BACKGROUNDER FROM PUBLIC CAMPAIGN

To: Interested Reporters and Journalists
From: Adam Smith, Communications Director, Public Campaign
Subject: Fiesta Bowl Scandal: Not Just About Sports—It’s Also About a Broken Political System
Date: April 1, 2011
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In college football, it’s against the rules for athletes to be paid to play. Athletes and programs face serious penalties if they break the rules. But in politics, elected officials are encouraged – even required – to take large amounts of money from wealthy donors to run for office. As we see in Arizona’s Fiesta Bowl Scandal, that’s a recipe for abuse of power and scandal.

 

Background

News reports broke this week about a devastating scandal that could force the college football Bowl Championship Series (BCS) to drop the Fiesta Bowl, an event that would cost the state of Arizona millions of dollars in lost tourism and tax revenues. Importantly, the scandal ensnares several lawmakers in ethics controversy and possible legal violations. It’s just one more sad example of a cash-and-carry political system that benefits the well-connected, and works for the few at the expense of the many.

According to a 276-page independent report (PDF) commissioned by the Fiesta Bowl’s board, at least 21 individuals connected with the organization were forced or asked to write campaign checks and then received reimbursements in the form of “bonuses” paid by the Bowl’s non-profit. Not only are straw donations illegal, but also so are the use of 501(c)(3) nonprofit funds for political purposes. As the New York Times reported, “the investigation may threaten the tax-exempt status of the bowl.”

In return for bundling campaign checks to many of Arizona’s prominent politicians, Fiesta Bowl bosses were looking for tax breaks and other special treatment to boost the bottom line of this $28 million a year organization.

Examples abound throughout the report. Here’s how one employee described how she became a political contributor:

[Kelly] Keogh, for example, said that in or around 2006 there was a stadium bill issue and, though she knew the Bowl had collected checks in the past for political candidates, she had never written one. Keogh said she told [Natalie] Wisneski that she wished she could help but that she could not afford to give any money, to which “Natalie said ‘don’t worry, we will get you reimbursed,’ and I remember I told her ‘that’s great, I’ll write a lot of checks.’”

Whether elected officials knew it or not, Fiesta Bowl executives knew exactly what they were doing (or buying) by collecting all these campaign contributions—the Associated Press reported on nine pieces of Fiesta Bowl legislation that the state legislature has handled since 2002. And these executives were pressuring their employees to help out:

• Shawn Schoeffler noted that he wasn’t “forced” to contribute, “but if you want to stay on the good side you need[ed] to do it,” he said.

• Peggy Eyanson remembers being told, “We really need you to donate to this and will get you the reimbursement as soon as possible. We did, and I was pretty upset.”

• Natalie Wisneski explained the reimbursement process succinctly, “It would be like a constant pounding on me to bonus the staff and I knew he was only talking about the ones that were getting the campaign reimbursements.”

That many of these lawmakers would take these campaign checks then accept free trips to watch football games in Boston, Chicago, or Minneapolis makes it even worse.

Federal recipients of the campaign contributions include Arizona Sens. Jon Kyl (R), and John McCain (R), Rep. Jeff Flake (R) and former Reps. John Shadegg (R), JD Hayworth (R), and Harry Mitchell (D). Arizona Senate President Russell Pearce (R) also received contributions and trips, along with a handful of local officials and current and former members of the legislature.  

Arizona’s Clean Elections System

In response to other state campaign finance scandals, voters in Arizona adopted a Clean Elections law in 1998. The law, which provides limited public financing for state candidates who show sizeable public support and agree to take little or no large contributions, has worked well despite being under considerable political and legal attack since passage. Just this Monday, two days before the scandal broke, the U.S. Supreme Court held oral arguments in McComish v. Bennett, a case challenging the constitutionality of one provision – the so-called “trigger funds” – in the Clean Elections system. In addition, opponents in the Arizona State Legislature – including Senate President Pearce, who is implicated in the Fiesta Bowl scandal – are attempting to repeal the voter-approved law.

This is no time to repeal, or invalidate, any part of the Clean Elections system, which would reduce the pressures on lawmakers to seek the type of donations that this week’s report exposed. Arizona lawmakers ought to take steps to protect it and save it, along with other possible anti-corruption measures, like a strict gift ban or limiting donations from state contractors and lobbyists.

The first order of business is to make sure that Arizona doesn’t slip backwards but enforces and improves upon the laws already on the books.

We don’t know what the result of this scandal will be, whether Bowl executives or lawmakers will face ethics charges or criminal charges, but we do know that it will only serve as an example to Arizonans and Americans that our political system is on the auction block.