for "administration" or "fundraising" from political-donation accounts — even when no discernible work was performed.

One example of his generosity to her includes an $8,000-a-month salary from a federal political-action committee formed to earn Phoenix influence by donating money to congressional candidates. Gordon paid Mullany's company $104,497 and contributed just $54,700 to candidates for Congress.

Gordon has given no answers to questions concerning Mullany, such as: Who paid for his and Mullany's tickets to Super Bowls in Glendale and Miami? And in whose private jet did the two fly from Miami to Phoenix?

The answer to the latter question is that the pair flew home on a plane owned by Mullany's former employer, Phoenix mega-developer Steve Ellman.

Gordon's refusal to answer questions and provide public records has sparked a lawsuit by Judicial Watch, a conservative Washington, D.C. think-tank, demanding that logs on the activities of his security detail be made public. In refusing to release the logs, the city claims Gordon's safety might somehow be imperiled if the more-than-a-year-old records are released.

Judicial Watch argues that the records should be released so the public can determine whether Gordon appropriately used his taxpayer-funded security personnel — including whether he used them to shuttle Mullany around the city.

A judge tossed out a motion by the city to dismiss the lawsuit and scheduled both parties to appear in court for a September 27 hearing.

Gordon also has refused to release his conflict-of-interest checklist — the one that he asked Mullany's name be placed on. New Times requested all city elected officials' lists, and every one except Gordon released the information. (That he wanted Mullany's name on the list was discovered in Gordon's internal e-mails concerning Veolia.)

A letter from New Times attorney Steve Suskin demanding Gordon's list was ignored by City Attorney Verburg.

Initially, Gordon's camp said the list wouldn't be released because it hadn't been updated. Then, his people claimed the list was protected by attorney-client privilege.

Critics suggest that he's trying to conceal Mullany's clients.

It wouldn't be the first time that he and/or his spokesman have tried to do that.

In March, Jason Rose, Gordon's paid representative before Leibowitz took over, tried to conceal that Mullany had worked for Steve Ellman.

Rose e-mailed one of Gordon's senior staffers, telling him that if anyone asks about Mullany and Ellman, he should: "Suggest the following . . . the mayor can't, couldn't, and wouldn't vote on something that she was involved in. Don't know who she represents or represented for event planning and community relations . . . if asked, unaware of any work Elissa has done for Ellman or anyone else in the city of Phoenix."

Rose knew Mullany was working for Ellman, who then enjoyed unfettered access to Gordon — the developer attended Mayor's Office staff meetings, had dinner with the mayor and foreign dignitaries, and accompanied Gordon on trips to foreign countries.

Despite Rose's posturing, internal e-mails between Gordon and Rose revealed that Mullany worked for Ellman for at least six months promoting investment opportunities for his development firm.

Then came her job with Veolia to, among other things, help the company win its Phoenix bus contract.

If what New Times has learned about Gordon's involvement with Veolia is accurate, Councilman DiCiccio says, "It makes the city look bad, and it opens up the city for a lawsuit from the other bidder."

DiCiccio added, "I think there are some legal issues here that the city attorney needs to look into."

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146 comments
Jim Kay
Jim Kay

veolia scams another city with a little help from the city's mayor...whos BFF happens to work with veolia. People really dont know what they are voting for when they vote to give their infrastructure to this sub-par, poorly managed company.

Jk91932
Jk91932

veolia scams another city with a little help from the city's mayor...whos BFF happens to work with veolia. People really dont know what they are voting for when they vote to give their infrastructure to this sub-par, poorly managed company.

Kandy
Kandy

The truth always comes out.

Cone
Cone

We love Mayor Gordon, He's an outstanding Mayor and we are fortunate to have him!

Johnqpub
Johnqpub

How does a fool like Gordon get elected..?? Are we..the voters...really that stupid..???

Arizonarocks
Arizonarocks

she is not with him for his looks or sterling conversation... just saying.

London
London

the Josephson Institute of Ethics sounds like a company who specializes in Labia liver spot removal!

Cristo
Cristo

Get your facts straight; the federal probe into Arpaio started in 2008 under Bush. To be bothered by things said in this unfactual article, and support Arpaio and his thugs is illustrative of your leanings, at best, and your lack of knowledge/smarts, at worst.

Rooster
Rooster

Sounds like the sentiments of someone "inside" who sees things through a smoke screen. NO marriage that wasn't on the outs anyway, was broken up.

Raison
Raison

Then you know he lives in a modest home; he doesn't live like anyone "cashing in". Get a life.

