Journalists’ Roundtable

Sept. 11, 2015

Transcript:

TED SIMONS: Coming up next on "Arizona Horizon's" Journalists' Roundtable. We'll talk about the latest intrigue involving the Arizona Corporation Commission. And the superintendent of public instruction wants more money now for public school teachers. 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 and welcome to "Arizona Horizon's" Journalists' Roundtable. I'm Ted Simons. Joining us tonight: Jeremy Duda of "The Arizona Capitol Times." Bob Christie of The Associated Press. And Mike Sunnucks of "The Phoenix Business Journal." The Arizona Corporation Commission is again in the unusual position of making headlines. It just never seems to end over there. This used to be a very quiet bunch of folks!

JEREMY DUDA: It has been and without them I don't know how we would have a show over the summer but this drama continued. This week it was a continuation of what we saw last week where Susan Bitter Smith and Bob Burns put an item on their agenda, wanting to talk about whether or not they should ask the utilities they regulate, i.e. A.P.S., to not participate or spend money in the elections. That got pulled from the agenda and they came back this week and quickly, this discussion quickly shifted focus, not should we ask but can we force them to tell us if they're spending money on elections? This is all dark money, it's allegedly money A.P.S. is suspected to put all of this money into other groups, they don't have to disclose their contributors, spending more than $3 million on the races last year. Bob Burns is talking about issuing subpoenas, they're looking for legal opinions, how much power they really have, whether or not one commissioner can do it on his own.

TED SIMONS: And along with that there was the idea, I think commissioners Burns and Bitter Smith wanted regulated businesses to refrain from campaign funds to corporation commission races. That's not going to go very far.

BOB CHRISTIE: That was a request. We would request that they not participate and, of course, Doug Little and Tom Frees, the two Republicans elected last November, came out with scathing letters that said that's unconstitutional, you can't do that. I mean, long, lengthy explanations of why the commission is stepping into areas where it's not allowed to regulate, even if they wanted to regulate it it's a constitutional right, a free speech right for companies to spend the money and it degenerated from that.

MIKE SUNNUCKS: It's all citizens united and we can complain about it, and it's untawdry but there's always that back drop of you can't really force them to do that. You can pressure them to do it and there's a lot of pressure on the members of the corporation commission and the utilities because the optics on this are horrible. It looks like, you know, people that are on the commission are bought and paid for. That's what the optics are of this so maybe their protests will be there, maybe eventually, you'll see it affect their behavior.

TED SIMONS: But they can force them to do that, can't they?

JEREMY DUDA: They may be able to. This is not traditional business or you know, a nonprofit. They're in a very unique position. They are a government-sanctioned regulated monopoly. They do not have any competition, remember a couple of years ago we saw a series push for deregulation at the corporation commission, A.P.S. fought very fiercly against it so they are in many ways at the whims of the corporation commission, which would lend itself to the notion of why they would spend so much money to choose who those regulators are.

BOB CHRISTIE: Right, and I think commissioner burns and Bitter Smith both believe that it's damaging the credibility of the commission and the Supreme Court has said there's nothing unconstitutional about requiring disclosure of things. It is unconstitutional to stop corporations from spending money, they're people, too, they can spend money and have free speech rights but states and other folks can require disclosure because as we all know sunshine is a little bit of a disinfectant.

MIKE SUNNUCKS: All of this kind of stemmed from the solar fight between the A.P.S. and solar city and the solar folks, they have folks working for them. They have money so they can have these groups with these public records requests. There's some juice behind all the scrutiny and criticism where it's not just a couple of watchdogs out there because for the most part, we only talk about the corporation commission when they do something wrong or raise rates and now they're doing something wrong.

JEREMY DUDA: And the solar folks, that gets to another major issue of this fight, the criticism from A.P.S., from the commissioners, is that the corporation commission can force A.P.S. to say what they're spending. They can't do that with the solar companies that are funding the other side. What a lot of these solar groups have said lately is we will voluntarily refrain from spending any money in the next corporation commission race but we reserve the right to withdraw that if those guys won't do the same thing.

