More regarding the impending ACC S***storm

As you recall from my previous post, the Arizona Corporation Commission appears to be running scared because of the shamelessly bold coordination Trash Burner Bob Stump facilitated between Arizona Public Service, 2014 Dark Money campaigners and now captured "regulators" Doug Little and Tom Forese.

I had wondered aloud whether the Yellow Sheet Report had asked anybody for the letter Verizon Wireless originally sent Mass. Sen. Ed Markey. and lately forwarded to the ACC with information on the limitations of its disclosures to law enforcement agencies. I have obtained both the Verizon letter and Cantelme's letter to C&BP counsel Dan Barr. You may view them in their entirety.

Here are a couple of gems I'd like to share with you from the letters.

First, I'd like to point out just how wonderfully gracious Can't Tell Me was in his letter.

I write only to allay some concerns expressed by the Project on its website and to Arizona media about the text records produced by the Commission relative to Mr. Stump.

My heart overflows (efflorescence, as it were) with empathy for Stump, Cantelme and the ACC in general. How kind of them to be so diligent in fulfilling their responsibilities to the people of our state vis-à-vis public records disclosure.

The Project suggests or implies that the Commission has failed to produce all public records in its possession responsive to the request made by or for the Project for text messages made by Mr. Stump. Let me assure you that the Commission has made extensive efforts to comply fully with the Project's requests and believes that it has in fact complied fully under the law. 

I'm absolutely astounded by the ACC's diligent effort to, in good faith, fully comply so that the people of Arizona can, finally, know just how responsibly Stump has carried out his charge to serve APS... er, the people of Arizona.

But wait, there's more!

The Commission takes its obligation to comply with public records law seriously, its lawyers have made prodigious efforts to make its response thorough and complete, and it has fulfilled its legal and ethical duties in this respect.

Yeah and the Arizona Legislature "suffered" a tangible, particularized injury as a result of the PEOPLE exercising their sovereignty under the Arizona and US Constitutions to wrest redistricting authority away from the elected lawmakers. Oh, but that's a different subject... which, btw, pundits nationwide and politicos in Arizona and California especially are champing at the bit waiting for a SCOTUS ruling in Arizona Legislature v Arizona Independent Redistricting Commission, which many hope will be made public tomorrow (Monday, June 1).

My point is that it should be obvious to everybody that Can't Tell Me is full of s**t.

But I digress.

Cantelme goes on to tell a cock and bull story about why C&BP can't get the content of Stump's text messages. Essentially, "not my fault, mahn." You see, Verizon says "text message content has generally been retained for less than a week."

Now, obviously, that in itself is an incredibly vague statement. The next step he takes to cloud the issues is to suggest the fact that Stump did nothing wrong. The way that we "know" he did nothing improper by engaging in ex-parte communications* with APS and its Dark Money operators is that he also exchanged text messages with parties ostensibly on the opposite side of matters from APS.

However, as I pointed out yesterday,

Further, RUCO, for which Lon Huber was employed during the time in question, is an agency of Arizona government which its director is appointed and serves at the pleasure of the governor.

Neither Jan Brewer nor Scrooge McDucey would be mistaken for anyone who has empathy for individual ratepayers.

Then, to further obfuscate, Cantelme elaborates on public record law and changes the subject to attack C&BP insinuating it's really a commercial operation, that we can only know for sure if the public watchdog... "Thus, 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."

Isn't that a kind, sweet, gracious invitation? Again, my heart is touched by his tenderness.

Anyway, getting back to the real issue that Cantelme sought to bury in a flurry of irrelevant gobbledygook, the ONLY way to tell whether Stump was violating any criminal or civil laws or rules is to scrutinize the content of those questionable text messages. Verizon apparently/supposedly claimed it could not produce the content. But that's not really what Verizon's letter to Sen. Markey ever says.

Even that "master of impartiality," Ryan Randazzo (APS publicity writer for the Arizona Republic) went so far as to call the ACC on this ridiculous claim.

Verizon, however, hasn't directly answered the question of whether Stump's text messages are available. The phone company answered the state regulators by sending along a letter from 2013 written in response to a U.S. Senator's questions about records retention. Verizon also declined to directly address the issue with The Arizona Republic.

Tangential to this concern, the US Senate was in emergency session today (Sunday) trying to work out a continuation of NSA authority to spy on Americans.

WASHINGTON – Sen. Rand Paul (R-Ky.) appeared on track to succeed Sunday in forcing certain controversial provisions of the Patriot Act to expire, including the National Security Agency's sweeping data collection program. But the lapse isn’t likely to last long.

Running down the procedural clock in a sensational emergency session Sunday night, Paul left the Senate in a stalemate on the House-passed USA Freedom Act. The bill would allow the NSA’s controversial bulk data collection program, justified under the expiring Section 215 of the Patriot Act, to continue running while the intelligence community works with telecommunications companies to reform the program. 

This of course demonstrates only that it is likely Verizon actually can find a way to retrieve the text message content. In the letter, Verizon does say that, with regard to text message content,

It is our practice to require a probable cause warrant signed by a judge to release stored text message content, unless a customer consents to the release of his or her stored text messages or law enforcement certifies that there is an emergency danger of death or serious physical injury. 

So, what actually IS the bottom line here?

1. Stump is freaked out about the possibility of having to disclose those texts.
2. The ACC claims IT does not have the text message content; Cantelme claims that the ACC has no duty to produce the text message content in question because it doesn't have it in its possession.
3. Verizon danced around the issue SUGGESTING but not specifically stating that it cannot produce the content.
4. External circumstances suggest that the content likely IS retrievable.
5. It will apparently take a court order to require Verizon to produce the content.
6. In order to obtain said court order, it will apparently be necessary to file suit against Stump and the ACC. This could be done by C&BP or by the Citizens Clean Elections Commission, which does, despite blustery denials by state elections director Eric Spencer**, have jurisdiction to investigate.
7. Stump and the ACC likely have their fingers crossed hoping against hope that they can ride out the storm without having to be held accountable for the blatant corruption that is in the process of being uncovered.

Obviously, since I'm not a lawyer, that list may be incomplete and/or not accurate in every detail. But it's probably not far off.

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*NOTE: The issue of ex parte communication with Corporation Commissioners is salient because the ACC fulfills executive, legislative AND judicial roles in carrying out its responsibilities on behalf of the people of Arizona. As ostensibly impartial judicial officers, ex parte communications are generally considered improper.

