Valley Metro CEO resigns amid Republic investigation

Valley Metro Chief Executive Officer Stephen Banta abruptly resigned Tuesday amid an investigation by The Arizona Republic into expenses he incurred while running the region's bus and light-rail systems.

Thelda Williams, a Phoenix city councilwoman and an officer for both transit boards that oversee Banta and the budget of the Valley's transit systems, told The Republic that Banta had resigned, likely because of the newspaper's investigation.

"Absolutely, it had to do with the story," Williams said.

Banta said in a prepared statement that he would leave Valley Metro in January to "pursue other and unique challenges in the transit industry." His statement did not address questions about his spending.

High-dollar expenses

The Republic obtained Valley Metro records showing he routinely flew first class, stayed in a nearly $600-a-night hotel room and bought alcohol for himself and guests at restaurants while running the transit system. The newspaper also confirmed Tuesday that on at least four occasions, Banta was reimbursed for dinners between $230 and $470 in which the people he claimed to have entertained did not attend.

Banta's expense and credit-card records show he flew first class on eight of the 11 trips he took this year while representing Valley Metro on business and at conferences in places such as Munich, Germany, and Milan, Italy.

Valley Metro paid $18,834 for Banta to take Glendale officials to Portland, Ore., in late September to examine that city's light-rail system. The two-day trip with Glendale's mayor, City Council members and staff included a nearly $4,700 dinner at El Gaucho, which boasts shimmering candlelight and live flamenco guitar music nightly. A New York-cut steak cost $74 at the restaurant.

Before submitting his resignation, Banta defended the spending, saying his attendance at international conferences allows Phoenix to be a player in the worldwide transit industry. He said he learned how to better leverage public-private partnerships.

Banta also defended the expensive dinners as a cost of doing business, and he said in most cases he flew first class by exchanging his frequent-flier miles to upgrade his seat. However, Valley Metro records do not indicate such transactions occurred.

Alcohol purchases defended

Banta also acknowledged in an interview last week that he used Valley Metro funds, which come almost entirely from tax dollars, to buy alcohol during meals while entertaining guests — a violation of Valley Metro policy.

Banta said Valley Metro's policy, which prohibits reimbursing employees for buying alcohol, does not apply to him because his employment contract allows him to be reimbursed for expenses that "serve the best interest" of the Valley's transit systems.

Banta's contract has no specific language that allows him to purchase alcohol with public funds. Unlike other Valley Metro employees, Banta typically did not turn in itemized meal receipts showing what was purchased.

"It's there, and it's nothing I'm going to hide from," Banta said of buying alcohol with tax dollars. "We are looking to advance the public transit agenda here in the Valley."

However, Banta's spending drew the ire of Councilwoman Williams.

"I can't believe that any CEO would think that a company's policy does not apply to him," Williams said.

Valley Metro has a roughly $300 million annual budget to operate dial-a-ride, bus and light-rail services throughout Maricopa County. The agency is headquartered in downtown Phoenix.

Valley Metro slow to produce records for councilwoman

Banta was hired in 2009 and was given a five-year contract extension in 2012. He is paid $264,493 annually and receives an annuity and deferred compensation in addition to a state retirement plan.

He reports to a pair of boards composed of elected officials. One is a 16-member group that includes politicians from 15 communities and Maricopa County that oversees regional public transit, such as bus service. The other is a five-member group that oversees light rail.

Williams is the treasurer for the larger board and chairwoman of the light-rail board.

Following questions from The Republic, Williams said she had asked Valley Metro to turn over to her all the expense and credit-card reports that previously were obtained by The Republic. The newspaper gathered hundreds of pages of documents dating to 2010 through the Arizona Public Records Law, which requires government entities to disclose such information.

Williams said her staff last week made repeated requests for the records, but they were not provided until she personally called Banta and demanded them on Friday.

