Arizona AG asked to investigate Valley Metro's spending

• Arizona AG may investigate Valley Metro's spending.
• Three Phoenix City Councilmen have asked for a criminal probe into spending.

Arizona's Attorney General is considering a criminal investigation into Valley Metro, after three Phoenix City Councilmen on Friday asked for an inquiry into whether tax dollars were misspent at the transit agency.

Meanwhile, outgoing Valley Metro Chief Executive Stephen Banta, who sought and received taxpayer-funded reimbursements for buying alcohol, flying first class and dining at fine restaurants while running the transit agency, has accepted a separation agreement.

Details of that agreement were not immediately disclosed. Banta will take his roughly $235,000 annuity with him. His contract allowed for him to have that money whether he resigned or was fired.

Phoenix City Councilmen Sal DiCiccio, Jim Waring and Michael Nowakowski all signed a letter calling for an Attorney General's investigation.

"We take all allegations of misuse of taxpayer funds very seriously and we will review all allegations," said Mia Garcia, a spokeswoman for the Attorney General's Office.

A spokesman for Banta said he would cooperate with any investigation and that he plans to repay Valley Metro for some of his expenses that have come under scrutiny.

On Thursday, Valley Metro's boards offered Banta a deal to encourage him to quit. Phoenix City Councilwoman Thelda Williams, who is on both boards, confirmed that Banta would receive an annuity that could range from $235,000 to $265,000 for nearly six years of work.

He's also expected to receive a buyout for unused vacation or about $18,000, according to Valley Metro records. He could also stay on the payroll until at least January.

Williams said the boards have offered a separation agreement that she hopes will avoid litigation and additional cost to taxpayers.

The Arizona Republic has found Banta was reimbursed $2,243 in public funds for nine dinners in which the guests he claimed to be entertaining on behalf of Valley Metro said they didn't attend.

Banta did not attend Thursday's special meeting on the advice of his legal counsel, according to Jyme Sue McLaren, his chief of staff. Banta has hired private attorneys and a personal spokesman.

Banta previously told The Republic that Valley Metro policies such as a ban on alcohol purchases did not apply to him. He declined to answer questions Thursday through his spokesman, David Leibowitz.

Instead, Banta issued a statement.

"We will continue to work with the board to appropriately end my employment with Valley Metro and to resolve any discrepancies regarding my expense reporting," Banta's statement said. "I regret that the great work Valley Metro has done developing a world-class regional transit system has been eclipsed by the focus on my expenses. For that, I owe our riders, taxpayers, the Board and Valley Metro's employees an apology."

Valley Metro has one board that oversees transit and one that oversees light rail. They voted Thursday to unanimously approve Banta's original Nov. 24 resignation, which was to take effect in January and place him on paid administrative leave.

The boards also appointed Eric Anderson, transportation director at the Maricopa Association of Governments, as the acting Valley Metro chief executive.

He will hire an independent auditor to examine the transit agency's books. The city of Phoenix, the largest player in Valley Metro, already has begun an audit of the organization's expenses and reimbursement of employees dating to 2010 — when Banta started working there.

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The boards will meet formally Monday to see if Banta has accepted the offer.

Williams said the boards would have had difficulty outright terminating Banta because his employment contract is so favorable to him. Valley Metro boards in 2010 and 2012 approved those deals, which call for him to receive a full-year's pay if he's fired — even for cause. He only would forfeit that pay if he's convicted of a crime.

However, his contract also calls for him to receive no severance pay if he resigns.

Banta abruptly resigned on Nov. 24, as The Republic was working on a story regarding his expenses. Banta on Tuesday asked to rescind his resignation, saying he was pressured to quit last week by Phoenix Mayor Greg Stanton's office before The Republic's article was published.

Banta, in a Tuesday letter to the chairs of the two Valley Metro transit boards, said he had brokered a secret deal with Seth Scott, Stanton's policy chief of staff, and Deputy City Manager Mario Paniagua in exchange for that Nov. 24 resignation. Banta's letter states the two city officials agreed in a meeting that morning that if he resigned, he could stay in his current job until January and then become a paid consultant.

After that meeting, Banta wrote, he agreed to quit.

Banta's Tuesday letter said Paniagua told him if he quit immediately, a consulting agreement for full pay and benefits would run through April 30, 2016.

Banta subsequently announced his resignation without mentioning The Republic's investigation of his expenses. Stanton's office then issued a statement wishing Banta well as he sought "new challenges."

The Republic, as it prepared to publish a story on Banta's expenses, became aware on Nov. 24 that he had quit. The newspaper published a story about noon that day on azcentral.com about his abrupt resignation. It detailed how Banta had flown first class, stayed in expensive hotels and bought alcohol with Valley Metro funds.

Scott and Paniagua in interviews Wednesday disputed Banta’s letter, saying it was misleading. The two said they tried to encourage Banta to resign in order to save taxpayers’ money because Valley Metro may have to pay him a full-year’s salary if he’s fired.

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