**NOTE:

In mid-May, state elections director Eric Spencer got cocky and put up this poll. Despite the fact that I supplied my email address when I voted in the poll, I have received NO email from the Secretary of State's office with the results of the poll. Perhaps because the office doesn't LIKE the result.

Nevertheless, the CCEC, in enforcing the Citizens Clean Elections Act (enacted by Arizona voters) does not "broaden its mission."

• A.R.S. § 16-941, one section of statute comprising the Act
• Independent Expenditure Reporting in Arizona a powerpoint presentation
• 2004 AZ Supreme Court opinion in Clean Elections v Brewer

From the 2004 court ruling in Clean Elections v Brewer:

The Act [enacted by VOTERS] assigns the Commission [CCEC] many duties related to the conduct of public elections, but three are paramount. First, the Commission administers the public funding provided under the Act for participating candidates... Second, it administers a voter education program and provides for debates among candidates... Third, it enforces the provisions of Title 16, Chapter 6, Article 2 dealing with administration and enforcement... The latter two categories do not relate to the public financing of political campaigns. Rather, they address voter education and require the Commission to enforce measures such as (1) statutory limits on acceptance of campaign contributions, which apply to candidates not receiving public funding... (2) requirements concerning reporting of contributions by candidates who do not receive public funding... (3) requirements that those making independent expenditures file periodic reports... and (4) provisions allowing candidates to agree jointly to restrict campaign expenditures... Nothing in Proposition 106 alters these statutory duties. The Commission, therefore, would retain full enforcement authority and responsibility as to these provisions even if voters abolished public financing of political campaigns. [some statutory citations omitted; excerpt highlighted in the linked text on page 10]

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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.

CORP COMM: WE’VE DONE ALL WE CAN DO

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:

ABOVE AND BEYOND

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)?

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* 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.

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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.

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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.

THANKS, Scrooge McDucey!

Ktar.com online content editor Jessica Suerth reported, on May 23rd,

PHOENIX -- The job market in Phoenix is steadily declining, according to the Phoenix Business Journal.

Phoenix ranked No. 42 out of the top 50 U.S. job markets in a recent study from Glassdoor.com, citing a high dissatisfaction with jobs and a low quality of life.

Granted, Scrooge McDucey's only been on the job for a few months, but he has only doubled down on the austerity his predecessor and the previous legislature imposed. Most notably by unabashedly cutting every level of public education and the taxes necessary to fund the investments that actually could attract quality, high-paying jobs.

At least Brewer fought in favor of the Medicaid restoration, necessary especially to keep rural hospitals in business.

McDucey, along with Senate President Andy Biggshot and House Speaker David "Big Spender" Gowan (on vanity items for the House of Representatives) refuse to invest in ANY level of public education in our state. Just how much fiscal sense does it make to cut Temporary Assistance for Needy Families when these bozos are doing everything possible to pour water on any economic spark that might be trying to ignite in our state?

Even more egregious, they implemented measures tightening Obamacare (the Medicaid restoration) that will -- absolutely -- put immense financial strain on rural health care facilities. That, in turn, will dramatically impact in a most serious and negative way, availability of health care services and hospitals.

Now, tell me, HOW in the hot summer desert could this change the course of Arizona's economy?

Well, the Greater Phoenix Economic Council (GPEC) thinks it has a plan. It's called Velocity. But there's no way any version of austerity is going to make either the job outlook or quality of life any better for you or me.

Velocity was developed by a group of business, community and education leaders gathered by the Greater Phoenix Economic Council, in partnership with the Brookings Institution and support from the Stanford Research Institute. The organization is dedicated to increasing the number of advanced industry jobs and the talent to fill those jobs in the Greater Phoenix region. 

Now, the spin doctors at GPEC think that sounds inspiring. But look beneath the surface and you have to ask, "what about the people already here?" That makes their little cosmetic line of bullshit "stink to high heaven," as my parents used to say.

This is but one more reason for a #RecallScroogeMcDucey campaign to begin as soon as it is lawfully allowable. That would be right after the Fourth of July. The corporate media won't mind because they'll get millions of dollars from the Kochtopus.

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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.

What REALLY happened at the APS shareholders meeting and the protest outside? UPDATED 6:30 pm MST 5-23-15

Link to Don Brandt's remarks to shareholders is included in the UPDATE at the end of the post, below.

On Wednesday morning, a lively but peaceful group of protesters called attention to the Dark Money escapades conducted over the last couple of years by Arizona Public Service, the wholly-owned subsidiary of Pinnacle West Capital Corporation in downtown Phoenix. Among the protesters, Renz Jennings (former chairman of the Arizona Corporation Commission) made (and handed out) the following statement.

My protest is not about name calling, or greed or even APS' attempts to knee cap the future of solar energy. It is about the theft of democracy, including and especially, APS secretly underwriting campaigns of the regulators who set their rates.

That most of the Dark Money in the recent elections could have come from some other source is fiction. No, this is the parable of the Emperor's New Clothes. APS has made a naked effort to secretly buy elections using the monies it collects from its ratepayers.

It is the duty of the Pinnacle West board to determine if the management they direct should continue to siphon off millions of dollars from the revenues generated by APS customers to overwhelm the election's process.

In setting rates, it is the Constitutional duty of the five elected Commissioners to ascertain how APS spends money. To date they have made no effort to order disclosure on the money that APS spent, dark or otherwise, on financing candidates. It's easy to understand their reluctance when what would be disclosed is that APS significantly funded each and every one of their elections. 

If the Board thinks this assault on democracy is fine, then it is up to the shareholders to determine if this reflects their values as investors and either fix it or disinvest.

APS has been a well-run company, in part because of its dedicated employees. I call on them to pressure their management to get out of the business of buying elections and squandering APS' community capital.

I ask my Republican friends if they think letting APS screen and select and finance their candidates for public office will be healthy for their party.

As citizens, voters and customers, we ask you to consider whether your investment damages our democracy and undermines our responsibilities for self-government.

If it takes shaming APS leadership, board members or shareholders into stopping this tawdry assault on our democracy, we are ready to do that.

This is not over, and we are not done.

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State Rep. Ken Clark (D-LD24/Central Phoenix) addresses protesters.

