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Koch-Funded Group Helped Develop Plan to Kill Future of Phoenix Light Rail
City of Phoenix

Koch-Funded Group Helped Develop Plan to Kill Future of Phoenix Light Rail

Much of the plot to kill the future of light rail in Phoenix was hatched in a window-tinting shop on South Central Avenue. At first, the plot was narrow.

Celia Contreras, owner of Tony’s Window Tinting, sought only to halt or alter Valley Metro Rail’s plan to build a six-mile track connecting south Phoenix to its 26-mile rail system.

Opponents of the rail extension held meetings in Contreras' shop — a nondescript garage bounded by a Mexican restaurant and a dollar store  — where they worked on raising awareness for their cause. Organized under the name 4 Lanes or No Train, business owners said they were blindsided by the city's plans to reduce traffic to two lanes along the South Central corridor. Construction of new rail would mean fewer customers for the restaurants, stores, and auto shops in south Phoenix's minority communities, activists claimed.

By summer 2018, however, the plot to stop light rail in south Phoenix transformed into a plan to stop light rail in Phoenix, period. As they broadened their mission, light rail opponents using the new name Building a Better Phoenix also started receiving assistance from an Arizona nonprofit associated with oil barons Charles and David Koch. 

The shadow of the billionaire brothers over Phoenix's light rail debate would not come as a surprise to anyone who's following transit policy in the United States. Notorious for bankrolling dark-money campaigns, the Koch brothers recently have thrown their weight behind efforts to stop public transportation projects across the country.

Contreras cut ties with the anti-light rail movement in October 2018, partly due to her growing disillusionment over its connection to the Kochs. "I wanted a clean movement," she said. "They just used the businesses. They don’t care about us."

The Koch-influenced project resulted in Proposition 105, which will appear on the ballot later this month. The initiative would amend the city charter to effectively kill future rail projects in Phoenix. Early voting is underway.

If more city residents vote "yes" than "no" on the initiative by August 27, Valley Metro will halt plans to extend light rail down South Central Avenue. Passage of the initiative would also terminate new routes in west and northwest Phoenix. The city would likely lose billions of federal dollars, and revenue from a public transportation sales tax approved by voters in 2015 would instead go toward funding infrastructure improvements.

Scot Mussi, president of the Koch-funded Arizona Free Enterprise Club, appears to have helped draft the language for Proposition 105, arranged meetings regarding the signature-gathering process, and has regularly spoken with leaders of the movement, according to interviews and records.

Mussi has downplayed his role in crafting Proposition 105, deflecting any implications of substantial involvement as an insult to the grassroots organizers who led the resistance against the South Central Avenue line. In a September 2018 interview with the Arizona Republic , Mussi said his organization was only playing a supportive role in the campaign. He also emphasized that the Free Enterprise Club was not contributing any funds to help the committee gather the 20,510 signatures it needed to put Proposition 105 on the ballot.

"We've only just been kind of watching it and monitoring it and just kind of sharing information as it comes along," Mussi said in 2018. "These unverified, false claims (of Arizona Free Enterprise Club involvement) that have been put out there are completely unfair to the people of south Phoenix that have been opposing this thing.”

Mussi’s claim of separation between himself and the anti-light rail campaign is belied by emails he sent Contreras during the same month he spoke with the Republic.

The conservative political operative messaged Contreras at least eight times from August 29, 2018, to September 25, 2018, Phoenix New Times confirmed on Thursday. Subject lines on Mussi’s emails show he was involved in drafting Proposition 105’s petition language and making arrangements with a signature-gathering firm.

On August 29, 2018, Mussi sent Contreras a copy of petition language with a subject line that referred to an "updated draft." He sent several tweaked drafts in the following days. He sent an email referring to “signature gathering” on September 21, which is also the listed date for a contract between Building a Better Phoenix and National Ballot Access, a Georgia-based firm that collects signatures for local referendums and ballot initiatives.

According to the contract, the anti-light rail committee agreed to pay National Ballot Access $187,440, equivalent to about $5.68 per signature. (While the campaign only needed 20,510 signatures to qualify for the ballot, the contract called for 33,000. Petition organizers often shoot much higher than the minimum in case of disqualified signees.)

Mussi also helped organize a September 26 meeting at City Hall to discuss best practices for ballot-petitioning, according to a Google Calendar event seen by New Times.

Another leader of Building a Better Phoenix, Mel Martin, said that Mussi has served as a “consultant” on his campaign, telling New Times that the two men speak about once a week. But Martin said he was unaware of Mussi's ties to the Koch brothers.

