PHOENIX - A 12 News investigation has revealed that Phoenix Fire Marshal Jack Ballentine personally accepted a $100,000 check while on duty from a philanthropist whose business had failed its fire inspection 11 months earlier.

The money was a donation for the 100 Club of Arizona. Ballentine is a volunteer for the organization, his wife is operations manager and his son is a scholarship recipient.

As 12 News first reported on May 6, the City demoted Ballentine from his position as Fire Marshal and permanently reassigned him to the fire department's Homeland Security section. According to city communications director, Julie Watters, this demotion is one step below his current assignment and Ballentine was placed in a lower-level middle manager position completely removed from the Fire Prevention Division.

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The City of Phoenix Human Resources Department was assigned to investigate by the Integrity Line Committee, which includes City Manager Ed Zuercher, City Attorney Brad Holm, City Auditor Bill Greene and Toni Maccarone, special assistant to the City Manager. The probe was to determine whether Ballentine abused his position and engaged in conflicts of interest during the fire inspection approval process with local businesses, whether he pressured a business owner to make a donation to the charity and if Ballentine violated any laws, city rules and regulations by accepting the check.

Although the City demoted Ballentine, the investigation concluded “there was no indication” that the business, the Madison Improvement Club, “received any special treatment in the Fire Marshal’s grant of a fire-code waiver.”

The investigation, conducted by Human Resources Supervisor Larry Lockley, Deputy Human Resources Director Fred Verdugo and Assistant City Attorney Micah Ray Alexander, concluded Ballentine violated the City's personnel rules and the Fire Department Rules of Conduct in his role as a public servant.

Ballentine's salary as Fire Marshal was $96,227. Watters told us in an email there is no immediate impact to his pay. "However, because it’s a lower salary range, the employee may see limited or no future pay increases as a result of the demotion and/or pay which would extend beyond the range of the new lower pay grade."

Watters says an Assistant Fire Chief will temporarily take over the role of Fire Marshal while the Fire Department conducts a national recruitment for the Fire Marshal position.

In August 2007, Ballentine went to work for the Phoenix Fire Department after retiring from the Phoenix Police Department, having served as a homicide detective. He would become director of the fire investigations unit.

Ballentine is well-known as an undercover detective who posed as a hitman for hire. He detailed his chameleon-like life in his book called "Murder for Hire." That book was published in 2009. Ballentine says the proceeds go directly to the 100 Club of Arizona, a charity that helps families of injured and fallen firefighters and police officers.

In 2012, Ballentine was named fire marshal.

He was placed on paid administrative leave in 2014 and the Arizona Department of Public Safety conducted a criminal investigation into a botched arson investigation by fire captains he directly supervised. DPS didn’t recommend criminal charges against Ballentine, but they did for the two fire captains. Subsequently, Ballentine was removed as director of the fire investigations unit.

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For the second time in two years Ballentine’s ability to supervise those under him at the Phoenix Fire Department has been cast into serious doubt.

Do not occupy: Business fails fire inspection

On Sept. 20, 2012, the owners of the Madison Improvement Club failed their final fire inspection. The building located at 3802 East Indian School Road lacked a fire sprinkler system. Previously, the location had been a bingo parlor, before the buildings were turned into a yoga studio and restaurant.

Records show owners Mary Swanson and her son Andrew Varela asked for and received an after-hours visit from Ballentine the same day as the final inspection. Fire Protection Engineer Joe McElvaney also attended the meeting.

During his interview with HR investigator Larry Lockley, Ballentine said Swanson and her son were “very emotional” and “begged” for approval. Ballentine also said the owners indicated that if they could not open Sept. 28, 2012, they stood to lose tens of thousands of dollars due to costs associated with advertisements and that 70 employees would be left without jobs. Swanson and her husband Bob Jacques confirmed that was true in an email and letter to 12 News. It also went on to say:

“We understood at that time from our architects that our building was exempt from the standard City of Phoenix commercial requirements for sprinkler systems,” said Swanson. “Indeed, the City of Phoenix permitted our project without any plan for a sprinkler system. This was a great shock to us, given what we had been told before, including by the city.”

After-hours visit from fire marshal

In a written statement on Dec. 20, 2015, Ballentine said he agreed to allow the Madison Improvement Club immediate occupancy with a few stipulations. The owners had to hire a fire sprinkler architect to install fire sprinklers, and submit a plan with acceptable dates for installation and completion. They would also need to hire 24/7 fire watch until the project was approved and would only be allowed to serve cold food and drinks. McElvaney would oversee the project.

The HR investigation revealed no formal records were kept to make sure Swanson complied with the stipulations. However, Swanson would later tell investigators that she complied with the stipulations. The report shows, "One Fire Department staff member indicates that these inspections were completed, but no records exist to confirm this. The lack of documentation may create at least the appearance of favoritism."

