Arizona Corporation Commissioners Accused Of Violating Gift Clause

On Monday, Arizona Corporation Commissioners Tom Forese, Andy Tobin, Doug Little, and Boyd Dunn voted to have the Commission pay for their separate defense attorneys’ fees, but refused to cover the cost of Commissioner Bob Burns’ attorney.

For over 18 months, Burns has challenged his fellow commissioners’ attempts to prevent the public from learning the truth about campaign contributions they may have received from Arizona Public Service (APS) and its parent company Pinnacle West Capital Corp.

Arizona Corporation Commissioner discusses violation of Gift Clause on the James T. Harris show

Burns wants APS to reveal the beneficiaries of their campaign contributions in the 2014 election.

Despite the concerted effort to block Burns, he continues the fight.

In August 2016, Burns filed subpoenas for the production of records and information relating to a range of expenditures from 2011 through 2016 by APS and Pinnacle West. Burns subpoenaed information concerning marketing and advertising expenditures, charitable donations, lobbying expenses, contributions to 501(c)(3) and (c)(4) nonprofits and political contributions.

On Wednesday, in an appearance on the James T. Harris radio show, Burns said that as a regulator, he has the “responsibility to oversee and make sure that the utility do not get into the habit of bad behavior.”

“If there is some behavior that appears to be out of line it is my responsibility to call them on it. I think that having a utility that is regulated being involved in the election of the regulator, who sets the amount of rates that people pay for utilities, can be a problem,” stated Burns. “Now the federal government, the U.S. Supreme Court ruled that it was legal to participate – to spend money – in the elections. But my point is, if that is the case, then they should report what they are spending and when they spend it. I think the Constitution of the state of Arizona gives me the authority as a single commissioner to examine their records and advise the public on what they are doing. They oppose that, claiming I don’t have that authority, and in my opinion they are trying to weaken the commissions regulatory authority over them.”

On the same day his fellow commissioners denied him essential legal services, Maricopa County Superior Court Judge Daniel Kiley ruled in Burns’ favor. The judge rejected a claim by APS attorney Mary O’Grady that he did not have the power to rule in Burns’ case, against APS.

Harris asked Burns why his fellow commissioners denied him equal access to legal services. “Basically the bottom line of this issue is that I am in a confrontation with APS,” said Burns. “We’re in a dispute over a couple of issues whether or not I have authority as a single commissioner and whether or not they have to honor the subpoenas I’ve issued to look at their records. The other four commissioners could sit back and not do anything and just let me have my day in court with APS and find out exactly what my authority is. They have chosen to block every attempt I’ve made to enforce my subpoenas and to get to the bottom of what APS spent on the 2014 election.”

Burns argues that because the four commissioners are “blocking my efforts, and in effect supporting APS’ position,” they are violating the state’s Gift Clause. “They are gifting APS legal support in this effort,” explained Burns. Burns, whose attorney is working for free, “filed in court a claim against them saying they have to defend themselves.” According to Burns, the commissioners “decided they need to hire lawyers. The lawyers at the commission are conflicted out because of the difference of opinion between myself and the other commissioners. So they had to hire outside attorneys. I have had this attorney for some time; he at one point was being funded. When APS sued to block the subpoenas, and then dropped that lawsuit, the commissioners voted not to fund my attorney any longer. So I can’t enforce the subpoenas without legal support. My attorney agreed to work pro bono and says he is in this for the long haul. We’ll have to see how this goes.”

Burns implied that he did not understand his fellow commissioners fight for the very company they regulate. Burns stated, “The whole point is they don’t even have to be involved in it. They have chosen to take the path to support APS and block a fellow commissioner from getting to the bottom of some of the behavior, which I think is misbehavior by the utility.”

After Monday’s vote Arizona Republic columnist Laurie Roberta called the commissioners’ decision “alarming, but “typical.” “I think it is a big deal, there is a term in the industry called regulatory capture. What that is, is that the utility captures the regulators and basically takes control of the decisions made by the regulators. We are going to be voting this week on an increase in the APS rates. If the utility is able to have control over the regulator, they can pretty much count on an increase in rates on a periodic time table.”

Remarkably, Burns told Harris that his fellow commissioners will forge ahead with vote on APS rate increase request. “I expect the rate case will take place next week. There is a settlement agreement between forty people at the table during the settlement agreement process. Thirty of those forty agreed to the rate increase for APS. The original request for increase was around 11% range and it is down to between 4 or 6 %. They negotiated and agreed to that lower increase. But it is still an increase. One thing that I have seen here recently, is that there is a report from an organization that tracks the salary of different corporations and the pay scales of these corporations. APS came in as the highest paying corporation as the state of Arizona. Their CEO, Mr. Brandt, makes over a million dollars a month. Now the Salt River Project, the second largest utility in the state, their CEO makes around a million a year. The two companies are very close to the same size.”

“The action they have been taking to prevent this transparency has been completely in support of APS’ position. APS has all the money they need to fight me in court. They don’t need to have five more attorneys, hired by tax payers, to assist them through the other four commissioners.”

About David Ahumada 162 Articles
David studied journalism at Northern Arizona University. After graduation he began writing for the Arizona Daily Independent.