Journalists’ Roundtable

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Three local journalists will discuss the week’s big stories.

TED SIMONS: Coming up next on "Arizona Horizon's" "Journalists' Roundtable," the state ends the previous fiscal year with a $266 million surplus. And the latest on questions regarding a Corporation Commissioner's cell phone records. The "Journalists' Roundtable" is next on "Arizona Horizon."

VIDEO: "Arizona Horizon" is made possible by contributions from the Friends of Eight, members of your Arizona PBS station. Thank you.

TED SIMONS: Good evening, welcome to "Arizona Horizon's" "Journalists' Roundtable," I'm Ted Simons. Joining us is Alia Rau of "The Arizona Republic," Howard Fischer of "Capitol Media Services" and Mike Sunnucks of "Phoenix Business Journal." Arizona's current budget was built on the belief that last year's budget would close on a deficit. But instead of being in the red, the state ended the fiscal year $266 million to the good. We are going to get to that in just a second. There's a lot of concern about where that money could be going, if anywhere. Alia, as of air time, early this evening, it sounds like there's something going on with the Arpaio case. Talk to us about this.

ALIA RAU: It is, it was a very busy day at court today. There's a court-appointed monitor making sure that sheriff Arpaio is turning over the documents in the racial profiling case. The monitor went to court and said, he's not doing what he's supposed to, we think there are documents and Snow said okay, I'm issuing a warrant, you can go into the sheriff's office. You can get databases, you can get supposedly I.D.s that are there. Anything you could find related to this case, go get it.

TED SIMONS: A federal judge telling the U.S. Marshals, go get the stuff that I'm not getting, that's pretty big stuff.

HOWARD FISCHER: That is pretty big stuff because it raises a whole bunch of issues. First of all they go in, even some of the warrant lists, 1500 I.D.s and 50 hard drives. Once you're wondering around in there, as we all know about search warrants, well what else will they come across that perhaps the sheriff didn't want them to see? You also get some fascinating 10th amendment issues here. We've had legislation which has said sheriffs can trump federal officials. Kelli Ward had a bill just this past year. But they never go anywhere because of some technical questions. We have had some 10th amendment bills that have passed. Now you have an interesting question. You have the county's chief law enforcement officer being told, you step aside so our federal marshals can come in. I see yet another court hearing coming up, perhaps disqualifying Murray Snow on another issue about where is the power.

MIKE SUNNUCKS: I think there's a couple things at play here. You talk to critics of Arpaio and the Sheriff's Office, they always wonder or contend or argue, what are the deputies taking off the undocumented workers and immigrants in these raids? Are they taking fake I.D.s are they taking cards are they taking other stuff from them? The folks that are victims in these raids, the defendants often don't have a legal voice or anybody to step up, it's a word against word thing. They could be looking for those. The other thing is hard drives, how much the sheriff's office has been investigating the judge and his wife, which has come up. Are they going to find anything there. We've all watched Law and Order, like Howie said what do you find in the closet that breaks the case.

HOWARD FISCHER: And what do you find on the hard drive, that's the thing. You start doing the data and nothing gets deleted --

TED SIMONS: We'll talk about that. This was a hearing today, and a court-appointed monitor said not only is this stuff there, the I.D.s especially, but the hard drives are, but some of these items are slated to be destroyed, and some of the sheriff's officials were being told, don't volunteer this information. Again Judge has got to look at this and say, that ain't gonna wash.

ALIA RAU: I think that's the reason for the emergency hearing and the immediate warrant. We haven't heard but I assume they will take that warrant up very quickly and we'll see some action with that. There's a question about what gets destroyed and what is being destroyed.

TED SIMONS: This is literally happening as we speak.

MIKE SUNNUCKS: The sheriff's office is sometimes kicking and screaming to get them to move forward on stuff. Of course folks that are on the sheriff's side always say, well these are politically motivated investigations and hearings and they're out to get the sheriff, and so they slow-play things and delay on other things.

HOWARD FISCHER: The other piece is, I think what the sheriff will argue, based on what we know at this hour, we produced everything that was responsive to your order. We didn't see these as responsive so therefore this is an overreach, this is a fishing expedition.

TED SIMONS: Right. Again This is happening as we're taping the show. I hear it at 5:30 to 6 on this Friday evening. By the 10:00 show, lots more information could be out there or we could still be wondering what's going on. U.S. Marshals have been ordered by judge Murray Snow to seize evidence from the sheriff's office.

