The Arizona Department of Public Safety is conducting an investigation into whether Payson Town Manager Debra Galbraith’s short-term $8,000 loan to Vice Mayor Michael Hughes constituted a conflict of interest.
Councilor Hughes confirmed that he had spoken to DPS investigators about the loan and that the investigation was launched three months ago. The investigators indicated they doubted the loan Hughes has since paid back posed a problem.
The investigators did not return calls from the Roundup seeking comment on when the investigation will be completed.
Hughes said that when the real estate market collapsed, it mangled his business selling real estate, he asked Galbraith whether she knew of anyone who might be in the market to buy his Harley-Davidson motorcycle, since she also rides motorcycles.
She then offered to loan him the money. He accepted the loan, but insisted on securing the loan with the title to his motorcycle.
He subsequently sold the motorcycle and quickly repaid $5,000 of the loan. He paid back the remaining $3,000 in March of 2011.
Hughes said the complaint was filed in April of 2011, shortly after the town council overturned a hearing officer’s recommendation and fired a town worker for allegedly attempting to access Galbraith’s e-mail. Hughes said the questions asked by the investigators left him with the impression that the complaint may have been related to that council action.
Hughes said the DPS investigators inspected the minutes of months of council meetings, seeking any time that Hughes had voted differently from the rest of the council but in favor of a position recommended by Galbraith. The council didn’t vote on Galbraith’s salary or contract during the time that Hughes owed her money.
The state laws concerning conflict of interest deal chiefly with whether a council member would gain some possible financial benefit from his vote. In such cases, the law requires council members to first declare that they have a potential conflict of interest and then abstain from voting on that issue.
Reportedly, the investigation into the loan to Hughes was triggered by a complaint filed by a fired town employee. Payson Police Chief Don Engler concluded that his department couldn’t investigate the town manager or council members, so he asked the Department of Public Safety to investigate instead.
The investigators reportedly talked to more than a dozen town employees. Other issues raised in those interviews reportedly extended the duration and scope of the investigation.