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Special Meeting Minutes Wednesday, December 11, 2019 1:00 PM BOARD OF SUPERVISORS Maricopa County, Arizona (and the Boards of Directors of the Flood Control District, Library District, Stadium District, Improvement Districts, and/or Board of Deposit) "The mission of Maricopa County is to provide regional leadership and fiscally responsible, necessary public services to its residents so they can enjoy living in healthy and safe communities.” Board Members Bill Gates, Chairman, District 3 Clint Hickman, Vice Chairman, District 4 Jack Sellers, District 1 Steve Chucri, District 2 Steve Gallardo, District 5 County Manager Joy Rich Clerk of the Board Fran McCarroll Meeting Location Supervisors’ Auditorium 205 W Jefferson Phoenix, AZ 85003 BOARD OF SUPERVISORS The Board of Supervisors of Maricopa County, Phoenix, Arizona, convened in Informal Session at 1:00 PM on Wednesday, December 11, 2019, in the Supervisors' Auditorium, 205 W Jefferson, Phoenix, AZ 85003, with the following members present: Jack Sellers, Supervisor, District 1; Steve Chucri, Supervisor, District 2; Bill Gates, Chairman, District 3; Clint Hickman, Vice Chairman, District 4; Steve Gallardo, Supervisor, District 5. Also present: Fran McCarroll, Clerk of the Board; Lori Medaris, Minutes Coordinator; Joy Rich, County Manager; and Andrea Cummings, Legal Counsel. OTHER OFFICE - DEPARTMENT 1. HEARING REGARDING THE SUSPENSION OF MARICOPA COUNTY ASSESSOR PAUL PETERSEN (C-06-20-288-7-00) Chairman Gates stated that the Board of Supervisors (BOS) has allotted four hours for this hearing. He introduced Fran McCarroll and John Doran who will be assisting the Board of Supervisors (BOS) for this hearing. He noted the following will be addressed: The specific issue being addressed A brief timeline relevant to the issue Documents that have been deemed a part of the hearing record Hear from Paul Petersen Chairman Gates explained the process and the laws governing the process, and the laws violated that brought about this process. The Board is empowered to suspend the County Assessor for up to 120 days if it is determined the Assessor has engaged in neglect of duty. On October 28, 2019 the BOS suspended Paul Petersen, County Assessor for 120 days for neglect of duty. Prior to the suspension the Board identified two potential grounds for the neglect of duty. It was determined Mr. Petersen did not perform his duties during the three weeks he was in law enforcement custody; and secondly, Mr. Petersen used County property to run his adoption business. Therefore, there are just two questions before the Board today. Special Meeting Minutes Wednesday, December 11, 2019 Page 2 of 7 1. Did Mr. Petersen neglect his duties as the County Assessor from October 8, 2019 to October 29, 2019 while in law enforcement custody; and 2. Did Mr. Petersen neglect his duties as County Assessor by using County facilities and property to run his private law practice and adoption business. The Board unanimously voted to suspend Mr. Petersen and he has asked the Board to reconsider their decision. Therefore, to give background for this hearing, the Chairman briefly reviewed the timeline of events. On October 8, 2019, law enforcement authorities took Mr. Petersen into custody, where he remained until October 29, 2019. Mr. Petersen has been charged with a variety of crimes by the federal government. all arising out of his adoption practice and business. To our knowledge, Mr. Petersen went into custody without any warning to the Assessor’s Office, his deputies, or staff. While in custody, he did not contact the Chairman of the Board or anyone else on the Board of Supervisors. On October 23, 2019, the Board voted in an open meeting to conduct another open meeting on October 28, 2019 to consider whether to suspend Mr. Petersen for neglect of duty under A.R.S. § 11-664. Also, on October 23, 2019, the Board notified Mr. Petersen, both through his legal counsel and through the U.S. Marshall, the Board had voted to consider suspension at an open meeting scheduled for October 28, 2019. On October 24, 2019, the Chairman, sent a letter to Mr. Petersen through the U.S. Marshall asking Mr. Petersen to answer two questions: 1. Since you were arrested and detained on October 8, 2019, how are you fulfilling your duties as the elected Assessor? And, 2. Please explain how and why over a thousand documents relating