Journalists’ Roundtable 12/04/15

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Join us as three local journalists bring you up to date on the news of the week.

Ted Simons: Coming up next on "Arizona Horizon's" Journalists' Roundtable, the state's attorney general wants Corporation Commission chair Susan Bitter Smith out of office. And commissioner Bob Burns wants APS to disclose all political donations. 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, Alia Rau of "The Arizona Republic." Bob Christie of The Associated Press. And Luige Del Puerto of "The Arizona Capitol Times." Arizona attorney general Mark Brnovich is calling for Corporation Commission chairwoman Susan Bitter Smith's removal from office. Petitions the Supreme Court, says she never should have been there in the first place, huh?

Alia Rau: Susan Bitter Smith is a lobbyist for a group that kind of advocates for telecommunications, cable, TV, telephone, stuff like that and basically, he sent a letter saying she never should have been in office, it's a conflict of interest, she needs to be out.

Ted Simons: She lobbies -- she says I'm lobbying for cable TV, not for things that are regulated by the commission.

Bob Christie: That's correct. The state Constitution says that you can't sit on the corporation commission if you have an interest in any of the things they regulate. They do not regulate cable television. They do regulate telephone companies and nowadays as we all know, cable companies sell telephone service and cox communications who she lobbies for and the southwest cable communications association, I may have messed up that formal term of the lobbying group for the cable companies, their membership also sells telephone. So what the attorney general says is by definition, she represents an entity that is regulated and she therefore was never qualified for office and should be immediately removed.

Luige del Puerto: And the attorney general's office in his petition argues that this petition of yours, in this case against, Bitter Smith, can't be cure even if she resigns from her post in those companies because of the time that she was elected into office. Those entities are regulated by the commission or have affiliated companies that are also regulated by the Corporation Commission. Therefore, the only remedy for her would be to quit her post or get removed by the Supreme Court.

Ted Simons: Was this a surprise? Was the wording a surprise?

Alia Rau: I don't think it was a surprise. There were complaints from at least one private citizen and some attorneys and stuff getting involved. So it's something that's been going around. It was interesting that yeah, you have a Republican attorney general kind of getting in the middle of it. He's getting some criticism for it, primarily because she is one of the corporation commissioners who has been a little bit willing to be a little more critical of APS.

Ted Simons: Well, that's an interesting point. You could kind of -- if you really want to dig deep on this thing and wonder about machinations you could say wait a minute now, this could be APS saying let's get rid of Bitter Smith.

Bob Christie: Yeah. If one were to go deep down the rabbit hole. Bitter Smith's lawyers, back in September, a private attorney, tom Ryan who has been involved around a little bit, filed a complaint with the attorney general laying out all these facts, that she had worked as a lobbyist for cox, that she's currently executive director of the cable commission and therefore, she shouldn't be allowed to stay in office and never was qualified for office. You know, political watchers kind of felt well the chances of the attorney general who's a fellow Republican taking up that were problems. She vehemently denied it through her attorney. She said this was an attack by the solar companies on me and the same attorney says it's an attack by a Democrat who wants my seat.

Luige del Puerto: If you want to go down the rabbit hole if you will. So this came about because it was -- it came as a tip from a nonprofit organization that is funded by renewable energy interests based in Washington, D.C. and they've been going after the Corporation Commission, specifically bob stump and his text messages. Now in their process of going after bob stump, they said Bitter Smith had these ties to the companies and the result, tom Ryan the attorney from the east valley filed a complaint against Bitter Smith with the attorney general's office but you see here's the thing: You cannot accuse Mark Brnovich of being a liberal lefty or being a pawn of solar interests. This guy came from the Goldwater institute. If you're talking about staunch conservatism, this is a very conservative lawyer. And therefore, even if she is claiming that it's politically motivated, the fact that we have a Republican who is staunchly conservative going after her and saying look, this is a clear-cut case. You violated the state's conflict of interest statutes and therefore, you should resign, I don't see how reading the accusation or the allegation by her that this is politically motivated sticks.

