Maricopa County Sheriff's Office spokeswoman Lisa Allen was dismayed when she saw the super-sleazy TV ad against her boss' opponent, Dan Saban, air on September 30, 2008.
She thought the ad, which stated that Sheriff Joe Arpaio's opponent had masturbated on county time and had once been accused of raping his own mother, put the county law enforcement agency in a bad light.
"We just look like scum," Allen told investigators two years ago.
She's sure right about that. But the scumminess goes way beyond the content of a political smear ad.
The recently released SCA report by the state Attorney General's Office exposes evidence of big corruption within both the MCSO and the state Republican Party.
Our previous stories on the secret fund known as "SCA," (Sheriff's Command Association,) detail a conspiracy to launder tens of thousands of dollars from Arpaio's rich supporters and his command staff through the fund. The money was funneled into the Republican Party, where it was used to pay for an attack ad against Arpaio's opponent in the 2008 election, Dan Saban. The report sheds new light on the scheme to violate campaign laws, while detailing lies and acute memory losses of key players.
Arizona law prohibits contributions to political parties or political action committees that are made in the name of another person or are earmarked toward specific candidates. The maximum contribution to a county candidate in 2008, the year of the election in question, was $390. In that year, corporations weren't allowed to contribute money for the purpose of influencing an election (in 2010, the Supreme Court ruled that corporate money could be used in campaigns).
The report contains strong evidence that those campaign laws were broken by sheriff's officials and representatives of the state Republican Party. Investigators suspect key players of even more. Search warrant returns show that, in addition to campaign violations, Captain Joel Fox is suspected of fraudulent schemes for his role in the SCA, and Chief Deputy David Hendershott is suspected of "illegal conduct of an enterprise and obstructing criminal investigations or prosecutions."
The report states:
* David Hendershott, Arpaio's chief deputy and campaign manager, masterminded the SCA effort and solicited many, if not most, of the secret contributions. A total of $101,500 was raised over two years.
* Working with another of Joe Arpaio's key confidante's, Larry Black, Hendershott had contributions sent to Black's subordinate, Captain Joel Fox. That way, Hendershott and Black could keep their names out of it. Fox has long maintained that he was the founder and only decision-maker for the SCA fund.
* During the run-up to the 2008 campaign, Black frequently was seen in his office on the 19th floor of the Wells Fargo building in downtown Phoenix -- Sheriff's Office headquarters -- working on the material for the planned anti-Saban ad. Lisa Allen saw him looking at a Saban deposition transcript, and Sheriff's Captain Jim Miller told investigators it was common knowledge around the office that he was working on the ad. The Republican Party later used the SCA money to produce an ad based on Black's work.
* In summer 2008, state Representative Jim Weiers set up a meeting between Black, Fox, and Republican political consultant Chris Baker. We put in a call to Weiers today -- he hasn't called back.
* After two meetings at restaurants with Black and Fox, Baker received an $80,000 check from the SCA account. He'd later receive another $25,000 check.
* Baker took the check directly to Randy Pullen, then chair of the state Republican Party. Pullen told an assistant to put the money in the party's state account, despite her protests that the contribution might be improper.
* The Republican Party used $78,000 of the money to fund an independent expenditure committee, Arizonans for Public Safety, created the day after Pullen received the check.
* Baker was then employed to work on the anti-Dan Saban ad. He told representatives of Anthem Media, which produced the TV ad, what the ad should say.
* The TV ad aired just once, on September 30, 2008. Pullen and other high-ranking Republicans watched the ad while attending an event at John McCain's Phoenix headquarters.
The Party's general counsel, Joe Abate, was present. He told investigators that Pullen told him about "some money given to the party [that] was supposed to be used for a specific purpose, but Joe Abate could not remember what the purpose was. He believed Randy Pullen said the money was earmarked...Upon leaving the meeting, Joe Abate thought that the party may be in some trouble."
Former state Republican Party chair Mike Hellon, also at the event, asked Pullen why he would create such a "sleazy" ad. He says Pullen responded, "Because there were some supporters of Joe Arpaio who gave us some money, and that is what they wanted us to do with it."
* Days later, someone tipped Hellon that Bruce Ash, a Republican committeeman, told a Capitol Times reporter that he'd been informed by Randy Pullen that the money would never have been donated if the party hadn't agreed to do the ad. Hellon told state investigators that he phoned Ash "and told him that he had better shup up, because he just told the media that the state party is guilty of a felony."
* Hellon also described how U.S. Senator Kyl was duped into raising funds to replace the SCA donation, which had to be returned to contributors.
The Republican Party was forced to give back the $105,000 in SCA donations after questions were raised about the anonymous contributors. Legally, it could only accept the donations if the names of the individual contributors were known. But this became a problem for the state party, which had spent the money on negative ads targeting both Dan Saban and Tim Nelson, the opponent of former County Attorney Andrew Thomas.
The Party was "basically broke during the 2008 election cycle," Hellon told investigators. He said Pullen asked Kyl to tap some of his rich contributors "so the party could do a get out the vote campaign."
A fundraising dinner was held for "12 or 15 guys, and somewhere in the range of about $85,000 was raised. Instead of using the money to have a get-out-the-vote effort, Pullen used it to repay the SCA money," Hellon said.
* The big-money contributors to the SCA, including local developer and Phoenix Coyotes owner Steve Ellman, were also contacted by either Sheriff's Office or party officials and asked to resubmit checks directly to the Republican Party -- which they did.
