Ducey's multimillion-dollar coronavirus charity fund draws controversy, questions (2024)

Craig Harris|Arizona Republic

When Gov. Doug Ducey launched hisAZCoronavirus Relief Fund in late March, the first million-dollardonor was already in place: Michael Bidwill, chairman and president of the Arizona Cardinals and a close friend of Ducey's.

A few weeks later, another $1 million pledge arrived. Jerry Simms,owner of the north Phoenix horse racing venue Turf Paradise, told The Arizona Republic he had been inspired to give while watching a Lady Gaga charity concert benefiting COVID-19 relief efforts.

"When you see ...on TV where people are lined up to get food, how can you sit on your hands if you have a few bucks? You just want to do the right thing,"said Simms, whotemporarily shuttered his track in mid-March as the new coronavirus began to spread in Arizona.

More than $8 million dollars and counting hasflowed to the fund intended to addressthe pandemic'simpact in Arizona. Most of the donations havecome in increments of a few hundred dollars or less.

But some high-dollar contributors, such as Simms, whose donation wastouted in a news releasefrom the Governor's Office, have raised questionsabout whether the givingis motivated by more than community spirit. A charitable fundwithwell-intended goals can, because of its associationwith Ducey, present an opportunity to curry favor with the governor orgive that appearance.

In Simms' case, his $1 million gift to Ducey's fund cameas the governorpreparestofill three vacancies on the five-memberstate Racing Commission, which regulates horse racing in Arizona including at Turf Paradise, 1501 W. Bell Road.

In addition,the Ducey administration isin the final stages of negotiating thestate'sgaming compact with Native American tribes. Simms, who bought Turf Paradise 20 years ago, has long lobbied governors and lawmakers to approve casino-style gambling at his track.

"Is there something expected in return? The optics say yes,"saidStephen Nolan, a longtime racing and jockey agent and critic of Simms.

Simmstold The Republic hisdonation had nothing to do with Racing Commission appointments or a desire to see expanded gaming in Arizona.Hedidn't speak toDucey about hisApril 27 donation, nor does he expect anything in return, he said.

"If people want to put a spin on giving money for people in need, they'll just do it," Simms said."They will say bad things about anything I do."

Daniel Scarpinato, Ducey's chief of staff, said donations to the COVID-19 relief fund should not beseen as politically motivated. Simms and other donorsare being good corporate citizens.

"This is something we should be praising, not denigrating," Scarpinato said.

"If someone were to donate with the expectation that they somehow will curry political favor, they will be very disappointed," Scarpinato said."This is a crisis and people in our community want to step up and contribute and find a way to be helpful, and I think it's wonderful."

A friendly board

Ducey created theAZCoronavirus Relief Fund because business ownerswanted to help, Scarpinato said.

“As we work to combat the spread of COVID-19, access to resources that can help support families and businesses in this time of need is critical,” Ducey said on March 24.

He housed it inthe Arizona Commerce Authority, the public-private entity that recruitsbusinesses to the state with financial incentives. Donations to the fund aretax-deductible.

The Ducey administration had released the names of several big donors, but nota completelist.After The Republic began asking questions,Ducey's office released to the newspaper a list of all 500-plus donors.

In addition to $1 million donations from Simms and Bidwill,the largest contribution — $5 million — came from the Ben and Catherine Ivy Foundation, earmarked for personal-protective equipmentsuch as masks and medical gowns.

Corporate donors include the charitable armof Arizona Public Service ($250,000), the electricity utilitythat has spent millions to benefitthe campaignsof Arizona politicians, includingCorporation Commission members who regulate the company; Salt River Project ($100,000);Western Alliance Bank ($150,000), whose executive chairman is Phoenix Suns owner Robert Sarver; and Waymo ($100,000), the self-driving car company that has received broad regulatory support from Ducey.

Onthe governor publicly announced he hadappointed a five-member committee to disburse the funds.