Ted Simons: He says the law clearly prohibits her from holding office pretty much means she's always been ineligible to hold the job. What becomes of her decisions? Do those stick?

Bob Christie:They do stick. And the attorney general made a point of that as did the assistant attorney general who actually filed the case. There is a legal theory and I forget the actual term.

Luige del Puerto: De facto officer.

Bob Christie:It means that if you thought you were sitting legally and everybody else thought you were sitting legally, then the decisions you made stand.

Luige del Puerto: And, in fact, you know, the question was raised not just about her past votes but her future votes now that she is under -- her legitimacy is in question and the same legal concept applies and that's why the attorney general's office went to the Arizona Supreme Court and said you need to take up this case and find a remedy right away because in the meantime, she's making all these decisions, important policy decisions when she may not be legitimately holding that office.

Ted Simons: If those policy decisions go against my particular concerns, I can't come back and sue the commission and say you made the decision but you knew you were making the decision when this person was being suspected of conflict of interest?

Luige del Puerto: Under this theory, you can't. Those votes, whatever they are would be legitimate.

Ted Simons: Even now?

Luige del Puerto: Even now yes. And that's why the attorney general is adamant that this case be taken up immediately.

Ted Simons: Will it be taken up immediately?

Bob Christie: The Supreme Court has not formally taken the case yet. They have put it on their calendar, their discussion calendar for early in January. They've asked for a briefing from both sides so the first week of January they will hold a meeting, closed door meeting and decide whether to take the case. There's a couple of different things they can do. They can reject the case, send it to the superior court or they can make a decision or they could decide it right on the papers.

Ted Simons: All right. We'll see how far that goes. Another Corporation Commission story, Bob Burns has decided he wants to see APS political donations and he wants to see those donations in 30 days. APS political donations, which is of major import here because it doesn't include something else does it?

Alia Rau: It doesn't include his letter, it doesn't include the parent company pinnacle west. So he would get the donations that APS directly submitted but he wouldn't get any donations that pinnacle west made and we know they made donations.

Ted Simons: But the idea is that APS is where the rate-payer dollars go in whereas pinnacle west may be not?

Alia Rau: That's his theory kind of but there's still taxpayer dollars in pinnacle west.

Luige del Puerto: We asked Bob Burns that question. Why did you ask these questions only from the Arizona public service and not from pinnacle west, which is the company that owns APS and therefore, in theory is not directly regulated by the Corporation Commission? Well, he basically said -- not basically, he said I'm doing this one step at a time. Now, I'm asking APS, I'm waiting for the response. Whatever their response is my next step would be to ask pinnacle west to provide me this data and if both APS and pinnacle west refuse to give me information I'm going to subpoena this information.

Ted Simons: And I would imagine that if he requests this from APS and in 30 days he comes back and APS says look nothing, we did absolutely nothing, someone's got to go after pinnacle west.

Bob Christie: They'll probably go after pinnacle west and if APS is actually -- APS has never confirmed or denied that they actually spent the money in the Corporation Commission race last year. There were $3.2 million I believe that were spent to back two corporation commissioners. Everybody thinks it's APS. Everybody suspects it's APS. No one has any confirmation that it is APS. But they haven't denied it.

Luige del Puerto: Right.

Bob Christie: So this has been lurking out there for a long time.

Luige del Puerto: I think it's very clear that Bob Burns is going to go after pinnacle west after and if he doesn't get what he wants, he'll subpoena the company.

Bob Christie: It's clear he can get APS's because they are a regulated utility and the Corporation Commission has the ability to look at their books at any time.

Alia Rau: The criticism is why now? People have been asking them to do this and the Corporation Commission has the authority, whereas under state law they don't have to disclose. People have been asking them to do this for a year and why now?

Ted Simons: Well, why now?

Luige del Puerto: In his letter, he's saying this perception that APS has funded the election of two regulators is coloring the perception of the public.

Ted Simons: They've been doing this for months. This is hardly news.

