Arizona Republic reporters Dustin Gardiner, Rob O’Dell and Richard Ruelas discuss Phoenix’s recent efforts to crack down on lobbyists and how it will affect residents, city government and the media.
The Arizona Attorney General’s Office is conducting a criminal investigation into an incident in which a high-profile law firm filed falsified documents with the city of Phoenix.
In January, The Arizona Republic reported the firm Burch & Cracchiolo had violated the city’s lobbying ordinance and had filed falsified documents to make it appear it had complied.
The firm, a presence in Phoenix’s legal community for decades, later withdrew those documents. Firm President Ed Bull said the documents were prepared by a non-attorney staffer.
On Tuesday, the Attorney General’s Office confirmed the matter is the subject of a criminal probe. However, the office would not release details about the status or scope of the inquiry.
“All I can confirm is our criminal division is investigating the matter,” Mia Garcia, spokeswoman for Attorney General Mark Brnovich, said in an email in response to a question about whether the office has investigated the falsified documents. “We can’t comment any further.”
Burch & Cracchiolo declined to comment about the investigation.
Bull said in January: “No attorney prepared, signed or notarized the 2015 and 2016 reports and affidavit; instead, they were provided to us by a member of our staff who told us the reports had been prepared and mailed to the City Clerk’s office.”
The inquiry is the second attorney general investigation involving activity at Phoenix City Hall that The Republic has confirmed in the past two weeks.
The incident also led city officials to realize Phoenix’s existing lobbyist ordinance cannot be enforced — which city officials said prevented them from penalizing anyone at the firm.
The revelation pushed City Council members to vote last week to strengthen and expand regulations on paid lobbying at City Hall. The new rules are expected to take effect July 1.
Separate legal issue
Although Phoenix did not prosecute anyone at Burch & Cracchiolo for not complying with lobbyist regulations, the issue of falsified documents is a separate legal matter.
Filing false documents with a government agency can be a felony offense.
Earlier this month, The Republic asked Phoenix City Attorney Brad Holm whether the city had considered taking any action over the fake documents, but he said it’s not within the jurisdiction of the city to prosecute felonies.
Any felony prosecution related to falsifying documents would be the jurisdiction of the attorney general or the Maricopa County attorney, he said.
Holm said the city didn’t refer the matter to the Attorney General’s Office. He said there was a reason the city didn’t do so, but he was “not at liberty” to discuss it.
As of Tuesday evening, it was unclear what triggered the attorney general’s investigation and which individual people were the subject.
Why law firm came under scrutiny
Phoenix officials began scrutinizing the lobbyist registration status of Burch & Cracchiolo and another lobbyist earlier this year.
The issue arose after a City Council vote on a controversial proposal to pay a developer about $1.2 million for storm-water culverts built on private property in Ahwatukee Foothills. The council denied that request.
But two lobbyists for the developer who sought to influence council members drew attention afterward.
The developer had hired lobbyists who, according to the city, weren’t registered. Those lobbyists were lawyer Bull and political consultant Joe Villasenor, a former city staffer.
Phoenix city code requires paid lobbyists to register, disclose their clients and disclose campaign contributions or gifts they give to elected officials. The intent is to provide transparency.
The law firm had not registered since 2014, and Villasenor was last registered as a lobbyist in 2011, city officials said in January.
At first, Burch & Cracchiolo insisted it had complied with the city’s lobbyist-reporting rules. The firm filed a signed affidavit with the City Clerk’s Office contending it had submitted nine separate filings over the past two years, which would have put the firm in compliance with the city.
Holm, the city attorney, said those documents were falsified and backdated.
Letterhead exposed false documents
Emails between the firm and Phoenix officials show Holm looked at the documents and compared them with the letterhead from official correspondence the law firm sent to the city in previous years. Holm contacted Bull to question inconsistencies in the names of attorneys listed on the letterhead.
“Check the stationery submitted to us last week against your stationery in 2015 and 2016,” Holm wrote in one email obtained by The Republic via a public-records request. “They are different.”
In another email, to city employees, Holm described his initial conversation with Bull about the falsified documents.
“Bull’s office is still asserting that they filed all of the documents covered by the secretary’s affidavit,” Holm wrote. “Yet he admitted last night that the secretary backdated and digitally signed the 2015 and 2016 cover letters.”
Burch & Cracchiolo later withdrew the forms. Bull said the firm originally thought its reports were lost in the mail or inadvertently misplaced but later realized that wasn’t true.
Bull said no attorney prepared, signed or notarized the documents, though the documents bear what appears to be the electronic signature of firm attorney Clare Abel. 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.
The staff member who signed the affidavit no longer works at Burch & Cracchiolo, The Republic was told by the law firm Tuesday.
Burch & Cracchiolo later filed the proper registration.
Meanwhile, Villasenor’s attorney insisted 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.
Villasenor filed another registration form with the city in May. But his registration was still pending because Villasenor has yet to provide corporation commission documents the city requested, according to the City Clerk’s Office.
Kory Langhofer, his attorney, has said the city cannot reject Villasenor’s registration based on corporate domiciliary filings. Villasenor’s business, domiciled in Delaware, is filing with the Arizona Corporation Commission, Langhofer said.
The new investigation into the law firm is the second probe involving the city of Phoenix publicly confirmed by the attorney general in the past two weeks.
The first involved Councilman Michael Nowakowski, who is accused of not properly disclosing a conflict of interest in a deal involving the sale of a prime piece of city-owned land. He has denied any wrongdoing.
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