FOLLOWING MONEY IN 2016 PRESIDENTIAL POLITICS

Tuesday, April 18, 2017

BREAKING: Arpaio Finds A Tax Exempt Nonprofit For Supporters To Fund Legal Defense, Starts With $250K

Former Maricopa County Sheriff Joe Arpaio has come up with a way to permit his thousands of supporters across the nation to fund his legal defense with tax deductible money.  His non-exempt Legal Defense Fund has now received $250,000 from the new tax EXEMPT organization the National Center for Police Defense.

Arizona's Politics has been reporting on the ongoing efforts by Arpaio - who is now facing a criminal contempt trial in June for admitted violations of federal court orders in the long-running Melendres v. Arpaio civil rights case. Impassioned solicitations for the Sheriff Joe Arpaio Legal Defense Fund (from Arpaio) have mistakenly informed his supporters that the contributions to keep him out of jail would be tax deductible.

Ironically on Tax Day, this plea for money hit Arpaio's supporters' email inboxes today. It comes from the new NCPL, and includes one of the Sheriff's *personal* emails. (The entire email is republished below the jump in this article.)  It emphasizes the unlimited, tax deductible nature of gifts.

Arpaio's Legal Defense Fund is an opaque entity operated by Summit Group Consulting, the same consulting firm that has run Arpaio's campaigns and made him into an unparalleled fundraising machine. There is no evidence that the fund is incorporated in Arizona (or, elsewhere). No public disclosure of the funds received or expended is required under law.

It is very likely that any monies raised by the fund and disbursed to attorneys on Arpaio's behalf are taxable income for the Sheriff. On his personal financial disclosure statement (filed while he was in office), Arpaio did not divulge receiving any income from this fund, nor did he list any gifts, reportable interests, or personal debts.

Arpaio also maintains control of his campaign committee, which had more than $460,000 on March 31, 2017.  His report filed last week does not show that any transfers were made to the NCPD during March, although that would appear to be one possible way for Arpaio to dispose of the campaign monies.

Arizona's Politics has asked for responses and explanations from both Jim Fotis of the NCPD and Arpaio's longtime campaign guru Chad Willems. This article will be supplemented as needed.

(Phoenix election law attorney and Arizona's Politics' co-founder Paul Weich contributed to this article.)


Tuesday, April 4, 2017

READ: "The Circus Is Over; The Tents Are Coming Down": New Sheriff Closing Expensive "Tent City Jail"

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BREAKING UPDATE: Judge Sets Emergency Hearing In Arpaio Criminal Contempt Case

(UPDATE, 3:45pm: The Department of Justice's Public Integrity Section informs Arizona's Politics that it will attend the Thursday hearing in person, rather than by telephone.)

Outgoing and incoming legal counsel for former Maricopa County Sheriff Joe Arpaio are ordered to appear personally at an emergency hearing this Thursday afternoon.  U.S. District Court Judge Susan Bolton issued the order this afternoon, after lead counsel A. Melvin McDonald told the Court last night that he needed to withdraw three weeks before the criminal contempt trial. (The Order is published below.)

The prosecuting attorneys for the Department of Justice are permitted to phone in for the accelerated hearing. However, a spokesperson for the DOJ's Public Integrity Section informed Arizona's Politics this evening that they will be in the courtroom. (And/or in the Judge's chambers, if necessary.)

Arizona's Politics reported yesterday on the surprise 11th hour withdrawal application. The Arizona Republic followed up with some possible insights into what may have prompted the ethical quandary that former U.S. Attorney McDonald and the Jones, Skelton & Hochuli firm found themselves in.

If the withdrawal is permitted, Mark Goldman (Goldman & Zwillinger) will become Arpaio's lead counsel. Goldman unsuccessfully asked that the trial be continued due to his son's Bar Mitzvah taking place the following weekend.

Late last night, McDonald filed witness and exhibit lists (subject to change by Goldman), showing eight possible defense witnesses in the April 25 trial. Those witnesses are Russ Skinner, Jerry Sheridan, Former Chief Brian Sands, Lt. Joseph Sousa, Chief Jack MacIntyre, Lisa Allen, Lt. Brian Jakowinicz and Brett Palmer.


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BREAKING: Trump Pays Approx $2M, Clears Lawsuit & Lien On Old Post Office (NATIONAL NEWS)

President Donald Trump's Old Post Office LLC officially removed the lien and the lis pendens stemming from its failure to timely pay $2 Million to the electrical contractor for work done last year on its new hotel, Arizona's Politics has learned. The taxpayers own the property and lease it to Trump*.

The lawsuit was filed by Freestate Electrical the day before Trump was inaugurated as President. The Trump company's rush to open the luxury hotel near the White House two weeks before Election Day required contractors to incur significant added costs, according to Freestate's lawsuit. The bills were not timely paid, and contractors rushed to file liens on the property. Freestate was still unpaid, so it filed the legal action to enforce its lien.

