Glendale’s reputation as a city on the rise was tarnished Tuesday when a majority of its City Council members were hit with felony charges that they had falsified financial-disclosure documents and tried to cover it up.

The city had been riding high after scoring several upcoming national sporting coups, including the 2008 Super Bowl, which will be played in the Arizona Cardinals’ new stadium.

The charges against Vice Mayor Tom Eggleston, Councilmen David Goulet, Steve Frate and Manny Martinez, and City Clerk Pam Hanna struck a blow to the image of honesty and efficiency the city has built during the 13-year tenure of Mayor Elaine Scruggs.

“This is a not a case of late disclosure, this is a case of cover-up,” said Maricopa County Attorney Rick Romley, who announced the indictments Tuesday morning. “You really need honesty in government … (and) they kept trying to cover up their mistakes with illegal activity.”

The council members and the city clerk are accused of falsely dating financial-disclosure forms and notarizing them. Hanna is accused of destroying them and helping them file new forms after the practice was questioned. Romley said Glendale’s former City Attorney, Rick Flaaen, who resigned last fall and is now in a legal tangle with the city, brought the matter to his attention several months ago. On Tuesday, Romley questioned why nobody else raised the matter even though the activities were well known inside City Hall.

“It wasn’t reported to me by anyone else in Glendale city government,” Romley said. “That’s a very troubling issue.”

Scruggs could not be reached for comment Tuesday and, due to a family commitment, did not attend the regular City Council meeting later that night. Eggleston ran the meeting in her place, but no public mention was made of the indictments. Outside City Hall, two Glendale residents wielded signs, “Betrayed” and “Broken trust.”

“We’re out here so when the four indicted council members walk by, they don’t feel like the citizens are going to let this pass by,” said Jim Lugo, 20, who was accompanied by Gabriel Cruz, 24.

“We’re outraged by their behavior,” Lugo added. “We don’t feel comfortable when any city official feels so empowered that they feel they can break the law without repercussions.”

Earlier, other city officials vowed not to let the criminal charges deter their work.

“City business will continue at the same exceptional level that it always has, and … today’s news will not, in any way, affect our ability to do that,” City Manager Ed Beasley said.

Councilwoman Joyce Clark said the council is “capable of continuing to conduct city business.”

“We only have a month to go before we have our August break,” she said. “And I believe the budget and most of the major decisions have been decided this year.”

Lawyers for several of the accused painted a different picture than Romley, suggesting that minor mistakes were being blown out of proportion by prosecutors for political reasons.

Darrow Soll, Hanna’s attorney, said his client made a simple mistake, readily acknowledged the error to everyone in City Hall and tried to make it right. He called it unfortunate that prosecutors built a case on what he called “fairly trivial” errors involving rarely used documents. He asserted that there was no criminal intent on Hanna’s part and “no cover-up.”

The crux of the case, Romley said, is that the four council members failed to file their 2002 financial-disclosure statements by Jan. 31, 2003, as required by law. Public officials must disclose their financial holdings to protect against conflicts of interest with their public duties. Late reports are subject to a daily fine of $50, up to a maximum of $500.

Hanna was supposed to ensure the reports were filed on time, though Romley said it clearly was the “personal responsibility of elected officials” to do so. When Hanna discovered last fall that they had not been filed in time, Romley said, she told council members to backdate the reports to January and file them. Later, after it was discussed by other city officials in executive session and deemed improper, the reports were destroyed and new, correctly dated, reports were filed.

“We will prove they had knowledge that they were falsifying (the initial reports),” Romley said.

Interim City Attorney Jon Paladini told The Arizona Republic in March that a fine would have been imposed only if the officials did not file the forms within 20 days of receiving a written notice from the City Attorney’s Office that the reports were late. The council members never received such a notice and therefore were not subject to a fine.

Flaaen, who filed a legal claim against the city in January and plans to sue the city, asserts he was forced to resign last fall amid allegations that he repeatedly viewed pornography on a city computer. He believes those claims were intended to discredit him after he warned City Council members that he believed their conduct was illegal.

“I feel bad for the City of Glendale,” he said Tuesday. “I’m not overjoyed with it at all because it puts a black eye on Glendale.”

Attorneys for Martinez and Eggleston also said their clients made innocent mistakes.

“He (Eggleston) submitted his disclosure forms exactly as he was asked by the City Clerk’s Office, and when it was discovered there was a mistake … they went ahead and took steps to correct the mistake,” said Steve Hart, Eggleston’s attorney. “I don’t know who was harmed in this.”

In March, Eggleston told The Arizona Republic that he’d signed financial records that were about eight months late, knowing they were incorrectly dated.

“It was just an inappropriate thing to do,” Eggleston said then. “But it was nothing criminal.”

William Foreman, Frate’s attorney, said his client intends to “vigorously defend the spurious charges.”

Soll, meanwhile, said Hanna received legal advice at the time and “relied on that legal advice to dispose of those records” that were destroyed.

Glendale officials tried to ease concerns about the city’s ability to meet its business obligations while more than half the council battles the charges.

“We’ve been in contact with the city, and they’ve assured us that it shouldn’t have any bearing on city business going forward,” said Brad Parker, spokesman for the Arizona Sports and Tourism Authority, which is overseeing construction of the $370.6 million Cardinals Stadium in Glendale.

Hanna faces eight felony counts of tampering with and destroying public records.

Eggleston and Frate each faces two felony counts of presentment of a false instrument for filing, while Martinez faces a single count of the same charge. Goulet faces the same charges as Eggleston and Frate, as well as a felony count of perjury accusing him of lying.

All except Goulet’s perjury charge are Class 6 felonies punishable by up to two years in prison and up to $150,000 in fines per charge. The Class 4 perjury charge is punishable by 3.75 years in prison and up to $150,000 in fines.

By Monica Alonzo-Dunsmoor & Pat Flannery, The Arizona Republic.
Copyright © 2004. The Arizona Republic. All Rights Reserved.