Arizona Eagletarian

Arizona Eagletarian

Saturday, May 30, 2015

Is the AZ Corp Comm running scared because of Stump's ex-parte communications with APS?

You may recall that back in March Checks and Balances Project, a public watchdog organization, filed a public records request to find out what kind of hijinx Bob Stump was up to in his role as Arizona Public Service's government enabler/facilitator on the Arizona Corporation Commission.

The ACC prior to the 2012 election had been known as a regulatory agency overseeing the provision of utility services for the citizens and ratepayers of our state. Thereafter, the ACC became known as a wholly-owned subsidiary of ALEC. Since then, we've seen numerous indications the ACC is conducting itself more narrowly in the role of wholly-owned subsidiary of Arizona Public Service.

From the ACC website, the mission of the utilities division,
Mission: To recommend thoroughly researched, sound regulatory policy and rate recommendations to the commissioners, which are based on a balanced analysis of the benefits and impacts on all stakeholders and are consistent with the public interest.
And from the Administration division webpage:
The Arizona Corporation Commission has jurisdiction over the quality of service and rates charged by public service utilities. By state law, public service utilities are regulated monopolies given the opportunity to earn a fair and reasonable return on their investments. What is fair and reasonable in any particular case has been and always will be open to debate in rate hearings before the Commission. Generally, the Commission tries to balance the customers' interest in affordable and reliable utility service with the utility's interest in earning a fair profit.
Those statements from and by the ACC demonstrate the seriousness of charges that Arizona Public Service has conducted itself contrary to the public interest by engaging in the political process with Dark Money, secret deal-making communications and all around bullying if it doesn't succeed in buying what it wants from elected officials.

With that stage set, lets look at what the May 29 Yellow Sheet Report had to say to its primarily plutocratic/oligarchic subscribers about the impending ACC shitstorm.

The Corp Comm is in no mood to furnish the DC-based Checks and Balances Project with additional information about Stump’s text messages. The group has been digging into Stump’s email and text communications to prove its point that Arizona’s energy commissioners have been lost to “regulatory capture,” the idea that regulators act more as consultants* [lapdog is a more appropriate description] of the industries that they oversee than as objective overseers. Attorney David Cantelme, who was recently hired by the Corp Comm to deal with the public records requests, wrote to Checks and Balances Project attorney Dan Barr on Wednesday to relay two main points.
Of course, Arizona Eagletarian readers may already be familiar with Cantelme. Recall that he and I had a wonderfully testy exchange at one of the first Independent Redistricting Open Hearings in 2011. YS report continued:
First, the Commission has made “extensive efforts” to fully comply with the group’s public records requests and it has already “fulfilled its legal and ethical duties in this respect.” Second, Cantelme raised questions about whether Checks and Balances Project is using the information it gets from the Corp Comm for a commercial purpose. That’s an important distinction, since Checks and Balances Project had gotten documents from the Corp Comm at the non-commercial rate.
Well, isn't THAT special? Those poor, persecuted, honorable public servants. Why is everybody always picking on me?
(The Corp Comm declines to charge for non-commercial records requests. However, for commercial requests, it could charge enough to cover the costs of staff resources spent on filling the requests.) To advance his question, Cantelme deployed a novel legal theory: the newsgathering landscape might have changed as a result of Citizens United. Cantelme said Citizens United resulted in the “efflorescence” [to which I would tell Cantelme that it takes one to know one] of groups that shield the identity of their contributors, and it has also led “commercial interests” to form nonprofits in order to conceal their identities while advancing their interests in the public arena. “I would invite your client to alleviate any concern over whether the Project is advancing the commercial interests of its true donors by revealing their full identities,” Cantelme wrote. 
Isn't THAT special... and OH... so ironic. Remember when Cantelme declared that nobody would ever find out who funded the "UNfair Trust?" Personally, I'd tell Cantelme that he should go first on the disclosures.
The rest of the letter explained the intricate details of what constitutes a public record, [as if C&BP attorney Dan Barr, wouldn't already know] and defended Stump’s text exchanges with an APS executive and others. Cantelme said it’s appropriate for commissioners to communicate with constituents, and therefore those text messages shouldn’t raise any eyebrows or be deemed out of the ordinary.
This statement should only be construed as a dare. As in "I dare you to sue me. Otherwise, you ain't gonna get what you're asking for."
“The Project’s website questions whether an inference can be drawn from the number of texts exchanged between Commissioner Stump and certain named individuals. Such an inference cannot be fairly drawn,” Cantelme said, adding that’s especially evident after considering that Stump exchanged more text messages with folks on the opposite side of APS and other utilities on net metering. (Stump, for example, sent roughly 900 text messages to former RUCO analyst Lon Huber.)
As if the Checks and Balances Project is the only organization that thinks inferences can be drawn from the disclosure of metadata already provided by the ACC? Further, RUCO, for which Lon Huber was employed during the time in question, is an agency of Arizona government which its director appointed and serving at the pleasure of the governor. Neither Jan Brewer nor Scrooge McDucey could fairly be described as anything but crony capitalists. So, the YS explanation used to justify the language in Cantelme's letter is faulty, erroneous.