MIKE SUNNUCKS: One thing that might be interesting to see, is how Arpaio reacts, he's been on the defensive for a while now. Since this kind of Donald Trump stuff came up, he was at the rally, immigration is back at the fore front, maybe we'll see a more aggressive Joe again.

TED SIMONS: Let's get back now to the lead story, or what was the lead story until a few minutes ago -- the idea of $266 million surplus, where did all this money come from?

ALIA RAU: A lot of it came from taxes and particularly capital gains taxes. So I think when people say, oh, Arizona is ending the year with more money than we thought they think we've got new jobs, new income, we've got new this and that's really not the case. It looks like most of it is the capital gains tax that comes from the wealthy, you know, stocks. It's just, you know, extra money that was unexpected.

HOWARD FISCHER: And that's really crucial. You can look over years at sales taxes and they go up and down according to the economic trends. You can look at income taxes. But something like capital gains is when people are selling stocks because they think the market is at a high, that's great. That provides a great bump but that's hardly predictable in terms of, well we're going to be able to say we're going have it next year and the year after that. The other piece is those with the conspiracy theories are saying part of the reason the Senate President and the House Speaker wanted to get out of session so early, is they knew this revenue bump was going happen. If we hung around longer maybe we wouldn't cut state aid to Universities by 100 millions dollars, maybe we wouldn't tell Pima and Pinal County we're going to have to backfill the budget.

TED SIMONS: We've heard those conspiracy theories for a while trying to figure out why it was such a big rush. But whether it was there or not, it is there now. What's going happen here? Is there going to be spending or hold back?

MIKE SUNNUCKS: Well If you're a Democrat you'll be pointing to things we could spend on, education, university are things at the top of their list. If you're a conservative Republican, let's see how things are going, this is a one-time thing. Some conservatives wouldn't want to spend it, they just want smaller government. It's kind of the folks in between those two polars that are going to decide this. There's no evidence that the Republicans down there are going to go out and spend this right away.

HOWARD FISCHER: No. But the shoe we've been waiting to drop has to do with this ongoing lawsuit over education. Going forward each year, it's 338 340 million dollars plus the request for a billion dollars in back aid, so folks may say let's get this case resolved. There's an arbitration going on in the court of appeals over these issues, we thought it may be resolved by the new fiscal year, July 1st. It hasn't been so this is a great unknown in here.

TED SIMONS: Indeed, and it hasn't been resolved. You wonder if there was an attempt to rush that one, too, before some of these numbers come out. And we still have the rainy day fund.

ALIA RAU: Well that's part of it and at the end of the year they thought they were going to have to take the money out of rainy day fund to protect the budget. It is there now. It is part of the money need for the education lawsuit.

TED SIMONS: How long can the Republican side especially say, we've got to be careful here, we can't spend it on things, we need to maybe look at debt reduction before spending.

ALIA RAU: This is Arizona, we could do it forever. But there is a lot of debts. We're starting to hear that conversation about we've sold all our buildings, there's money coming due with that. We pay I don't know how much in other debt rollover stuff. There's a lot of conversation going on about the debt we have and should we focus on that first.

HOWARD FISCHER: Again, the predictability becomes the problem. Folks have these charts taken out in FY 17 and 19 that say the growth in corrections, the growth in the K-12 education, just from population and even the University, just population is going to overwhelm any growth. And a lot of folks that are going to get burned. When Janet Napolitano said, oh I'm sure this recession can't last, well welcome to reality.

MIKE SUNNUCKS: I think we'll see a push, especially from the education folks and the Universities that just took a cut. We know there are numbers that have come out about us ranking last in teacher pay and last in per-pupil spending, 46th in child poverty, child well-being. We'll see big pushes for that. Whether the Republican Governors on down will listen to that or be receptive to that is the big question.

HOWARD FISCHER: Where it's going to be interesting in terms of education, we're going to have the debate next session about do we tap the trust fund to provide some extra money for five years, actually for 10 years out. If there's money available, and you had Jeff DeWit on last night to talk about why this is a bad idea or absolutely unconstitutional, the fact that there's money out there is going to make it harder for Doug Ducey to sell this idea of tapping the corpus of the fund when there's cash there.

TED SIMONS: I think at the very least, Don Schutter was saying maybe no cuts next year.

ALIA RAU: It could, and I think you are going to have Democrats making the argument. We seem to be hitting a tipping point with education. We've seen it in the polls, we've seen it in the studies, there's got to be a conversation about education funding. It's just a question of what direction does it go, what does the governor introduce in terms of a plan. I think all that plays a role in how we talk about this money next session.