Apparently, NO, APS ain't got transparency.

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While that was happening outside of the Heard Museum, local community activist and PinWest shareholder Jarrett Maupin and As You Sow energy program manager Amelia Timbers were inside the meeting.

Timbers gained entry to the meeting by presenting legal documentation that she represented certain shareholders throughout the process of developing and submitting the shareholder proposal to require disclosure of political spending. But when she attempted to ask a question, she was denied that courtesy (right) based on a claim that her documentation failed to demonstrate she had the right to ask questions.

Nevertheless, the shareholder proposal was voted on. But the earliest the final vote tally will be disclosed will be next week. Reportedly, PinWest did say that the proposal did not garner a majority of the votes. However, that's not necessarily a big deal at this point.

The essence of the company line as presented during the meeting was captured in a lengthy statement read by APS president Don Brandt. Because no recording devices were allowed in the meeting, and because the statement was not made available in writing, one can fully expect that it was extremely slanted in favor of the PinWest company line.

Really, a closed meeting with no journalistic coverage and no recording devices sets it up as a propaganda fest bordering on demagoguery. Notably, Brandt played the victim card, portraying the local media controversy as exclusively theatrics. [Kudos to 12News correspondent Brahm Resnik for much more fair coverage than Randazzo has (probably ever) provided] Of course, as previous statements have indicated, Brandt claims he only acted lawfully. Those poor defenseless... ALEC members.

Given the heavy-handedness of all the actions by APS and Pinnacle West, I now have to wonder what safeguards are in place to ensure the integrity of the vote.

If Arizona Republic energy public relations writer Ryan Randazzo wants to make even the slightest pretense of being a legitimate journalist, he will dig and report on what procedures and mechanisms are in place to provide any assurance that the vote will be counted accurately and reported fairly. Oh, sure. APS will provide him with ITS story. Randazzo will then take it and transcribe it into the Republic and claim he's fulfilled a journalistic responsibility. That's just what shills do, isn't it?

Several quotations websites attribute to the late Russian dictator Josef Stalin the following,

“People who cast the votes decide nothing. The people who count the votes decide everything.”

Only one source I found provided back up documentation, saying a variant was found in

Boris Bazhanov's Memoirs of Stalin's Former Secretary, published in 1992 and only available, so far as I know, in Russian. The pertinent passage, which appears near the end of chapter five, reads as follows (loosely translated with the help of Google):

"You know, comrades," says Stalin, "that I think in regard to this: I consider it completely unimportant who in the party will vote, or how; but what is extraordinarily important is this — who will count the votes, and how." 

Given what former ACC chairman Jennings had to say (above), this is especially poignant.

By the way, the Arizona Republic's Ryan Randazzo reported about the protest,

Outside the meeting, armed security and Phoenix police kept the small crowd of mostly retirees, politicians and political activists confined to the sidewalks along Central Avenue.

Take a look at this and then tell me if Randazzo fairly characterized the police presence.

UPDATE           UPDATE           UPDATE
PinWest chairman Don Brandt's remarks to the shareholders is now available for review. It's chock full of propaganda.

Call out Pinnacle West and Arizona Public Service for Dark Money activity; Protest on Wednesday!

To set the stage, consider:

As but one example, in 2013, Arizona Public Service shamelessly purchased the support of Arizona lawmaker Catherine Miranda.

In 2014, APS purchased the new Arizona Attorney General and two newly-elected members of the Arizona Corporation Commission.

As a result, Arizona stakeholders have become increasingly uneasy about this direction the state's largest utility has taken.

Therefore, on Wednesday, Pinnacle West Capital Corp, the publicly-traded holding company that owns Arizona Public Service will conduct its annual shareholders meeting (see page 6 of the pdf). At 10:30 am, PinWest will convene the meeting at the Heard Museum, 2301 N. Central Ave., Phoenix.

The purposes of the Annual Meeting are:

• to elect ten directors to serve until the 2016 Annual Meeting of Shareholders (Proposal 1);

• to hold an advisory vote to approve executive compensation (Proposal 2);

• to ratify the appointment of our independent accountants for the year ending December 31, 2015 (Proposal 3);

• to consider a shareholder proposal, if properly presented at the Annual Meeting (Proposal 4);

• and to transact such other business as may properly come before the Annual Meeting and at any adjournments or postponements thereof.

All shareholders of record at the close of business on March 12, 2015 are entitled to notice of and to vote at the Annual Meeting. Your vote is important. Whether or not you plan to attend the Annual Meeting in person, please promptly vote by telephone, over the Internet, by proxy.

For those of us NOT shareholders of record as of March 12, we are still STAKEholders.

A corporate stakeholder can affect or be affected by the actions of a business as a whole. The stakeholder concept was first used in a 1963 internal memorandum at the Stanford Research Institute. It defined stakeholders as "those groups without whose support the organization would cease to exist." The theory was later developed and championed by R. Edward Freeman in the 1980s. Since then it has gained wide acceptance in business practice and in theorizing relating to strategic management, corporate governance, business purpose and corporate social responsibility (CSR).

Rather than giving its customers (a legitimate stakeholder group) voice in its corporate governance, the last forty plus years have seen America's economic and political systems devolve to exclude consideration of the interest of customers and nearby citizens who can be adversely impacted by what the corporation intends to do.

APS could have taken a drastically different approach to the impending disruption of its business model. Based on inevitable technological innovations it has seen coming for at least two decades, the company has focused its energy (pun intended) in the direction of Regulatory Capture. As well, it has generated (another intended pun) copious amounts of paid propaganda (advertising) in an awkward attempt to manipulate the stakeholders, at times trying hard to keep the scope and magnitude of that political activity in the dark.

To call out these disturbing and insidious business practices, a coalition of stakeholders, community activists, and customers, will also convene on the public sidewalk in front of the Heard Museum to raise public awareness of shareholder proposal 4 (cited in the agenda above).

WHEREAS:

• Corporate lobbying exposes our company to risks that could adversely affect the company’s stated goals, objectives, and ultimately shareholder value, and

• Shareholders rely on the information provided by the company to evaluate its goals and objectives. Shareholders seek disclosure of our company’s lobbying activities to assess whether these undertakings comport with the long term best interests of the company, its shareholders, and its stakeholders. 

