November 24, 2004
For 20 years, a charitable organization founded and led by Tempe City Councilman Johnny G. "Hut" Hutson has been soliciting money from the public without registering with the state as required by law.
Since starting the Friends of Tempe Butte in 1985, neither Hutson nor anyone associated with the organization has registered the group as a charity, the Tribune found.
Gene Palma, director of business services at the Arizona S ecretary of State’s Office, said charitable groups must register each year with his office and provide an annual financial report.
Failing to do so is a Class 1 misdemeanor punishable by six months in jail and a $2,500 fine.
"I’ve been doing this for a long time and no one ever said anything to me about this," Hutson said. "I took this over at the request of the City Council."
On Tuesday, Hutson said he would immediately file the appropriate paperwork.
The three-page registration form, which is available online, asks for a background of the organization, its purpose and a list of officers involved with the group.
Friends of Tempe Butte has never paid taxes or provided an expense report, said federal and state officials. The only financial record cited by Hutson was a bank account he keeps in his name.
Palma said laws requiring charities to resister are intended to protect the public from fraudulent organizations. He added that complaints are forwarded to the Arizona Attorney General’s Office for investigation.
Additionally, Palma said organizations that do not call themselves charities can fall under that title if they are perceived that way.
"We consider those groups de facto charity organizations," he said.
Each year in early December, the Friends of Tempe Butte decorate Hayden Butte near Arizona State University’s Sun Devil Stadium with holiday symbols of the Three Wise Men on camels. Additionally, the group places a cross on the mountain before Easter.
Hutson organized the group after the American Civil Liberties Union became concerned that public land and money were being used to maintain the Christian religious figures on the butte.
Then-Mayor Harry Mitchell asked Hutson to take over the effort and ensure no public money would be used to maintain the holiday decorations, longtime Tempe officials said.
Since then, Hutson annually mails out letters after Thanksgiving requesting a $25 donation for the maintenance and cost of the project. Hutson said he sends out about 100 letters each year. A mailing list was not available.
Because the organization did not incorporate, Hutson said he created a separate bank account in his name to deposit the donations. Detailed financial records were not available, but the organization took in about $515 last year, Hutson said.
He said the money pays for utilities and maintenance fees. For example, vandals damaged the decorations last year, forcing the organization to pay for repairs.
Hutson estimated the annual electrical costs at $200 to $300.
Hutson said he has spent about $1,400 on the effort this year, leaving $954 in the account.
Hutson came under questioning during his quest to win a seat on the City Council in May about his financial management of the city’s Industrial Development Authority.
Since Hutson took over as the treasurer in the mid-1980s, the authority found itself in trouble over a number of financial inaccuracies and errors. The Arizona Corporation Commission in 1999 temporarily dismantled the authority for failing to file several years’ worth of financial statements.
The authority also was the subject of an investigation by the city’s internal audit department. Since that investigation, the authority is required to present a full disclosure to the city of its finances as well as annual treasury reports.
Hutson was later re-elected treasurer during a special meeting called to address the authority’s financial records.
However, Hutson again found himself in trouble for violating a state law requiring that he step down as treasurer of the authority after taking his seat on the council.
Hutson said he had continued managing the authority’s finances to shore up unfinished business and to ensure there were no oversights.
State law seeks to keep council members from approving items recommended by the boards they serve on. However a violation of that law carries no penalty.
Despite assuming office July 15, Hutson’s name had remained on the authority’s bank account.