Luige del Puerto: And I think it's getting to a point where he feels he needed to do something. Just to back track a bit. Bob Burns has always been wary of election spending by APS or any utility but always been wary of regulated entities spending money that is not directly related to the cost of service and that means they're spending money that's beyond what's necessary to provide electricity or telecom, whatever regulated services. He's saying they shouldn't even be providing funding to outreach programs, community projects. He's always been wary of that. And I think it came to a head when all these allegations that had started a year ago, just keep on piling on. At one point I think he decided he needed to do something about it.

Ted Simons: Did he decide he needs to do something about it because something was in the wind that APS wasn't happy with Bob Burns?

Bob Christie: I don't know. That's all background. We don't really know what the noise is. Now, he was on your program three months ago? And about the same time that he sent a letter to all the public service corporations in the state, all the cable companies and Tucson electric and the others saying please, voluntarily refrain from election spending and the CEO of APS and pinnacle west sent him back a letter saying sorry we will not give up our First Amendment rights under any condition which set the stage which said go ahead and try us, which now Bob Burns has done. And we'll see what happens with that.

Luige del Puerto: And I think ultimately will go to court or this thing ends up in court. There are already indications from APS that they are not going to give up this information without a fight, and I think it goes to court.

Ted Simons: The APS information or something later with pinnacle west?

Luige del Puerto: I think both. Because Bob Burns is prepared to ask for information from not just APS but pinnacle west and maybe get a subpoena. I think in the end, we will see this thing end up in court.

Bob Christie: It does taint the commission. The fact --

Ted Simons:It's tainted the commission for a year now! Goodness gracious. We don't do any stories about the great work the Corporation Commission is doing.

Bob Christie:They're supposed to be the taxpayer advocate, the rate-payer advocate, the consumer advocate and make sure that these companies that have vast power and have monopolies granted by the state are only getting a fair amount of return and when you have a suspicion that they are electing the people who are regulating them, it just looks bad.

Ted Simons: State senator Kelli Ward is now an ex-state senator.

Alia Rau: Soon will be.

Ted Simons: And wants to become a U.S. senator obviously in a race. Any surprise here?

Alia Rau: Not really. She's got to run a statewide race and she's running against John McCain. So this is a state senator who's from Lake Havasu city, but in terms of statewide recognition, she has a lot of work.

Ted Simons: Does this indicate optimism that maybe she's got something here and she can go somewhere? Or otherwise?

Alia Rau: That's a hard question to answer. I think it indicates that she's got a lot of work to do. I really think it's otherwise realizing that you can't juggle both. She kind of got the education special session under her belt but to start a new session and to try to campaign in a statewide race is, you know --

Luige del Puerto: It really is a full-time job. Her main problem is raising money. That's what she needs to do. She needs to raise money and she needs to make sure she can compete with John McCain. John McCain is expected to have lots of money, there's going to be a lot of negative campaigning that's expected next year. If you can't even compete really, you know, you don't stand a chance.

Ted Simons: But most folks don't think she stands a chance anyway and you've already got your Senate seat, you can do some work there in the Arizona legislature. What's going on here?

Bob Christie: You know, good question. You know, if one looks at it, she raised I think half a million dollars and John McCain is sitting on $500,000. She loses her bully pulpit so she can't hold a press conference at the state capitol. So it's real questionable as to whether it's a smart move.

Ted Simons: What is the classrooms first council and why did they miss their deadline?

Alia Rau: This is a group Governor Ducey set up basically saying our school funding formula is 35 years old, it's completely convoluted, they shoved charter schools in there and we need to look at it and redo it. This group has spent six months looking at the school funding formula and they were supposed to make final recommendations this week and they basically said we need more time. The last group that did tis spent two years, we've spent six months, give us another six to nine months and let us kind of finish the work on redoing this formula.

Ted Simons: Give us six to nine months so we can finish the work and so what? We don't bother the governor? Don't annoy him?

Luige del Puerto: I think the prevailing sentiment is that this committee, this group has deliberately delayed providing recommendations in order not to muck up, if you will, this very big initiative that's going to be before the voters in May. And, you know, politically that's a very smart move.

Ted Simons: Would they muck it up?