Additionally, recall that it was only days ago that the Arizona Republic stated,
Arizona is moving inexorably closer to a real crisis involving the Corporation Commission's ability to provide constitutionally mandated oversight of utilities.
Public confidence in the commissioners' ability to do the job they are elected to do is evaporating.
And it is entirely the fault of a compliant, weak commission that is bending to the will of the organizations it is duty-bound to oversee, notably Arizona Public Service, the state's largest utility company.
And 2014 Republican candidate for ACC Vernon Parker, a target of APS Dark Money hit pieces, in an op-ed published by the Republic,
What does commission Chair Susan Bitter Smith's response ("Let the people decide who regulates their utility bills," May 22 My Turn) tell us? Dark money spending is democracy in action.
Actually, when a few, wealthy and influential members of the "power" class select your rulers, its oligarchy. When the regulated "power" company selects your leaders, it's just more monopoly or crony capitalism.
What's worse, Bitter Smith doesn't seem to care that she and the other commissioners can address the cause of this smell of corruption: It's the dung from the $5 million elephant in the room. That much dark money, apparently coming from one of the regulated monopoly power companies, was spent electing the people who will set your utility rates.
More from the May 29 Yellow Sheet Report:

Even if the Corp Comm wanted to release the content of Stump’s text messages, it cannot because Verizon no longer has them, Executive Director Jodi Jerich told our reporter this morning. Stump is using a cellphone account owned by the commission. “We asked Verizon for the content of the text messages, and they said [they] don’t have them. They said, ‘We don’t keep texts for more than a week. We have the text log,’” Jerich said.
I wonder, did the Yellow Sheet reporter even ask Jerich for a copy of the letter they got from Verizon? The blurb doesn't say. What about a copy of the 2013 Verizon letter to Markey? Does this info from Verizon belie a contempt for Congress? Do you think Verizon would have been so flippant with requests from the NSA?
Verizon also provided the Corp Comm a copy of a letter it sent to US Sen. Edward Markey in 2013 explaining its policy on releasing customer data to law enforcers. In the letter, Verizon said it typically retains text message content for less than a week. Jerich insisted the Corp Comm had been more than responsive to Checks and Balances Project. “We provided the entire text log without redaction, and the law only requires us to produce documents that are in our possession… We went to Verizon and asked them to give us everything that they have, and we turned everything that Verizon gave us over to Checks and Balances Project,” she said.
What will Verizon do when presented with a lawful subpoena in either a civil suit or from the Citizens Clean Elections Commission? (That's fodder for another blog post, hopefully very soon)

The bottom line, as I see it, is that the ACC is scared shirtless (or something like that). And it is wasting money at a _____ clip (shouldn't it have to disclose how much it is paying Cantelme to try to bullshit the public)?


* NOTE: the YS definition of regulatory capture minimizes the significance of the concept by using euphemisms to make it seem like "no big deal." To the contrary, Nobel laureate economist George Stigler coined the term to signify,
It is the process by which regulatory agencies eventually come to be dominated by the very industries they were charged with regulating. Regulatory capture happens when a regulatory agency, formed to act in the public's interest, eventually acts in ways that benefit the industry it is supposed to be regulating, rather than the public.
Investopedia goes on to explain,
Public interest agencies that come to be controlled by the industry they were charged with regulating are known as captured agencies. Regulatory capture is an example of gamekeeper turns poacher; in other words, the interests the agency set out to protect are ignored in favor of the regulated industry's interests.

To my friends at Yellow Sheet Reports, save yourself the effort of trying to intimidate me this time. I believe my criticism of your crony capitalism leanings in the blurbs above are sufficient.


Today it is a case of the grasshopper pitted against the elephant. But tomorrow the elephant will have its guts ripped out. Le Loi, Vietnamese emperor, 15th Century.

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