BOB CHRISTIE: It's quite an interesting development. I think we've seen over the summer, the scope of the summer, this absolute refusal by the corporation commissioners to address this ongoing public outcry over this deep-seated feeling I think that a lot of people believe that those commissioners are in the pockets of the regulators.

MIKE SUNNUCKS: The Bitter Smith stuff resonates with people. Everyday people that see the story, people can understand that. She was a lobbyist, works for the cable industry, maybe worked for Cox, right? And she votes on things related to those industries. People can understand that. A lot of the other stuff about the corp com, it gets kind of inside baseball but this is something that is simple for people to understand.

TED SIMONS: Not only that there's a new poll out and it shows a telephone poll, 86% of those questioned thought that yes, Susan Bitter Smith should be removed from office if she's found moonlighting with conflict of interest issues.

JEREMY DUDA: And this show that people are paying a bit more attention to what's going on on the corporation commission, it's been in the news every day for this accusation or scandal. This is a telephone poll so maybe take it with a grain of salt but it's hard to argue with those numbers of folks who say 86%, if those allegations are true, she should be gone. What these allegation comes down to is two things: Whether or not she has a conflict of interest because she's a lobbyist for a cable television industry association which includes Cox, which the corporation commission regulates for some of its other services, and whether she has a conflict of interest for her company, a consulting firm called technical solutions, which is very big in Scottsdale, they're involved in a lot of projects and bob parsons hired them to help get some neighborhood support for this big golf course project which required the relocation of an A.P.S. substation.

TED SIMONS: So we've got her P.R. firm helping a client deal with A.P.S., we've got her lobbying for a telecom firm overseen by the corporation commission. She says it's cable TV only, but Cox does deal with telephones and has she ever dealt with telephones?

BOB CHRISTIE: The lawyer who brought the complaint was digging around this afternoon, about 3:00 he sent out from Jeremy's publication, they produced a list of lobbyists every year, the lobbyists can take ads out and there's a big Susan Bitter Smith ad that says lobbying for telecommunications companies, which he immediately sent to the attorney general and said see? Pretty much proof right here. It looks bad. The optics are bad for her. We'll get into some type of legal discussion.

JEREMY DUDA: When you're explaining in politics and these things are usually losing and they're doing a lot of explaining on this and trying to convince people that this is legal or this is okay but it just looks bad. It looks like they're on the take. It looks like who's getting favored treatment down there? People you do business with or the consumers?

TED SIMONS: It doesn't seem like they're even hiding it. It seems like they're adamantly supporting anything and everything that A.P.S. would want. That is the appearance, the perception and it doesn't seem like it's bothering them.

JEREMY DUDA: Apparently, not. We saw a couple of two or three weeks ago we had a very big vote on whether to allow them to impose new fees on solar panel owners, normally, you would wait for a rate case which wouldn't roll around for a couple of years. 3-2 vote, the same way pretty much every controversial vote splits there with Bitter Smith and Burns on the losing side and Forese Little and Stump on the other to allow this.

TED SIMONS: That brings up the last question here. Are we seeing a split? A fissure with Burns and Bitter Smith on one side and the three who seem to be associated, A.P.S. isn't denying anything out there, associated with dark money slash A.P.S.? Is there a bit --

BOB CHRISTIE: I think so. Especially with commissioner Bob Burns, who I believe finally, he gets it. From what he's said publicly in meetings, he understands that this is damaging the credibility of the commission and he's trying to find a way to protect it.

JEREMY DUDA: Sure and we saw Burns even last year during the election year, he was kind of starting to hint that maybe we can do this for the next election, can we force them to disclose? You have this two person faction now but it seems like Burns is leading it, Bitter Smith is not as comfortable with some of the things he's doing. One of the things they want this legal opinion for is to see can Bob Burns do this on his own?

TED SIMONS: And we're talking possibly subpoenas.

JEREMY DUDA: Could be.