MIKE SUNNUCKS: And the business folks are kind of key to that. The Republicans down there don't really listen to us or the Democrats or the children's advocates. But they listen to the Chambers of Commerce. Their focus, the Chambers this year, was preserve those tax cuts Jan Brewer gave us, that was their number one priority. Everything else kind of goes to the wind. Those are preserved now, and maybe with some extra money they may become the education advocates that are needed.

TED SIMONS: All right. Sounds like there's a cell phone out there, a renegade cell phone everyone wants to get their hands on. Certainly the records. Talk to us about Corporation Commissioner Bob Stump, his cell phone, and why now as the phone itself or the records been handed over to the Attorney General's Office?

HOWARD FISCHER: It's the phone itself. The quick back story, ahead of the 2014 primary there's a log of texts, Bob Stump to APS executives, to Scott Mucey, part of the a dark money group, to some candidates running. It would suggest Stump was serving as coordinator. Stump says now that questions were raised about the texts, Stump says, you know the iPhone 3, it really was a lousy phone, I destroyed it, I now have an iPhone 5, and anyway, the texts were deleted. There's some argument that maybe somehow the meta data from the deleted texts will wind up on the new phone. They have tried to get the police to examine it, tried to get DPS to examine it. Now the Attorney General's Office says we've got an investigation going into the 2012 election, activities involving Gary Pierce, activities involving perhaps coordination with his son Secretary of State's campaign. Let's just bring that into that and see if there's anything else there. Part of the issue is that the whistle-blower in the 2012 case says I told Stump, who was the chairman at the time, and he did nothing. It's all tied together in this wonderful little bow here.

MIKE SUNNUCKS: The NSA probably has that meta data somewhere in Maryland that we could find. There's a lot of questions about APS' influence over the commission. It's a different political and economic world now. In the old days, Bill Post and Marty Schultz were good old boys that got along with everybody. Now APS is in these big fights with Solar City, and it's hardball, hard knocks politics. They've really kind of changed the culture. They are much more aggressive. It would be interesting to see if these texts are ever disclosed. What we would see behind the curtain in terms of APS and these numbers.

TED SIMONS: Who is checks and balances? And Dan Barr is helping them. We will get to him in a second, he's been a target, as well.

HOWARD FISCHER: It's checks and balances. It almost sounds like the dark money group. Essentially they are backed by solar interests and with APS doing everything it can to kill all solar except the solar it owns, to charge extra money, I think they want to sully Stump's name, they certainly want to question whether APS had an undue influence. And the fact is they're using the public records law as it exists to go after what's there. Now, this leads to a larger question of why aren't texts being preserved? Well the argument of, I deleted it from the phone because the server was full. No, you can't fill a server. You can always buy more memory. To her credit, Jodi Jerich the executive director of the commission is now installing new software so texts will be preserved. That still doesn't help us for what happened in 2014.

TED SIMONS: Impact on the Corporation Commission. Are people increasingly looking sideways at those folks and wondering how much influence APS has?

ALIA RAU: I think they have since the last election. A lot of money, as you were saying flowing in and out, APS, SPR, dark money groups, solar groups even, there's a lot of money coming in, there's a lot of concern. The public doesn't understand entirely what the Corporation Commission does, but I think there's some question about who they are connected with and what they are doing.

HOWARD FISCHER: It didn't help that we found out that APS gave a bunch of money to the Republican attorney generals' association and brought the money back to Mark Brnovich.

TED SIMONS: Mark Brnovich, which is one of the reasons he's walled off from this latest-

HOWARD FISCHER: He says he's walled off from this and he's given it to his chief criminal deputy and to the extent that his chief criminal deputy is willing to say, I don't care where it goes, Mark, we will find out.

MIKE SUNNUCKS: Real quick, one of the challenges is like with the legislature, it's all Republicans on the Corporation Commission. There are no Democrats anymore. There's nobody on the panel to squeal on the rest of them or narc on the rest of them or shed some light on how things work. At times they all kind of work together on these things.

HOWARD FISCHER: And this is important. The question was raised to Bob Burns who's on the commission and Susan Bittersmith. Look, you have the power now to ask APS and Pinnacle West. What did you contribute last time around? And Burns's position is that's history, we'll deal with this going forward. There's not a lot of folks interested in rocking the boat.

MIKE SUNNUCKS: Howie's powers probably going to be off later today?
HOWARD FISCHER: Yes, I am an SRP person for exactly that reason.

TED SIMONS: Well, you kind of wonder about Dan Barr's power, because apparently the Republicans came out with a YouTube video and it was pretty strong.

