Counsel Probe Backs Mecham Impeachment

A special counsel hired to determine whether grounds exist to impeach Gov. Evan Mecham told the state House of Representatives Friday that Mecham had deliberately tried to conceal a $350,000 campaign loan, had used public funds to bail out his car dealership and had attempted to thwart an investigation by the attorney general.

He said evidence supports the Republican governor’s impeachment in all three cases.

In a nearly hourlong presentation, William P. French, the special counsel hired by the House and a former presiding Superior Court judge, presented documents which he said show “clear and convincing evidence” of an elaborate scheme by the governor to hide a campaign loan from Tempe developer Barry Wolfson.

Mecham, indicted last week in connection with the loan, faces six felony charges, including perjury and fraud.

Other documents presented by French show that Mecham transferred $80,000 designated as public funds to his automobile dealership and then used part of that money to pay for a building he owned with others in Tacoma, Wash.

French also presented a sworn statement from the director of the Department of Public Safety that the governor told him not to cooperate with an investigation by the state attorney general’s office into death threats made by a member of the governor’s staff.

‘Sad Day in Arizona’

“It is a sad day in the state of Arizona,” French said, “when the highest executive officer of this state would try to block or impede an investigation. . . . “

After the presentation, most lawmakers said they would reserve judgment until they had studied the nearly 200-page report, but many were obviously troubled by what they heard.

Thirty-one votes, a majority, would be needed for impeachment. Republicans control the House, 36 to 24.

House Speaker Joe Lane (R-Wilcox), who has stood staunchly behind Mecham through his troubles, said after hearing the report that he believed the governor should “do some very serious soul-searching.”

“I’m disturbed,” said Rep. Sterling Ridge, former mayor of Glendale, Mecham’s hometown. “I’m trying to keep my mind open, but it’s tough. I’ve been in office for 12 years, and I’ve never come across anything like this.”

‘Governor Is in Trouble’

“If these facts as they are outlined are true,” said Rep. William Mandel (R-Chandler), “I would say the governor is in trouble.”

Mecham’s lawyer, Murray Miller, was refused the right to appear before the Legislature to respond to the report.

In a news conference, Miller denied the charges and challenged the objectivity of the special counsel. Miller said that French was removed from the state racing commission by Mecham last year and that he had signed a petition calling for Mecham’s recall before he undertook the investigation.

“I must tell you that what you and the state and probably the nation witnessed was nothing short of a scandalous, outrageous closing argument made by a one-man impeachment committee,” Miller said.

“It is my understanding that an investigator is just supposed to present the evidence. By what right and by what authority does this one-man show dictate to a publicly elected body what they must do?”

King Birthday Cited

French’s report came on the birthday of Dr. Martin Luther King Jr. Last year, Mecham rescinded the birthday as a state holiday, setting off a storm of protest and criticism that has plagued his administration and has left him facing an almost certain recall election.

French told the state legislature that, at the outset, Mecham started to conceal the loan from Wolfson, more than one-third of his campaign budget, by agreeing in a letter to keep it “confidential.”

French displayed to lawmakers a page of handwritten notes by campaign finance committee member Vern Gasser made during a meeting at Mecham’s car dealership that said “don’t show borrowed money” and “show Evan borrowed money.” French said those notes and other documents were the “smoking gun” indicating that the loan was to be concealed.

A separate bank account was created to receive the money so that an examination of the regular campaign bank account would not turn up the loan, French said.

“In some circles it’s called laundering,” he added.

French also displayed a receipt for $350,000 made out to the governor from his brother, Willard, which, French said, was a phony document made to create the illusion that the governor had loaned the money from his personal funds.

“This receipt appears to be a manufactured document created to cover up the $350,000 loan,” he said.

Kept ‘Detailed’ Book

French noted that Willard Mecham kept a “very detailed” receipt book, “including a $1 loan from an anonymous donor,” but he never showed a receipt to Wolfson for the $350,000 loan.

The governor did not list the loan on his personal or campaign finance documents but insisted after it was reported by the news media that it was an “honest mistake” by his brother. He amended his financial disclosure statements in November and contended that the loan had been kept quiet because Wolfson wanted it confidential so other political candidates would not seek money from him.

French told lawmakers that Wolfson probably wanted the loan kept quiet because he was already under investigation for questionable financial dealings, while Mecham, campaigning on corruption in government, probably would not want it known that such a large sum had come from one contributor.

The governor also violated state law by using money that was turned over to him from a fund-raiser for a so-called “protocol fund” to pay off personal debts, French said.

Just over $92,000 was transferred to the fund by the governor’s inaugural committee “solely for purposes of promoting the interests of the state, or to promote and encourage citizen public services to the state . . . “ the chairman of the inaugural fund wrote in a letter to the Maricopa County attorney’s office.

Transfer of Funds

According to evidence presented by French, Mecham transferred $80,000 from the account to his Pontiac dealership on July 16 and two weeks later, $20,000 was paid on property in Tacoma.

French also presented what he said was evidence that Mecham attempted to thwart an investigation into alleged death threats made by Lee Watkins, the controversial state’s prison construction chief.

Watkins, in a conversation with another Mecham aide, allegedly made death threats against Donna Carlson, a former Mecham aide who was testifying before a grand jury investigating the governor.

Watkins, who resigned under fire Thursday after reports that he had failed to disclose a pair of criminal convictions dating back more than 20 years, allegedly told the aide that “Donna is talking too much,” and said she would “be going on a long boat ride and may never come back.”

Reported Threats

The aide reported the threats to security officers who were later called to testify before a grand jury.

According to a sworn statement by the director of the security staff, when he approached the governor Nov. 15 about requests from the attorney general for two officers to testify before the grand jury, Mecham said: “Well, if you want my permission for them to talk to the attorney general, you can’t have it. The answer’s no.

“I don’t want Frank and Beau (the two officers) giving any statements to the attorney general. The attorney general is out to hang me, and I’m not going to help him in any way. I don’t want you to help him get me. Don’t tell the attorney general anything.”

French then gave the legislators a partial transcript of an interview between the governor and a television reporter the following the day in which the governor was asked about the subject.

According to the transcript, Mecham said he had not been informed by anyone on his staff about the threat.

Offers Apology

Only hours before the impeachment report was delivered, Mecham issued a letter of apology to the people of Arizona and asked them to “forgive me for my mistakes.”

“I apologize to the people of Arizona for any of my actions or mistakes which may have sparked embarrassing publicity for our state,” he said in a letter published Friday in the Arizona Republic.

“I have been well-intentioned, but I know that I may have been the cause of legitimate concerns. I am willing to accept my share of the blame for the contentious atmosphere in Arizona.”

Mecham said he had no choice but to cancel the King holiday because the state attorney general had ruled that the holiday was illegal. But he said that he should have established a Sunday in January as the legal holiday to replace it.

He admitted that his staff failed to properly investigate his appointees and said he should have hired an accountant and an attorney to make sure that his dealings in the campaign were handled properly.

“I hope the people of our great state will balance these errors against the good things which I have done . . . and forgive me for my mistakes,” he said.