TED SIMONS: As we mentioned, the corporation commission has kept us in business all summer long. So has Diane Douglas. And she came out today and she -- goodness, gracious. She wants $400 million more spent on education. Not just education, directly to teachers.

BOB CHRISTIE: Directly to teachers for raises for teachers and to hire new teachers. She wants it right away. She wants governor Ducey to call a special session, which is sitting on $750 million give or take of surplus in rainy day money and they're expecting to see another $270 million. We're close to a billion dollars in extra money in the next year and a half that the legislature doesn't have set forth. She says let's get it to the schools right away and no I'm not talking about the school inflation funding lawsuit, that $330 million. That should come on top of it and when Governor Ducey, if he brings the land trust thing in, it's on top of that, too.

MIKE SUNNUCKS: Sometimes, Republicans make the best Democrats in the state. Jan Brewer with the tax increase. Diane Douglas is your friend of teachers. Roy Roberts, singing the raises. The world is a different place today. But she has some good political instincts on stuff. She showed it when winning the race, the primary, the general election and this is - I bet you there will be 80% support for this among people.

TED SIMONS: She is nothing if not a wildcard. I mean, she's out there. And she just doesn't care what people think, she's going to say it and may have to say it twice.

JEREMY DUDA: Absolutely not. You can count on her to throw you a curveball lately and one of the things that's interesting about this is she's very much aligning herself with all of Doug Ducey's enemies on this issue, all the liberal education groups came out demanding a special session for more funding, she also kind of tied herself to treasurer Jeff Dewitt who has made himself the enemy of Ducey lately and said we want to use extra money from the land trust for this but only if treasurer Dewitt says the fund can take the hit.

TED SIMONS: Quote here, making our children wait two years, the inflation adjustment suit would call for that, the land trust funds, making our children wait for two years and then funding them for a few years, and then not funding them after that makes no sense, at all. Do all Arizona children deserve a education or only those who are in school during lawsuits or high revenue growth? That is a shot at the governor.

BOB CHRISTIE: The reason we're having this talk of the special session and it wasn't just the school advocates. That's been brewing for several weeks now and it's not necessarily going for the Democrats. It's coming because the production in the legislature and governor Ducey know that this issue cannot wait until next year. Ducey's plan in July was next spring, the legislature would refer the land trust to the ballot, and then in November of 2016 it would go to election in 2017, if it passed, they would start getting money in schools. There is no time for that. The governor I believe is starting to realize that. A lot of Republican lawmakers know that they've got to get some money now because they're getting hammered.

JEREMY DUDA: I'm not ready to start penciling in a special session on the calendar quite yet, though. You're hearing a lot of talk about this but so much of it is really coming from one person, from Representative Paul Boyar who's a very close ally of the governor on this land trust. He's been one of the top cheerleaders over in the legislature. And he's talking about this but you start talking to leadership and you realize he hasn't talked to anyone else about this. The governor is keeping an open mind and they don't appear to have polled members on availability, willingness. We're not sure if Governor Ducey has the votes for this.

BOB CHRISTIE: We probably don't. One, Peterson was in the town hall on Tuesday. He said we need to do it week. And the governor said we need a solution within several weeks. I think this is resonating.

MIKE SUNNUCKS: It does show you the state of politics here. Democrats if they call for this, nobody would listen to them. Nobody would listen to the teachers unions. Where's the business community on these things. We're last or near last in terms of classroom spending, teacher spending. We're routinely near last on classroom pay. It takes Diane Douglas who's a right wing, tea party, anti-common core person to get this going and it shows also that there's some vulnerability to the governor not just out of the capitol but those cuts to universities he took a hit especially with women voters, with Republican women voters who supported him in his election, he took a hit and if you see some momentum behind her on this, we will see a special session.

TED SIMONS: One more quote, I want to comment on this one. We have an entire generation for children, we can never go back and provide that education to them. How many more children must suffer the same fate before the leaders of our state truly prioritize education? That's a Republican speaking.