MIKE SUNNUCKS: Yeah, it went after -- he's an attorney for Perkins Coie, a First Amendment guy, pretty well respected around town and he represents checks and balances. Usually you don't see people going after the attorneys and stuff. They're just council and stuff. They have gone after him, all types of accusations, typical negative political ad, soft on Osama bin Laden and lots of other things. It's hardball stuff, you know?

HOWARD FISCHER: But again, attorneys are legally, ethically obligated to represent the interests of their clients. The fact that someone in his firm represented the driver for Osama bin Laden, how do you determine that to be the case?

MIKE SUNNUCKS: Connecting the dots, Howie, you're connecting the dots.

ALIA RAU: They also accuse him of being friends with Democrats and media.

HOWARD FISCHER: Oh my god.

MIKE SUNUCKS: That's almost as bad.

TED SIMONS: I thought soft on criminals was bad. They really went after him.

But what good does this do? Most folks have no idea who Dan Barr is. He does tremendous work, but they don't know who he is. What good is putting it on YouTube, what is this all about?

HOWARD FISCHER: This is about the red meat folks. This is about the Republican Party trying to raise money to stir up the base to say, you may be hearing some nasty stuff about Bob Stump. But understand, this isn't an innocent sounding group going after him. They are just trying to do some defense work

MIKE SUNNUCKS: Defending one of their own and I think and maybe a message to other folks that we're not to be trifled with.

TED SIMONS: Does it do the Republicans any good to have the video out there?

HOWARD FISCHER: No because if you want to go after Scott Peterson, who heads the checks and balances project, fine go after Scott Peterson, go after their source of money. Going after the attorney, who is a First Amendment attorney, taking people to court over public records for Democrats, Republicans and the media? Oh c'mon.

TED SIMONS: It does kind of sound like waking up with a horse's head --

MIKE SUNNUCKS: A little bit. The solar versus utilities thing, which this kind of stems from, Solar guys are good, where everybody loves solar in any market. This goes on in other states with solar markets. The utility's always kind of the bad guy.

TED SIMONS: Alright, we'll keep an eye on that. That story never ends, though. That could go for quite a while.

HOWARD FISCHER: Definitely, and like I say, next step is was the attorney general able to retrieve any of the texts from the phone. Are there records somewhere else. What else can we determine. And who else does it drag in from the Corporation Commission?

TED SIMONS: Something else dragged in this week was a deal. A compromise deal. It looks like the Coyotes will be playing in Glendale for two more years. It doesn't look like they're going to be playing for much longer than two years though does it.

MIKE SUNNUCKS: Well, they at least settled their legal fight. The City Council up in Glendale voted to cancel the 15-year deal that was approved in 2013. They cited a conflict of interest with Craig Tindall who was the city attorney that went to work for the Coyotes. They wanted to get the Coyotes back to the negotiating table. The Coyotes sued and they figured hey, let's do a new deal, it's two years, the city pays $16.5 million a year to manage the arena, that's better than the $15 million they were paying. In exchange the Coyotes get to keep all the revenue they bring in which over the years hasn't been enough. But if they do a good job, and bring in all the revenue, good for them, but then the thing is, it's only two years, in 2017, the moving vans to Vegas or Quebec City --

TED SIMONS: Not only that but Howie, that means there are two years now for the Coyotes that being basically saying, we're out of here in two years. Phoenix, where are you. Tribes, where are you.

HOWARD FISCHER: Exactly and that becomes the issue, here's what we're getting right now. Can you beat this deal? It's sort of like a car dealership. Can we beat this deal? Can you give us 7 million more share of the revenue? Are there other things we can latch onto? That's where it gets fascinating. You've got a lot of folks out there who, despite my belief that arenas and sports franchises are money losers, like this idea of having a franchise. Certainly Canadian teams think they do better back there, but even here in the Valley, going downtown, perhaps a new arena in midtown. Actually, Salt River Reservation, they would love to have this.

TED SIMONS: Has there been any talk of ASU getting involved in this? ASU's got a hockey team, they will have a hockey team, they will try and redo Wells Fargo Arena, the basketball arena. Are they a player at all?

ALIA RAU: There has been some preliminary quiet conversations about it. I have no idea how much legitimate interest there is in it. They have this hockey team, they have one that was just recreational and doing really well, and they are going try to go further. Is there an opportunity somewhere for a hockey arena, that would be an interesting question.

TED SIMONS: They are all on the table right now.

