Journalists’ Roundtable 09/18/15

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Three local journalists will discuss this week big stories

TED SIMONS: On the next "Arizona Horizon," it's the journalist's round table. We will hear how former Corporation Commission members speak out against current commissioners and we'll hear the latest in a developing feud between the governor and the state treasurer. The Journalist's 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 and welcome to "Arizona Horizon's" Journalists' Roundtable, I'm Ted Simons. Joining us tonight. Alia Rau of "The Arizona Republic." Howard Fischer of Capitol Media Services. And Hank Stephenson of "The Arizona Capitol Times." Former members of the Corporation Commission decide to get involved in controversies facing the current commission. What is going on here?

ALIA RAU: Oh, my. You've got democratic Ren Jennings and Republican bill, both former commissioners showed up with their lawyers, the former Tempe mayor one of them, to say you guys shouldn't be voting on A.P.S. issues, basically $300 million went in dark money involved in their campaigns, there's been a lot of belief that that was APS money. APS hasn't said it wasn't their money. So these guys are coming in saying there's a huge conflict of interest here. You guys should not be voting on APS issues, specifically on the rate issue dealing with solar.

TED SIMONS: The $5 monthly fee that APS wants increased and the other commissioners kind of said well, I don't know if the other commissioners said this but there was a thought that you would wait until the general rate case and it will take care of itself. APS wanted it handled now and the folks that they're targeting, they said okay let's handle it now.

ALIA RAU: They did. Along with Stump and there's a separate request that he recuse himself for a completely different reason.

HOWARD FISCHER: The tricky problem here is we've discussed the mysterious contributions around this table before. But there isn't a single one of us who has a bit of proof to show that it came from Arizona Public Service or its parent company Pinnacle West. Now, Hugh Hallman is saying and I'm not the attorney in the room that we don't need proof, just the public perception that it came from APS is enough to disqualify them. Now, this gets real tricky. You're going down the rabbit hole here that if you have other dark money groups contributing to other issues, is the public perception enough to disqualify state lawmakers, judges or anything else?

TIM SIMONS: Well, it's public perception but again, APS has not denied -- all they've got to do is say no we didn't do it and you've got a whole new ballgame.

HANK STEPHENSON: I think it's telling that they haven't done that in the year, almost a year that it's been. You know, the public perception is by default that they are the ones behind this or their parent company is the one behind this. You know, massive amount of money spent putting a couple of people who are favorable to APS to begin with onto the commission. But as Howie said that does open up a can of worms that is very interesting, you know. We can't prove where this money came from and without that, you know, what's the linchpin to this case?

HOWARD FISCHER: And the interesting thing in terms of the proof is the commission could get that because under the Arizona Constitution, the commission is entitled to the books and records of A., any regulated utility, or B., any publicly traded company, which would take in Pinnacle West.

TIM SIMONS: And we're going to speak with commissioner bob burns who has floated this idea, we're going to talk to him next week and see how far he can go with that, but the public perception aspect is interesting. The Corporation Commission has a lot of responsibilities but protecting rate-payers and being independent of the utilities it regulates, that's an important public perception is it not?

ALIA RAU: It is. I don't think most people understand, you know what the Corporation Commission does or how influential they are over, you know, all of your utilities, all sorts of things, and they have an enormous amount of power and they really run under the radar, at least they have until this past year or so.

HANK STEPHENSON: They're different from the legislature in that they're a quasi-judicial body. They're held to a different standard than lawmakers and their conflicts of interest.

TIM SIMONS: So these two former commissioners, they want the two to recuse themselves from this particular issue. There's another complaint here regarding Bob Stump and this is coming from a solar company and they say he's irretrievably biased when it comes to net metering, he should be recused.

HOWARD FISCHER: I don't know whether one can be retrievably biased which is an interesting question. The argument is that Stump has made up his mind on the issues related to APS, solar fees, whether it should be $5, $21, $50, APS I think would like. And they've cited a bunch of evidence in terms of statements he had made, even the little morality play he put on for the Edison institute for utilities, and again, we come to this question that, you know, as Hank points out, they're held to a higher standard than lawmakers but it's quasi-judicial and they also, they're elected and they are allowed to talk policy. Now, does that rise to the level of being as you say irretrievably biased?