THEREFORE BE IT RESOLVED:

The shareowners of Pinnacle West Capital request the Board authorize the preparation of a report, updated annually, disclosing:

1. Company policy and procedures governing lobbying, both direct and indirect, and grassroots lobbying communications.

2. Payments by Pinnacle West Capital or its subsidiaries used for (a) direct or indirect lobbying or (b) grassroots lobbying communications, in each case including the amount of the payment and the recipient.

3. Pinnacle West Capital membership in and payments to any tax-exempt organization that writes and endorses model legislation.

4. Description of the decision making process and oversight by management and the Board for making payments described in sections 2 and 3 above.

For purposes of this proposal, a “grassroots lobbying communication” is a communication directed to the general public that (a) refers to specific legislation or regulation, (b) reflects a view on the legislation or regulation and (c) encourages the recipient of the communication to take action with respect to the legislation or regulation. “Indirect lobbying” is lobbying engaged in by a trade association or other organization of which Pinnacle West Capital is a member. Both “direct and indirect lobbying” and “grassroots lobbying communications” include efforts at the local, state and federal levels. The report shall be presented to the Audit Committee or other relevant oversight committees and posted on Pinnacle West Capital's website.

Shareholders encourage transparency and accountability in the use of staff time and corporate funds to influence legislation and regulation, directly and indirectly. Pinnacle West Capital does not comprehensively disclose its trade association memberships, nor payments to special interest groups on its website. Absent a system of accountability, company assets could be used for objectives contrary to the long term interests of the company.

Pinnacle West Capital spent approximately $800,000 on federal lobbying in 2013. (opensecrets.org) This figure excludes spending on memberships or contributions to organizations that write and endorse model legislation, such as the American Legislative Exchange Council (ALEC), where Pinnacle West Capital serves on the Energy, Environment and Agriculture Task Force. It also excludes contributions to trade groups such as the Edison Electric Institute, where Pinnacle Capital West is a member. Additionally, in 2013 Pinnacle West Capital’s subsidiary Arizona Public Service donated $4 million to nonprofits that executed an anti-renewable power advertising campaign which created national controversy. (Berman, “Why the Dark Money Debate Matters”, AZCentral.com, April 5, 2014)

We encourage our Board to require comprehensive disclosure related to direct, indirect and grassroots lobbying. 

Please join us at 9:30 am on Wednesday morning.

If you drive to the protest, there may be street parking on side streets off of Central Ave. You may also take the Valley Metro Light Rail, which conveniently has a terminal directly adjacent to the museum.

Rise UP! Take a stand for our community, our state and our environment.

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"Publicity is justly commended as a remedy for social and industrial diseases. Sunlight is said to be the best of disinfectants; electric light the most efficient policeman." -- Associate Justice of the Supreme Court Louis D. Brandeis

Bombastically Deceptive John Kavanagh gets it wrong on the Plastic Bag Ban Ban

Last Wednesday, Tempe City Councilwoman Lauren Kuby got a dose of John Kavanagh's bogus reality when she went up against him for a brief ten minutes or so on Arizona Horizon, moderated by Ted Simons.


Here's a sampling of why Kavanagh is the biggest bullshitter in the 52nd Arizona Legislature.

First, for a man that has a Ph.D. degree, he seems to rely more on being forceful than allowing the argument he wants to make (the content of the message) be forceful simply by virtue of it being the right thing for the situation. But that wouldn't be the bombastic blowhard we all know and loathe (or love... some people love him, I'm sure).

I think back to early 20th Century Republican Theodore Roosevelt. From an artifact on exhibit at the Library of Congress, a letter dated January 26, 1900, from Roosevelt to Henry L. Sprague:

I have always been fond of the West African proverb: "Speak softly and carry a big stick; you will go far."

That's not a lesson our bombastic friend from Fountain Hills seems to have ever taken to heart.

Nevertheless, a few more of my thoughts on this video clip follow.

First, I observed Horizon host Ted Simons make a significant faux pas. Traditionally, he handles his role as moderator by seeking to give each side a relatively equal opportunity to make their case. However, the first time Kavanagh interrupted Kuby, Lauren tried to interject that "I'm not done..." Simons contradicted her, "yes, you are."

Nevertheless, Kavanagh had the first opportunity, to answer why he believes the plastic bag ban ban bill is a good idea. Back when John was unafraid to engage in banter with me on comments to this blog, he thought he was in charge and could establish the ground rules (as he went along). He suggested on occasion that rules of logic should be diligently adhered to. He was big on identifying logical fallacies. Well, his opening statement on this video is, "this bill is a good idea because banning plastic bags is a bad idea."

Maybe John will grow a pair intellectually and face the music on this particularly fallacious premise. No doubt he could tell us which fallacy he used. Because it surely was NOT a substantive response to tell viewers why the bill is a good idea.

Kuby's argument was based on facts, not political bullshit like Kavanagh. She cited cost figures that cities and counties encounter in collecting and processing trash, including recycling. She showed Kavanagh up by making her point well that cities are where innovation takes place. Cities have to manage the costs. Blowhard Kav, supposedly a master of the Arizona budget given his years of service as House Appropriations chair, did not respond to the points she made about the cities' responsibilities and costs.

Anyway, John cites "there are health problems with the bags that are reused." Eventually, he uses THIS point to justify HIS imposition of the NANNY STATE concept, "I'm concerned with the health of my constituents." Therefore, AND (as he stated a couple of times) because HE CAN. The Arizona Constitution gives him the power to preempt cities from doing what they need to do to properly process trash in their jurisdictions. Yes, he indicated that it's the right thing to do because the Constitution says he CAN do it. How's that for illogical reasoning?

Never mind that his position is based on a study that was thoroughly and completely debunked. Not only that, but Kuby effectively rebutted that claim by pointing out that there is e.coli in his socks then simply (softly) suggesting that what people do about that problem is to WASH their socks. From a Tulane Law Review article (page 29-30 in the pdf) on plastic bag ban ordinances,

In 2011, the American Chemistry Council (ACC) funded a study authored in part by University of Arizona Professor Charles P. Gerba that looked at the dangers of bacteria in reusable bags. The study found that consumers who were interviewed rarely washed their reusable bags and that some bags contained bacteria but that “[h]and or machine washing reduced the number of bacteria in reusable bags by > 99.9%.” Consumer Reports issued a rebuttal pointing out that the bacteria found was minimal and that the sample size of eighty-four bags was too small to be meaningful. A scientist interviewed by Consumer Reports noted, “A person eating an average bag of salad greens gets more exposure to these bacteria than if they had licked the insides of the dirtiest bag from this study . . . .”

