Fontes gives exclusive government contract to his top political consultant
The contract is for 47 months and will expire at the end of Fontes' first term in office.
Newly-elected Arizona Secretary of State Adrian Fontes hired his chief political consultant from his 2022 campaign to do communications for the office, but it’s not a typical government hire.
Instead, Fontes agreed to give Matt Grodsky and his firm, Matters of State Strategies, an exclusive 47-month contract to handle communications and other duties part-time.
This is highly unusual and I spoke to several attorneys and political consultants who all saw potential issues with this agreement that would blur the lines between what Fontes wants to accomplish in an official government setting and what he wants to achieve politically.
I allowed the sources to speak on background1 so they could provide comments more freely.
Fontes’ office did not respond to any questions.
The contract between Grodsky/Matters of State Strategies and the Secretary of State’s Office is for a rather unprecedented 47 months –– covering Fontes’ entire first term leading the office –– and will cost taxpayers north of $400,000.
While on the surface it may appear to save the office some money than it would traditionally cost to hire a full-time communications person, it probably won’t save a lot of money.
By comparison, Gov. Katie Hobbs, who previously occupied the Seventh Floor before Fontes, paid her communications director Murphy Hebert (she followed Hobbs to the Ninth Floor in the same role) $104,000 as of the 2021 Fiscal Year, according to the Arizona Republic’s salary database which has not yet published data reflecting last year. Hebert may have received a raise, but that’s unclear.
The major difference here outside of the roughly $4,000 discrepancy is Hebert worked in the office full-time and also had help doing communications in the office.
Fontes’ office told me they are planning to hire another communications officer, but that person is expected to also be part-time.
All of that aside, as one Democratic political consultant said, “the appearance of impropriety is just as bad as impropriety itself.”
“It becomes increasingly difficult to determine what is political and what is official,” the source added about what this agreement looks like. “I think most people in this business, we understand how people view us … so we go to great lengths to ensure that we avoid scenarios where people might raise eyebrows.”
The consultant, who has helped several Democrats get elected to office, said they would never put themselves in the same position as Grodsky of working on behalf of a person politically and officially in a government capacity. “I would be ashamed to do so,” they said.
The contract itself goes through Anderson Moss LLC (Anderson Advertising) since that business already has an agreement to conduct state business as a vendor.
The Secretary of State’s office has official capacity to “directly contract with a vendor outside the formal Arizona Department of Administration procurement process,” according to a disclaimer provided in the records. Fontes chose to go that route in order to hire his campaign consultant.
Email records provided show top Fontes staffers were not privy to state procurement law but everyone signed off on the contract anyway, seemingly without asking any questions.
One of the questions that was not answered by the Secretary of State’s Office was why they wouldn’t just go through ADOA to cover all their bases given how it would look to hire Grodsky to serve in dual roles that should not typically co-mingle.
But one attorney told Fourth Estate 48 they didn’t agree with the contract disclaimer.
“I'm not sure where the constitutional exemption for procurement is,” the attorney said citing the procurement code. “The secretary of state is exempt from this chapter for contracts entered into pursuant to section 41-1012 to publish and sell the administrative code. All other procurement shall be as prescribed by this chapter.”
“I'm not aware of a case that limits this language,” the source added.
The contract began January 2, 2023 and is set to run through December 1, 2026, which would be a few weeks after the 2026 election where all statewide offices will be on the ballot once again. It’s too soon to know whether Fontes will seek re-election or seek another office, but it’s expected that Grodsky will be involved in those plans.
The contract says the vendor will send invoices on the ninth day of every month. Those monthly invoices will come out to roughly $8,000.
Grodsky and Matters of State Strategies received more than $2 million during the 2022 campaign, according to campaign finance records through the SOS website.
Anderson Advertising received $265,000 from Fontes’ campaign during the cycle and also worked for the Arizona Democratic Party.
The Scope of Services in the agreement lays out who will be doing what for the office.
Anderson Moss’s Vice President; Director of Public Affairs, Matt Grodsky, will serve as the Communications Advisor and account lead for the office of Secretary of State. Tessa DeConcini will assist Matt on all communications related items. Creative Director Sara Cody and Paid Media Manager Austin Kreitler will be available for creative services and social media support respectively.
“…engage with and promote the Secretary of State with members of the media through press events and releases,” is one of the tasks of the consulting firm in the agreement. This is problematic and not forthright with the media or public because it would be impossible to know if the work being done was taking advantage of public resources for political concerns.
Grodsky, as Fontes’ campaign consultant, has free reign to collect taxpayer dollars part-time while working full-time to speak with potential contributors for Fontes’ electoral hopes in 2026. That could open the potential for favors if people have business before the secretary of state’s office and because Arizona doesn’t require off-election year campaign finance reports, we won’t know who gives Fontes’ campaign account money until January 15, 2024.
Here is how the contract is broken down at $105/hour.
“Anderson Moss is not to exceed the approved estimate without prior verbal or written approval from the office of Secretary of State. The office of Secretary of State agrees to pay all remaining authorized and approved costs within 15 days upon receipt of statement from Anderson Moss for production costs that the office of Secretary of State will be directly liable to agency vendors for any unpaid outstanding costs for production services, and subject to their late fees and/or collection charges,” the contract says.
Another political consultant called the agreement “awkward” and that the $100,000 per year is “a little rich for a part-time gig.”
"Every office should have a PIO. Somebody that is responsible as the official spokesperson of the organization. Adrian may take a year or so to learn that. As we know, Mr. Fontes is very passionate about his beliefs,” the source said, adding that it’s very possible Fontes could decide a year or so from now to end this contract and hire somebody to handle communications full-time.
The contract does have an out, meaning the SOS can terminate the deal before the 47 months are up, but it will look bad regardless of what happens.
There doesn’t seem to be any similar contract in recent state history to this one.
Even under Gov. Doug Ducey, state employees covered their bases in order to act politically on behalf of the former governor.
For example: Ducey’s second chief of staff Daniel Scarpinato took a leave of absence from the Ninth Floor as its spokesman in order to help Ducey get elected to a second term. During that leave, he was not paid by the state.
Kirk Adams, Ducey’s first chief of staff, left the office after Ducey was re-elected in 2018 and signed an agreement to advise the governor on water policy with his consulting firm Consilium Consulting. Adams never ended up sending the state an invoice for his work, which was supposed to be $4,500 over three months.
In both cases, Scarpinato and Adams were not doing political work and government work for Ducey precisely because of potential conflicts of interest, the state’s laws against electioneering and it just looks really bad.
The second consultant said the blurred lines between government and politics are not transparent with the public.
“The mingling of the two is problematic, because what are you spending your time doing and how are you engaged in it and how do I know that? Am I talking to you in your official capacity or a campaign capacity? What's the hat you're wearing today? And somebody needs to wear that hat for the office,” the source said.
“On background” means sources are quoted but not attributed by their name. There are different variations to this term with certain level of qualifiers like job title, sometimes even their place of business like “a source on the Ninth Floor.” Or sometimes they are just “a source” with nothing more. It’s up to the reporter and the source to agree on what they are comfortable with. This is different than off the record.