TIM SIMONS: And what was this now?

HANK STEPHENSON: I think it's George B. Green, the little story about somebody who is very much like Monroe and wants to live off the grid and comes to the realization that that's not possible and the power company is actually a good friend.

TIM SIMONS: What is the Corporation Commission doing?

HANK STEPHENSON: I mean, it was a very weird little thing to begin with but he's been very open about his views on this, and it's kind of interesting if you start going after these guys for talking about their fundamental views and things like this, do you just shut them up?

HOWARD FISCHER: For example, Chris Mayes is a very big believer in distributed generation and requiring utilities to have a certain percentage of their electricity from renewable sources, her definition of renewable sources again did that make her irretrievably biased in terms of against the utilities?

TIM SIMONS: The concept of being irretrievably biased is interesting. These people are elected. They campaign out there. They've got to have an opinion somewhere along the line.

ALI RAU: You would think so. We had a few years ago the solar team running, they've had very strong opinions on the issues of solar versus, you know, non-solar. So it's an interesting debate. Where do you draw the line is the question?

HOWARD FISCHER: And we're going to end up with some case law. They've got 20 days for the commission to decide, you know will they recuse themselves, next step could be Superior Court or the Supreme Court and at some point, somebody is going to have to decide in Arizona where is the line in terms of Forese and Little in terms of their bias over what they knew, should have known, might have known and what Stump's irretrievable bias is.

HANK STEPHENSON: And interestingly if all three of these people recuse themselves, we don't have an a quorum of the commission anymore, so who makes the decisions?

HOWARD FISCHER: We've seen that with the state Supreme Court where they're being asked to decide on pensions for the Supreme Court justices. I don't know if there's authority of the governor to appoint acting Corporation Commission members.

TED SIMONS: Are you surprised a little bit that with all the controversy regarding dark money, Forese and Little especially, along with Stump, the corollary here that the three of them still just have absolutely no qualms about doing anything and everything that APS seems to want?

HANK STEPHENSON: I'm not terribly surprised that they haven't pushed back against APS because they were elected as pro-aps candidates so for them to do that would kind of almost be, you know, against what they campaigned on to some degree.

TED SIMONS: Can't you at least show a little bit of like --

HOWARD FISCHER: Look, the fact is I don't know if I would call them pro-aps candidates but they were certainly candidates who ran on the perception, on the belief that somehow, the utilities are good, that our job is to balance. It's not to necessarily protect the consumers but to balance consumer interests with utilities. Now, if I'm a publicist for either of them, I say look, I would at least vote for opening up the books or something like that.

TED SIMONS: At least question a little bit. Try to show a little bit, you know, that maybe, maybe not, put a little question in. Let's move on here. Every week we're talking about Diane Douglas. Every single Friday. And now, it sounds like the school board that she's fighting with is saying we're going to talk about Diane Douglas too, and it's likely to be through lawsuits. What's going on here?

ALIA RAU: They had a meeting this week, basically called specifically to talk about Diane Douglas and they talked about two possible lawsuits. One in relation to her restricting investigator's access to teacher data when the board folks moved into the governor's tower out of the department of education building. The records stayed in the department of education building and so they're allowed to come and look at them but they're not allowed to access them offsite. So the criticism has been this has severely impacted their investigations and these are people who investigate allegation of sex crimes against teachers, pretty nasty stuff.

TED SIMONS: The second one involves --

ALIA RAU: The website.

TED SIMONS: Moving the board of education website, good gracious.

HOWARD FISCHER: Well, what's interesting about this is, you know, we're going to find out look there's been already one court case where Diane Douglas sued the board over who has authority, we'll get another court case but one of the funny aspects of this whole meeting was we talked on the show about whether Greg Miller assaulted, touched, harmed Diane Douglas at a prior meeting. Well, Greg thinks he was set up, he doesn't want a repeat, so he moved her chair. Well, you would think that this is a kindergarten class in terms of well that's not my chair, I get to sit to the right of the speaker, of the chairman. And so part of the reason she didn't attend and she said in the prepared statement was well he can't do that. I mean, this is what it's come to.

TED SIMONS: Her prepared statement, she said that he's turning these things into spectacles and that he can't control his temper.