From an Arizona Republic story about germy reusable grocery bags,

Sinclair and other authors faced some criticism after the study was published because the American Chemical Council partially paid for the research. The trade organization has advocated against reusable shopping bags on behalf of its members who manufacture the thinner, petroleum-based plastic bags.  

There are SOOOOO many more things Kavanagh did poorly in his meager attempt to rationalize support for the ALEC bill he championed. Rather than bore you with more on it in this post, I'll hope that somebody, perhaps Ms. Kuby, will write an op-ed to tear Kavanagh's position apart. If that happens, wonderful.  But if no local corporate news enterprise publishes it, I certainly would love to do so.

From where I sit, however, the bottom line is that Kav really cares nothing about any of it except what his corporate masters tell him. They even have a website dedicated to being "a resource for legislative bodies considering laws limiting the use of plastic bags." And Kavanagh makes clear that's his priority by making the convenience of businesses his bottom line.

So, Lauren Kuby, keep telling the story of what really is at stake when it comes to Arizona cities and towns needing to be the experts on their own responsibilities, including the collection and processing of trash. Then we can continue to call out the fallacious arguments and claims blowhards like our good friend John Kavanagh spew at every opportunity.

It may actually BE time to start the movement to #RecallScroogeMcDucey

There are a number of topics requiring attention and blog posts at this time, from Diane Douglas' Listening Tour, to John Kavanagh's bloviating deceptiveness on the plastic bag ban bill, to the condition of Arizona government altogether. But this evening, another story is urgently troubling.

According to the Arizona Republic, Stephen Slivinski, senior research fellow at Arizona State University's Center for Economic Liberty and formerly a senior economist at the Greedwater Institute, published a disturbing new report this week on the feasibility of eliminating the state income tax. Slivinski has also held senior positions at the Cato Institute and the Mercatus Center.

Each of those organizations is funded with big money from Charles and David Koch and are aggressive extensions of the messaging machine that has turned up the volume on Reagan's "government isn't the solution, government is the problem" propaganda. ASU's center for enslaving all but the top 1 percent of Arizona (a more fair characterization of the mission of Slivinski's current host organization) says about itself,

Committed to the study of the role economic liberty and the free enterprise system play in increasing opportunity and improving well-being, the Center for the Study of Economic Liberty seeks to advance our understanding through independent thinking, scholarly debate, factual argument, and clear, honest communication of research and policy findings. The center is a non-partisan academic unit within the W. P. Carey School of Business at Arizona State University; our scholars enjoy academic freedom and share with each other a basic commitment to a freer, more prosperous world.

Our operations are financed by donations from foundations, individuals, and alumni who share an interest in advancing our understanding and continuously improving the institutions that make us free and prosperous. 

In other words, from the Kochs and the Kochtopus. Russ Wiles, the reporter who authored the story linked above, states about that funding,

The ASU Center for the Study of Economic Liberty, also housed at the W.P. Carey School of Business, was established in 2014 with the help of $5 million in gifts. Part of the money came through a grant from the W. P. Carey Foundation, which supports schools and universities in the areas of business and economics. The organization's founder, the late investor Wm. Polk Carey and founder of W. P. Carey & Co., also provided a $50 million gift to ASU in 2003 that resulted in the renaming of the business school.

The W. P. Carey Foundation helped to secure up to $3.5 million for the new center from the Charles Koch Foundation, which focuses its philanthropy on university research and education to advance understanding of how free societies improve the well-being of people around the world.

Again, it has been well established that what the Kochtopus funds is NOT charitable endeavors but studies and activities that provide the "intellectual" foundation for public policy implementation that enriches THEMSELVES. The Economist reported in 2014,

The Kochs are also at the heart of one of America’s most powerful political machines. Most businesspeople take a strategic approach to politics: they lobby for special privileges and contribute to both sides of the political aisle. The Koch brothers have ideology in their DNA. Fred senior was a leading light in the anti-communist John Birch Society. David ran as the Libertarian Party’s vice-presidential candidate in 1980, and Charles and David helped to raise an estimated $400m for efforts to defeat Barack Obama’s re-election bid in 2012. Critics fret about the “Kochtopus”—the Kochs and the network of institutions that they finance, ranging from the Cato Institute, an august think-tank in Washington, DC, to Tea Party organisations like Americans for Prosperity.

As Upton Sinclair, author of the revolutionary novel about the meat packing industry in Chicago, The Jungle, said (plenty of times),

It is difficult to get a man to understand something, when his salary depends upon his not understanding it!

But I digress.

Slivinski has argued, thus far (in my opinion) unsuccessfully, that eliminating the income tax would create tens of thousands of jobs in Arizona. Given data comparing tax rates and job growth, you'd think somebody would have a level of critical thinking skills necessary to see through Slivinski's bullshit. But when they all make big bucks pushing the Koch agenda, all bets on who has those skills get thrown out the window.

Arizona has cut taxes (including income taxes for individuals and corporations) consistently (pretty much EVERY year) for more than two decades. Coupled with this strategy -- that, by the way, has produced lower than the national average job growth over that period -- has been dramatically increased reliance on sales/transaction privilege taxes. So, what does Slivinski, the latest prominent Arizona-based Koch propagandist suggest we do? Double down, of course. Here's how he opens his new "academic" report.

Restructuring the state's revenue system to rely more on consumption taxes (i.e., the transaction privilege tax, commonly known as the “sales tax”) and eliminating the personal income tax can be beneficial from both an economic perspective and a public policy perspective. In the following study, I explain how the reform can be accomplished while still maintaining budget balance over six to eight years.

Data regarding economic performance and public policy IS available. We do NOT have to take the word of voodoo economists like Slivinski anymore.

By the way, because Scrooge McDucey falsely boasted about the meaning of his Moody's credit rating report last week and because he has boasted since before the 2014 election that he intends to eliminate the income tax in our state, it may actually be time to gear up to #RecallScroogeMcDucey. After all, he has done what he promised as far as cutting state spending, with especially draconian cuts to education. Now McDucey's job approval rating is at 27 percent, with disapproval at 44 percent.


