New probe of Valley Metro's Stephen Banta: Attorney general investigating

• State Attorney General's Office has begun a criminal probe of Valley Metro CEO Stephen Banta

Arizona Attorney Mark Brnovich has launched a criminal investigation into outgoing Valley Metro Chief Executive Stephen Banta, and is seeking assistance from the state auditor general to review his expenditures of public funds at the transit agency.

Banta, through a spokesman, expressed his innocence and promised to fully cooperate with any investigation.

On Friday, The Arizona Republic — which last month first uncovered questionable spending by Banta — obtained a letter from the Attorney General's Office to Auditor General Debra Davenport.

The one-page letter, dated Dec. 9, acknowledges that the Attorney General's Office has "opened an investigation to determine if any laws were broken by Mr. Banta." It goes on to say while the Attorney General's Office has an investigator on the case, it wants additional resources from Davenport's office to review "expenditures from Valley Metro by Mr. Banta."

It's unclear what role the Auditor General's Office would play in the investigation. One of its duties is to determine whether public entities are properly using tax dollars, personnel, property and equipment. A call to the office was not returned.

An Attorney General's spokeswoman said the office could not comment on criminal investigations.

Valley Metro CEO Stephen Banta to take $265,000 annuity when he leaves Jan. 4

Banta resigned last month amid an investigation by The Republic that found he incurred thousands of dollars in questionable expenses paid with public funds, such as flying first class, staying in a $600-a-night hotel, buying alcohol and dining at expensive restaurants. The Republic found that Banta spent more than $2,200 over 10 instances when he claimed to have entertained clients at Valley Metro dinners. At least some of the reported guests at those dinners told the newspaper they never attended the functions.

The Republic also found Banta and his wife, Ellen, racked up airfare for 44 round trips between Phoenix and Portland, Ore., where they kept a home, for 2 1/2 years after he was hired. The more than $15,000 in flights was charged to Valley Metro, unbeknownst to key board members.

David Leibowitz, Banta's personal spokesman, said his client was unaware of the investigation until informed Friday afternoon by The Republic.

"Obviously, he wants to cooperate fully with any investigation or audit, and he looks forward to telling his side of this," Leibowitz said. "From where he sits, he absolutely did not do anything that constitutes having broken the law."

Banta previously told The Republic that a Valley Metro policy he instituted that prohibited employees from purchasing alcohol with public funds did not apply to him.

Valley Metro CEO Banta, wife racked up taxpayer-funded flights

The criminal investigation comes after three Phoenix City Council members last week requested a formal inquiry from the Attorney General's Office, and brings the number of ongoing public inquiries in the matter to three. The others:

• The city also has begun its own audit of Valley Metro travel and employee expenses since Banta began working for the agency. Banta's expense reports were routinely approved by Valley Metro Chief Financial Officer John McCormack, who has repeatedly declined interview requests.
• Valley Metro's two governing boards also are seeking an independent financial audit, even though accounting firm Heinfeld, Meech & Co. of Tucson has given Valley Metro clean audits since 2011. 

The city of Phoenix is the largest member in Valley Metro, composed of 16 political bodies, and is the conduit of federal funds for buses and light rail throughout Maricopa County.

Phoenix orders audit of Valley Metro's finances

Banta was hired away from a transit agency in Portland and began work in January 2010. He abruptly resigned Nov. 24, during The Republic's investigation of his expenses. He later tried to rescind his resignation, claiming Phoenix officials, including Mayor Greg Stanton's office, pressured him to quit before The Republic could publish the information. Valley Metro's two boards, however, formally accepted his resignation this week. His last day is Jan. 4.