Arizona Corporation Commission’s Ethics Committee Has Ethical Issues

Commissioners Tobin and Dunn join ACC staff in “soaking in the eclipse.” [ACC Facebook photo]

Last week, the Arizona Corporation Commission hosted the first meeting of the newly formed Ethics Committee. The committee was created by Commissioner Tom Forese this summer due to the persistent and multi-faceted charges of unethical behavior on the part of commissioners.

Even before the committee convened, it was the subject of questions about its own ethical foundation. Specifically, Commissioner Bob Burns has questioned the cost and constitutionality of such a committee.

Burns, an ethics hawk, has worked to expose and end the undue influence of campaign contributions on commissioners. He has argued that because the Arizona Corporation Commission (ACC) was created to be a quasi-judicial body that oversees monopolistic public utilities, any real or perceived influence of contributions on commissioners would violate their basic job duties.

Every step of the way his fellow commissioners have fought Burns.

Burns and many others claim that the majority of commissioners have become “captives” of Arizona Public Service (APS) due to the inordinate amount of money the corporation spent on the 2014 election. “Captives” act on behalf of and in the interest of their captors. In the case of the ACC, the “captive” commissioners appear to be protecting the interests of the corporation by fighting Burns’ effort to make public those contributions.

Just last month, the “captive” commissioners stunned the public when they approved a rate increase for APS. Burns had urged his fellow commissioners to join his fight to have the corporate giant reveal its contributions before a rate increase could be considered.

Heart Burns

While there is opposition to the committee based on the suspicion that it was developed for the sole purpose of providing “captive commissioners” political cover, Burns reasons are more solid than suspicions.  Prior to the meeting, Burns submitted a letter to ACC exective director Ted Vogt, and his fellow commissioners explaining those concerns:

Mr. Ted Vogt Executive Director
Arizona Corporation Commission
RE: Fiscal Year 2019 Arizona Corporation Commission Budget Request

Dear Director Vogt:

As I stated at the August 29, 2017 Commission Staff Meeting, I am unable to support the Commission’s proposed FY2019 budget due to one $100,000 allocation included in it. To my recollection, this is the first time I have been unable to support the Commission’s proposed budget in the nearly five years I have served as a Commissioner.

I cannot support allocating $100,000 to Chairman Forese’s newly-created “committees” because it is unnecessary. I felt the same way when I learned that $50,000 was being allocated for the “committees” this fiscal year. If the Commission has $100,000 in vacancy savings, it should be used for its original purpose-to fund employee position(s)-not to fund “committees” whose work encompasses the duties of our already existing employees.

The Commissioners do not need an additional $100,000 to do the work that is already part of our existing staffs duties. The work of the committees thus far appears to be scheduling and organizing Commission workshops. A few years ago, my office organized seven Commission workshops and 70+ presentations from experts around the nation. We were allocated $0 additional dollars in our budget to coordinate these workshops. These workshops were educational opportunities for Commissioners and Staff, garnered national and international attention, and the Commission implemented several recommendations that came out of the workshop discussions.

The perception is that this $100,000 will go to Commissioners who support Chairman Forese’s agenda. This is already evidenced by the fact that to my knowledge, only two Commissioners received committee chairmanships, and they happen to be the two who have consistently supported the Chairman’s agenda. To re-purpose these vacancy savings funds in this way is troubling. It creates an appearance of a carrot and stick model that can be used as leverage against members of the Commission who “fall out of line” with the Commission Chairman.

Moreover, Chairman Forese’s creation of these “committees” appears to have originated from a desire to make the Commission more like the Legislature, which in my view, is a deviation from the Arizona Constitution.

Our founders specifically created the Commission as the “fourth branch of government” to be different from the executive, legislative and judicial branches. Each Commissioner has equal responsibilities and authority to work on behalf of the citizens of Arizona. These “committees” instead appear to centralize the Chairman’s own power at the expense of those who may not always agree with him.

