Order Forces Pac To Disclose Identities

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The short history of the political action committee, Citizens for Payson's Economic Future, has read like a suspense novel, complete with innuendo, mysterious front men, toll-free numbers and a private investigator.

A second order requesting compliance -- filed May 2 by a Phoenix-based law firm on behalf of the town of Payson -- could finally demystify this political enigma.

The May 2 directive, that came on the heels of an initial letter of compliance sent by the town April 26, address possible statute violations in the PAC's documentation.

"It's been very, very unfortunate," said John Back, whose name has been linked to the PAC.

In early April, shortly after the primary election ended, advertisements opposing mayoral candidate Bob Edwards began showing up in local media.

In the ads, the PAC stated its funding source: "Paid for by Citizens For Payson's Economic Future."

In Arizona, PACs are required to file a Political Committee Statement of Organization and name a chairman and a treasurer.

The paperwork, originally submitted to the town March 26, 2006, identified Dwight Adams and Dennis Heinonen as chairman and treasurer respectively.

Handwritten by one person, the PAC application reflected shared contact information.

The data reported Adams and Heinonen as self-employed executives sharing a Phoenix address, and toll-free phone and fax numbers.

That address traced back to a Nevada-based corporation in Phoenix called Trasyd Group LLC, which provides auditing services for health care professionals.

The toll-free phone number is connected to a voicemail greeted by Robert Back -- John Back's brother.

John Back, a principal of the Payson-based development firm, Terra Capital LLC, said he offered to let the PAC use Trasyd Group's contact information when it first formed in late March.

"My brother is totally uninvolved," Back said. "It was a poor idea to use that address because it was convenient at the time. The PAC was being set up very quickly. It's been disappointing because I naively volunteered."

Though Back said he has personal relationships with some of the PAC members, neither he, nor Terra Capital's other two principals, Stephen Carder and Michael Horton, have contributed money.

"I've had nothing to do with the orchestration of what they've done," Horton said.

On April 26, the law offices of Curtis, Goodwin, Sullivan, Udall and Schwab filed the first order of compliance, requiring the PAC to comply with three counts: Amend the document to reflect the accurate contact information and employment information of Adams and Heinonen, and disclose the financial sources that contributed to a radio advertisement.

A day later, the PAC provided updated, typewritten information, including a shared Payson post office box, new job titles -- Adams as a consultant and Heinonen as a broker agent, both self-employed -- and a toll-free number welcoming callers to a Citizens for Payson's Economic Future voicemail.

Still not in compliance with state law, the PAC received a second order May 2.

It chronicled two other violations: "The (PAC) failed to properly list the employer for its chairman and treasurer," and "The (PAC) failed to accurately identify the occupations of its chairman and treasurer."

According to a public records search, Adams and Heinonen, both licensed real estate agents, have been associated with Choice Properties LLC of Scottsdale since 2005.

"They're independent contractors," Back said. "They just hang their license with Choice."

Choice Properties, incorporated in 2004, reported the Arizona Corporation Commission and verified by Back and Horton, is partially owned by Terra Capital LLC and Choice Properties' designated broker, Bruce Griffin of Payson.

Griffin contributed $1,000 to the PAC, but wasn't part of its organization, he said.

"I just heard about it," he added. "It seemed like a lot of money was being spent on the Edwards' campaign, and I said (to acquaintances), ‘If you hear of anything happening on the other side, let me know.'"

Heinonen declined to provide details about his connection to Payson and the PAC.

"My background is finance," he said. "I do financing up there for projects. I'm involved in commercial mortgage banking. I was asked to be the treasurer. It wasn't any one person."

To investigate the PAC, mayoral candidate Bob Edwards hired local investigator David Christensen, who later died during a hiking accident April 22.

In the following weeks, details of Back's past have surfaced.

Back served as an independent auditor for KPMG from 1993 to 1999 when he audited the fiscal records of First American Health Concepts (FAHC) of Phoenix.

The Securities and Exchange Commission said he engaged in "improper professional conduct," after the agency found FAHC had overstated income by $892,000 in 1999.

"Back knew, or should have known, that when KPMG issued its audit report on FAHC's 1999 fiscal year, FAHC's accounts receivable balances should have been reconciled for two years," reported the SEC.

Back retired in 2002, relinquished his CPA license in 2003 and agreed to be barred from public-company accounting in 2005.

"At that time (the SEC) was coming after people with guns loaded," Back said. "I'm neither admitting nor denying guilt. Had I done a better job, the regulators said, I would have caught the $829,000.

"My choice was to fight it for years and probably destroy myself.

"I retired and then started some other businesses, one of which is real estate."

Back joined Horton, longtime friend Stephen Carder, and other principals to form Terra Capital Group in 2003, according to the SEC.

Carder served as vice president of finance and administration for FAHC -- the same company Back audited for seven years -- until 1988.

"We knew each other in the early 1980s," Back said. "He was long gone when my problems blew up with the state."

The PAC has 20 days to comply with the order, nearly a week after the election ends.

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