Former Pinal County Sheriff Paul Babeu, ex-County Attorney Lando Voyles subject of FBI probe
Two top former Pinal County law enforcement officers whose activities are under state and federal investigation say they have been defamed by the new county attorney and are demanding an apology.
Former Pinal County Sheriff Paul Babeu and County Attorney Lando Voyles said they have been maligned and subjected to “disparaging statements” over their handling of profits from seized property.
Attorneys for Babeu, Voyles and his former chief of staff, Dwight Fujimoto, accused County Attorney Kent Volkmer of making false claims “with respect to our clients’ management of RICO funds” and asset seizures.
“You have defamed Mr. Babeu and Mr. Voyles … via your false statements to others by accusing them of criminal activity,” attorneys wrote in a May 1 letter to Volkmer.
“You, with actual malice, have willfully failed to investigate the matters on which you commented and intentionally published falsehoods.”
READ: The letter
RICO refers to anti-racketeering laws that give authorities wide latitude to seize assets in criminal cases — even if charges are not filed — and then fund operations with the proceeds. Arizona’s forfeiture laws direct proceeds into the coffers of the prosecutors and law-enforcement agencies involved in seizing the items.
Volkmer on Monday said he was surprised by the letter and dismissed the allegations as unfounded.
“My reaction is: This seems like a political stunt,” Volkmer told The Arizona Republic. “I don’t know if they’ve done anything wrong or not. That’s what the FBI and the (Arizona) auditor general are investigating.”
Babeu and Voyles said in their letter they want Volkmer to make a public retraction and apologize or promise to “use all legal remedies available to us.”
Volkmer said he had no plans to respond.
“I don’t know what they want me to retract or apologize for,” he said.
FBI, Arizona auditor general review spending
Volkmer in March confirmed that federal authorities launched a probe into whether Babeu and Voyles inappropriately used profits from seized property for personal and professional expenses.
He said he also asked the Arizona auditor general to review Pinal County’s asset-forfeiture records to determine if monies were properly used.
“I did not make any statements that accused them of wrongdoing,” Volkmer said Monday. “If they did something wrong, I will not bury it. And if they did nothing wrong, I will make sure everybody knows.”
Voyles on Monday called Volkmer reckless.
“The new attorney is making statements about the law without knowing what the law is,” he said. “It’s extremely outrageous that you would make such bald-face lies — claims that this money was spent improperly.”
Voyles maintained that the system he put in place to review RICO expenditures became a model for other law enforcement agencies in Arizona. He said there was nothing requiring recipients of RICO funds to list specific expenditures until he made it part of the review process.
Voyles said any suggestion that he and Babeu did something unethical or illegal is “unfounded.”
FBI agents conducted an informal search of the Pinal County Sheriff’s Office in February, taking items related to Babeu and his administration and specifically related to asset forfeiture expenses. Agents also approached the County Attorney’s Office about financial records kept by Voyles, who oversaw and approved expenditures of the funds.
The May 1 letter maintained that Babeu and Voyles had proper controls in place to ensure RICO funds were not misspent. It accused Volkmer of failing to investigate RICO fund audits conducted by the county, the Arizona Attorney General’s Office and the Arizona Criminal Justice Commission.
Scottsdale-based lawyer Marcus Kelley, who represents Babeu, Voyles and Fujimoto, said his clients established proper controls to ensure RICO funds were not misspent. He said Volkmer failed to research yearly audits of RICO fund audits conducted by the county, the Arizona Attorney General’s Office and the Arizona Criminal Justice Commission.
“Not one of the aforementioned audits denoted improper use of RICO funds by either Mr. Babeu or Mr. Voyles,” Kelley wrote in the letter. “These audits are all public records, which are easy for you to obtain and were obvious starting points for determining the truth of the matter before you made your patently false statements.”
Dispute over Volkmer’s statements
The May 1 letter is unclear about what specific statements Volkmer made about Babeu and Voyles that were being called into question. It references “news stories” and includes a copy of a story published March 1 in the Casa Grande Dispatchin which Volkmer commented on the FBI investigation.
A similar article was published the same day on azcentral.com.
The demand letter from Babeu and Voyles does not cite any quotes or specific statements.
Kelley said Volkmer has repeatedly accused his clients of misspending RICO funds, which is a crime. Kelley said Volkmer’s statements suggest his clients broke the law. He referenced a partial quote in the Dispatch article in which Volkmer said he wasn’t going “to hide their misdeeds.”
Volkmer’s full quote in the article reads: “I am not going to intentionally throw the prior administration under the bus and back it up over them and go forward and backward and forward and backward. But by the same token, I’m not going to hide their misdeeds. I don’t believe that is fair to the citizens. I don’t believe that is fair to this office.”