This committee system also creates a mechanism for the Chairman to assign duties in a manner that can advance his own views and silence opposing Commissioner views. This was already seen in the manner in which Commissioner Dunn attempted to stop my workshop on the development of transparency and disclosure rules, stating that as the “Ethics Committee Chairman,” he should be the only Commissioner allowed to coordinate presentations and oversee discussion on those topics. Never mind that Commissioner Dunn’s ethics committee was created after my transparency and disclosure docket was opened.

The manner in which this “committee” system works shifts the decision-making from the Staff Meeting model involving all five commissioners to a model where the selected commissioner becomes the sole determiner of that particular committee’s agenda. It reduces opportunities for all members of the Commission to engage in issues that are important to the functioning of the Commission as a whole.

I regret that I could not support the overall FY2019 proposed budget based on this one item.

Robert L. Burns Commissioner

“Above reproach in the public eye”

During the workshop, ACC staff presented an overview of various Arizona statutes and rules covering open meeting law, conflicts of interest, financial disclosure, gifts, and lobbyists.

In her presentation, Naomi Davis advised the commissioners that the “list of laws that carry ethical obligations is pretty extensive, but there is a particular list of subjects that is covered in the Public Service Orientation program that all public officers are required to participate in within six months of appointment or election.”

“That list is described in the introductory language of the session law that created the Public Service Orientation program, which is referred to as the state’s “ethics policy.” The list includes bribery, conflicts of interest, confidentiality, disclosure and reporting requirements, and others. These laws specify what kind of conduct is required, what kind of conduct is permissible, and what kind of conduct is prohibited. These laws serve a dual purpose,” explained Davis, “First they serve to illuminate the kind of conduct that the Legislature has determined is illegal, and serve to eliminate or reduce the appearance of impropriety by setting a standard of behavior required of public officers that places them above reproach in the public’s eye.”

The State Ethics Policy states in part: “It is the public policy of this state that all public officers and employees of this state shall discharge their duties in full compliance with applicable laws concerning ethical conduct. To ensure that state public officers and employees know the standards of conduct against which their actions will be measured, information shall be provided to state departments, agencies, boards, commissions and councils on compliance with laws on ethics including those relating to bribery, conflicts of interest, contracting with the government, disclosure of confidential information, discrimination, nepotism, financial disclosure, gifts and extra compensation, incompatible employment, a political activity by public employees, public access to records, open meeting laws, conduct after leaving one’s position with the government and misuse of public resources for personal gain.”

Rather than strengthening the statute to ensure that the commissioners are above reproach in the public’s eye, Governor Doug Ducey worked to weaken the conflicts of interest law that governs the ACC. In February 2016, former House Speaker and current Corporation Commissioner Andy Tobin called on the Legislature to support HB2123, which essentially lowered the standards for conflicts of interests so that he could keep his then- new job at the ACC, according to an ADI report.

At the time, Tobin admitted to lawmakers that “he was told by attorneys before he was appointed to the Commission” that he “wasn’t even appointable,” reported the ADI. “At the end of the day, I knew before being sworn in,” Tobin said referring to the obvious conflict of interest presented by his son’s work with a utility company.

During testimony on HB2123, private attorney Tom Ryan “explained to lawmakers that the reason the Corporation Commission currently operates under somewhat stricter standards for conflicts of interests is because commissioners can take measures that might destroy an industry,” or service provider.

Related articles:

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Ducey Dips Into Shallow Talent Pool, Pulls Out Tobin For ACC

Case in point, this summer, Tobin moved to change his vote in the matter of Arizona Water Service (AWS). In that case, Tobin had initially voted with Commissioner Doug Little and Burns in favor of AWS. Later, Tobin called for the matter to be reconsidered by the commission.

Tobin’s Arizona Water Vote Raises Questions, Concerns

In April, after a highly unusual move by Arizona Corporation Commissioner Andy Tobin, attorneys for Arizona Water Company requested a rehearing in a matter involving its Certificate Of Convenience And Necessity. In its application, the company accuses the Commission of violating its due process rights.