* A "day or so" after search warrants were served at the home of Joel Fox, Hendershott visited several subordinates for a chat. Scott Freeman, the office's chief of special operations, recalls that Hendershott wanted to remind Freeman that Hendershott had nothing to do with the SCA fund. "Scott Freeman told Chief Hendershott that was not his recollection," investigator Mike Edwards wrote.
Freeman had been among several deputies asked to contribute to the SCA through payroll deductions. But Freeman let Hendershott know he wasn't going to lie for him. He told his boss that he specifically recalled how Hendershott invited him to contribute, telling him to "contact Larry Black about how to set it up."
* The AG's office, in a search warrant for Hendershott's e-mails, wrote that Arpaio's second-in-command was suspected of violating campaign laws, obstruction of justice, and running an illegal enterprise.
The FBI, which conducted its own investigation of the MCSO along with AG sleuths, found additional dirt Hendershott in "file reviews and interviews" from other investigations, the SCA report says:
* "Per an interview, on or about 10/12/05, David Hendershott made a request of Alltell Rep, Mark Walker, to destroy all cell phone call records because he was concerned that campaign phone calls made from MCSO phones could be tracked," the report states.
Although that pre-dates the SCA mess, the FBI's accusation raises questions about what other kinds of evidence Hendershott or others in his command might have destroyed. As we mentioned in a previous blog, Arpaio's spokeswoman, Lisa Allen, told investigators that when the Sheriff's Office learned it was under investigation, Black had urged her to delete anything on her computer related to the 2008 campaign.
The FBI also accuses Hendershott of ordering a Verizon rep to "write a false document that indicated no bad credit with Verizon in order to facilitate the financing for his home."
The Verizon rep, Dawn Shackner, "later became a civilian employee of MCSO."
We should mention that the SCA report contains no direct evidence that Arpaio knew anything about the scheme. Perhaps Hendershott kept him in the dark intentionally, protecting him from the storm he figured would later come. We can't help but wonder if there was discussion about the SCA within what Sheriff's Office employees called Arpaio's "inner, inner circle," of his closest aides: Hendershott, Black, and Brian Sands.
The scandal essentially began in summer 2006, when Hendershott invited County Elections Director Karen Osborne for an unusual sit-down meeting at a Phoenix CoCo's restaurant.
"We've got big money we can get to out there; there is big money we can bring in to this effort," Hendershott reportedly told Osborne.
By effort, Osborne told investigators, Hendershott meant his intention to "crush" Sheriff Arpaio's competition.
Hendershott wanted to set up a political action committee, but Osborne told him no corporate money could be mixed with the PAC's donations. Corporate money could be given to a "political organization that only focused on issues," she advised.
A few weeks later, Black and Fox set up two political action committees and opened the SCA bank account. The PACs were never used, but the SCA account grew rich.
Hendershott and Black persuaded several high-ranking deputies to contribute, telling them the money would be used to help deputies. The pair also contacted "several rich individuals" and asked them for fat checks.
Ellman, who gave $25,000, told Anchorage businessman Tom Gimple that the contributions would be used to support Sheriff Arpaio. Hendershott began e-mailing Gimple, recommending a donation of $25,000, and telling Gimple how to make out the check and where to send it. (Gimple sort of screwed it up by writing, "Vote for Sheriff Joe Arpaio" on the check, which became a key piece of evidence that the contribution was an illegal earmark.)
One contributor believed she was helping fund a toy drive.
In the months before the election, Hendershott took "weeks" off from work to focus on Arpaio's campaign, which he considered "God's work," according to retired Maricopa Captain Jim Miller, who was interviewed by the FBI.
Miller told investigators that, before the anti-Saban ad was run, Black spent a great deal of time working on it in Arpaio's 19th-floor "video room."
Miller also confessed that it was "common talk/knowledge" around the office that the shady SCA fund "was the method used to 'fund the hit piece on Saban,'" the report states.
Worthy of note: Randy Pullen and Bruce Ash came off as extremely evasive in their interviews. Both suffered acute memory loss at times.
By contrast, Pullen's assistant at the time, Amy Lynn Gordon, was much more forthcoming to investigators. The talk around the office was that the SCA money would be used for an ad to help Arpaio, she said.
She said she assumed it would be a negative ad. Politically the campaign did not want its hand on dirty stuff, she said. That would be the job of the party
Asked what she understood the purpose of Arizonans for
Public Safety to be when it was ﬁrst formed, Gordon said it was an independent-expenditure committee to support the sheriff. Asked if it was formed speciﬁcally to support the sheriff, she said yes. Asked how she learned that, Gordon said she gleaned it from talking to Sean McCaffrey or Randy Pullen, though she could not remember a speciﬁc conversation.
Investigators note that Pullen, in a letter to a state elections investigator, wrote: "In fact, no one at the Party ever had a direct or indirect conversation with any one with or associated with SCA regarding the intended use of the funds."
The fact that Baker, a Republican contract worker, had meetings with SCA organizers Black and Fox, belies Pullen's statement.
SEE OUR OTHER COVERAGE ABOUT THE SCA REPORT:
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September 17, 2010
Munnell Memo Fleshes Out SCA Scandal
We've written more blog posts and articles about the SCA than we count. Click here for a list of a whole bunch of them.