For the last five years, the city of Phoenix has illegally doled out more than $28.5 million of taxpayer funds to over 100 private organizations with little to no oversight, according to findings recently uncovered by several members of the Arizona Legislature. Now, the Goldwater Institute, on behalf of Phoenix taxpayers, has asked Arizona Attorney General Kris Mayes to put an end to the city’s unlawful spending spree.
Organizations like the Phoenix Film Foundation, Phoenix Pride Inc, Mexican Baseball Fiesta LLC, the Arizona Science Center’s Galaxy Gala, and many others received subsidies—sometimes simultaneously by multiple departments—under questionable labels like “Sponsorships,” “Grants and Subsidies,” “Emerg[ency] Assist[ance],” or “Miscellaneous.” The city has no lawful authority to spend public money in this way.
When pressed to identify a legal basis for the spending, officials pointed only to an outdated ordinance that allows the city manager to settle claims against the city—an insufficient justification for these discretionary giveaways. Incredibly, the city claims that this policy gives department directors authorization to dole out $32,000 to any organization of their choosing. This effectively turns large portions of the city’s budget into a patchwork of slush funds that special interests can access in the sole discretion of a single city employee. Amazingly, the city “does not track donations by nonprofit status,” so it does not know exactly much taxpayer money has been funneled out through this opaque process.
Goldwater notes that if treating taxpayers as financiers for private entities—even controversial and ideological ones—sounds familiar, that’s because it mirrors what has been exposed throughout the federal government this year. For example, the U.S. Agency for International Development (USAID) was described as “a slush fund for leftist priorities” after the White House exposed decades of waste and abuse in that agency. And the then-Elon Musk-led Department of Government Efficiency (DOGE) brought to light that Treasury officials “were instructed always to approve payments,” sparking new “payment categorization code” requirements for auditing purposes.