In February, the Commission approved the company’s Certificate Of Convenience And Necessity (CC&N), in a 3-2 vote. In Arizona, companies must obtain a CC&N through the Commission in order to provide water in a defined service area.

Commissioners Andy Tobin, Doug Little, and Bob Burns voted in favor of Arizona Water.

An order memorializing the CC&N approval should have then been signed by the commissioners. “Despite the unambiguous legal requirement that the Commission “make and file an order containing its [February] decision,” see A.R.S. § 40-257(B), the Commission failed to do so,” according to the application for rehearing. ”Instead, almost two months later, on March 29, 2017 – just seven days before the April 5 Open Meeting – the Commission filed the April Open Meeting agenda in this docket listing reconsideration of that February 7 decision as an item for discussion.”

At its April 5, 2017 Open Meeting, the Commission then voted to reopen and reconsider its February 2017 decision. According to the application, “The impetus for reconsidering the February decision was not new evidence related to the CC&N dispute, but the reservations of a single Commissioner who had voted in the majority and believed that “the issue of the CC&N needs a deeper dive.”

Tobin’s “deeper dive” essentially vacated the February 7, 2017, vote to approve the December 22, 2016 Recommended Opinion and Order in Arizona Water’s favor and denied Cornman Tweedy’s request to delete the portion of Arizona Water’s CC&N that includes property owned by Cornman Tweedy.

Arizona Water has been engaged in a legal battle with Cornman Tweedy 560 L.L.C. over the CC&N for years. Tobin’s move appears to prolong that fight in favor of Cornman Tweedy, which is controlled by the powerful Robson family.

Tobin the class clown

Andy Tobin has been Governor Ducey’s go-to-guy to fill positions over and over again. Thanks in part to his hale-fellow-well-met/class clown demeanor; Tobin has landed in very profitable government and quasi-government positions since leaving the Arizona House of Representatives.

Ducey’s Chief of Staff, Kirk Adams, described Tobin as a “Swiss army knife” in an article in the Arizona Capitol Times. “The guy, when you give him a job to do, he finds a way to get it done.”

Tobin can always be counted on to heap praise on colleagues when they are caught with their pants down, or inject sophomoric humor when situations become tense. He came through for Dunn on Thursday.

Tobin holds up “Integrity Tiger.”

“I have a gift for you,” said Tobin to Dunn as he reached under the dais. “So this morning I attended a meeting with Mr. Greg Ostro and he is doing this “Winning with Integrity” program and they give out what are called “Integrity Tigers.” So, I have an Integrity Tiger for you. You are actually the first commissioner that’s ever brought together a panel to actually write a manual for ethics here.”

Dunn, obviously uncomfortable, responded with the joke that fell flat. “If things don’t’ work out on the Corporation Commission, I can always open a personal injury law firm.” Meeting blank stares and confused countenances, Dunn explained, “a tiger,” presumably referring to the Law Tigers, a motorcycle personal injury group.

Ostro, according to the website, is the “founder, CEO and owner of GO Media Cos…. He is a nationally recognized strategic marketing, brand image, PR expert, TV and video producer, strategic business relations and development specialist, public speaker, event moderator and emcee with an extensive track record of professional achievement with a blue chip list of clients.”

Tobin was thoughtful enough to bring fliers for the “Winning with Integrity” program for staff and others who might be interested in signing-up.

The exchange epitomized the failing public relations efforts of the ACC under the leadership of Forese.

Up next

The code of ethics will next be considered by the Commission Ethics Committee at its upcoming meeting on Friday, September 15, 2017, in Hearing Room 2. Corporation Commission staff is expected to provide the committee with an overview of codes that have been adopted by other public utility commissions, relevant regulatory associations, and a selection of state subdivisions.

“Commissioner Dunn vowed to maintain an open and transparent process moving forward,” according to the ACC press release issued after the meeting. “We will do everything we can to make certain the development of the code of ethics is totally open and transparent to the public,” said Dunn in the press release. “The committees will be set by agenda, publicly noticed, and will be part of an open process where anyone can participate.”

Anyone who wants to participate in a charade.