"It never, ever, ever, ever came up in my presence, anything about the Koch brothers," he said. "I don't know anything about the Koch brothers."

Martin would have known if he had followed the money.

As a "dark money" political nonprofit operating as a 501(c)(4), the Free Enterprise Club is not required to disclose its donors. Still, tax documents show that the group has received hundreds of thousands of dollars from Americans for Prosperity, the national conservative advocacy organization founded and funded by the Koch brothers. In 2016, Americans for Prosperity made a $100,000 cash grant to the Free Enterprise Club, according to tax documents. In 2017, the national Koch organization gave another $110,000 in cash to the Arizona nonprofit during a year that the state group received $546,172 in contributions and grants.

American Encore, another Koch-affiliated organization, granted $450,000 to the Arizona Free Enterprise Club in 2014. The president of American Encore, Arizona native Sean Noble, previously managed money for the Koch brothers’ national network of political advocacy groups, according to an investigation by ProPublica.

Tax documents from last year for Americans for Prosperity and the Free Enterprise Club are not yet publicly available online. Because of the Free Enterprise Club's 501(c)(4) status, it's unclear who else is funding the organization and whether other Koch-tied groups have contributed. Loose disclosure requirements also mean that it's unclear exactly how the group has spent its money.

The Free Enterprise Club's 2017 tax disclosure makes one reference to light rail. According to the document, the group spent $183,000 on public education and outreach events, including a presentation on "why fixed rail passenger transit is the wrong approach" to transportation policy.

Mussi, meanwhile, makes about $140,000 annually from his work with the Free Enterprise Club.

Before sharing Mussi's emails, Contreras told New Times that Mussi first reached out to her in April, attended a meeting with her and then-City Council candidate Carlos Garcia, helped develop the language for Proposition 105, and volunteered to deliver Building a Better Phoenix’s petition application to the Phoenix City Clerk’s office in September.

Mussi did not comment on those claims and instead attacked Contreras’ credibility.

She's “mentally unstable," he said, citing an incident in June when she appeared before the Phoenix City Council and said God “judged” former Congressman Ed Pastor for “bringing death” to south Phoenix by supporting light rail. Pastor died of a heart attack in November. His daughter, Laura Pastor, sits on the City Council and left the dais during Contreras’ comment.

On the same day, Contreras handed out a flier written as a catechistic dialogue between God and a “vision,” wherein she quotes Galatians, Leviticus, and Matthew to imply that the Christian deity somehow caused Pastor’s heart attack over his support for expanding Valley Metro Rail lines.

“I have no comment about a person who decides to show up at a council meeting to declare that former Congressman Ed Pastor died because he supported light rail,” Mussi said.

He added: “The Arizona Free Enterprise Club has never shied away from supporting efforts to stop wasting billions on light rail expansion, and that includes supporting Prop 105. Our group taking a position on the issue is no different than the many organizations that have come out against Prop 105.”

Contreras showed Mussi’s emails to New Times after being told that Mussi would neither confirm nor deny her claims about his involvement in Building a Better Phoenix. She said she formally left the campaign in October 2018, as Mel Martin, the committee’s primary financier, attempted to push her out. Martin denies forcing Contreras out of the group.

Contreras said she did not realize in the beginning that the Free Enterprise Club was connected with the Koch brothers and became angry when she found out.

Working in her sweltering, AC-less garage, carefully plastering tinting film on the window of a white sedan, Contreras told New Times that she wanted a “clean” movement and felt that any association with outside conservative interests would turn off Phoenix’s liberal voter base.

“I am really angry, because he dirtied the movement,” Contreras said of Mussi. “Not because he is a bad person, but because Phoenix doesn’t want the Koch brothers.”

Contreras also said she doesn't regret her comment on Pastor. “It’s not my fault humanity doesn’t understand where I come from.”

Scot MussiEXPAND
Scot Mussi
Arizona PBS

‘Boondoggle’

Americans for Prosperity (AFP), the Koch brothers’ main advocacy organization, has fought against light rail projects since at least 2015.

The group recently waged anti-transit campaigns in southeast Michigan; Little Rock, Arkansas; and Indiana. Last year in Nashville, the group launched its most visible and effective anti-transit effort to date. Canvassers organized by Americans for Prosperity knocked on thousands of doors to oppose a plan that would have added a downtown tunnel and increased the number of light rail trains and bus routes in the Tennessee capital city. Nashville voters rejected the plan in May 2018.

In a press release celebrating its victory, Americans for Prosperity thanked supporters for their help in defeating  the transit plan, which the organization described as a "$9 billion boondoggle."