to your private legal practice are stored on your County desktop and/or the County’s servers, or physically stored in your County office. The letter is a part of the record of this proceeding. Mr. Petersen did not respond personally or through his counsel. In fact, to date Mr. Petersen has not provided answers to the questions asked of him in the Notice of Possible Suspension Letter dated October 24, 2019. On October 28, 2019, the County Internal Audit Department reported to the Board its findings with respect to a high-level review of the County Assessor’s Office. That audit found over 500 documents on Mr. Petersen’s County PC and related County systems dealing with his private law practice and his adoption business. The audit also found that Mr. Petersen used his County Internet access, County email account, and County phone for his adoption business. Also, on October 28, 2019, the Board met and unanimously voted to suspend Mr. Petersen for 120 days for neglect of duty. The vote was based on Mr. Petersen’s failure to meaningfully oversee the operations of his office for an extended period and his repeated misuse of County resources to conduct his private law practice, which the Board found to be neglect of duty. On October 29, 2019, the Board notified Mr. Petersen of the suspension and informed him of his right to a hearing. Mr. Petersen requested the hearing on November 7, 2019, and the Board subsequently set this date for the hearing. Special Meeting Minutes Wednesday, December 11, 2019 Page 3 of 7 On October 29, 2019, Mr. Petersen was released from custody, although he still faces criminal prosecution in three jurisdictions for alleged conduct related to his private adoption business. On November 13, 2019, the Board also invoked its authority under the suspension statute to ask the County Attorney to conduct an investigation with respect to the suspension issues. The County Attorney retained an independent, third party law firm. Mitchell Stein Carey Chapman, to conduct the investigation. In November 2019, the Board, through its outside counsel, requested that Mr. Petersen immediately return his County laptop. The Board gave Mr. Petersen 48 hours to return the laptop. Mr. Petersen did not return the laptop to the County. Instead the laptop was seized pursuant to a search warrant. On December 5, 2019, the Mitchell Stein firm presented its preliminary investigative report. The preliminary investigative report and all exhibits are a part of the record of this proceeding. Chairman Gates stated this hearing is not a forum to prove or disprove that Mr. Petersen engaged in criminal conduct. Nor is this forum to prove that others have done what Mr. Petersen did but were not suspended for it. The hearing today is for one reason and one reason only, and that is to allow Mr. Petersen to demonstrate that he did not do the two things that serve as the basis for his suspension. The Board is interested to hear from Mr. Petersen. The Rules of Evidence do not apply for this proceeding. However, the issue to be decided at this hearing has been outlined and the focus of any testimony or questioning will be redirected back to relevant issues if the testimony has become irrelevant. Prior to the hearing, the parties have reached no stipulations. Mr. Petersen is not required to make an opening statement, but individually or through counsel is welcome to present an opening statement. Mr. Petersen may then call witnesses who will be sworn in by the Clerk of the Board, Fran McCarroll. Mr. Petersen individually or through counsel may question the witness he is calling. Then the witnesses may be asked questions either by the Chairman or his colleagues, or by the Board’s attorney, John Doran. This hearing is set for four hours. There will be a break every hour for 10 minutes for a restroom break. If Mr. Petersen wishes to present closing remarks at the end of this hearing, he will need to reserve enough time within the allotted four hours for his closing remarks. At the end of the hearing, the Board will take this matter under advisement. Chairman Gates asked that the counsel for Mr. Petersen state his name and proceed, keeping in mind the narrow issue presented today. Kory Langhofer, counsel for Mr. Petersen introduced himself and his law partner, Thomas Basile. He asked for clarification if the outside investigation was a part of the hearing record. Chairman Gates confirmed it