HANK STEPHENSON: Yeah, and it was pretty harsh prepared statement. She also noted that he's putting a mute button so he can cut her off if he wants to. It's getting very, very petty over there.

TED SIMONS: And again, as far as the two suits are concerned, they both basically deal with them moving out of the building. One is they can't get to the files and the other is they can't get to the website or at least have the access they need. Is there an adult in the room who is saying, you know, this is all fine and dandy, work it out on your own time but education and kids are at stake here?

HOWARD FISCHER: Well, the board would say we're still dealing with the issues, Diane would say she's dealing with the issues, she's got an October 1st surprise planned, she's going to trot out her solution and this becomes a distraction. That the fact we're talking about this as opposed to finance. Here's the other lawsuit waiting to happen. Now in the board, having lost its executive director, who had enough of putting up with Diane Douglas, street -- voted to start the process of replacement and they did put Diane Douglas on the committee. However, state law says the board can only hire replacements quote on recommendation of the superintendent which raises the question if she doesn't specifically recommend somebody, can they hire that person? Next lawsuit waiting to happen.

HANK STEPHENSON: And this was the thing that put them on bad terms to begin with. The woman who just resigned was somebody who Diane Douglas had fired and then realized she probably doesn't have the authority to fire there and they were rehired and so they moved out of the office. And, you know --

TED SIMONS: Let's get into the schematics here. She fired her, she was unfired. Moved out of the office. Wound up resigning. We could have a lawsuit because Douglas wants to hire the new person. Is that pretty much the road map there?

HANK STEPHENSON: That's about what happened there.

TED SIMONS: Does any of that, Alia, have anything to do with education?

ALIA RAU: Depends who you ask but I would say a lot of parents would probably say no.

TED SIMONS: What's next in all of this? Where does all of this go?

HOWARD FISCHER: Other than court?

TED SIMONS: Does Diane Douglas have folks behind her? Does -- who's got her back out there?

ALIA RAU: I think that's the question. We've got the recall effort that's continuing to gear up, you've got, you know, Governor Doug Ducey and his classroom first initiative, they've got recommendations coming out next week. They're making some major education decisions potentially that they'll take to the legislature and Diane Douglas is on the committee but she's never been there and I'm not sure how much influence -- Greg Miller is there and he's sitting in the chair and he's very influential in the conversation so we'll see.

HANK STEPHENSON: And Diane Douglas has her own package of proposals as Howie just mentioned, the October surprise that's coming, different from what the governor is going to be talking about.

TED SIMONS: Speaking of the governor and speaking of feuds and folks not getting along, what's going on between the governor and the state treasurer? The treasurer is calling the governor and his people not good guys, not moral, they're just no good.

HOWARD FISCHER: That's one of the nicer things that Jeff DeWit has said about the governor and his staff, this all comes down to the issue of using the proceeds from the trust fund. We're already using the interest from the trust to fund schools to about the tune of $250 million a year. The governor thinks well, we can quadruple that and take, you know essentially what does it come down to, $1 billion? $2 billion over 10 years. And somehow not hurt the trust. Now, it's true that at the end of the period, the trust would still be worth more but it would be worth $3.7 billion less than it would be if we didn't take the money, which is where Jeff DeWit comes in. He says wait a second, you cannot take more than you're earning and not hurt someone down the road. Now needless to say our governor who was a little thin skinned about this since he came up with this plan said look I can do this without raising taxes is a little miffed that his treasurer is saying wait a second you can't do that.

TED SIMONS: Not just miffed but according to the treasurer, he won't appear in the same room with him and his guys are out to get him.

HANK STEPHENSON: And I think one of the more interesting points of that story where he really came out swinging was that he finally said when I announced that I was going to be against this, Ducey and his people started threatening me. They said that they're going to run people against me, which is a rumor we've heard for a long time but he wasn't willing to come out and acknowledge that up until this point so it seems like DeWit and this is maybe the third or fourth item of the little, you know, skirmishes between the two of them and at this point, he's letting it all hang out there.

TED SIMONS: And he told Laurie Roberts over at your paper that they're going to make an example to show what happens when you oppose him.

ALIA RAU: And this is a guy who ran very closely with Doug Ducey. I mean, he supported him on issues, they seemed very aligned on stuff. People claimed he won because he had the support.

TED SIMONS: Treasurer on treasurer violence?

