Lawmakers Call for AG Investigation into Phoenix Donations to Multiple Organizations

Lawmakers have raised concerns that the city of Phoenix may have breached the state’s Gift Clause by making numerous financial contributions to non-governmental organizations (NGOs). The allegations center on city employees facilitating over 600 donations without the required approval from the City Council.

Three Republican state representatives—David Marshall, Walt Blackman, and Quang Nguyen—have taken action by submitting a formal complaint, SB1487, urging the Attorney General’s Office to investigate this matter. By law, Attorney General Kris Mayes is obligated to assess the allegations and provide a report within a month.

The representatives contend that 41 city employees unlawfully donated significant sums—up to $32,000 each—to various NGOs. These contributions were allegedly categorized as sponsorships, grants, or subsidies, bypassing necessary legislative scrutiny.

On May 21, the Goldwater Institute joined the fray, sending a letter to Mayes threatening legal action if an investigation does not substantiate the violation claims. Representing Phoenix taxpayer Bramley Paulin, the organization has called for a halt to the city’s current NGO funding practices.

Goldwater Institute Staff Attorney Parker Jackson emphasized the organization’s commitment to protecting taxpayer interests. He stated the Institute is poised to seek legal avenues if the Attorney General opts not to act.

Marshall initiated his inquiry into the city’s funding practices back in February after recognizing substantial contributions to the Arizona Science Center’s “Galaxy Gala.” In a letter to the Phoenix City Council dated February 25, he expressed doubts about the appropriateness of such significant taxpayer-funded donations.

Phoenix City Attorney Julie Kriegh responded to Marshall’s concerns, explaining that city policy allows department directors to make donations under $32,000 without City Council approval. However, the representatives argue that no city policy explicitly grants this authority for donor contributions.

A compilation of city financial data revealed that since April 15, 2020, department directors have made at least 634 donations totaling over $28 million. The representatives claim their data may be incomplete and have accused the city of inaccuracies in reporting its financial transactions.

The city defends itself by citing an ordinance that grants the city manager the ability to handle administrative funds. However, the representatives challenge the validity of this argument, insisting that the contributions are not governed by any existing policy.

Marshall criticized city officials for shielding these transactions from legislative oversight. He called for the Attorney General to intervene, expressing concern over a lack of accountability.

Many of the funds have been labeled as sponsorships, grants, and miscellaneous allocations, benefiting a range of organizations including state universities and nonprofits. Some contributions, however, have raised eyebrows for appearing unrelated to Phoenix.

For instance, a $10,000 sponsorship to the Alliance for Regenerative Medicine, based in Washington, D.C., was flagged. This organization has a conference on cell and gene therapy scheduled in Phoenix, but its relevance to local governance remains contentious.

Additionally, representatives noted a $5,000 contribution to a Chicago-based organization with a local office. They also highlighted substantial funding to the National Forum for Black Public Administrators, citing concerns about perceived favoritism.

Blackman expressed disapproval of what he termed an “illegal slush fund” for certain nonprofit organizations, arguing that such practices contravene the spirit of Arizona’s Gift Clause.

Kriegh noted that department directors choose organizations based on alignment with city goals. She asserted that decisions consider not only financial implications but also the potential community benefits.

As the investigation continues, the city of Phoenix has refrained from commenting on the ongoing developments.