Americans For Prosperity also has openly opposed the expansion of light rail in the Valley. Last year the group, describing light rail as a "boondoggle," launched "an education campaign" in Chandler to prevent local officials from bringing Valley Metro lines into the city.

Three years before its advocacy in Chandler, Americans for Prosperity in 2015 issued a statement urging Phoenix residents to reject Proposition 104, a sales tax increase to fund public transportation, including new light rail lines.

"The tax increase would fund a gigantic $30 BILLION boondoggle – the largest tax-and-spend plan in Phoenix history," the release stated. Voters approved the initiative, which created revenue for projects that Proposition 105 would effectively kill.

The 2015 press release opposing Proposition 104 no longer appears on the Americans for Prosperity's website.

According to the Internet Archive's Wayback Machine, which uses "web crawlers" to preserve public web pages, the release was still viewable on the site as of June 24, 2018. At the time, Building a Better Phoenix was working on its petition to put light rail on the ballot.

Americans For Prosperity has not publicly commented on Proposition 105.

The influence of the Koch brothers on the current light rail campaign has been filtered through a couple of degrees of separation, via Scot Mussi and the Arizona Free Enterprise Club. Rather than directly funding the campaign — as Americans For Prosperity has in other cities — the Free Enterprise Club has taken a behind-the-scenes approach to the current light rail initiative.

It’s unclear exactly when Mussi became involved with the campaign, but he began communicating with the group as early as April 2018, according to a Facebook message he sent to Contreras offering to help. Contreras said that she and then-City Council candidate Carlos Garcia met with Mussi not long after.

“He said, ‘Nobody knows more about light rail than me. Let me help you,’” Contreras said, describing her alleged meeting with Mussi. “He told us, ‘We don't want nothing, we just want to give you information.’”

Garcia, now the City Council member for District 8, did not respond to multiple requests for comment. Contreras said she did not know at the time that Mussi was associated with the Koch brothers.

Martin, the investor who serves as the primary financier of the anti-light rail initiative, told New Times that he connected to Mussi through Statecraft PLLC, the conservative law firm that represents Building a Better Phoenix. Martin, who owns property on South Central Avenue and the Martin Auto Museum, said he speaks with Mussi about once a week.

“They've been a consultant to us,” Martin said, referring to the Free Enterprise Club. “Scot has been a help to us. We're all just business people that have never been involved in anything like this before. It was very valuable information from them that helps us.”

While working with Building a Better Phoenix, Mussi has given multiple media interviews speaking in favor of the ballot proposition. Without disclosing his role in the campaign, he touted the initiative on 92.3 KTAR and 550 KFYI, as well as in the Ahwatukee Foothills News. His associate, Free Enterprise Club vice president Aimee Yentes, gave an interview to KJZZ extolling Proposition 105 without mentioning her organization's involvement.

Arizona Free Enterprise Club has also contributed public relations support for Building a Better Phoenix without disclosing its ties to the campaign.

The Free Enterprise Club frequently publishes social media posts, both paid and unpaid, in favor of Proposition 105. The Arizona organization has paid between about $1,600 and $6,500 to run Facebook ads supporting the proposition, according to records available on the social media site.

Mussi claims the Facebook ads were "in full compliance with state campaign finance law and all reporting requirements for ballot measures."

In early July, the city of Phoenix announced that it received a $100 million federal grant for light rail extensions. In response, the Free Enterprise Club drew attention to the fact that the projected costs for the current planned light-rail expansion have doubled from $700 million to $1.35 billion.

The increased costs, as the Republic explained, are due to inflation, added contingency costs, and a new plan to build a downtown transfer station for light-rail passengers. The federal government is paying for 47 percent of the costs.

“Neither Phoenix or Valley Metro have explained how they are going to pay for this, or what happens when the cost goes even higher,” Mussi said in a statement on July 11. “Taxpayers have a right to know what roadway projects will be canceled to fund this boondoggle.”

A pro-Prop 105 billboard along the South Central Avenue corridor.EXPAND
A pro-Prop 105 billboard along the South Central Avenue corridor.
Steven Hsieh

Falling out

In late September 2018, the Arizona Republic reached out to Mussi after discovering that he purchased the web domain BuildingABetterPhoenix.com. Records show he bought the URL three days after the group filed its initiative paperwork.

Mussi stressed to the Republic that he was not involved in the campaign and only purchased the domain over fears that political opponents would snatch up the URL first.

According to Contreras, Mussi called her after the Republic reached out to him to warn her that a reporter from the paper would probably call her, too. She said Mussi told her to repeat his explanation of his domain purchase to the Republic, which she eventually did.