was. He stated he will be making serious arguments concerning this matter and giving his view of the Mitchell Stein report and the facts. He said there is a process in this State for how to handle criminal indictment and a different process for removing someone from elected office. He then gave examples of people who underwent criminal prosecutions that failed. He explained the two processes cross only when the office holder is convicted. He said that if you want to remove someone from political office Special Meeting Minutes Wednesday, December 11, 2019 Page 4 of 7 for a criminal accusation, you are unable to do so in Arizona. Mr. Langhofer then explained when someone could be removed from office. He went on to explain what standard should be used to define neglect of duty, which is not doing what you are elected to do. He said Paul Peterson did not neglect the duties of his office. The office functioned as it should, and he did not necessarily neglect his duty in the 20 days he was incarcerated. Mr. Langhofer noted there were two allegations made. He first addressed Mr. Petersen’s absence from office during his 20-day confinement and that Mr. Petersen was often not in the office. Mr. Langhofer said that if the number of days Mr. Petersen was not in the office is being used as a barometer, he is in good company. John Doran stated whether Mr. Petersen swiped in or out was not a point of contention and cannot be used to indicate what others may or may not have done. Mr. Langhofer said there was nothing in the report that indicated Mr. Petersen neglected the duties of the office. The office ran as it was supposed to and staff reported there were no problems that required Mr. Petersen personally. Mr. Langhofer stated other officials were known to be out of the office for 33 and 34 days. He noted that Mr. Petersen spoke to his Chief Deputy twice while incarcerated and the Chief Deputy was able to carry out the functions of the office. Mr. Langhofer addressed the misuse of resources. He noted the report stated there is no prohibition of outside employment for elected officials. Nothing Mr. Petersen did for his adoption business interfered with his County work. He said no one in the Assessor’s Office witnessed outside work being performed using County resources. He said the report stated that approximately 1% of the records on Mr. Petersen’s computer were related to the adoption business versus the 95% that was originally reported. He commented that a look at other officials’ computers would probably find 1% of the work on those computers would not be related to County business. Mr. Langhofer stated employee policy does not necessarily bind an elected official. He said he has requested records to see if other County officials have engaged County resources for outside business. He stated one cannot remove someone from office when it is common that other officials have done the same. Mr. Langhofer stated that Mr. Petersen did not refuse to cooperate with the investigators. He just had conditions if he were to cooperate. Even if Mr. Petersen had refused to cooperate, there would have been no statutory violation. It cannot be said this was a neglect of duty. If Mr. Petersen’s statutory duties were performed, then there was no neglect of duty. Mr. Langhofer commented on A.R.S. §11-253 that stated the Board of Supervisors may require the Assessor to give a report concerning the function of the office. He noted Mr. Petersen did not respond to a letter from Chairman Gates and this may be considered a violation of this statute. He said Mr. Petersen was not notified in the notice that he had to respond to the letter. It was a request not a mandate. He stated the letter was too informal a communication to be used for removal from office. Mr. Langhofer claimed the formalities were not met for such a serious request addressing serious circumstances. Special Meeting Minutes Wednesday, December 11, 2019 Page 5 of 7 Mr. Doran responded to Mr. Langhofer and clarified Mr. Petersen had not been removed from office. He commented that the removal from office process was under a different statute. Mr. Langhofer clarified that his use of “removal from office” was used casually and that “suspended from office” could be substituted whenever he used “removal from office.” Mr. Doran asked Mr. Langhofer to clarify, it is his position that neglect of duty only occurs when a statutory duty is not