Raison
Raison

Probably a good story lies behind your writing these comments Follow the URL address and I bet you'd find the person or persons planting these ugly stories.

PolySy
PolySy

Write another blog once you've attended school and learned how to write.

PolySy
PolySy

When you're feeling down, and don't know what to say that would factually support some position, do some name calling.

PolySy
PolySy

You some sort of a nut? Think of something of substance and believable before you post.

PolySy
PolySy

Hate to break the news, but this country wan't founded on Christianity. It was founded on FREEDOM OF RELIGION, you idiot. Also, learn some English (before you most likely demand everyone, immigrants included, speak perfect English). Listen to your line: : These are the things that myself and my fathers fought forI. If you served, I salute and thank you, but please understand you fought for, and not be so offended by someone stopping to pray, as they have for thousands of years. You sound like a nut, by the way.

PolySy
PolySy

Disgusting assumption.

LitaPita
LitaPita

its just so ridiculous how "goverment" works. everyone eating from everyone's hands, pay to play...

Apalerider
Apalerider

Why do the dumbshits in Phx keep electing this clown?

Peter
Peter

This is not news. You're naive if you don't think helping out your friends in govt. isn't going on in every govt office in the nation. It's part of the culture like it or not.

Blind ustice
Blind ustice

Talk about confilct of interest! Mayor Gordon has no business talking to anyone involved with the contracts, old or new, beings that He is involved with an employee of that contracting company. This Mayor should be recalled and outsted from Office on grounds of conflict of interest with City contracts and opposion to the AZ SB 1070 Immigration Law, refusing the Public's safety to be protected by the Law Enforcement requirements.

Mayor Gordon, has stated opposion to te AZ SB 1070 Immigration Law on basis of; RACIAL PROFILING and has not, as of this date, provided any evidence that Racial Profiling does currently exist or would exist, has not provided any evidence that there is HATE or Discrimination in this law.

Guest User
Guest User

As someone who rides the bus everyday, the last thing we needed was a drop in the quality controls of these busses/drivers/schedules

XSoldier
XSoldier

Who paid for his and Mullany's tickets to Super Bowls in Glendale and Miami?A: Steve Ellman, Elissa Mullany's former boss.

How could he have known the the status of negotiations?A: Elissa Mullany works for Veolia.

How did he develop the opinion that the city manager needed to get involved?A: Elissa Mullany told Gordon that the company wasn't getting its way and to ask the city manager to get involved and give out $30M in concessions to retain business with his serial killer "girlfriend's" employer.

Why was he discussing Veolia and ongoing negotiations with the company's lobbyist?A: Elissa Mullany knew that Billy Shields was a friend of Gordon's and she knew that he could give the company advice on how to strong-arm Phoenix, which he did.

Ross1776
Ross1776

Gee, with all the homeless and jobless in Phoenix metro, Gordon outsources the city transit jobs and privatizes it? I mean, city bus drivers used to be city employees and the buses owned by the city, not by an outside Chicago based company that charges Chicago rates and unionized workers and such. Really, what is going on in that town under Gordon defies imagination to this former long term Arizonan, and no wonder the state is always having budget shortfalls if their "state actor" municipal governments negotiate contracts like these.

trvlchf
trvlchf

recall the mayor, it the worst bus system for the fifth largest city to have ,no 24 hour or late nite routes, increased fares-less service, never run on time

Tr7fan
Tr7fan

pretty convienient sounds like to me

Skatemom1
Skatemom1

Do these comments get scrubbed? The posts that I read the other day are nowhere to be found.

Skatemom1
Skatemom1

Quit regurgitating this story. Seriously not news. Where are your sources?

Gump
Gump

Thats what Nixon told the Washington Post.

Az1969guy
Az1969guy

I hope nobody is surprised by this? I don't live in Phoenix, but I work for the City of Phoenix. This is only the tip of the iceberg. It's amazing what goes on here behind the scenes. It's almost seems like a movie.

Frddy
Frddy

Isn't it nice when you can get the taxpayers to pick-up the cost of your ho?

anonymous
anonymous

Mayor Gordon - same guy who wanted to fight SB1070 on the taxpayer's dime. Democrat, correct?

Lrbuchanan2003
Lrbuchanan2003

Lets be fair! Would you put up with Phil Gordon for less than 30,000,000? It's time for him to go.

Fingersfreddy
Fingersfreddy

king herod tetrarch gave the head of john the baptist just to see his brother's daughter dance..wonder what phil goofy gordon got in return for sellin us out?? guess it isnt hard to imagine ... no wonder bus fare is so high now..