JEREMY DUDA: And I've been hearing the same thing for years from legislative Democrats, the teachers union, that there's no going back, so much criticism over all these cuts for the last few years and casting this as an emergency that must be solved immediately. [ Overlapping Speakers ]

BOB CHRISTIE: I want to let Jeremy know, this special session thing is not ready yet. The leadership, the members, they don't know what is being proposed. So it will be a while.

MIKE SUNNUCKS: She's not beholden. The business community, the business lobbyists, they're so beholden to the legislature and the governor, the rank and file down there, they capitulate to the leadership and governor. Diane can say what she wants. She sounds like children's action alliance or the teacher's union.

TED SIMONS: And apparently, her chief of staff or one of her high-level staffers can go around e-mailing folks and making threats?

JEREMY DUDA: Depending on who you ask. Also throwing and curveballs here. He sent this e-mail to a group regarding an affiliation with Max Goshert, the head of this Diane Douglas recall effort. And this group, the Arizona association of black educators I believe, they had a page on their website which Goshert says, it mentions he's the head of the Douglas recall. Michael Bradley who sent this, he was home that day, home sick he says, he had a lot of very pointed questions, very terse, sounded accusatory, are you a nonprofit that can participate in a recall election? Are you trying to get rid of Diane Douglas? What's your association here? He says well, I didn't mean for it to sound intimidating but it was very tersely worded.

TED SIMONS: Yeah, sure they do and again, attorney general's office says they will review the situation.

BOB CHRISTIE: They will review the complaint just like they'll review the complaint. Here's what I see in the Michael Bradley issue. We've heard this tune before back in Tom Horne's day. We hear it when supporters or backers who work for political operatives or political sitting office holders get on the phone and start leaning on people for political things that are outside their job description. There's supposed to be a clear line between what you do for the government and what you do politically. We've seen it out of Tom Horne's office.

TED SIMONS: The secretary of state apparently is getting involved in this redistricting, the latest redistricting fight, this state legislative, appearing before the Supreme Court, back to bat again. She's got involved and surprised some folks.

JEREMY DUDA: This is a very stark departure from her predecessor Kim Bennett who never got involved, all the years of accusations, of them kind of stacking the deck for Democrats. This case goes to the legislative districts, not the congressional ones like the last case where Republicans are accusing the redistricting commission of under-populating some districts and overpopulating Republican districts in order to make a map more favorable to Democrats and especially one particular district, the commission very openly said we're trying to make this more competitive, we're going to move some Republicans over here. Michelle Reagan filed a brief with the Supreme Court and said you guys should overturn these maps.

TED SIMONS: And the claim was a built-in bias in the redistricting process?

BOB CHRISTIE: Correct. The Supreme Court has ruled previously that you can redraw maps for political reasons. You can have a difference in population. The question is whether this goes over that line. There was a three-judge panel of federal judges in Phoenix who looked at this issue, held a lengthy hearing, and ruled 2-1 with 1 drawing dissent that it was perfectly constitutional and the Supreme Court will have a direct review.

MIKE SUNNUCKS: This is a completely partisan thing. They hate that commission. They appointed the wrong person to be the independent chair of that and Democrats had three votes and Republicans had two. And they challenged it on so many levels and they've tended to lose on those levels and everything that commission does is tainted so they see that. But it hasn't resulted in any democratic majority at the legislature.

JEREMY DUDA: The argument from the redistricting commission is one big reason for this repopulation is pretty much every democratic legislative district is underpopulated below the average and all the Republican ones are over. Their argument over is this is mostly done for the Voting Rights Act. At the time, Arizona had to get preclearance from the department of justice before the map could go into effect. That's gone now. And so the Republicans including Michelle Reagan now are saying it's no longer permissible. You've got to redraw the maps.

TED SIMONS: Can it be argued that the secretary of state's job, among the many aspects of the job, is to implement the redistricting commission's actions?

BOB CHRISTIE: It is. But she's a political office holder, she's a Republican. She is weighing in. She has a perfect right to do that and, you know, like Jeremy said, her predecessor did not. She's going to weigh in.