“"He said, 'Please, a reporter is going to call you. Please tell them I am a good person. I am doing you a favor because I am a good person,'" Contreras said.

The phone call, she said, was one of a few incidents with Mussi that made her disillusioned with his involvement. Contreras said she also became upset when Mussi allegedly told her (she can’t remember the date) that he was associated with the Koch brothers, which came to her as a surprise. Finally, Contreras said, she did not like the general feeling that Mussi took over the movement despite her early work in organizing 4 Lanes or No Trains.

In September, shortly before Building a Better Phoenix filed its application for the initiative, Mussi showed up to her workplace with some paperwork. Contreras said Mussi volunteered to file the petition for the group. He also asked her son, Jadon Contreras, to sign on as the committee chairman. Byron Waldrep, the owner of Pete’s Fish and Chips, was also present and signed on as treasurer.

According to Celia Contreras, the thinking behind those two signatures went like this: Jadon Contreras, a 19-year-old Latino, and Waldrep, a white businessman in his 60s, would represent an alliance of disparate voters they hoped to appeal to.

Contreras became annoyed when, days later, Mussi called a meeting with the city clerk’s office to go over best practices for the initiative process. A Google Calendar event titled “Phoenix City Clerk Meeting to discuss signature collection” lists Mussi as the “organizer.” That didn’t sit well with Contreras, who took pride in the work she did organizing the movement against the south Central extension.

An exhibit at the Martin Auto Museum, which is owned by Mel Martin.EXPAND
An exhibit at the Martin Auto Museum, which is owned by Mel Martin.
Tony Saniago via Wikimedia commons CC BY-SA 4.0

But it wasn’t just Mussi that led to Contreras’ break with Building a Better Phoenix. She said Martin also attempted to remove her from her position in the group.

Contreras said her disagreements with Martin started when Council Member Sal DiCiccio became involved in the campaign. According to Contreras, DiCiccio convinced Martin to add a clause in the original petition language that would redirect freed up light-rail funds toward police and fire services.

Indeed, an early petition filed with the City Clerk in August calls for savings to be “used for other infrastructure improvements and/or enhanced police and fire services in areas that are within one mile of where the light rail extensions would have been constructed.”

DiCiccio spokesperson Sam Stone confirmed that the Council member lobbied for police funding, but only with the 4 Lanes or No Train group, not Martin.

Martin — who has donated at least $70,000 to Building a Better Phoenix — also denied speaking with DiCiccio about adding public safety funding to the initiative. 

Contreras said she disagreed with earmarking funds for police services, reasoning that south Phoenix voters would not support an initiative that gives more money to cops. Eventually, Contreras said, Mussi convinced Martin to take out the language that transferred funds to Phoenix Police.

During a meeting at her business early on in the campaign, Contreras said, Martin pointed at her and said he no longer wanted her to lead the movement. Instead, Martin allegedly said he wanted then-Council candidate Garcia to head the campaign.

Before the group filed its August petition, Contreras said, she received a call from several business owners telling her that a lawyer representing Martin asked if any one of them wanted to sign on as chairman of the committee. Contreras said felt betrayed by Martin for going around her.

Pete's Fish and Chips owner Byron Waldrep confirmed to New Times that attorneys for Martin suggested he become chair of the group. When Waldrep and other business owners declined, Martin listed himself as the group's head.

Contreras said she further distrusted Martin after learning that he served on a steering committee organized by former Mayor Greg Stanton on the development of the South Central Avenue line.

Martin denied that he ever tried to drive Contreras out of the movement. He did, however, recall a meeting with community members in her shop. Martin said that during the meeting he offered to host future gatherings at a nearby empty dentist office he owned, which he said was cooler and had more seating than Contreras' building.

"She went off on me and said I was trying to take control of the group and blah, blah, blah, blah," Martin said. "She's a nice lady, but she's just a little mixed-up, as far as I'm concerned."

Contreras said she opposed moving the meetings to the empty office because she distrusted Martin. Previously, the group had held a meeting at a South Phoenix charter school, but the school owner "would kick anyone out that disagreed with his ideas," she said. "We didn't want that experience again."

According to Contreras, business owners who originally supported 4 Lanes or No Train gradually stopped talking with her.

By October, Contreras said, she felt abandoned by the movement she once led and decided to end her involvement. She declined to say whether she plans to vote for Proposition 105.

UPDATE: This story has been updated to include additional detail on the disagreements between Mel Martin and Celia Contreras, including a statement by Byron Waldrep.

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