It goes on to say, "But as Fire Marshal and as the Fire Department employee who granted the waiver, he had the obligation to not just “trust” Madison but also to “verify” that it complied with the stipulations. Therefore, he should have insisted — and ensured — that inspections were regularly conducted by a qualified inspector and that this information was documented in department records."

Records do show the owners appealed the failed fire inspection, but Ballentine denied it. Though the timeline appears to be in question during the city investigation. Ballentine blamed his administrative aide who he claimed was “performing below standards,” and was removed from her position.

The HR investigator wrote that “One day after his interview, Mr. Ballentine phoned me and confirmed that a formal appeal did occur involving the Madison Improvement Club. In addition, he indicated that during the timeframe in question, his assigned administrative aide was performing below standards and was ultimately removed from her position.”

The Madison Improvement Club opened its doors without delay on Sept. 28, 2012.

On Feb. 12, 2013, the Madison Improvement Club was re-inspected by the city after automatic fire sprinklers were installed throughout the building and passed the final inspection.

PHOTOS: Appearance of impropriety

(Story continues below.)

Conflicting statements

Ballentine told the HR investigator Swanson and Jacques paid him a visit two months later, in April 2013. According to Ballentine, Jacques wanted to know about his career in law enforcement and “wanted to meet him personally for his support of their business opening.”

During the visit, the couple saw photos from various 100 Club events on Ballentine’s office walls, including the Jason Schechterle 100 Club Scholarship Ball.

Ballentine told the investigator that Swanson informed him she had a foundation and donated to various programs. Then, he told them about his involvement with the 100 Club of Arizona, and that he donated all of the proceeds from his book and income from speaking engagements to the charity.

Ballentine told the investigator he recommended that the couple consider donating to the 100 Club of Arizona if they wanted to donate to an honorable program. He said that he gave them materials for the Jason Schechterle Scholarship Program and contact information for the 100 Club of Arizona.

However, according to the report, Jacques said he had no recollection of this meeting and said there were no other meetings where the 100 Club was discussed. Ballentine told the investigator he didn’t know why Jacques couldn’t recall their discussion about the 100 Club of Arizona.

Ballentine collects $100,000 for a charity with family ties

Ballentine told the investigator that Swanson called him on July 11, 2013, and asked him to come to her business office to answer more questions about the 100 Club. He said he gave her materials about the 100 Club of Arizona and answered her questions, then Swanson wrote him a check from the Swanson Family Foundation to the 100 Club of Arizona for $100,000.

Ballentine said Swanson instructed him that the money was to go toward the scholarship program, and he told the investigator he gave the check directly to the 100 Club of Arizona.

However, where this transaction actually occurred is in dispute, according to the report. Phoenix Fire Battalion Chief Kelvin Bartee told the city investigator he was “100 percent certain” Ballentine told him the transaction occurred at city offices and not at Swanson’s business.

According to the investigator, Jacques indicated that his wife donated the money because she was “emotionally moved” after the deaths of 19 firefighters in the Yarnell Hill wildland fire on June 30, 2013.

Swanson later submitted a statement to investigators confirming that sentiment:

"In June 2013, my husband and I were, like so many people, moved by the tragedy of the Yarnell Fire. We wanted to do something to honor the memories of the 19 firefighters who died in that horrific event, and to help their families. I reached out to Mr. Ballentine, as a firefighter, to express my grief and to see if he had any thoughts on what we might be able to do. At that time, about five months after our dealings had ended with the Phoenix Fire Department, Mr. Ballentine suggested the 100 Club, saying that the club’s executive director could tell me more about what it did. Several days later, I received in the mail a 100 Club informational brochure and a phone call from the club’s executive director. After that, we did some independent research on the 100 Club and decided that we would make a substantial donation."

Abuse of authority alleged

Ultimately, the investigation found Ballentine used his city position for personal gain when he solicited money during work hours and accepted a $100,000 donation from the Madison Improvement Club on behalf of the 100 Club of Arizona.

This is considered a violation of city policy and a violation of the fire department’s Rules of Conduct which state: “All members shall not engage in a conflict of interest to the Department or use their position with the Department for personal gain or influence.”

The investigator concluded, "Mr. Ballentine did not “uphold ... the highest standards of ethics,” did not “guard against conflicts of interest,” and did not avoid the appearance of “improprieties in role as a public servant,” as required by the ETHICS HANDBOOK. Mr. Ballentine was involved in activities that could be viewed as conflicting with his Fire Marshal responsibilities. Further, his actions could adversely impact the trust and confidence the public places in both the Office of Fire Marshal, the Fire Department, and the City."