In the same article, Volkmer talked about the RICO funds as a festering wound and said it was time to rip the Band-Aid off and expose it to light, adding, “We’re going to find out what’s there or what’s not there.”
Kelley accused Volkmer, who successfully campaigned against Voyles, of pandering to the public.
“He’s saying, ‘I’m the good guy. Those guys were the bad guys,’ ” Kelley said. “That was the thrust of his campaign.”
Kelley denied his clients had political motives for demanding the apology and retraction, saying none of them holds public office.
Babeu, who left office in January, is a Republican who made border security a top issue in his two losing attempts to win a seat in Congress.
Criticism over auditor general’s involvement
In the letter, Kelley criticized Volkmer for asking the auditor general to review the RICO funds.
“It is not the Pinal County Attorney’s place to call on the the Arizona Auditor General to conduct an investigation,” it said, adding that Volkmer should have sought approval from a state legislative audit committee.
Volkmer said Monday he consulted with former Maricopa County Attorney Rick Romley and other legal advisers before approaching the auditor general.
Romley, a highly regarded Republican, frequently consults on issues of legal ethics and has led independent state and county investigations.
“We thought this is the best way,” Volkmer said. “(The auditor general) is a non-biased party, who is looking into this for the public good.”
Not the first inquiry into RICO funds use
Babeu and Voyles’ use of RICO funds has been questioned for years in lawsuits and investigations.
The FBI issued a subpoena last year to a non-profit agency that received hundreds of thousands of dollars in Pinal County RICO funds.
The Arizona Public Safety Foundation, which for years operated out of the Sheriff’s Office and was staffed by sheriff’s deputies, used RICO funds from Pinal County to help support Sheriff’s Office activities and functions.
Foundation executive director Joseph Trasser has declined to discuss the subpoena or the FBI investigation. He said the FBI probe of Babeu and Voyles “is not our issue.”
The Goldwater Institute, a conservative watchdog group, raised concerns about the foundation last year and sought records to determine if Babeu was using it to bypass campaign finance laws and promote his 2016 congressional campaign.
Questions about the foundation also were raised in a 2015 federal lawsuit by attorneys from Perkins Coie and the American Civil Liberties Union. They contended the foundation operated as a pass-through for Babeu and Voyles.
PREVIOUSLY: Pinal County seeks to dismiss forfeiture lawsuit
The lawsuit accused Babeu and Voyles of exploiting Arizona’s forfeiture laws, which provide little to no oversight on spending, plaintiff’s attorneys said. Forfeiture laws, in general, created a multimillion-dollar “slush fund available to (law enforcement) with little or no oversight,” the lawsuit said.
Forfeiture money paid for Voyles’ personal security system, retirement contributions of employees in his office and fundraising for the sheriff’s office, according to the lawsuit.
Babeu was tapping RICO funds to pay for sheriff’s office travel as early as 2011. Records show Babeu spent more than $53,000 to send 25 people to a weeklong conference in St. Louis at which he received a national award.
“At a minimum, it seems that by funneling money to a private group which buys things for him and his department … Babeu is able to avoid procurement laws and other transparency regulations which usually apply to government purchasing,” the lawsuit stated.
All but a fraction of the foundation’s money came from Pinal County’s RICO fund, and the money was used to buy items such as automatic weapons for deputies, supplies, police dogs, horses and feed, according to the lawsuit.
Voyles’ office reported to the Arizona Criminal Justice Commission that RICO funds sent to the foundation were used for a “Gang & Substance Abuse Prevention & Education Program,” according to the lawsuit.
Committee to OK future expenditures
Pinal County Sheriff Mark Lamb, who was not named in the defamation letter, said Monday he is reviewing every aspect of RICO expenditures before releasing funds.
“Our challenge is we want to make sure we are using RICO funds the right way,” he said. “I wasn’t in charge of the past, but I can be in charge of the future.”
Lamb said he wants to release RICO funds on a quarterly basis and that he will require recipients to submit a breakdown of expenses, which will be reviewed by a committee before a request is approved.
Kelley said Babeu and Voyles welcome the FBI and state investigations into their use of RICO funds.
“I can’t imagine the FBI or the auditor general will turn up anything that hasn’t been in previous audits. … There has been nothing wrong,” he said. “If wrongdoing was going on, the disparate auditing entities would have found it.”
Voyles said he will drop his claims as soon as Volkmer apologizes.
“I want him to recant his words,” he said. “Retract them and I’ll be good with it.”
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