AhwatukeeT
AhwatukeeT

Not at all surprized. "Phail" has once again demonstrated a profound lack of discretion and a complete disregard for those who he was elected to represent.

Salbecker56
Salbecker56

So, we have worse bus service becsause the Mayor decided screwing his girlfriend wasn't getting it done for him so he needed to screw the citizens of the Valley as well. Gordon seems to have a problem understanding who's money he is dealing with. I do seem to recall and issue with the parking garage across from Chase field and the fact that it sat vacant most days except when the team was playing. (Yes this was a few years ago). Gordon made lit known that this cost the taxpayers nothings as the fees collected from other parking facilitites help cover the operational cost of the parking facility in quesiton. Gordon seems to forget that said money belongs to the city of Phoenix and is therefore taxpayers money. Phil. I quess it is time for you to get your degree from the Bill Clinton University Graduate program in the art of rationalization. You need to be out... really is there anyone of an honest character interested in running for office.

Cruise123
Cruise123

mayor gordon should step down!!!!!!that is abuse of power .he thinks know one will find outwrong i think the people of phoenix could use that moneybefore some scum bag bus company

Bllcorwin
Bllcorwin

He is one of those people that you never feel good about and don't know why., Until now.

Jazzbo13
Jazzbo13

Elissa Mullany is cute in a MILF'y sort of way. Funny thing though, I always thought Phil Gordon was a HOMO. Makes you wish for the days of Skip Rimjob!

phx taxpayer
phx taxpayer

I knew I didn't like that dirtbag for a good reason! he needs to be removed frm office immediately!

Ricklhamrick
Ricklhamrick

BOY THATS HARD TO BELIEVE HUH? WE HAVE THE BEST POLICIANS MONEY CAN BUY

Chuck Walla
Chuck Walla

As if my and every other bus riders experience was not bad enough. Broken down buses and waiting 30 minutes in the heat for a bus that never comes, creating an hour wait. I also had to re-apply for Dial A Ride in July. Thanks a lot, my heart implant and multiple surgeries are enough to deal with and the disruption of service I feel put me at serious risk when it occured on July 26. Maybe I should sue? Haha, I will contact my stable of lawyers. I will note that all the drivers are very friendly and they have a very stressful job and low pay.

Lukie85013
Lukie85013

One more thing, wonder how much it cost for GIRLFRIENDS makeover?

Lukie85013
Lukie85013

And what else is knew in the Land of Fun and Scum.. Why is it that politicians get away with things like this? Most decent people have lost their job, homes and almost everything they have ever worked for. And believe me they have worked. I guess maybe we as citizens are doing something wrong.

Freedom
Freedom

WOW.....I have been an airport employee for many years as well. I also have been down the road of sweeping things under the rug that aren't conducive to the overall bottom line.$$$$$$$$$$$$$$. This department portrays the self appointed "Friendliest Airport"Is this FUCKING disneyland or an International Airport? They have Muslims that are being given asylum and jobs, and we as employees have to be sure as to not offend these people who choose to come here to live. FUCK THEM! This is my country that was founded on Christianity, Equality and PRIDE. These are the things that myself and my for fathers fought and died for. I am a 3 time Purple Heart Veteran of this WAR on Terror. When I was offended by an employee on his knees praying to Allah in a sterile area of the airport. I filled a report with the Aviation Department, to no avail. I was never contacted back in response to my letter of concern. Yet, the Operations Assistant that took my report and submitted my letter was reprimanded for getting involved. What I understand is that the City of Phoenix gets kickbacks from the Government to employ these refugees. So once again, the bottom dollar wins out over your personal safety even after 911! TSA, you ask? Well, at the time I was offended by the prayer, it was exiting a freight elevator on passenger level to grab a bite to eat. When the doors opened, TSA was performing a random inspection point and wanted to pat me down? In front of the door I was exiting was the Muslim behind the TSA on the floor praying? When I had asked if he had been checked, their response was, "after he is done prying"! WHAT? ARE YOU FUCKING KIDDING ME? This City as well as its leaders need to be taken down before its too late

Jerry
Jerry

Good luck getting rid of this scumbag, I moved my family out of N Phoenix after he raised the taxes again to pay for this GF. Good luck and I hope you get him out soon. He is a bad Representive for AZ.

Piscesinphoenix
Piscesinphoenix

How long do we have to deal with this pond scum? He's been a hemorrhoid on our assets since his election. Isn't there some way to oust him NOW?

 
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