Tuesday, May 30, 2017

Arizona Corporation Commission: A sack of scoundrels

Here is what the Arizona state constitution says about the powers of the Arizona Corporation Commission (Article 15, emphasis added).
4. Power to inspect and investigate
Section 4. The corporation commission, and the several members thereof, shall have power to inspect and investigate the property, books, papers, business, methods, and affairs of any corporation whose stock shall be offered for sale to the public and of any public service corporation doing business within the state, and for the purpose of the commission, and of the several members thereof, shall have the power of a court of general jurisdiction to enforce the attendance of witnesses and the production of evidence by subpoena, attachment, and punishment, which said power shall extend throughout the state. Said commission shall have power to take testimony under commission or deposition either within or without the state.
I remind you that Scriber is not a lawyer so a constitutional expert, perhaps like AZBlueMeanie at Blog for Arizona, might (or might not) take exception to what I have to say.
I read the part in bold as empowering individual members of the ACC to compel, via subpoena, any “public service corporation” to produce evidence of its behaviors. That is what Commissioner Bob Burns is trying to do with respect to Arizona Public Service and its parent company. The issue is what APS did to influence the election of members of the Commission that has jurisdiction over APS.
The other interpretation, championed by attorneys for APS, holds the the “several members” reference in Section 4 means that only the entire Commission, or at least a majority of members, can issue subpoenas.
This division of legal opinion has been reported in several places. My source this morning is Howard Fischer’s May 26 report in the Arizona Capitol Times (subscription required) that Scoundrels’ aside, Burns has no right to APS records, lawyer says.
The attorney for the state’s largest electric utility said the fact that Bob Burns may think the other members of the Arizona Corporation Commission are “scoundrels” does not give him the right to issue his own subpoena for the company’s records.
Mary O’Grady told Maricopa County Superior Court Judge James Kiley on May 25 that Burns has no legal basis for issuing his own demand for the records of Arizona Public Service and parent company Pinnacle West Capital Corp. She said only the full commission has the power to make such a demand, particularly in the middle of its consideration of an APS rate hike case.
What that means, she argued, is that Burns needs to make his case for the subpoenas to his four colleagues and get at least two of them — creating a majority — to demand the records. O’Grady said only if and when APS and Pinnacle West were to refuse to comply, and only after the commission issues an order to compel disclosure, would it be proper for Kiley to intercede.
But Bill Richards, who is representing Burns, told the judge that’s not necessary. He contends the Arizona Constitution specifically gives each commissioner the right to demand documents of regulated utilities. And that, said Richards, trumps everything else.
Anyway, he suggested it would be improper to force Burns to actually ask the other commissioners to vote on his request.
Burns contends that APS may be the source of “dark money” spent to elect Republicans Tom Forese and Doug Little in 2014, a contention the company will neither confirm nor deny.
APS did admit to spending money to elect the three Republican candidates this year: Andy Tobin, Boyd Dunn and Burns himself. But Burns said the money spent on his behalf was only because APS executives were far more scared of the possibility of Democrats getting elected.
What all that means, said Richards, is that the other commissioners may actually be legally disqualified from voting on anything involving APS. And that, he told Kiley, underscores the need for Burns to be able to act on his own — and for the judge to enforce the subpoenas.

Richards said Burns has a legitimate right to seek the documents to get answers to questions he has been asking.
“One is whether or not APS and its parent company have been setting their rate requests in a way to ensure that its customers will unknowingly be funding millions of dollars that the company uses to try and exert and create political influence over its designated regulator,” he told Kiley. Richards said that includes “questionable, perhaps even unlawful coordination between other commissioners and APS or their surrogates.”
“The fear that a regulated monopoly might nevertheless try and capture, through spending millions of dollars, a majority of the commissioners is one reason we respectfully submit that the framers of our constitution wisely granted … each elected commissioner the individual power to conduct investigations, issue subpoenas, inspect corporate records,” he said.
That last paragraph sums it up. If the majority of members of the Arizona Corporation Corruption Commission are beholden to an entity regulated by the Commission, then the opportunities for redress seem limited. Burns should get his subpoena. If not, Arizona’s fourth branch of government is reduced to a sack of self-serving scoundrels.

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