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.

Scrooge McDucey's head fake on budget and finance

On May 5th (Cinco de Mayo), Scrooge McDucey sent out a self-congratulatory (propaganda) email boasting how his AUSTERITY plan has already brought about a boost to the State of Arizona's credit rating.

This morning the highly renowned bond credit rating agency, Moody's Investors Service, announced it has upgraded Arizona's credit rating to Aa2, with a "stable" outlook.

In their announcement, Moody's said the rating increase "reflects the state's positive economic trends, significantly improved liquidity (asset) levels (and) budget actions expected to eliminate a structural imbalance."

What's the problem with that, you ask? Let's start with the first phrase, designed to fake you out with a specious claim suggesting Moody's credit rating service has anything to do with anything.

"[T]he highly renowned bond credit rating agency..." Now, IF Moody's really was a "highly renowned" organization, why would ol' Scrooge need to tell you before saying anything else? If Moody's really was credible, why not either provide EVIDENCE of that credibility, or simply let the organization's claims speak for themselves?

Instead, McDucey expects us to not notice that he told us a fib right off the bat. A McClatchy report from 2009 states,

WASHINGTON -- As the housing market collapsed in late 2007, Moody's Investors Service, whose investment ratings were widely trusted, responded by purging analysts and executives who warned of trouble and promoting those who helped Wall Street plunge the country into its worst financial crisis since the Great Depression.

A McClatchy investigation has found that Moody's punished executives who questioned why the company was risking its reputation by putting its profits ahead of providing trustworthy ratings for investment offerings.

Instead, Moody's promoted executives who headed its "structured finance" division, which assisted Wall Street in packaging loans into securities for sale to investors. It also stacked its compliance department with the people who awarded the highest ratings to pools of mortgages that soon were downgraded to junk. Such products have another name now: "toxic assets."

As Congress tackles the broadest proposed overhaul of financial regulation since the 1930s, however, lawmakers still aren't fully aware of what went wrong at the bond rating agencies, and so they may fail to address misaligned incentives such as granting stock options to mid-level employees, which can be an incentive to issue positive ratings rather than honest ones.

The Securities and Exchange Commission issued a blistering report on how profit motives had undermined the integrity of ratings at Moody's and its main competitors, Fitch Ratings and Standard & Poor's, in July 2008, but the full extent of Moody's internal strife never has been publicly revealed.

Even the bias-averse Wikipedia (they scrub anything that presents even the appearance of bias) goes so far as to cite Moody's business model as suspect.

The "issuer pays" business model adopted in the 1970s by Moody's and other rating agencies has been criticized for creating a possible conflict of interest, supposing that rating agencies may artificially boost the rating of a given security in order to please the issuer. The SEC recently acknowledged, however, in its September 30, 2011 summary report of its mandatory annual examination of NRSROs that the subscriber-pays model under which Moody’s operated prior to adopting the issuer pays model also "presents certain conflicts of interest inherent in the fact that subscribers, on whom the NRSRO relies, have an interest in ratings actions and could exert pressure on the NRSRO for certain outcomes". Other alleged conflicts of interest, also the subject of a Department of Justice investigation the mid-1990s, raised the question of whether Moody's pressured issuers to use its consulting services upon threat of a lower bond rating.

Read more here: http://www.mcclatchydc.com/2009/10/18/77244/how-moodys-sold-its-ratings-and.html#storylink=cpy

Given the evidence, and the fact that McDucey knew of the need to try to bolster the credibility of his (and Moody's) claims, he goes for the head fake before presenting the information he wanted you to remember.

Additionally, even more recent than the McClatchy report, in 2011 The Guardian carried a story citing a former Moody's senior vice-president that further calls Moody's analyses into question.

A former credit-ratings agency executive has launched a stinging attack on the powerful organisations that can damage countries' economies and wreak havoc in the markets with the stroke of a pen.

William Harrington, a former senior president at Moody's, claims the organisation's senior management interfere with analysts' independent assessments.

Ratings agencies have attracted international opprobrium after Standard & Poor's, another of the three big agencies alongside Moody's and Fitch, stripped the United States of its gold-standard AAA rating.

Harrington, who worked at Moody's for 11 years until he resigned last year, said ratings agencies suffer from a conflict of interest because they are paid by the banks and companies they are supposed to rate objectively.

"This salient conflict of interest permeates all levels of employment, from entry-level analyst to the chairman and chief executive officer of Moody's corporation," Harrington said in a filing to the US financial regulator the securities and exchange commission (SEC), which is considering new rules to reform the agencies.

Harrington claims that Moody's uses a long-standing culture of "intimidation and harassment" to persuade its analysts to ensure ratings match those wanted by the company's clients. He says Moody's compliance department "actively harasses analysts viewed as 'troublesome' " and said management "rewarded lenient voting".

"The goal of management is to mould analysts into pliable corporate citizens who cast their committee votes in line with the unchanging corporate credo of maximising earnings of the largely captive franchise," he said in the 78-page filing submitted earlier this month. [Note that because The Guardian is a British publication, some of the spellings differ from what is traditionally used in American English]

Back to Scrooge McDucey's subterfuge.

So what does this upgraded credit rating say about Arizona?

• It says that Arizona is a good investment.

• It says that Arizona is open for business.

• It says that Arizona is fiscally responsible.

• It says that Arizona is headed in the right direction.

The fact of the matter is that IF use of Moody's rating and analysis was fundamentally sound, McDucey wouldn't have had to resort to misdirection to get people to believe the claims.

What Moody's report really says about Arizona is that it doesn't think it will get in trouble for vouching for the low risk inherent in debt instruments issued by Arizona state government.

It also says NOTHING about whether any other investment any business might make in any aspect of Arizona's economy is good, bad or indifferent. Further, it absolutely does NOT provide ANY evidence that Arizona's state government is at all fiscally responsible. The facts would suggest just the opposite. The current crop of lawmakers controlling the legislature (Republican) and Scrooge McDucey can only be judged as fiscally responsible IF that term is defined as driving state government into the ground.

Or, as my good friend state Rep. Andrew Sherwood describes it,

They've welded the gas cap shut, punctured the tires and poured sugar in the engine. Now they are telling people that the car is unreliable.