The records indicate Banta spent Valley Metro funds purchasing expensive meals that he said were to entertain current and former elected officials, whose communities have contributed millions in tax dollars to run Valley Metro.

Expensive dinners and travel detailed in records

Banta reported spending $745 to take former Phoenix City Councilman Tom Simplot and two others to dinner in Washington, D.C., in March 2014. Banta also turned in receipts to be reimbursed for $99, saying this past July 28 he entertained Simplot at Pita Jungle in downtown Phoenix. Pita Jungle's most expensive meal is about $16, but the restaurant has a bar. Simplot, who hired Banta in 2009 as then-Valley Metro board chairman, did not return calls.

Banta also sought reimbursement for $227, reporting that he took Surprise Mayor Sharon Wolcott and Goodyear Mayor Georgia Lord to dinner in Washington, D.C., in May. Wolcott confirmed she attended the dinner. Lord could not be reached.

Other records show that Banta:

Reported entertaining San Diego transit executives in November 2014 at Ruth's Chris Steak House. Banta reported that San Diego Metropolitan Transit System CEO Paul Jablonski and COO Wayne Terry dined with him, and the tab was $366. A San Diego transit spokesman told The Republic Tuesday that neither Jablonski nor Terry dined with Banta on that date at Ruth's Chris, as his receipt indicated.

Reported entertaining Portland transit executives in September 2015 and November 2014. Banta reported TriMet General Manager Neil McFarlane was at both dinners, which cost $233 and $263 apiece. However, McFarlane's office told The Republic Tuesday that the Portland executive was not at either dinner.

Reported spending $477 on dinner entertaining two transit executives in San Francisco on July 10. The San Francisco Municipal Transportation Agency told The Republic that the two executives did not attend that dinner.

Included five "personal days" on his trip to Milan, Italy for a conference. He flew from Phoenix to Zurich, Switzerland, where he took vacation before embarking on a train for Milan. Taxpayers footed the round-trip bill between Zurich and Milan, as well as the round-trip airfare between Phoenix to Zurich. He took his wife on the trip and paid for her expenses.

Had Valley Metro pay $594, the non-conference rate, to stay an additional night at the JW Marriott in Washington, D.C., for a legislative conference in March 2014. The discounted rate was $359 per night.

Turned in receipts after the Portland trip for "snacks" of nearly $101 and $50, respectively. The receipts show the purchases were made late one night at a tavern/restaurant and at a brewery.

Board members had 'no idea' about spending

Williams, the councilwoman and board member, said Valley Metro paid for a Mexican dinner for her about a year ago that wasn't expensive. She said she knew Valley Metro paid for some entertaining, but was unaware of high-cost meals.

"First of all, thank you for inquiring about this," Williams told The Republic. "We had no idea this was going on … We trust him to give us accurate information."

Williams said she was bothered by the amount of Valley Metro funds spent to take the Glendale contingent, which included 11 city employees, to Portland.

"I don't know how you can justify that," Williams said. "You can't justify a dinner bill ($4,695) for that amount of money. It's obscene."

Glendale Mayor Jerry Weiers, who was on the Portland trip, said it was educational and that no city funds were used. Glendale is considering whether to expand the region's light-rail system into that city.

"Valley Metro covered the tab, and it was an opportunity for the council to get an idea how another city has embraced light rail and to see if there were comparisons that could make Glendale more efficient," Weiers said.

Changes afoot?

Jenn Daniels, a Gilbert councilwoman and member of the larger Valley Metro board, said she too was unaware of Banta's spending. She said changes may be needed to monitor expenses.

Banta's spending stands in stark contrast to the Arizona Department of Transportation's. ADOT Director John Halikowski manages a $2.89 billion budget and 3,686 employees.

Halikowski's travel records show he flies only coach class, which is less expensive than first class. Nearly all of his meal receipts are itemized. There is also no reimbursement for alcohol purchases.

"That would not be a prudent or appropriate use of taxpayer dollars," said Tim Tait, ADOT spokesman.