Scarpinato said all five committee members have experience helping charities.

The members are also Ducey allies and political supporters: Tina Marie Tentorie, APS Foundation executive director; Nicole Bidwill, co-owner of the Cardinals and sister of Michael Bidwill;Eileen Klein, whomDucey appointed asstate treasurer in 2018 (she didn't run for reelection); Sandra Watson, president and chief executive of the Commerce Authority where Ducey serves as chairman; andDan Mahoney, a partner at Snell & Wilmer law firm.

Arizona campaign finance records show Tentorie from 2016 to 2018 gave $3,400 to an APS-relatedpolitical action committee that was a big donor to Ducey's reelection;Nicole Bidwill in 2017 gave $10,000 in political contributions to help Ducey;andMahoney donated $10,200 in 2017 and 2018 to help Ducey get reelected.

Simms said heappreciates that Ducey's charity has no overhead costs.

So far, AZCoronavirus Relief Fund has passed some ofthe donated money to charities thatdo have overhead costs.

The fund had neither made nor announced anydistributionswhen The Republic first contacted the Governor's Office about its plans for the money on May 11. Two days later,the governorand Commerce Authorityannounced a first round of grant funding would total $1.5 million. In the days since, they have announced grants including$500,000 for food banks, $100,000 for children with disabilities,$300,000 to groups serving senior citizens, $100,000 for foster families and$500,000 for child care.

The office says the$5 million April donation was earmarked forpersonal protective equipment that the Department of Health Services will distribute "as it is received."

Fischer said Ducey's charity might compete for donations withestablished Arizona charities that have established track records of delivering services.

A controversial donor

Simms told The Republic that he didn't want publicity for his AZCoronavirus Relief Fund donation.

"We didn't reach out and talk to the TV stations. There was no solicitation," Simms said. "I have given other money. I don't take an ad out. I didn't call anyone."

Ducey's office and Turf Paradise did, however, issuesimilarly wordednews releases on April 27, in which Ducey praisedSimms' $1 million gift:“This generous contribution from Jerry Simms will help our medical professionals and vulnerable populations amid this health emergency. Thank you to Jerry and all our community partners who are stepping up to help others." The news releases alsonoted Turf Paradise had given $25,000 worth of food to St. Mary’s Food Bank.

Even without an announcement, Simms' donation was going to attract attention. It's the second-largest donation andaccountsfor 12% of the $8.2 million Ducey has raised, according to theGovernor's Office.

And Simms is a controversial figure. During the late 1980s, Simms gottangled in a California political-corruption case dubbed“Shrimpscam,” which sent 15 people to prison, including legislators and other public officials. Simms, who was granted immunity as afederal witness, admitted making a loan to a public official that was intended as a bribe, and playing a role in an extortion plot, according to court records.In 2017, Simms told The Republic he did not realize at the time that he was paying a bribe, andnoted that an FBI case agent inCalifornia signed an affidavit declaring he was a crime victim.

More recently, he has fought a long-running legal battle with his brother, Ron,over finances and control of the partnership that owns Turf Paradise. That legal conflict, still unresolved,spiraled into a separate battle involving attempts to effectively ban Ron Simms from racing.

Jerry Simms also has clashed with members of the Arizona Horsem*n’s Benevolent and Protective Association, who race their horses at his track and share in profits from gambling.

Simms said he wants to expand into casino-style gambling at his track, butthe 2002 voter-approved ArizonaTribal-StateGaming Compact prohibits casinos outside reservation land, including at racetracks.

The compact expires in 2023, and the Ducey administration is negotiating with Arizona tribes on an agreement to replace it.One key tribal negotiator told The Republic that an agreement is close, but it does not include "racinos" at Turf Paradise or other racetracks. Yet, itcould include sports betting outside of Native American-owned casinos.

