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Crimes and Consultations 

A phantom payment sticks Nogales taxpayers with the tab

Nogales is a burg beset by lies. Take the Nogales Wash: In truth, this torpid channel dissecting the city is a largely unwashed sewer trench from Mexico.

The border town also boasts endlessly unfulfilled government promises (cleaning the Nogales Wash is one), and it's a fleeting refuge for politicians arriving only to bequeath grants--and steal headlines--for studies of this or that maladaptation. Then they beat a hasty retreat.

This is an American city of Third World poverty, with a stable of leaders who mostly serve their own ambitions and the local patriarchy.

Naturally, Nogales is also a prime destination for those well-paid, professional prevaricators known as "consultants." Such as Bill McNally. Such as Ron Caviglia.

Both did pretty well by Nogales. Or at least they did, before the Arizona Attorney General's Office began pondering one city payment to a company that did not exist, except perhaps in the minds of Bill McNally and Ron Caviglia--along with a former mayor named Marco Lopez.

It is a small matter grown large: in a quick conversation with a Tucson Weekly reporter, AG spokeswoman Andrea Esquer still managed to mention "grand jury"--two words to make any scoundrel's short hairs perk up.

This complicated mess dates back to 2003, when Tucson Electric Power purchased Citizens Energy Services, the electric company then powering Nogales. Though Citizens mustered a lousy service record, ever-hungry TEP quickly added injury by saddling the city with a 22 percent rate hike.

Suddenly, Nogales muckety-mucks glimpsed a perfect opportunity to make hay: Why not have the city wrest Citizens away from TEP? Then-mayor Lopez became the movement's chief cheerleader; furious fact-finding began; fund-raising ideas were floated, and soon, the political waters were filled with consultants.

Voters weren't buying, however, and a ballot proposition allowing Nogales to purchase the utility for about $41 million was firmly defeated. But as the political feeding frenzy subsided, questions quickly arose. In particular: How come Nogales taxpayers had shelled out $6,000 to AR Consulting Engineers, a firm that apparently doesn't exist?

More than two years later, no one interviewed for this story admits knowing of any such company, or where those funds ever went. Indeed, a Google search does not reveal any business by that name.

But consulting engineer Bill McNally did spill a few beans, saying he was asked by then-Nogales City Manager Lee Maness to create a $6,000 invoice for AR Consulting Engineers--and then "flip" that money to Ron Caviglia.

McNally says he was paid around $55,000 for his work. Others estimate that he earned up to $100,000.

Meanwhile, Ron Caviglia of Tucson remains mum.

According to an earlier interview with Axel Holm, chairman of the Nogales utility-purchase campaign, Caviglia simply appeared one day making big promises. "He told me he was a political consultant," Holm says, "and that he could raise $15,000 a day." But in the end, "he didn't raise (more than) $1,500 total. We spent it on a couple of billboards and a bus-stop advertisement."

It's unclear how much Caviglia was paid for his labor. But $6,000 might be a workable figure.

So what does Ron Caviglia say? Well, that depends upon which Ron Caviglia you're talking to: When first contacted by a Tucson Weekly reporter who's interviewed him numerous times, it appears that Caviglia tried to disguise his voice; in low grunts and mumbles, the speaker announced that he actually was not home at all. Still, the speaker did take a message for the real Caviglia, who then called back the next day, only to angrily say he had "no comment" on anything surrounding the mysterious $6,000 invoice.

It was, on the whole, a rather quirky interaction.

Meanwhile, the AG's office won't confirm or deny that they're investigating the case. But according to current Nogales City Councilman Ignacio Barraza, state investigators have been spotted at City Hall. Barraza also says he met with AG officials in Tucson earlier this year, who told him the case would soon be closed. "I think they were talking about next month."

Observers suggest indictments against several individuals, including former mayor Marco Lopez, could be in the offing.

Not surprisingly, all these players are passing the buck quicker than corn through a goose. McNally now says he can't comment. But "it wasn't like we were stealing anything extra from what we were billing for our services," he remarked in an earlier interview. "We flipped it around for (the city), but it was at their request, at the request of (city manager) Lee Maness."

However, Tucson attorney Mike Storie, who represents Maness, claims his client doesn't know jack about the invoice. "There's just been a lot of talk about who knew what when." But Storie believes the AG's focus is upon Marco Lopez. The utility purchase campaign "was his baby," Storie says. "Marco put all of his effort into it."

Today, Marco Lopez heads the Arizona-Mexico Commission, a post to which he was appointed by Gov. Janet Napolitano. From his Phoenix offices, Lopez denies knowing about the invoice. Nor has he been interviewed by the AG's office, he says. "I haven't been contacted by anyone."

But one veteran observer of Nogales politics, who requested anonymity, says Lopez had Mexico energy industry connections eager to push the city's purchase of Citizens. "Marco had made commitments to spend money with them" if the city utility purchase succeeded, says the source.

Lopez calls that charge ridiculous. "There are also allegations that terrorists are crossing the border through Nogales," he says, "and that's not true either." Instead, he says he simply supported the ballot measure because "we had seen that other publicly owned utilities throughout the country provided a positive return for consumers, allowing them to enjoy lower-cost electrical services."

As for the wily Caviglia, "I've known Ron about four years," Lopez said when interviewed in June. "I know he was raising funds. ... But he was not compensated by the city."

Councilman Barraza remains a prime mover behind the AG's investigation. He was appointed to the Nogales City Council after the invoice scandal and says he just wants the truth. "I mean, an invoice for $6,000 was submitted to the city by a company that, when you trace it back, doesn't exist. I'm very curious to know where that money went."

As are 21,000 other residents of a city, where lies flow like the rancid Nogales Wash.

More by Tim Vanderpool

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