Last but far from the least, Moody's report says NOTHING about the direction Arizona is headed. Other indicators are, however, available to tell us the truth on that issue.

For example, when school districts are having to go to 4-day school weeks because McDucey and the legislature have cut funding, Arizona's not headed in the right direction.

As you can imagine, I could go on and on and on demonstrating how and why Arizona, with the current REPUBLICAN leadership is headed in exactly the opposite of the right direction, and the decisions they make are increasingly fiscally IRRESPONSIBLE when measured against metrics that describe quality of life for Arizonans.

I'll leave it to another post, for surely this trend will continue at least until we can change the direction by electing representatives and a governor who are not governed by the dominant framework of Ronald Reagan, Charles and David Koch, and Grover Norquist.

Given the very recent history of Kansas and McDucey's forerunner (Sam Brownback), what McDucey may really want is to grease the wheels for issuing more debt (than we already have) when the inevitable cash crunch that austerity will bring actually hits.

What happens when a person has a debt that can not be paid? Well, you go bankrupt. If you are a nation state, like Greece, and you have been straddled with debt from a small group of criminals, like the Troika (ECB, BOE and IMF) you have a couple of choices. You can allow the criminals to steal everything your country has that is valuable or you can stand up to them like Prime Minister, Alexis Tsipras and Finance Minister, Yanis Varoufakis have done and begin making demands. If you are the State of Kansas in the United States, well, you issue more debt to pay off the old debt and set policies based on hopes and dreams. 

The bottom line is that Arizona is headed in the wrong direction under the current governor and legislature. It's time for an about face. It's time for genuinely fiscally responsible elected officials. And the current crop of Republicans just ain't capable of getting that job done.

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.

A Livable Wage in FLAGSTAFF Arizona?

Last month, Flagstaff Living Wage Coalition filed suit in Maricopa County Superior Court seeking to strike down illegal legislation passed by the GOP-dominated legislature in 2013.

The lawsuit asks a Maricopa County Superior Court judge in essence to void a 2013 law which declares that only the state can regulate employee benefits, including compensation. That statute spells out that things like wages are “not subject to further regulation by a city, town or other political subdivision of this state.”

In other words, the legislature illegally preempted municipalities from enacting a higher minimum wage than that mandated by Arizona law.

In a nutshell, Arizona voters, in 2006, in the general election, approved Prop 202 by a nearly two to one, 65.4 percent to 34.6 percent. Prop 202, in pertinent part, adds section 23-364 to Arizona Revised Statutes. 23-364 I. (as added by Prop 202) (in part) states,

THE LEGISLATURE MAY BY STATUTE RAISE THE MINIMUM WAGE ESTABLISHED UNDER THIS ARTICLE, EXTEND COVERAGE, OR INCREASE PENALTIES. A COUNTY, CITY, OR TOWN MAY BY ORDINANCE REGULATE MINIMUM WAGES AND BENEFITS WITHIN ITS GEOGRAPHIC BOUNDARIES BUT MAY NOT PROVIDE FOR A MINIMUM WAGE LOWER THAN THAT PRESCRIBED IN THIS ARTICLE.

But in 2013, the legislature, in a narcissistic act, and in violation of the 1998 voter-approved Voter Protection Act passed HB2280 and Brewer signed it into law. The bill added ARS § 23-204 A., which states (in full),

The regulation of employee benefits, including compensation, paid and unpaid leave and other absences, meal breaks and rest periods, is of statewide concern. The regulation of employee benefits pursuant to this chapter and federal law is not subject to further regulation by a city, town or other political subdivision of this state. 

The legislature probably would not have even tried to get away with this blatant violation of the Voter Protection Act if Prop 202 had included one additional provision, namely to strike the previously added 23-362 from ARS. That version (added by Laws 1997, chapter 51) states,

A. The legislature declares that the establishment of a uniform minimum wage is a matter of statewide concern.

B. No political subdivision of this state may establish, mandate or otherwise require a minimum wage that exceeds the federal minimum wage prescribed in 29 United States Code section 206.

In other words, pissed off about the Will of the (2006) Voters, Tom Forese, then (in 2013) chair of the House Commerce committee, sponsored HB2280. HB2280 failed to pass by a margin that would have satisfied the requirements of the VPA (a supermajority of 75 percent of each chamber) which would then have precluded the lawsuit by the Flagstaff Living Wage Coalition.

Tom Forese, by the way, is now an APS-owned captured regulator over at the Arizona Corporation Commission. He was the ONLY sponsor of HB2280.

Forese and probably plenty of others at the legislature knew full well that they were violating the VPA. They did this purposely. They also likely fully expected this lawsuit, though they may not have anticipated WHEN the legal challenge would be filed. Like with the redistricting suit heard in March by SCOTUS, this was a conscious act to harm workers (voters) in our state.

Preemption is a familiar tool in the legislative tool box. They've done or attempted to do so regarding firearms regulation, plastic bag bans and minimum wage, and no doubt plenty more matters. They do it because they can.

Eva Putzova, Flagstaff city councilwoman and chair of FLWC, also filed an affidavit supporting the complaint. From the affidavit,

The core of the Coalition’s activities focuses on bringing about positive labor policy changes and on community organizing to achieve the goal of all working people earning wages that afford a decent life in Flagstaff.

On the Maricopa County Superior Court's online docket, you can check the status (for case CV2015-004240). Councilwoman Putzova advised me this evening that she expects the Attorney General's office to file a response to the complaint by May 15.

The bottom line, and why this lawsuit SHOULD be a slam dunk, is that when language in statutes conflict the courts interpret and tease the ambiguity out of the conflict. In this case, the conflict is clear and plain between legislation enacted by the legislature in 1997 and 2013 and that enacted by the voters in 2006.

In a pissing contest between the voters and the legislature, the Arizona Constitution clearly sets forth that the power resides with the PEOPLE. Article 2, Section 2 states,

2. Political power; purpose of governmentSection 2. All political power is inherent in the people, and governments derive their just powers from the consent of the governed, and are established to protect and maintain individual rights. 

Does it say the powers are established to protect and maintain the rights of Big Corporations?

By the way, if you're afraid this lawsuit will cause the price of hamburgers at Jack-in-the-Box in Flagstaff to skyrocket, you can rest assured, the economics do not supply any legitimate basis for such fear. Perhaps on another post, I'll link to or otherwise provide a Kahn Academy style lesson showing that a rise in the cost of labor at such a restaurant would likely cause a price increase of less than $.25 for that burger (and that's a high estimate) in order to support the new wage without impacting the net income for the business owner.

