Joe Arpaio's defense fund got $500,000 from one donor. But was it legal?

Rebekah L. Sanders
The Republic | azcentral.com
Former Maricopa County Sheriff Joe Arpaio's legal-defense fund received $500,000 from the National Center for Police Defense, a Virginia non-profit. The legality of the donation is not clear.

Supporters of former Maricopa County Sheriff Joe Arpaio have given him hundreds of thousands of dollars to cover defense costs in his criminal-contempt trial.

And even though President Donald Trump has pardoned the controversial immigration hardliner, Arpaio is again asking donors for more money as he continues battling to vacate the conviction.

But the rules governing Arpaio's spending of the legal-defense funds are murky.

And there are questions about whether a Virginia non-profit organization, the National Center for Police Defense Inc., is legally sending contributions to Arpaio.

Non-profit under scrutiny

In April, the center's president, James Fotis, presented an oversized check of $250,000 to Arpaio's defense fund. A picture of Arpaio accepting the check is on the organization's website. The memo line on the check says: "Defending the Rule of Law in America."

In total, the center has given $500,000 to Arpaio's legal fund, Fotis said Thursday in a written statement through his spokeswoman. 

"The trial of Joe Arpaio was a travesty, each day that passed as I sat in the court room, I realized that this was just a political lynching. If the Sheriff had had a jury, he would never have been convicted on the evidence that was presented by the prosecution," Fotis said. "We’ve been pleased to help Sheriff Arpaio in some way."

A sketch of Sheriff Joe Arpaio testifying in federal court on April 23, 2015.

His organization, founded in 2015, has come under scrutiny for hefty payments to fundraising consultants. A previous group Fotis ran, the Law Enforcement Alliance of America, was criticized for a lack of transparency.

The National Center for Police Defense raised $388,952 last year, according to Charity Navigator, one of the largest online evaluators of Internal Revenue Service-approved tax-exempt organizations. But the center's annual tax return, known as a 990, is not available on Charity Navigator or GuideStar, another large charity clearinghouse.

ROBERTS:  Arpaio's latest fundraising plea? Give so he won't go to jail for life

Tax-exempt organizations are required to disclose their annual tax returns upon request. The Arizona Republic requested a copy from Fotis' spokeswoman Cassandre Durocher, but on Thursday she said she could not provide a copy of it because the accountant is out of town.

"It's sort of a 'buyer beware' kind of thing," said Arizona State University law professor Adam Chodorow, an expert in tax law. "If you're donating to the legal-defense fund, you would be really wise to say, 'What are the rules?' ... I am deeply skeptical that this (non-profit) meets the law's requirements."

Guidance lacking on legal-defense funds

Phoenix election attorney Joseph Kanefield, a Republican, said he has encountered questions about other legal-defense funds numerous times, but there is little in state statute or local mandates to govern them.

"We don't have a lot of guidance on this thing in Arizona," he said.

Arpaio spokesman Chad Willems said the legal-defense fund for the ex-sheriff has restrictions in place.

"The funds cannot be used for any other purpose besides paying for legal representation and legal fees," he said. "It was a very costly trial and … we have asked supporters to cover some bills that are outstanding."

Neither Willems nor Arpaio attorney Jack Wilenchik would say how much money the former sheriff's legal-defense fund has spent or raised outside of the $500,000 gift from the police organization.

"It's pretty obvious paying a lot of lawyers in this kind of case, with this many appeals and this kind of publicity, it's not cheap," Wilenchik said. "I'd love to know how much (the federal prosecutors cost). It's only fair for the sheriff to keep up with that."

Maricopa County taxpayers footed nearly $17 million in civil court for both Arpaio's defense and the legal fees of his opponents, such as the American Civil Liberties Union,after it won the Melendres racial-profiling case against the Sheriff's Office.

MORE:His arrest helped bring down Arpaio. Manuel Melendres speaks publicly.

But the county was not responsible for covering Arpaio's defense once a federal judge recommended criminal contempt charges.

Where does the money go?

The former sheriff is raising money through the Joe Arpaio Legal Fund, established in 2010 "to combat the numerous and frivolous lawsuits that have been filed against Sheriff Joe Arpaio because of his tough-on-crime policies and being so outspoken against illegal immigration," according to the fund's website. 

It is not a registered, tax-exempt non-profit organization.

The website adds that contributions will be used to defray legal expenses from any court proceedings involving him.

But there is no public documentation to show how the money is spent.

That's because most legal-defense funds are set up as private trusts, with no duty to file public reports on spending or collections. The trustee gets to decide at the start how narrow or broad to make the spending restrictions, said Chodorow, the ASU professor. 

They can collect unlimited donations from individuals and corporations.

"There is no reporting that trusts need to do," he said.

Donors can request a copy of the trust's founding documents, but trustees have no duty to provide them, Chodorow said.

Such documents "give donors some sense that Arpaio isn't going to go off on a vacation with (the money) but really is going to use it for his defense," he said. "If (an organization) is not willing to show you the limitations on how the money will be spent, you shouldn't be giving them money."

Then there's the Virginia-based National Center for Police Defense.

By law, donations to trusts like Arpaio's are not tax-deductible and are subject to a gift tax above $14,000 per person. Donations to the National Center for Police Defense are tax deductible, a major financial advantage for donors.

That difference means the center's donation to Arpaio could be illegal, Chodorow said.

"(The National Center for Police Defense) may have some claim to charitable status for various activities, but raising money to give to Joe Arpaio seems outside the realm of qualifying activities," he said. "They are essentially funneling money to Arpaio. … If you can't give to him directly and get a donation deduction, you should not be able to do so through a conduit."

Willems said the legality of the donation is a question for the center or a tax attorney. 

Fotis, the center's president, did not address the questions raised about the donations. Instead he said the organization benefits "all law enforcement officers."

"There is no doubt that there is a continuing war on cops," he said in the statement. "(T)hese men and women in blue have to then worry that they will be charged with a crime while trying to protect and serve the community in the way they were trained. ... NCPD works to make sure they have the resources to protect themselves against the community that they protect and serve daily.” 

Arpaio is also raising money through the Sheriff Joe Arpaio Action Fund, an issue-advocacy non-profit organization that promotes conservative values. Willems has said that money would not go to legal-defense costs.

Even if U.S. District Court Judge Susan Bolton agrees to vacate Arpaio's sentence, taxpayers will not pay for his fees, according to the Maricopa County Attorney's Office.

"We can say that, categorically, the county does not provide counsel for criminal matters. So, regardless of the status of a criminal case and/or conviction, we would not cover those expenses," Maricopa County Attorney's Office spokeswoman Amanda Jacinto said. "The costs that previous supervisors sought to be compensated for — and were — had to do with attorney's fees in civil suits against the county."