AG seeks inquiry into 2 PSPRS pension trustees

Two Public Safety Personnel Retirement System board members are being investigated for alleged Open Meeting Law violations after they revealed privileged information in legal claims against the state, records obtained by The Arizona Republic show.

Will Buividas, a Phoenix police officer, and Mike Scheidt, a Tempe firefighter, last month filed notices of claim — a precursor to a lawsuit — against PSPRS and its chairman, Scott McCarty.

They allege defamation, emotional distress and interference with business relations arising from an email McCarty sent earlier this year to about 60,000 people. It mentioned ethical questions about real estate deals Buividas and Scheidt entered with PSPRS

staff that earned commissions for them. Buividas and Scheidt are seeking a combined $624,999 in damages.

But in their claims they disclosed discussions among PSPRS board members and legal counsel during a PSPRS executive session meeting.

That triggered the Arizona Attorney General’s Office to launch an Open Meeting Law investigation. Because the Attorney General’s Office provides legal representation to PSPRS, creating a conflict of interest, the Mohave County Attorney’s Office was asked to conduct the inquiry.

Mohave County Deputy Attorney Ryan Esplin on Thursday confirmed to The Arizona Republic that he is conducting the investigation. “We will move forward and do our job with the Open Meeting Law complaints,” Esplin said.

Assistant Attorney General Katherine Jessen, in requesting assistance from Esplin, wrote in an email that her agency’s Open Meeting Law Enforcement Team “believes there are potential violation(s) of Arizona’s Open Meeting Law,” and concern “that confidential executive session information” was disclosed in the claims, according to records The Republic obtained under the state’s Public Records Law.

Such disclosure would constitute a legal violation, Jessen wrote.

Esplin said most Open Meeting Law violations are treated as civil cases but the PSPRS case “could spill over to criminal.”

State law says a “knowing or intentional violation” of the Open Meeting Law could result in a felony and removal from office. Typically, those who violate the law are required to attend training or pay a fine.

Buividas and Scheidt say they are not concerned by the investigation.

“Arizona law required us to file a notice of claim prior to initiating a lawsuit to recover the damages we’ve suffered. That notice, by law, must include a complete statement of fact. We followed the law to the letter, and we’re confident the (Mohave) County Attorney will agree,” the two said in a statement.

Buividas, a loan officer, is seeking $249,999 in damages, while Scheidt, who owns a real estate company, wants $375,000.

Arizona, like all states, has an open meeting law intended to prevent officials from making decisions in secret and to promote accountability. Public officials are allowed to discuss private matters, such as personnel issues or legal matters, behind closed doors in an executive session.

However, it’s against the law to publicly disclose information discussed in executive session.

The Republic last month obtained the notices of claim from Buividas and Scheidt through a public records request, but portions of them were blacked out.

Ryan Anderson, a spokesman for the Attorney General’s Office, said at the time that the “redactions are of material that is attorney-client privileged and presented in executive session of the PSPRS Board, and the claimants did not have authority to waive these privileges by including the redacted information in their notices of claim.”

Arizona law requires individuals to file a notice of claim prior to suing the state. The state can pay the demand, settle for a different amount or ignore it. At that point, an individual may file a lawsuit.

So far, there has been no settlement, according to the Arizona Department of Administration.

“Staff will cooperate with the Attorney General’s Office and ADOA as these agencies have authority over these matters. This development does not impact our work with employers, investments, day-to-day operations and the continued progress at PSPRS,” said Christian Palmer, PSPRS spokesman.

The state since December has paid $1.35 million to settle claims from three women who worked at PSPRS and alleged former Administrator Jared Smout had sexually harassed them. Smout, a friend of Buividas’, was fired last year after admitting to harassing and spying on staff.

The nine-member PSPRS board is composed of volunteers appointed by the governor and legislative leaders. They manage a $10 billion trust that pays retirement benefits to Arizona police officers, firefighters, correctional officers, judges and elected officials.

Buividas was appointed in November 2016 by thenstate Senate President Andy Biggs, now a congressman. Scheidt was appointed in 2017 by then-House Speaker David Gowan. Their terms expire in January, unless they are reappointed.

The Republic reported in January that Buividas and Scheidt made thousands of dollars in commissions on Smout’s purchase of a $550,000 home. Smout, as PSPRS administrator, had approved travel expenses for Buividas and Scheidt to stay at upscale hotels during out-of-state investment conferences, records obtained by The Republic show. The three of them spent at least $58,000 over a two-year period.

Following the report on their real estate deals together, Buividas and Scheidt lost their posts as PSPRS chairman and vice chairman.

The Republic later reported that Buividas and Scheidt had been involved in a real estate deal involving another PSPRS executive, earning them thousands of dollars more in commissions.

After The Republic reported the second deal, PSPRS Chairman McCarty sent an email on Feb. 4, saying it raised questions about ethics and conflicts of interest, and that such behavior “would be taken with the utmost seriousness.”

McCarty’s email was sent to roughly 60,000 people, including PSPRS members, every legislator, every city and county manager as well as every finance director, budget director and human resources director in government, according to the claims.

Buividas and Scheidt said in their claims that McCarty’s email hurt their businesses, especially among police officers and firefighters. The agency later sent another email apologizing for McCarty’s email.

“Arizona law required us to file a notice of claim prior to initiating a lawsuit to recover the damages we’ve suffered. That notice, by law, must include a complete statement of fact. We followed the law to the letter.”

Will Buividas and Mike Scheidt In a statement