According to records, Ballentine told the investigator that Swanson wanted to buy his lunch on the day he received the $100,000 check but he didn’t think it would be appropriate.

The investigator wrote:

“He appropriately viewed the acceptance of lunch from Swanson through the ethical lenses of conflicts of interest and the appearance of impropriety. However, it is alarming that in his position as Fire Marshal, he would summarily dismiss the $100,000 donation he received for an organization he strongly supported and who was also a source of financial support for his family through his wife’s employment with the organization.”

Ballentine’s wife Patti began working as operations manager for the 100 Club of Arizona in 2006. 100 Club CEO Angela Harrolle said Patti Ballentine has nothing to do with soliciting donations for the charity.

Harolle did not know if Jack Ballentine delivered the check to the 100 Club or if his wife brought it to the office, because she only became CEO earlier this year.

An unapologetic fire marshal

When asked in retrospect if he would have done anything differently, Ballentine said, “No, I was happy to receive the donation for the 100 Club of Arizona.”

The investigator interviewed high-ranking members of the fire department about the $100,000 transaction.

This is part of what he wrote about those interviews:

During the course of our interviews, I asked McElvaney, Battalion Chief Kelvin Bartee, and Assistant Fire Chief Scott Krushak if they would be comfortable accepting a donation from a business owner for a charitable organization that they supported. Each indicated that they would not feel comfortable doing so and stated that they would direct the business owner to make their donation directly to the organization. They each clearly understood the conflict of interest and/or the appearance of impropriety that would result from engaging in that type of behavior during the course and scope of their employment with the City.

Mark Spencer is the Southwest Projects Coordinator for Judicial Watch, a retired Phoenix Police officer and the former president of the Phoenix Law Enforcement Association. He said the conflict of interest is pretty clear, adding that in his experience, city management is reticent to hold upper level managers like Ballentine accountable for policy violations.

The fire department denied repeated requests for an on-camera interview with Jack Ballentine. And when contacted in person, Ballentine would not answer any questions.

A conflict of interest

However, a letter from Ballentine’s personal attorney John Charland stated that his wife’s salary comes from the general fund and the $100,000 was earmarked for the scholarship fund. Therefore, the donation did not support the Ballentine family financially.

Charland also wrote that “there is no and was no conflict of interest. There was no quid pro quo. There was no exchange of one thing for another, the Madison Club got nothing from the City and in fact the City forced the Madison to pay a very large sum for a fire suppression system that the Madison never expected…”

Charland went on to write that “Mr. Ballentine got nothing from the Madison or from Ms. Swanson and he gave nothing to the Madison or Ms. Swanson.”

However, neither the city investigation nor Charland’s letter mentioned that Ballentine’s son Cody was a 2008 scholarship recipient of the 100 Club of Arizona.

The investigator expressed concern that based on the $100,000 transaction and Ballentine’s responses he raised “significant questions about his ability to effectively carry out those supervisory responsibilities at this time.”

The investigator recommended Ballentine receive additional ethics training and remove himself from any future appeals involving the Madison Improvement Club.

No evidence of wrongdoing by Madison Improvement Club

In the end, investigators concluded “it could not be determined by a preponderance of the evidence that the Madison Improvement Club received any special benefits during the fire-code waiver process.”

The report states:

"[c]onsidering Swanson's statement, the interviews, and the documents reviewed, there was no indication that the Madison Improvement Club received any special treatment in the Fire Marshal's grant of a fire-code waiver. The evidence indicated that Madison did not receive an expedited appeal: they did go through a formal appeal process, which is a Phoenix Fire Code requirement; and they were required to install fire sprinklers after their project failed fire inspection on September 20, 2012."

In her statement, Swanson wrote: “I can say unequivocally that there was no quid pro quo between me and Mr. Ballentine regarding any Phoenix Fire Department certification of occupancy for the Madison property.” Although Swanson and Jacques declined to be interviewed for this article, they told 12 News in an email and a letter that they did not receive special treatment.

What's more, the investigation indicated Swanson, Jacques and Varela followed the fire-code waiver/appeal process, accepted and followed through on several stipulations during the correction period, and completed the required improvements at their location without any special benefit or exception.

The final report indicates based on the interviews and information received, “it could not be determined . . . that the Madison Improvement Club was influenced by Ballentine to make a donation to the 100 Club of Arizona.” The investigation revealed "inconsistencies" in how the Madison Improvement Club learned about the 100 Club of Arizona. Ballentine told the investigator a visit by the owners to his office prompted the initial discussion.

But in that same vein, the investigation also concluded Mr. Ballentine did not provide any special considerations or fire code benefits to the Madison Improvement Club and he did not influence anyone to make a donation to the charity.

The city HR investigators say this was "strictly an administrative matter and not a criminal one." On June 1, Ballentine appealed his demotion.