Phoenix moves to toughen lobbying rules

Lobbyists paid to influence decisions at Phoenix City Hall likely will face harsher penalties if they don’t comply with the city’s regulations, an expansion that follows a report in The Arizona Republic that showed the city’s rules were useless.

The City Council voted 9-0 Tuesday to amend the city’s lobbying ordinance so that those who don’t comply with its registration or expense disclosure rules can face sanctions, including fines of up to $2,500, suspension from lobbying and possible jail time for repeated offenses.

The new law also would apply rules to lobbyists’ communication with far more officials at the city.

Almost four months ago, The Republic reported that a high-profile law firm had violated the city’s lobbying ordinance and filed falsified documents to make it appear they had complied with it.

The city attorney said the episode led the city to conclude that Phoenix’s current lobbying ordinance is unenforceable.

That means lobbyists who do not register, disclose their clients or report meals, gifts or other expenses to influence elected officials currently face no

penalties.

Some council members said that Tuesday’s move would fix the city’s toothless lobbying law and provide more transparency about lobbyist activity. The council will take another vote next week to finalize the changes.

“This is long overdue,” Councilman Daniel Valenzuela said.

The new law would apply to lobbyists trying to influence city executives, including department directors, the city manager and his top staffers, along with members of boards and commissions, such as the Planning Commission, where some major development decisions are made.

Right now, disclosure is required only when lobbying the mayor and City Council members.

The strengthened rules also would make fines steeper and increase the amount of time lobbyists could be suspended from contacting city officials, from a maximum of 90 days, as previously proposed, to one year.

Council members debated the definition of a lobbyist, and some worried that the new law would ensnare small business owners who contact the council. But the members settled on a simple definition: Anyone who is paid to lobby for someone other than themselves is a lobbyist.

“If you’re getting paid to lobby, you should be registered,” Mayor Greg Stanton said.

Under the new ordinance, which would take effect July 1, lobbyists who fail to register or disclose their expenses would have a chance to address the problem before facing an investigation.

The law gives them 15 days to correct their error. Penalties would escalate for further non-compliance.

City officials said they realized the city’s ordinance was unenforceable in January, when the episode with the law firm was exposed.

City Attorney Brad Holm said city couldn’t do anything to penalize the law firm or others who do not comply because of how the rules were written. The law had been in place for more than two decades, but city officials never realized it had a fatal flaw.

The proposed rules that council members approved Tuesday state that failure to comply with the city’s lobbyist rules is unlawful.

Making the law enforceable required only the addition of several key words, but the city sought a broader overhaul after the City Attorney’s Office compared the ordinance to those of other large cities.

One of the biggest changes would make initial violations a civil offense rather than criminal. The City Attorney’s Office said that many other large cities treat lobbyist violations as civil offenses.

For years, the city considered a violation of the lobbying rules a criminal misdemeanor offense, punishable by up to six months in jail, a fine and three years of probation.

Some council members said they want progressive penalties so that repeat offenders are punished more harshly, but not those with simple registration errors.

“I think it would take quite a bit for someone to fall under this ordinance,” Councilwoman Thelda Williams said of repeat offenders. “Personally, I will not accept any excuses for failure.”

The city now plans to create an online registration form and will provide a registration kiosk outside Council offices.

Under the new ordinance, a lobbyist’s first two offenses within a seven-year period would be civil violations, punishable by a fine ($1,000 for a first offense and $2,500 for a second offense). A third violation in that time frame would be a

“If you’re getting paid to lobby, you should be registered.” GREG STANTON MAYOR OF PHOENIX

criminal misdemeanor.

Lobbyists who violate rules also would face suspensions from contacting city officials, with 90 days for a first offense, six months for a second offense and one year for a third offense.

Valenzuela said longer suspensions from lobbying are more of a deterrent than the fines.

If a lobbyist is accused of not registering or disclosing expenses — and ignores a warning to fix the error — the city’s Ethics Commission would investigate. The commission can determine whether a violation occurred and refer the case to the city attorney.

Phoenix’s independent Ethics Commission, which council members voted to create in February, isn’t expected to form until early next year. The city attorney will enforce the law until then.

Phoenix officials began reviewing the lobbyist law in January after a council vote on a controversial proposal to pay a developer about $1.2 million for stormwater culverts built on private property in Ahwatukee Foothills. The council denied the request. It drew attention because the developer had hired two lobbyists who, according to the city, weren’t registered. The developer hired lawyer Ed Bull of the firm Burch & Cracchiolo and political consultant Joe Villasenor, a former city staffer.

The law firm had not registered since 2014, and Villasenor was last registered as a lobbyist in 2011, city officials said in January.

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.

Meanwhile, Burch & Cracchiolo filed a signed affidavit with the City Clerk’s Office contending it submitted the proper filings the past two years.

Emails show Holm looked at the documents and compared them with 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.

Holm said that he determined the documents were falsely created and backdated. Burch & Cracchiolo withdrew the forms and blamed the false documents on a non-attorney staff member.

Bull attended Tuesday’s council meeting and said afterward that he supports the council’s changes to the lobbying rules.