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In the meantime, here's what's really at stake.



On the other hand, here's why I believe Arizona Republicans were pissed off and purposefully intended to defy Arizona voters. From the Prop 202 publicity pamphlet, the first argument presented demanding (in a sweet, but still fallacious tone) that voters vote NO on the ballot measure, signed by now disgraced former Senate President Russell Pearce,

Fellow Arizonans join me in voting no on Proposition 202. Setting a state minimum wage at a rate that is almost 28% higher than the federal minimum wage and increasing it every year by indexing it to the cost of living is bad public policy. It will have severe damaging unintended consequences that our state cannot afford. Most importantly it will make our already intolerable illegal alien crisis even worse. We will be providing the worst of both worlds in creating economic incentives that will only serve to further attract more illegal aliens. On one hand many employers will find themselves forced to cut back on employment in order to accommodate the minimum wage. Unscrupulous employers will opt for employing illegals off the books at below minimum wage to maintain their business operations. This will be taking jobs away from our own citizens, promoting an expanded underground economy and depriving our state of tax revenue. Just as important on the other hand is the enhancement to illegal employers to risk the consequences hiring of illegal aliens. By setting an artificially high minimum wage illegal aliens will now have a greater incentive to enter our country and enjoy even higher rewards for being here. Making our state even more attractive to illegal immigration is something that makes no sense. Rather than creating more incentives for illegal aliens through the creation of an artificially high state minimum wage we should be pursuing policies to reduce the economic incentives for illegal aliens. What should be done is reduce government burden on small businesses and allow free-market concepts to work. That is what made America so great. I urge fellow Arizonans to vote no on Proposition 202. (emphasis mine)

• Pearce opens his argument with a claim that it's "bad public policy." 
• He claims it will have "severe damaging unintended consequences."
• Next, as his first effort to "prove" those claims, he invokes the invective, "intolerable illegal alien crisis." Because he failed to set forth any evidence of the consequences of the immigration crisis, that puts Pearce's statement completely in the category of demagoguery and baseless propaganda.
• Without support, and economically wrong, he said "employers will find themselves forced to cut back on employment in order to accommodate the minimum wage." Ask yourself, WHEN have you EVER heard of ANY employer cutting jobs because of high wages? Ever? No! Instead, they eliminate jobs when they don't have adequate revenue (sales) to support the work the workers do. Okay, some traitorous big companies ship jobs they can ship overseas because of costs. But the jobs they can't send offshore are ONLY eliminated when there is NO DEMAND. What is the ramification (natural consequence) of putting MORE money in the pocket of workers? They SPEND it. That INCREASES demand.
• "What should be done is reduce the government burden on small businesses and allow free-market concepts to work." Again, because he clearly has no idea what the economic principles actually involve, he provides ZERO support for this claim. Government burden on small businesses is nothing more than Kochtopus code intended to pull the wool over the eyes of those without critical thinking skills. 

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I will continue to monitor the lawsuit and update when the AG files a response to the complaint. Additionally, as I've mentioned before, I'm now reading David Berman's latest book which is a political biography of Arizona's first governor, George W.P. Hunt. You can thank Governor Hunt for having strongly advocated for the constitutional provisions on direct democracy -- initiative, referendum and recall. More on that subject when I finish the book. 

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.

Redistricting Reform Act of 2015 introduced in Congress!

On Thursday, 15 Members of Congress introduced the Redistricting Reform Act of 2015 in the House of Representatives.

The bill will require States to conduct Congressional Redistricting through Independent Commissions and sets forth a framework for ending the two-century old practice of gerrymandering. From Common Cause:

The Redistricting Reform Act of 2015 includes:

- Requirement that every state establish an independent, multi-party redistricting commission to draw Congressional district maps.

- Prohibition against allowing individuals with conflicts of interests – such as lobbyists, political donors or party operatives – to serve on the commissions.

- Requirement that commissions reflect the diversity of the state and operate transparently.

- Criteria for drawing districts, mandating that they:

        • have equal population in accordance with the U.S. Constitution;

        • comply with the Voting Rights Act of 1965;

• be geographically contiguous and compact, as well as have boundaries that minimize the division of any community of interest, municipality, county, or neighborhood.

• - Ample notice from the commission and opportunity for the public to provide input and engage in the redistricting process.

The 15 sponsors are all Democrats. Only one member of the Arizona delegation signed on so far, Raul Grijalva (D-Arizona's Third District).

Normally, this is where we see reporters or pundits write off a proposal put forth only by Democrats because both chambers of Congress are controlled by Republicans. And that's what happened in a USA Today story by Susan Davis.

With Republicans in control of both chambers of Congress, the Democrats' bill is unlikely to gain momentum unless it can bring on GOP sponsors and support. While gerrymandering has critics in both parties, Republicans are unlikely to support weakening the states' role in the process.

But Ms. Davis takes it a step farther by characterizing this proposal as "weakening the states' role in the process." That, of course, is complete bullshit. This proposal only weakens the elected state legislatures' roles in the process, but it dramatically strengthens the role of the PEOPLE of each state in the process.

I don't know what is in the constitutions of all 50 states, but I do know about Arizona. Article 2, Section 2 says,

All political power is inherent in the people, and governments derive their just powers from the consent of the governed, and are established to protect and maintain individual rights. 

The Redistricting Reform Act of 2015 addresses the long-standing and deeply-ingrained problem of gerrymandering and has the power to make moot any adverse decision the Supreme Court might hand down in Arizona Legislature v AZ Independent Redistricting Commission.

Therefore, while the GOP-controlled Congress may be reluctant to enact redistricting reform, we have learned quite well over the last few years that citizen action can rise to a level to compel Congress to act and to do so appropriately. [Consider the 2014 scandal in the Veterans Health Administration]

At this time, I strongly recommend each reader call AND write their Congressional representative to assert the request that each of them sign on as co-sponsors and enthusiastically support passage of the Redistricting Reform Act of 2015.

In fact, I also invite each of you to sign my petition on Change.org calling for passage of this bill. Here's some lawmakers in North Carolina talking about a reform measure before that legislature.

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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.