performed. Mr. Langhofer stated Mr. Doran was correct. Mr. Doran asked Mr. Langhofer if he understood that Mitchell Stein are not the Board’s attorneys, but they only performed the independent investigation into the actions of Mr. Petersen in his role as County Assessor, and Mr. Langhofer said he understood. Mr. Doran said Mr. Langhofer’s preliminary comments suggested if personal business did not interfere with County duties, there is no premise to be suspended. Mr. Doran asked if Mr. Petersen was going to testify today and the answer was, “no.” Mr. Langhofer said the criminal attorneys representing Mr. Petersen asked he not testify today. Mr. Doran said there was a need for Mr. Petersen to be present as he is the only one who knows what his day to day responsibilities are. Mr. Langhofer disagreed. Mr. Langhofer addressed Chairman Gates stating he did not need to make his arguments to Mr. Doran and claimed it would not be productive. Chairman Gates explained why Mr. Doran was asking the questions. He thought the questions were insightful and that Mr. Langhofer’s responses were insightful. He told Mr. Langhofer if he chose not to answer any more questions from Mr. Doran, the hearing could move forward. Mr. Langhofer called Tim Boncoskey to give his testimony. Mr. Boncoskey was sworn in by Fran McCarroll and made his opening statement saying public service is an honorable profession and he has served in that capacity for many people and for many years. The Assessor’s Office staff is like-minded. He gave a list of duties the Assessor’s Office is responsible for and said all the duties were addressed by staff. He referenced the qualifications of the Assessor’s staff and noted the email he sent to Chairman Gates on October 9, 2020, informing him it was business as usual in the Assessor’s Office. Mr. Boncoskey said the Assessor’s Office will continue to serve the public efficiently. He said it is staff’s position that Mr. Petersen’s private business is such as that it will not interfere with the responsibilities of the Assessor’s Office. Mr. Langhofer asked Mr. Boncoskey to pronounce his name and to give his job title. He asked Mr. Boncoskey what his duties were and who had appointed him to his position. He was asked to share his thoughts on the statutory duties of the office. Mr. Langhofer asked Mr. Boncoskey if he was able to reach Paul Petersen when needed and the response was “yes.” Mr. Boncoskey noted Mr. Petersen had an open-door policy with his staff. After determining Mr. Boncoskey was familiar with the problem encountered with the MARS program and asked was it due to Mr. Petersen’s confinement for 20 days, he responded no it was not. Mr. Doran asked Mr. Boncoskey why it mattered that Mr. Petersen exhibit knowledge of the activities and operations of the Assessor’s Office. He responded saying Mr. Petersen needed to know if the statutory responsibilities of his office were being performed. He has participated in all the training offered by the Department of Revenue and is aware of all appraisal functions. He guides the staff with strategic direction which is important in his role as the County Assessor. Mr. Doran asked if it Special Meeting Minutes Wednesday, December 11, 2019 Page 6 of 7 was important that Mr. Petersen be involved in the day-to-day operations and Mr. Boncoskey said “yes.” Mr. Doran asked Mr. Boncoskey if he knew whether Mr. Petersen was involved with the day-to-day operations while he was incarcerated and he said he did not, but that is why Mr. Petersen hired him, the Deputy County Assessor, and senior staff – to carry out the day-to-day operations. Mr. Doran asked Mr. Boncoskey about the MARS project noting that Mr. Petersen had missed a meeting and that a problem arose that caused a major deadline to be missed. The meeting was rescheduled, but Mr. Petersen was not able to attend and provide his thoughts or guidance. Mr. Boncoskey confirmed Mr. Petersen did not attend the meeting. Mr. Doran noted that Mr. Petersen strongly disagreed with pushing the deadline date out, and Mr. Boncoskey stated Mr. Petersen was very disappointed. Mr. Doran asked Mr. Boncoskey if Mr. Petersen gave him any advanced warning he was about to be incarcerated and give him direction on office matters while he was unavailable. Mr. Boncoskey stated he did not. Mr. Boncoskey was asked if anyone in the office was given instruction prior to Mr. Petersen’s incarceration and