MIKE SUNNUCKS: I think the one most people are talking about is a new arena for the Suns, the south building of the Phoenix Convention Center, the oldest building, nestled between Chase Field and US Airways arena, Talking Stick Arena, whatever you want to call it now. They would tear that down and build a new arena there and make the multipurpose for both hockey and basketball.

TED SIMONS: You're talking the north side of Washington?

MIKE SUNNUCKS: The south building

HOWARD FISCHER: North of Jefferson.

TED SIMONS: Oh, interesting.

MIKE SUNNUCKS: So that's kind of the talk on the street about the Suns arena. This is a better deal for Glendale. They are not paying $15 million a year, they are paying $16.5 million a year.

TED SIMONS: They're losing out on that surcharge money.

MIKE SUNNUCKS: They weren't getting enough from that and obviously they are worried about whether the Coyotes were accurately sharing that with them. That sparked the audit. If they are going to leave they're going to leave in 2018. They lost $34.8 million first year. If you want to lose money in a hockey team, it's pretty easy to do. They were going to leave a year earlier. It gives Glendale a better deal and gives the Coyotes maybe more revenue if they are successful and stuff. One thing I will say about The Coyotes ownership do seem like they want to try to stay here in Arizona. They were ready to sue over this thing, they could have packed up and said, okay, we're going.

TED SIMONS: We've only got a few minutes left. The Governor ordered a review on fetal tissue law, which is kind of interesting because it's against the law already, isn't it?

ALIA RAU: It's against federal law to sell fetal tissue.

TED SIMONS: This is a Planned Parenthood video. Talk to us about this.

ALIA RAU: There's a video that came out that appeared to show from a nonprofit group that appeared to show a Planned Parenthood executive talking to an individual about the sale of fetal tissue, which is against federal law. So the question is, was Planned Parenthood selling fetal tissue? Was it just a conversation? Was the video oddly edited? It was an advocacy group that did it. So Ducey released, or made this announcement, but it's against federal law, there's some question as to -- he or the attorney general could look into whether somebody is doing that. But in terms of meeting new regulations I think there's no question about this.

HOWARD FISCHER: The fact is this is political. Every Republican governor did the same thing. The one area where Cara Chris, who is the health director said, look, maybe we need to tweak our rules, while it is against federal and state law. We don't have anything that requires the reporting. Where her emergency rules are going to go is to say, look, if there is some transfer of fetal tissue, what happens to it.

ALIA RAU: So, check this box if you're violating federal law?

HOWARD FISCHER: In essence, it's not a question of selling it, but you can donate it.

TED SIMONS: Donations.

ALIA RAU: Then it's not illegal.

HOWARD FISCHER: Not only that, but we get into this area of sale versus we get into this with body parts and organs, can you pay somebody certain costs for preparing it, doing the work and that. That's where we get into the gray areas of the law.

TED SIMONS: The video did mention Arizona, too, which is another concern, in some respects.

MIKE SUNNUCKS: Conservatives want to defund Planned Parenthood, they get federal money for other medical services and you see these fights all the time between the conservative antiabortion crowd and they want to go after Planned Parenthood and this is a way to make them look bad and they're on the offensive they like to be on the offensive. They are on the offensive with immigration now and this is a chance, they've been on the defensive for a number of years on these issues and now they're kind of going after them.

HOWARD FISCHER: You have to understand, they're using it for funding. I saw a piece of video up, look give to Republicans,

MIKE SUNNUCLS: Give back to the base

HOWARD FISCHER: And that's all this is, this is all about politics.

TED SIMONS: Are we going to hear more about this?

ALIA RAU: I think we will. We're hearing all about Arizona lawmakers are talking about it, I'm sure we'll see some legislation next session. Cathy Herrod's always in the middle of that.

MIKE SUNNUCKS: Absolutely the base loves it and they will go after it.

TED SIMONS: Good to have you all here. Thanks for joining us, we appreciate it. Monday on "Arizona Horizon" we'll have a debate. We'll hear from the three candidates running for mayor of Phoenix. A Phoenix mayoral debate Monday at 5:30 and a replay at 10:00 here on "Arizona Horizon." If you'd like to watch tonight's show again, see a previous edition of "Arizona Horizon" or check out what we have in store for the future, check us out at azpbs.org/horizon, that's azpbs.org/horizon. That is it for now, I'm Ted Simons. Thank you so much for joining us. You have a great weekend. Captioning Performed By LNS Captioning www.LNScaptioning.com

Alia Rau: The Arizona Republic, Howard Fischer: Capitol Media Services, Mike Sunnucks: Phoenix Business Journal.

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