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Mayor Phil Gordon and His Girlfriend/Fundraiser Elissa Mullany Have Some Explaining to Do

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Phoenix Mayor Phil Gordon hasn't needed to raise money since he waltzed to reelection in the fall of 2007, leaving a war chest stocked with $370,000.

Yet in the last two years, Gordon has paid his chief fundraiser big bucks all the same. Records show that Gordon paid fundraiser Elissa Mullany and her business partner, Cate Wunder, a total of $39,000 since January 2008. That's a period in which the campaign hasn't shown a dime of revenue.

And that's in addition to the money Mullany and Wunder earned working for the mayor's federal political action committee (which totals $104,497) and while working on a privately funded commission affiliated with the city -- a commission the mayor appointed Mullany to. (That netted Mullany's company $12,000, plus a trip to Dubai.)

The expenditures might raise questions all by themselves. But this story is significantly more complicated, because Gordon, 58, and Mullany, 38, have been romantically involved during much of the time in question.

Gordon's newly hired public relations flack, Jason Rose, acknowledged the relationship in a press release today. Rose, the go-to guy for politicians in trouble, told New Times in a subsequent phone conversation that the pair began dating in the spring of 2008.

At that point, Gordon was separated from his wife, Christa Severns, but not yet divorced. (Severns filed for divorce this March, records show. The matter is pending.)

Gordon's divorce was unrelated to his relationship with Mullany, Rose says. He also told New Times that Mullany has been separated from her husband, James, for several years.

New Times has been working on this story for nearly a week, and Rose's press release -- coming on the same day as the announcement that two county supervisors have been indicted for alleged corruption -- appears to be a preemptive measure. The indictments will surely be Page One news tomorrow, pushing this story to the Valley & State section of the Republic, or the bottom of the front page.

The timing has the additional benefit of making this whole affair "old news" by the time we write about it in our print edition next week. Ah well...

In the statement issued by Rose, Gordon did not address the $39,000 in payments directly, focusing instead on the fact that Gordon has appointed Mullany to several city commissions.

United States Senator Max Baucus, a Democrat from Montana, recently came under fire for recommending that his girlfriend be appointed United States Attorney. Citing that case, Gordon asked City Attorney Gary Verburg to review his actions here involving Mullany. He also asked retired Arizona Supreme Court Chief Justice Thomas Zlaket to take a look, citing "an abundance of caution."

The release stressed that Mullany no longer serves on any city commissions.

But Gordon did appoint Mullany to a commission just as their romantic relationship was beginning, records show -- and she made a bit of money from it, too.

In the spring of 2008, as the two became romantically involved, Mullany served as one of the founding officers of Gordon's Phoenix Global Trade Initiative.

The much ballyhooed Initiative was a "privately funded partnership between the city of Phoenix and the business community," according to the press release annoucing its formation. The effort, spearheaded by Mayor Gordon, was designed to promote Phoenix to Israel, Dubai, and other Middle Eastern nations.

Mullany and her business partner, Cate Wunder, filed the nonprofit's articles of incorporation in March 2008.

Gordon officially appointed Mullany to the board of directors in August 2008. She resigned two months later, along with a host of other board members. (Soon after being granted tax-exempt status, the organization officially dissolved earlier this year. The organization's attorney, Sam Coppersmith, says that was because of Dubai's economy collapsing -- not to mention major financial problems here.)

Records from the aborted organization obtained by New Times show that Mullany and Wunder were paid $12,000 for their work organizing the Initiative's kickoff fundraiser, a breakfast at the Phoenix Convention Center.

The nonprofit also paid to fly Mullany and three public officials to Dubai. Total cost to the nonprofit: $20,977. (Gordon does not appear to have gone on the trip.)

The mayor also appointed Mullany to the Phoenix Sister Cities Commission in July 2007 and to the Citizens Transit Commission in 2005.

But it's the money Gordon paid Mullany via his campaign finance fund that may present the most interesting issues for Zlaket and Verburg to examine. Mullany started working for Gordon's campaign in March 2006, records show. She rapidly became one of his best-paid fundraisers.

Mullany earned $62,352 on her work on the campaign through November 2007. At that
point, when fundraising virtually ceased, Mullany formed a limited liability company with another Gordon fundraiser, Cate Wunder. They called it MullanyWunder LLC.

And that's also when Gordon began to pay her, and sometimes Wunder, monthly $500 "retainer fees," campaign finance reports show.

From January to May of this year -- a period in which the campaign was almost entirely inactive -- Gordon paid MullanyWunder $4,000 a month for "administration."

During that same period, a committee entirely funded by Gordon's campaign coffers -- a committee the mayor's supporters formed to push for a plan that would allow Gordon to stay in office even after term limits kick in -- paid MullanyWunder $10,000 for fundraising.

The committee never raised any funds other than direct donations from Gordon's main campaign finance committee. It folded in August of this year after polls showed that the public did not support extending the mayor's term in office.

Rose, the mayor's public relations rep, said that just because no funds were raised doesn't mean MullanyWunder wasn't working hard.

"Believe it or not, it takes quite a bit of time to raise money," he said. "You have to put together a finance plan, contact the donors." Because of the effort to get Gordon more time in office, the campaign wasn't as dormant as it appears, he said.

Gordon told the Arizona Republic last week that, with the issue dead, that he'll be looking to move to the private sector when his term concludes in 2011.

But that doesn't mean he can just drain his campaign finance committee -- or gift his family or relatives. Arizona law has strict policies on where excess campaign funds may go.

Lisa Hauser, a lawyer with Gammage & Burnham who specializes in election law, said that the law prohibits public officials from using campaign funds for personal benefit.

That means the mayor couldn't, for example, pay his estranged wife from the fund.

But his girlfriend is apparently fair game -- provided the mayor isn't indirectly benefiting.

"The only time that a payment to someone you're not related to by blood or marriage might be worth looking into is if those payments result in personal benefit to the candidate," Hauser said. "Based on the information you've provided to me, I can see why you'd be asking a question about it. But there's not enough information there to answer that question.

"I can't say that it's illegal," she added. "There's not enough to draw a conclusion."

Dave Levinthal, a spokesman for the Washington, D.C.-based Center for Responsive Politics, said that while he's not knowledgeable about the specifics of the case, the facts as described by New Times raise concerns.

"In general, any time you have a situation where a person in elected office is paying their close friend, family member, or a person they're romantically involved with, it raises serious questions," he said.

"The people who have donated to his campaign should take a pretty acute interest in anything like this," Levinthal added. "Political campaigns are run to win office. They shouldn't be a slush fund for your buddies."

The mayor's press release noted that he and Mullany do not live together and do not have a joint bank account.

Mullany, who was then known as Elissa Peters, was divorced from her first husband, Aldon Terpstra, in December 1998. She married James Mullany five years later, in October 2003. She has two young sons.

A former City Council staffer, James Mullany now works for former Phoenix Mayor Paul Johnson at his development company, Old World Communities/ Berkana Townhomes. Thanks to an appointment from Gordon, he's also on the city's Deferred Compensation Board.

Before raising funds for the mayor, Elissa Mullany did public relations for Donald Trump's controversial proposal to build a high-rise in the Camelback Corridor, according to the Phoenix Business Journal. That proposal was ultimately defeated.

A call to the mayor through his chief of staff, Toni Maccarone, wasn't returned yesterday afternoon. We'll let you know if we hear back. New Times also left a message for Mullany with Rose.

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