HOWARD FISCHER: I sort of like that. There is a history of Ducey and his supporters striking back shall we say, we remember what happened to a Mesa school superintendent who spoke out, and all of a sudden there were robo calls going into his district. The governor clearly has allies who would make life difficult. If there's an enemy's list, we know he's on it.

TED SIMONS: Does Jeff DeWit, who's got his back? Are folks out there saying, you know, this guy's got a point? I'm standing with you?

HANK STEPHENSON: I think there's a fair amount of people who have his back in the moral situation, think that from the lawmakers I've talked to stuff say that Ducey is going a little overboard on this but he hasn't pulled that many votes yet. There aren't that many people in the legislature who are siding with DeWit over Ducey in this fight. Maybe a few Republicans and that may be all he needs but it's certainly not a flood of people agreeing with him on the merits of the issue.

HOWARD FISCHER: And a lot of it depends on what the legislature comes up with. The pressure is building not to wait to the election to put the Ducey plan on the ballot. So the question is what do they put on the ballot? They've got a modified Ducey plan where they use $100 million of current funds and raid the first things first account and use some trust funds. You know, DeWit is going to have to decide what kind of position he wants to take on it. But remember, a treasurer can have an interesting position. You do remember a former certain state treasurer, name of Doug Ducey who came out against the 1 cents sales tax extension and got a lot of political capital on that.

TED SIMONS: Political capital enough for the governor's office.

ALIA RAU: There's a lot of question about where the schools are going to fall on this. They're hugely influential. They've kind of reserved a position on it. They haven't said they don't like it but there's definitely some murmurings about leaning towards DeWit so if they come up with their own proposal or if they decide to take a side, that would be a huge backer for DeWit.

HANK STEPHENSON: And Democrats in the legislature right now are saying they're united against the Ducey plan. So unless there's some --

HOWARD FISCHER: Not like that matters I suppose. Here's the other -- [ Overlapping Speakers ]

TED SIMONS: It may well matter if they've got to get a coalition to get that thing through.

HOWARD FISCHER: Here's the other thing. You know who's backing DeWit? Diane Douglas who also says we've got enough money.

TED SIMONS: Alright, with that in mind, the concept because obviously, the governor is probably not the biggest fan of Diane Douglas, and I think it's safe to say he's no fan of Jeff DeWit. What are you hearing regarding the governor's style? Is there a heavy handedness? Is there a above it all -- talk about this.

HANK STEPHENSON: Well I would criticize him. I just don't want his dark money friends to come after me.

TED SIMONS: We've got you covered, don't worry.

HANK STEPHENSON: As you said earlier, he has very thin skin on a couple of these issues. DeWit was trying to be cool about opposing this plan at first, kind of sticking to the numbers and it just, you know, snowballed. And I think people are seeing that and looking up at the ninth floor and saying do I want to go against him on anything? Is it worth it? Which is good for the governor I guess but at some point maybe sparks a backlash.

TED SIMONS: Do you get the impression that there's a my way or the highway kind of thing going on here?

ALIA RAU: It seems like it a little bit with this issue. I mean, I'm not hearing a lot of interest in any of the sides to kind of compromise. You've got these splits, the legislature with their plan and that's the question of are we having a special session or not? Is there a willingness to compromise and what's the compromise going to be?

HOWARD FICHSER: And the problem for lawmakers, at least the Republicans, is you need a signature on them and I'm not sure how many legislators will be in the position where they're ready to come out and say the governor is wrong if they want their bill signed.

TED SIMONS: The jobless rate in Arizona is at 6.3%. It was 6.1% in July. This despite the fact there are more workers back on the job. I think an obvious question is if the job growth rate is at 2%, why is the employment rate increasing?

HOWARD FISCHER: Well, we'll be going long with the explanation here. Here's the problem. You've got two separate surveys. The number of jobs added is based on a survey of employers and they say they added 6,100 private sector jobs last month and, of course, a lot of folks went back from school, but they were expected to be back. The seasonally adjusted jobless rate went up because the number of people in government is not up as high as it used to be and that's based on a separate survey of individuals. You call the house, are you working? Yes, no. If not are you looking for work? Are you trying to get work? Are you working part time? So you don't always have a direct correlation there and you have the whole seasonal adjustment thing. No matter what you look at, even if you're looking at the survey of employers, 2.1% year over year growth is tepid at best.