TED SIMONS: All right. Let's keep it moving here. Mike this is for you. Glendale wants a new arena manager, which is understandable. Some say they're jumping the gun a little bit here because they were supposed to be working out and do a little kumbaya thing. No kumbaya

MIKE SUNNUCKS: They struck a deal with the coyotes owners in 2013, right? They didn't like that deal so they nixed it in June. The coyotes sued. They came back and today two-year deal in August. They can't even wait for that to get going. Now, they're hiring a Massachusetts consulting firm, $400 an hour to do an rfp. If they find somebody they like, they're going to dump ice Arizona and that would be the end of hockey in Phoenix, in Glendale and that council, that city cannot be coherent with a message, they're all over the place. They get rid of coyotes deal, they do another one, and now they want to get rid of them again.

TED SIMONS: And an audit of the coyotes a year ago showed that the team -- they shorted them in naming rights, in ticket surcharges, they didn't provide -- this is a toxic relationship.

MIKE SUNNUCKS: It absolutely is. They requested that audit under the 2013 deal last year, took them a year to do it. They still weren't happy with the information they got from the Coyotes, how they were really disclosing everything and the auditors claims they didn't get the naming rights revenue, the parking, ticket sales revenue, and the coyotes reported a loss of $34.8 million that included closing costs of the deal, operating losses, the auditors think it's more than that. It is toxic and I don't know how they can craft a new deal that would keep the team here long term.

TED SIMONS: Gut feeling, will there be a Phoenix Coyotes in the future?

MIKE SUNNUCKS: That's the latest thing. They might not move to Vegas or Seattle but come back down to the arena, we're looking to build a new arena for the suns, maybe they move down here and give it a shot down here. There's always rumors about Scottsdale and the reservations.

TED SIMONS: ASU's got a hockey team.

MIKE SUNNUCKS: Do something out in Tempe or Scottsdale. You know, the boat looks like it's pretty much going to sail on Glendale pretty soon.

TED SIMONS: This ruling that involves some election laws. Basically saying forget about it.

JEREMY DUDA: The ruling, the federal court ruling that keeps striking again and again, and again, a ruling from a federal judge late last year that struck down the definition of political committee that was in Arizona statute as unconstitutional. And the problem that we've seen a lot with election regulators since then is every one of our laws that we have to enforce is based on that and so you have all these outstanding complaints and enforcement actions, people have been trying to collect fines from them, the secretary of state's office dumped a couple of these. And now the attorney general's office has about 82 of these things, some of them go back as far as 2008. They looked at this and said based on this ruling, the laws are unconstitutional, we're going to drop all of them.

TED SIMONS: Help me here now. The wordy definition was struck. The legislature rewrote a new definition, not quite as verbose. And the attorney general wanted the ninth circuit to vacate the original definition. Where are we in this?

BOB CHRISTIE: Well, what we've seen this week is they're drawing a fine line. Anything before we rewrote the law we're just going to let it pass.

TED SIMONS: Okay.

BOB CHRISTIE: And those are all the pending things. Of course, there have been dozens of people who have paid fines and have been disciplined or whatever over the years. Those all stick but anything pending, being appealed or still in process as of this last year are forgiven.

MIKE SUNNUCKS: You look at these court rulings, dismantled all the clean elections and the reforms we've had. The landscape of the state has changed. We were reformists on those things. The folks at the legislature, the folks in office right now have no interest in doing those. So you have the courts and the political wings conspiring against that.

TED SIMONS: That will do it. Gentlemen thank you so much. Monday on "Arizona Horizon," the city of Phoenix is working on plans to regulate drones. And a former state attorney general releases an album of original music. That's Monday at 5:30 and 10:00 on "Arizona Horizon." Tuesday, we'll see how Arizona is preparing for National Preparedness Month. Wednesday, learn about efforts to develop a general-purpose data storage platform. Thursday, a discussion on raising the gas tax. And Friday, it's another edition of the Journalists' Roundtable. That is it for now. I'm Ted Simons. Thank you so much for joining us. You have a great weekend.

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