FBI probes Babeu's use of seized criminal money

Posted at 7:49 PM, Mar 29, 2016
and last updated 2016-03-30 08:01:10-04

The FBI is asking new questions about Pinal County Sheriff Paul Babeu and his office’s use of seized criminal money.

ABC15 has learned agents in the FBI’s Phoenix Division have conducted interviews with several people in recent weeks to talk about so-called RICO funds used by the sheriff’s office.

According to sources with knowledge of the interviews, agents have asked about Sheriff Babeu’s use of a non-profit foundation run by some PCSO employees that received hundreds of thousands of dollars in funds that come from this seized criminal money.

There are restrictions about how these funds can be used.  Sources said agents also are interested in whether Babeu and other staff used any RICO funds or other public resources for campaign purposes since Babeu is currently running for Congress.

It’s not clear if the FBI has opened an official case. When reached Tuesday, a spokesman declined to comment.

“Thank you for your inquiry, as you know we cannot confirm or deny the existence of investigations,”   said FBI Special Agent Matthew Reinsmoen.

Pinal County Sheriff’s Office Director of Administration Tim Gaffney sent ABC15 a written statement denying that there is “any open investigation” into their office.

“Today, our Chief Deputy directly contacted a top level supervisor within the Federal Bureau of Investigations who confirmed their office does not have any open investigation on our office but rather there is an open investigation against another Sheriff’s Office in Arizona,” Gaffney wrote.

Gaffney did not identify the other Sheriff’s Office or the FBI’s top level supervisor. But ABC15 remains unable to confirm Gaffney's statement.

Explaining their use of RICO funds, Gaffney also said, “Any request for RICO Funding by our office as you are aware has to be submitted in writing to either the County Attorney’s Office if it is State RICO Funds.”

RICO seizures and spending by the Pinal County Sheriff’s Office and County Attorney’s office have been heavily criticized by several watchdog groups during the past year.

In July, the American Civil Liberties Union and international law firm Perkins Coie jointly filed a lawsuitagainst the Pinal County Sheriff’s Office and the Pinal County Attorney’s Office.  The lawsuit claimed the county agencies were misusing RICO funds and funneling money through the Arizona Public Safety Foundation.

Last month, the Goldwater Institute, a conservative Arizona watchdog group, echoed concerns over Pinal County’s RICO spending and requested files from the Sheriff and County Attorney.

In a February interview with ABC15, Goldwater attorney Jared Blanchard said they decided to look at Pinal County after questions were raised about funds being used to promote Babeu in a way that could benefit his congressional campaign.

The new FBI interviews are the latest issue to hit Babeu as he attempts a second run for Congress.

In late January, ABC15 exposed a damning home video showing Babeu praising the abusive and inhumane treatment of special needs children at a boarding school he used to run. Babeu had previously deniedany knowledge or awareness of the abuse.

In the weeks following the video’s release, it was discovered Babeu also filed to run in the wrong congressional district and his financial disclosure forms were late. Earlier in March, Gaffney also barred this reporter from entering a press conference held by Sheriff Babeu in a public building.

Contact ABC15 Investigator Dave Biscobing at