TED SIMONS: Well, it's tepid, especially compared to where Arizona once was. What are you hearing out there as far as state lawmakers are concerned, whether or not -- we keep hearing about the great Arizona come back, Arizona is on the right track, good news Arizona. Whatever you want to call it and yet these numbers, they don't lie.

HANK STEPHENSON: I get an e-mail every couple of hours from, you know, Doug Ducey or somebody else talking about how awesome our economy is and when you look at the numbers, maybe it's not that awesome. The bureau of labor statistics said that Arizona's the third highest unemployment rate when you count people who have quit looking for work and who have settled on part-time work when they wanted full-time work, so obviously, there's a disconnect between the message and the reality here.

TED SIMONS: We should mention this is not going to be an minimum wage hike in Arizona because the consumer price index didn't hit the right level.

HWOARD FISCHER: Back in 2006, voters said we would like a minimum wage higher than the five and a quarter I think the feds were paying. Which for Arizona to pass was sort of fantastic in and of itself. The real kicker to that, what the business community hated was the automatic inflation adjustments and that's gotten us up to $8.05 an hour. Every August the industrial commission says what's inflation been the last year? We just looked at the numbers and it comes down to two 10ths of 1% which comes down to 1.6 cents. If you round to the nearest nickel, the nearest nickel is zero and absent some change or updated figures, same $8.05 an hour from the 12 months in 2016.

TED SIMONS: Before we get out of here we've got a minute or so left. What is going on in Coolidge?

HANK STEPHENSON: The Coolidge city council wants to have prayers before their council and Christian-only prayers now, which is, you know, just a little bit strange, I guess.

HOWARD FISCHER: It's illegal.

TED SIMONS: I'm not a constitutional lawyer Howie, but I see question marks there.

HOWARD FISCHER: Well, the courts have consistently said you know, we had this with the New York Supreme Court, as long as everyone gets a chance to bring in a prayer, we will not have a problem. Congress starts their session with a prayer but nobody is saying it has to be a Christian prayer. I think Coolidge just bought itself a very expensive lawsuit.

ALIA RAU: They need one more vote so it's not a done deal. Everybody's threatening lawsuits at them but they haven't actually done the final vote yet and they did call a very hasty meeting for Monday night, I'm guessing to vote on this and considering its hastiness I'm wondering if they're maybe changing their minds.

TED SIMONS: I'm wondering if the general revenue is such they can afford to go to court for goodness knows how long trying to defend this kind of thing.

HANK STEPHENSON: Maybe they'll reverse it before they go all the way through.

HOWARD FISCHER: And what's the point? What do you pick up as a constituent? Look probably 90% of the prayers fall under the Christian category. Of course, what's interesting, we've had this discussion among evangelical groups to wonder, are Mormons Christians? We've had that debate. Who do you pick up by pushing this kind of issue as a councilman? I don't know what it does for you.

ALIA RAU: Even before they had revised it, it said all religious organizations within the town of Coolidge. I'm not sure that doesn't limit it already by what's an organization? Do you have to have a physical building? Are there any temples? What is in Coolidge?

HOWARD FISCHER: There may be a Jew in Coolidge somewhere.

ALIA RAU: A synagogue.

TED SIMONS: IT could be a guy out in the desert worshiping dogs in his van. We'll keep an eye on that story, as well. Good to have you all here. Thanks for joining us. Monday on "Arizona Horizon," a new report from the State Board of Regents shows that nearly half of Arizona high school graduates don't meet the criteria to enroll in the states' three public universities. That's Monday at 5:30 and 10:00 on "Arizona Horizon." Tuesday, physicist Lawrence Krauss is here for another edition of Science Matters. Wednesday, Corporation Commissioner Bob Burns will join us on set to discuss a variety of issues. Thursday, why Arizona is facing a teacher shortage. And Friday, it's another edition of the Journalists' Roundtable. A reminder, if you would like to watch tonight's show again, see any previous episodes of "Arizona Horizon," maybe see what we have in store for the future, check us out on the web, 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.

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

Alia Rau, The Arizona Republic; Howard Fischer, Capitol Media Services; Hank Stephenson, The Arizona Capitol Times.

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