Bob Christie: I think you would because, you know, think about it. We have all these different formulas that go into you know, what one individual school or school district gets paid for each student. There's classrooms, there's basic school aid, there's transportation funding, there's five or six other things that go into this big mix and there's going to be winners and losers and you don't want the losers to say you're messing with us.

Ted Simons: So they do have some ideas, though. We've had some general recommendations correct?

Alia Rau: They do. I mean, there's a recognition that something needs to be done to attract and retain teachers, you know. We need some mentoring, we need to look at salaries, we need some stuff like that. There's some suggestion that we need to rehash sort of how schools get money. Right now, you're giving the worst performing schools money. They think you should give the best performing schools money, and then maybe the best performing low-income schools even more money.

Ted Simons: And the difference between charter schools and districts, traditional school districts, I mean the idea that charters can't do obey rides and districts can but charters get more state money? It's a mess.

Alia Rau: The broader goal the governor has said is to create one formula that works for everybody. So the question is down the line does that mean nobody can bond? Does that mean -- what does that mean ask what does that look like and yeah, who's the winner?

Bob Christie: Really the way to do it, I mean you have to put more money into the system and I don't think the governor is willing to put more money.

Luige del Puerto: And in talking about putting in more money, I think the one elephant in the room is prop 301, it's expiring in the next couple of years here. This committee is at the very least expected to do something or not do something, at least delve into what do we do with prop 301? My thinking is it gets extended and who gets to carry that ball is the question but somebody will have to.

Ted Simons: All right. Jeff DeWit thinks he's the one who has to tell the governor and those who support the idea of using state land trust it's not that easy, you're going to need congressional approval to use the plan that the governor has and now, we're going to see on the ballot here next year because you're mucking around with the enabling act that gave us all the land in the first place.

Bob Christie: That's correct. He went in front of what's called the legislative council which writes ballot language, which is made up of primarily Republican lawmakers yesterday and he argued two points. One is you're breaking the enabling act because the way this is set up, you're going into the principal of the fund and the principal of the fund cannot be diminished under the enabling act. John Shattuck who wrote the last changes got up there and said, no, you can do whatever you want, I wrote the law, I know what it says. The governor's attorney got up there and said this is just fine. The other thing is that Jeff DeWit wanted language in the actual -- that's going to go to voters, going to get mailed out to voters in a month or so that laid out this issue, the fact that there is some doubt in his mind whether this is legal and whether it requires congressional approval.

Ted Simons: Is there some doubt in other attorneys' minds? Obviously, those who support this say there's no problem, change in 1999 gave states more control, we've got that side of the argument. Is DeWit the lone wolf out there?

Alia Rau: He's not the lone wolf. There seems to be consensus among constitutional experts that there's a question. But they think it could be either way. It's basically an issue that eventually, the courts should probably figure out. The question is are they going to figure out with Arizona?

Luige del Puerto: In fact, John Shattuck yesterday during his testimony said that both have valid interpretations of the change that Congress did in 1999. In 1999, Congress basically said how to fund is distributed is going to be referred back to the state Constitution, thinking by the governor's office is that because Congress wrote or amended the enabling act that way, then therefore you could amend how the fund is distributed. Of course, Jeff DeWit is saying no because it doesn't explicitly say in that congressional act in 1999 that you could do it -- that you could amend without congressional approval.

Ted Simons: So very quickly, we've got a few seconds left here. Why not just go to Congress and say approve it?

Bob Christie: They could do that. The problem is what happens if the whole Arizona delegation doesn't agree? What if you get a few Democrats or a couple of Republicans who say I think Jeff DeWit is right, I don't think we should change this law. This is damaging the thing that's supposed to last forever. Supporting Arizona schools.

Ted Simons: But you've got to figure that Congress would overall now probably okay.

Bob Christie: They probably would pass it.

Luige del Puerto: That's another layer of complication. I don't think they want to go there.

Ted Simons: We've got to stop right here. Good to have you all here. Thanks for joining us. 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-Arizona Republic; Bob Christie-Associated Press, Luige del Puerto-AZ Capitol Times

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