he responded, “no.” Mr. Doran asked Mr. Boncoskey if he thought the position of County Assessor was a leadership position and if Mr. Petersen was a leader and Mr. Boncoskey stated he was. He was asked if this included leadership by example and Mr. Boncoskey said yes. Mr. Doran asked Mr. Boncoskey if leading by example included following policy such as computer usage. Mr. Boncoskey said he was shocked when he read the internal audit report. Mr. Doran asked if Mr. Petersen was leading by example when he basically disappeared on October 8, 2019. Mr. Langhofer objected to this question and Chairman Gates said the objection was on record. Mr. Doran reworded the question and Mr. Langhofer interrupted to say it was unclear to him if the question was being asked as a prosecutor, as a judge, or as counsel to a neutral body. Chairman Gates informed Mr. Langhofer that the questions were being asked as counsel for the Board and he could make his objections on record as he had been doing. Mr. Doran asked again if Mr. Boncoskey thought it was leading by example to be gone from the office for three weeks with only two phone calls made to check on the office. Mr. Boncoskey said he could only say that Mr. Petersen reached out at the first opportunity. Mr. Doran asked if Mr. Petersen was leading by example when he used County equipment to store his personal and business records. Mr. Langhofer objected again and said leading by example is irrelevant to the scope of these proceedings as defined by the Board. Mr. Doran asked the question again and Mr. Boncoskey stated he was unaware at the time. Mr. Doran asked him what his answer is now. Mr. Langhofer objected again. Chairman Gates said his objection is noted in the record. Mr. Langhofer said he wanted to object on the basis that they are being excluded from presenting evidence outside the scope as the Board has defined it. Chairman Gates said he disagreed with Mr. Langhofer’s objection. Mr. Doran asked the question again and Mr. Boncoskey answered he could not speak to what was on Mr. Petersen’s computer. He could say that whenever Mr. Petersen was in the office, office business was discussed, and he had no knowledge of Mr. Special Meeting Minutes Wednesday, December 11, 2019 Page 7 of 7 Petersen’s outside business. Mr. Langhofer asked Mr. Boncoskey if Mr. Petersen had been present at the meeting concerning the MARS program, would the deadline still have been extended? Mr. Boncoskey said, “yes.” RECESSED: Chairman Gates recessed the hearing for a short break. RECONVENED: Chairman Gates reconvened the hearing following the break. Chairman Gates wished to clarify the difference in the data found in the Mitchell Stein report was caused by a significantly larger denominator. Mr. Langhofer called Russell Pearce as a witness. Mr. Pearce gave his opinion of the suspension and said Paul Petersen should be allowed to perform his elected duties. Mr. Langhofer asked Mr. Pearce if the Treasurer’s Office and Assessor’s Office worked closely together and if there had ever been a time when the duties of the Assessor’s Office had not been carried out in relation to the Treasurer’s Office and Mr. Pearce stated not to his knowledge. Mr. Langhofer asked if the Treasurer’s Office had any problems during Mr. Petersen’s 20-day incarceration and Mr. Pearce said no. Chairman Gates asked Mr. Langhofer if he had any other witnesses and he said no he did not. He said there was one issue he wanted to address that he left out of his opening statement. He said that because Mr. Petersen did not immediately surrender his laptop this could be considered neglect of duty. Mr. Langhofer said Mr. Petersen was under no obligation to surrender his laptop as he had not been terminated. Mr. Langhofer said he wanted to suspend the belief that this type of hearing would be productive, and he does not believe that the participation of someone in a role such as that of Mr. Doran makes further witnesses a productive use of his time. Chairman Gates said that the Mitchell Stein report is a preliminary report and stated the Board of Supervisors will wait until the final report is produced from Mitchell Stein to make any decision on this matter. MEETING ADJOURNED There being no further business to come before the Board, the meeting was adjourned. ___________________________ Bill Gates, Chairman of the Board ATTEST: ____________________________ Fran McCarroll, Clerk of the Board