Tempe paid $32K to track Coyotes opponents. Now the city is under state investigation
The Arizona Attorney General's Office is investigating Tempe for possibly violating open meeting laws and using tens of thousands of public dollars in an effort to influence the outcome of the Arizona Coyotes election.
Both allegations have to do with Tempe hiring a political consultant to monitor and geolocate opponents of the project using social media, as described by the scope of work.
Tempe quietly hired the consulting firm, called Strategy 48, on Oct. 15, 2022, without a public vote. That was three weeks before Tempe "reserved" a spot on its special election ballot for the Coyotes' $2.1 billion proposal to build an NHL arena and entertainment district on city-owned property. Residents decisively rejected the project on May 16.
Tempe paid the Phoenix-based public relations firm more than $32,000 for services that are typically used by political campaigns, rather than by government bodies. A city document obtained by The Arizona Republic shows the contractor's scope of work included:
Identifying social media pages "that could provide a platform for project opposition to publicize their concerns," as well as analyzing media stories and online posts to "better understand potential opposition messaging strategy."
Tracking the social media activity of individuals who post about the project and working to "determine where they live" in order to gather "data needed to identify and micro-target messaging."
Developing a long-term outreach plan in coordination with the Coyotes. In addition to being the main beneficiary of the project, the NHL franchise also ran the vote "yes" campaign.
"The city's intention to develop an outreach plan in coordination with the Coyotes was a brazen and illegal attempt to promote the passage of the Coyotes referendum," said Ron Tapscott, a leader in the Tempe 1st opposition campaign. "This surveillance effort raises serious issues about legality, transparency and democracy in our city. Tempe residents deserve an explanation."
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The Arizona Republic asked Tempe for that explanation. All of the city's answers are available here.
Tempe did not directly address questions about how the contract benefited residents and whether it was a legitimate use of public funds. The city's official response was simply that former City Manager Andrew Ching created the contract.
Ching hired Strategy 48 and, per state law, contracts under $100,000 do not require council approval.
Ching told The Republic that Mayor Corey Woods was the one who requested the contract.
In an emailed statement to The Republic, Ching said Woods specifically recommended Strategy 48.
"As a result of several conversations with (Woods) in 2022 … I met with two firms, both of which were suggested by (the mayor)," Ching wrote. "While the contract was officially initiated and administered by me … the main purpose of their engagement was to provide information and strategy to, and to receive direction and feedback from, the mayor and council."
In a statement to The Republic, Woods said, "I chatted informally with (Ching) last year about the need for a better understanding of public opinion and improving the city's communications strategy. That conversation was not specifically focused on the (Coyotes project), but on a range of issues."
The mayor went on to say he "suggested a couple of companies who I thought might be able to help — but I did not initiate the contract or negotiate the contract. In fact, I never once saw that contract or its scope of work. In sum, the city did nothing wrong here, nor did I."
City Attorney Sonia Blain's office is responsible for signing off on the legality of such deals and the city said it followed guidance from its legal office.
The consultants' findings were discussed with City Council members during closed-door executive sessions — the subject of at least one potential state law violation being investigated. The city attorney is also responsible for deciding what topics qualify for those private meetings under state law.
Tempe spokesperson Kris Baxter-Ging wrote that Tempe behaved "in accordance with Arizona law." She added that Tempe did not know it was under state investigation until Thursday morning.
"The city is in the process of reviewing the notice from the Attorney General. We intend to cooperate fully with Attorney General Mayes, and we look forward to the full truth coming out," the city wrote in an email on Thursday.
Richie Taylor, Attorney General's Office communications director, had already confirmed via email on Wednesday that the office was actively investigating Tempe in response to a complaint filed by Tapscott and two other Tempe 1st members.
State investigators are trying to determine whether the city's actions violated at least two state laws, namely:
Arizona's Open Meeting Law. Local officials have to make most city decisions publicly. There are nine exceptions, most of which are related to legal advice or security discussions. Presentations about campaign messaging aren't typically covered by those exemptions. But Tempe never publicly discussed the contract itself or the consultant's work.
The state statute on "electioneering." Cities and towns are explicitly barred from using public dollars in an effort to influence the outcome of elections. That can include funding opposition research on behalf of a campaign like the Coyotes' Tempe Wins political action committee, depending on when and how it happens.
To prove a violation of the Open Meeting Law, state investigators must determine whether the City Council received reports from the consultant or discussed the firm's findings during executive sessions. Tempe would have to make a case that there was some type of legitimate legal sensitivity that exempted those discussions from the open meeting statute.
The electioneering allegation is more complex. Nuances in the law could make a big difference, according to former Assistant Attorney General Tom Collins, who now heads the Arizona Citizens Clean Elections Commission.
One has to do with when exactly city campaign spending constitutes a violation. An attorney general opinion from 2015 says the electioneering prohibitions kick in once someone files an application for a serial number for a ballot initiative or referendum," the first step in getting a measure on the ballot.
The Coyotes organization announced that it planned to begin collecting signatures in November. That step follows the serial number application, so it's likely Tempe's contract was finalized a few weeks before the cutoff date.
But the contract remained in effect until December. And Collins said that if Tempe or its city-funded consultant shared information with the Coyotes campaign — which the contract's scope of work indicates they planned to do — a court could interpret Tempe's behavior as a violation.
"(If) the opinion is read to say that prior to the issuance of a (ballot petition) serial number, there is no law that applies to this situation, I think that would be overemphasizing the timeline and underemphasizing reality," said Collins, a Tempe resident.
Tempe wrote to The Republic that "there was no sharing of documents by city staff with any outside organizations." The issue is there were no "documents" that staffers could have shared, according to an email sent by Interim Deputy City Clerk Karen Doncovio that indicates the consultant did not produce physical reports for Tempe.
"All outgoing information regarding this project produced by the City of Tempe was designed in accordance with Arizona law," the city said in its statement.
Whatever the outcome of the attorney general's probe, Collins explained there could still be legal implications if the contract expenditure isn't considered a legitimate use of city funds. He also cited possible ethical issues given that the city was tracking its own residents.
"If you are examining critics of the government and you work for the government … the first question you have to ask yourself is, why are you paying to do research on critics of the government or potential critics of the government? That's got all kinds of other potential implications," he said.
This article originally appeared on Arizona Republic: Arizona investigating Tempe contract to sway Coyotes vote
