Dear Mr. Hempling:
I wanted to take a few moments to respond to your letter to me dated August 15, 2016. Based on your stated interpretation of my position expressed in the August 11th Commission Staff Meeting, I believe you may be drawing an incorrect conclusion.
For the record, I did not state that you had a conflict or that you had worked on behalf of any solar companies, nor did I state that you had any financial or professional connection to any solar companies.
I am a person who deals in facts and at the Commission staff meeting on August 11th, 2016 I stated the following five facts.
- On your website in two different locations, you show the Energy Foundation as a former client. In one specific entry it shows that you did work funded by a grant from the Hewlett Foundation and the Energy Foundation.
- Based on IRS Form 990 filings from the Energy Foundation, Kris Mayes was a highly compensated member of the Board of Directors for the Energy Foundation from 2012- 2014, receiving $126,000 in compensation for an estimated two hours of work per week. The majority of the other board members were compensated in amounts ranging from approximately $13,000 to $18,000 for the same period.
- Based on Arizona Secretary of State campaign finance reports, Kris Mayes is currently actively campaigning on behalf of Commissioner Robert Burns and is the head of an independent expenditure committee called Save our AZ Solar that has spent approximately $450,000 on behalf of his candidacy.
- Save Our AZ Solar is being funded by Solar City, an entity that while not regulated by this Commission, has a significant financial stake in the decisions of the Commission.
- Commissioner Robert Burns had contracted with you, Scott Hempling, to investigate whether or not there was “undue influence” being brought to bear on either Commission Staff or Commissioners by the entities we regulate or that have business before the Commission. An inquiry that essentially calls into question the integrity of the regulatory process at the Arizona Corporation Commission.
In the staff meeting, I simply stated that in an inquiry like this, there should not be a conflict or even the appearance of potential conflict and that in engaging outside counsel in the past, the appearance of a potential conflict has been grounds for not retaining a particular attorney.
I reiterated that anyone hired to do this kind of inquiry should be completely independent and that based on the five facts stated above, I did not feel comfortable allowing the contract with you to move forward.
Mr. Hempling, I am sure you are a fine attorney and you are certainly well known in the regulatory community, but it was the opinion of three Commissioners that we should not move forward with your contract. That decision was, in part, based on a concern about an appearance of a potential conflict, but it was a very minor factor in the decision.
The primary concern was that Commissioner Burns’ project was without foundation and was perhaps politically motivated since in the 18 months I have served on the Commission, I have seen nothing that would lead me to believe that such an inquiry would be necessary or appropriate. Since the contract would have potentially spent nearly $100,000 in taxpayer funds, I felt that the full Commission should weigh in on whether or not it was appropriate.
As the sitting Chairman of the Arizona Corporation Commission, my first duty is to insure that what we do at the Commission is in the public interest. I did not believe, based on the facts available to me, that the project Commissioner Burns hired you to undertake was in the best interests of the taxpayers of Arizona. Let me be clear. It was the project itself that was the biggest issue. Apparently, based on the outcome of the vote, at least two other Commissioners agreed with me.
I hope this clarifies my position on this issue and why I believe the actions we took as a Commission at the Staff Meeting on August 11th were reasonable, appropriate, and in the public interest.
Chairman Doug Little, Arizona Corporation Commission