Turning the legal tables on Bob Burns, the state’s largest electric utility is accusing him of an improper and illegal power grab.
New documents filed in Maricopa County Superior Court by Arizona Public Service and parent Pinnacle West Capital Corp. say Burns cannot use his constitutional power of subpoena to force the companies to disclose their financial contributions to political candidates.
Attorney Mary O’Grady acknowledged the state Constitution and statutes do give the Arizona Corporation Commission and its members some power to demand documents from publicly held corporations doing business in the state. But she said anything her clients did — and she’s not admitting to anything that Burns has alleged — fits within what’s allowed under state election law.
More to the point, O’Grady said, only the Legislature — and not Burns — can demand more details.
“Commissioner Burns may not rely on his subpoena power to override the Legislature’s judgment and impose a different disclosure regime that he prefers,” O’Grady told Judge Daniel Kiley in asking him to throw out Burns’s lawsuit seeking to compel her clients to comply with his subpoenas. “It is not, and should not be, Commissioner Burns’s job to investigate alleged violations of the state’s campaign finance law.”
Burns has been on the offensive, not only in issuing subpoenas to APS and Pinnacle West and demanding to question Don Brandt, CEO of both firms, but also in seeking a judicial ruling that he has such authority.
He argues that APS expenditures are relevant for several reasons, including the possibility that the utility’s alleged covert support for fellow Republicans Tom Forese and Doug Little in the 2014 election and open support for other Republicans last year has created an improper conflict of interest, undermining — and possibly invalidating — their vote last month to let APS collect another $95 million a year from its customers.
The outcome of the legal fight has implications beyond this particular case.
It would set the rules for how broad are the rights of individually elected commissioner to delve into the books of not only regulated utilities but every corporation doing business in the state. And that could allow any commissioner to demand that every publicly held corporation disclose their donations to “dark money” groups that, in turn, seek to influence the outcome of all elections, donations that state lawmakers have determined can be kept secret.
At the heart of the dispute is $3.2 million Save Our State Now and the Free Enterprise Club put into that 2014 race on behalf of Forese and Little.
APS will neither confirm nor deny it was the source of those dollars. And the groups contend that their status under federal tax law as “social welfare” organizations exempts them under Arizona campaign finance laws from having to disclose their donors.
So Burns wants corporate documents and answers from Brandt.
In asking Kiley to quash the subpoenas, O’Grady contends they have an improper purpose: to undermine the First Amendment rights of APS and Pinnacle West.
She cited the historic 2010 U.S. Supreme Court ruling which concluded that corporations, like individuals, have a right to participate in political debate, including with their dollars. O’Grady also said other court cases say that corporations cannot be subject to any more stringent disclosure requirements than anyone else.
In this case, she said, if Burns can force her clients to spell out publicly how they spent their money it would discourage them from making future political donations. She told Kiley that is impermissible use of his powers.
And there’s something else.
O’Grady said that Burns, in seeking to figure out how much APS and Pinnacle West allegedly spent through the “dark money” groups to elect Forese and Little, is effectively suggesting that they coordinated their individual election campaigns with these groups, something that is illegal under Arizona law.
“These are explosive allegations striking at the core of the commission’s integrity,” she charged.
Anyway, she said, even if it were true, it is “not for Commissioner Burns to investigate.”
“That responsibility lies with other branches” of government, O’Grady said, including the attorney general and secretary of state.
“Commissioner Burns is neither authorized by law, nor competent, to conduct a law enforcement investigation,” she continued. “He has put forth no credible evidence that any laws have been violated, and if there is any such evidence, he should take it to the state officials who bear responsibility to enforce state law.”
In her new filing, O’Grady seeks to undermine Burns’s interpretation of his powers.
She does not dispute that individual commissioners do have the authority to issue orders and inspect corporate books. But O’Grady contends, in effect, that the other members of the panel can overrule him.
“If a party does not comply with a commissioner’s order, the commission gets to decide what happens next,” she said. That could be finding the company in contempt and imposing penalties — or simply declining to punish the firm.
And O’Grady said it is up to the full commission — and not any one member — to determine whether the information sought is relevant to the case before the panel.
She contends it is not, saying even if APS and Pinnacle West did help elect utility regulators of their choosing, it is irrelevant to the rate hike the commission just approved for the utility. O’Grady said that’s because the four other commissioners who voted just last month to allow APS to collect another $95 million a year from customers said their decision of the company’s financial needs and expenses did not include what it spent for political, charitable, lobbying and advertising purposes.
APS did put more than $4 million openly into the 2016 campaign to defeat Democrat contenders Bill Mundel and Tom Chabin, money that helped elect Republicans Andy Tobin, Boyd Dunn and Burns himself. Burns, however, said he was a beneficiary only because the utility feared the Democrats more than they did him.