Scarpinato, Ducey's chief of staff, told The Republic, "What the governor has said on renegotiating the compact is to ensure that there's not a change in the culture of the state. He favors something in agreement with the tribes that ensures we don't expand gaming beyond where it currently exists."

Simms said, "We don't know what we are going to get, it's so top secret.I know nothing. It's under high confidentiality."

But Racing Commissioner Rory Goree, a security consultant and advocate for theracehorse owners, said itlooks badthat Simms made such a large donation to the governor's charity as gaming compact talks are coming to a close.

"It's politics," Goree said of the donation. "The governor is a very important person in the state."

A sidelined oversight board

Turf Paradise is regulated by the state Division of Racing, an administrative agency within the Department of Gaming, and bythe Arizona Racing Commission, a five-member boardappointed by the governor.

Live races at the track typically run from October to May, drawing more than200,000 gamblers. Simms and key players who work at his track have long fought over safety and health issues,how to divide revenues from horse racing at Turf Paradise and from off-track betting. The disputes are typically resolved by the Racing Commission.

Simms had two allies on the commission quit a few months ago. Since mid-February, the oversight board has hadonlytwo voting members and, lacking aquorum,has been unable to take any action.

Earlier this month, a handful of individuals whor*ly on Turf Paradise for their livelihoods gatheredin an office on the track's back lot.The group included Robert Hutton, president of the 1,300-member Arizona Horsem*n's Benevolent & Protective Association.

Hutton said he was "sickened" to learn Simms had given $1 million to Ducey's COVID-19 relief fund. WhenSimms closed the track on March 14,it was financially devastating for thousands of workers who care for and trainthe 1,600 horses that raceat Turf Paradise, Hutton said.

Hutton said he and others were forcedtoraise$20,000 to keep theracehorses from starving.

Kevin Owens, a Glendale horse breeder who has feuded with Simms,called Simms' $1 million donation "obnoxious."

"That money, to me, would have been better applied to taking care of the people who take care of you," Owens said. "If you are doing something out of the goodness of your heart, you should help your people."

Hutton saidSimms requested association members pay half of the track's operating costs through April 30. Typically, Turf Paradise covers all of those costs.

Because Ducey hadn't filled the three empty seats on theRacing Commission, Hutton said his organization was unable toappealthecost-sharing agreement.

"There's nowhere for us to go," Hutton said. "There's at least six people who have interviewed for the positions (onthe Racing Commission.)They are very qualified people who could be appointed."

Horse owners hadlittlechoice but to agree to Simms' terms, he said.Hutton said the association's share of the track's operating costs were atleast $94,717 through late April, with the money coming out of the racing purse. The associationcontributed another $26,445 to help horse ownerswho continued to keep their horses at the track.

ByMay 10, nearly all of the horseshad been moved to other tracks in the hope thatracing resumesthis summer, Hutton said.

Simms said he had to ask the owners to contributebecause nomoney has beencoming into his track since mid-March, and heneeded to share the costsof maintaining the track with the horse owners who benefit from the facility.

He said hedonated $2,000 to help feed the horses.

Hutton said Simms'"influential donation" could swayDucey to not appointcommissioners whom Simms doesn'tlike.

Simms scoffedat the idea that he has much control over the Racing Commission, and notedthat one reason for the vacancies isit's difficult to find volunteers to serve.

"For five years, they couldn't get a fifth commissioner," Simms said. "Two have walked out, and they both are my friends &mldr; Igot voted down many times."

Scarpinato, the governor's chief of staff, said Simms' donation won't influence Ducey, agreeingthat it's tough to find volunteers to serve on the Racing Commission. Plus, he said,the governor faces more pressing issues.

"We have been focused on the coronavirus and that has been our top priority the past 10 weeks," Scarpinato said. "And, it's very challenging to find good people who are willing to serve, and who do not have a conflict of interest on this commission."

Have a tip on investigative stories? Reach the reporter at craig.harris@arizonarepublic.com or 602-444-8478 or on Twitter @charrisazrep.

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