Three other contractors separately had to file mechanics liens against T.O.P.O. LLC since November. All were (paid and) released in February and March (after hotel revenues began to roll in).

Freestate's legal action was due for a hearing at the end of this month. The dismissal was filed on Friday, and the releases of the lien and the lis pendens were recorded today (see, below). It is unlikely that the plaintiff settled for less than the balance due.

Arizona's Politics has requested comments from representatives of both Freestate and the Trump Organization, and will update this article as necessary.


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* Trump's interest may or may not be held in a trust and may or may not be able to access monies from the Trump Old Post Office LLC, per recent news reports. For purposes of simplicity, Arizona's Politics refers to "Trump" because he still appears to have a significant level of involvement and interest in the LLC.

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WATCH, IN-DEPTH: Rep. Schweikert On C-Span Re: Healthcare Reform; "I May Be An Outlier" In Freedom Caucus

Arizona Rep. David Schweikert had "fun" this morning discussing healthcare reform in-depth on C-Span.

Although we have not yet watched/listened to this entire interview (he took many calls), we did catch the end where he says he

When asked what the Freedom Caucus wants, Schweikert gave a disclaimer that he "may be an outlier because I was a yes vote within the group". He then said that the group - of which he is a member - wants to lower costs and give states more discretion on how to use Medicaid expansion funds.

If you find some interesting tidbits, please let us know. The uncorrected closed captioning is below the jump.



McCain Still Very Sad, But Will Vote To Go Nuclear (In Senate): "I Have No Choice"

John McCain (R-AZ) says he will vote to go "nuclear" in the U.S. Senate this week because "I have no choice." Last week, McCain said he was "very sad" at the prospect of changing the filibuster rules in order to get Supreme Court nominee Neil Gorsuch confirmed; today, he said he has "terrible
qualms" but will vote with his party.

McCain - possibly in his final 6-year term in the Senate - told Politico: "I have no choice." He warned that the GOP will pay a political price for opting for a simple majority - "Democrats are obviously paying a heavy price for what Harry Reid did, and I believe we will pay a price for this."

Democrats removed the 60-vote threshold for confirming nominations and appointments other than for the Supreme Court (though the rule could have been reinstated) during the Obama presidency, claiming that Republicans were filibustering non-controversial District and Court of Appeals nominations.


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Monday, April 3, 2017

BREAKING: Former U.S. Attorney Moves To Withdraw As Sheriff Arpaio Counsel 3 Weeks Before Criminal Contempt Trial

(UPDATE, 4/4, 7:40am: Arizona's Politics requested a comment from the U.S. Department of Justice. They "decline to comment at this time." We do expect them to file a response with the Court very quickly.)

A. Melvin McDonald, lead counsel for former Maricopa County Sheriff Joe Arpaio, has applied to withdraw as counsel 3 weeks before the criminal contempt trial set for April 25.

Late Friday, U.S. District Court Judge Susan Bolton denied Arpaio's efforts to delay the trial due to co-counsel's son's Bar Mitzvah at the end of April. Late today, the Jones, Skelton & Hochuli's Application To Withdraw was filed, claiming that to continue to represent the former Sheriff because "the representation will result in violation of the Rules of Professional Conduct or other law." The Rules of Professional Conduct refers to ethical rules that attorneys are required to follow.

It is unclear what specific type of violation could occur or what has suddenly changed in the law firm's relationship with the former Sheriff, although McDonald did state that he is "ready, willing and able to answer, in camera, any questions the court may have relative to this application."  He suggests that he is available for a private hearing in the Judge's chambers during the next three days. McDonald's Application does reference "comment 3" to the ethical rule, which is reproduced at the bottom of this article.

As for the law firm's fees, Arpaio recently has been sending out regular emails soliciting funds from his massive donor base, claiming that he was falling short in his efforts to pay his attorneys. It is unlikely that that is what caused today's Application to Withdraw, however.

Arpaio is still represented by Mark Goldman and his Goldman & Zwillinger firm. In fact, the 8-person firm filed a Notice of Appearance adding its Jeff Surdakowski to the Arpaio trial team.


This is a breaking news story. The documents and more details will be posted shortly.
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Comment 3 to Ethical Rule 1.16:
[3] When a lawyer has been appointed to represent a client, withdrawal ordinarily requires approval of the appointing authority. See also Rule 6.2. Similarly, court approval or notice to the court is often required by applicable law before a lawyer withdraws from pending litigation. Difficulty may be encountered if withdrawal is based on the client's demand that the lawyer engage in unprofessional conduct. The court may request an explanation for the withdrawal, while the lawyer may be bound to keep confidential the facts that would constitute such an explanation. The lawyer's statement that professional considerations require termination of the representation ordinarily should be accepted as sufficient. Lawyers should be mindful of their obligations to both clients and the court under Rules 1.6 and 3.3.


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