The Question Nobody Asked APS

The following op-ed, written by Court S. Rich, co-founder of Rose Law Group, first appeared in the Arizona Republic (and azcentral.com on September 12, 2019)

Opinion: Why did Arizona Public Service funnel money to support the son of a regulator when he ran for secretary of state? The Corporation Commission needs to ask.

What struck me most about the Arizona Corporation Commission’s questioning of APS CEO Don Brandt on Sept. 4 was not the way that APS predictably got away with sidestepping tough questions or the damning characterizations of APS’s political machine.

No, the thing that left me dumbfounded is the question that wasn’t asked.

In April, the Associated Press reported that documents turned over by APS in response to commission subpoenas confirmed that APS’ parent company, Pinnacle West, gave $5.8 million to the Free Enterprise Club which in turn spent about $450,000 of this money to support two candidates for the commission and $733,000 to aid the son of a sitting commissioner in his unsuccessful run for secretary of state.

This money was funneled through the Free Enterprise Club to shield its source [see OutlawDirtyMoney] and, despite wide speculation, APS refused to confirm that it was the source of this money until the disclosure this spring. To be clear, a regulated utility monopoly spent three-quarters of a million dollars in secret to support the campaign of the son of a sitting commissioner.

Why get into the secret funding game?

As far as we know, APS had not previously funded elections for public office, and it seems odd that its first foray into "dark money" campaigning would just so happen to be to support the son of a sitting commissioner.

APS obviously knew the person it was throwing its money behind in secret was related to a commissioner. The decision to, for the first time, play in an election in this manner had to be subject of intense scrutiny. APS knew there were risks if it got caught and the obvious question that everyone would ask is if this secretive expenditure were in exchange for favorable treatment from the regulator-father.

In fact, APS CEO-in waiting, Jeff Guldner, recognized the perils of playing politics. In late 2013 Guldner told The Arizona Republic, “Getting involved in commissioner elections? Unbelievably high risk.” That APS ultimately got involved in secret reveals that it knew there were risks if it were to get caught.

Nevertheless, after weighing the foolish risks, APS decided to make this investment and keep it secret for the better part of five years. In light of the risks and in light of the obvious perception of impropriety such a secret campaign would trigger, why did APS make the decision to funnel money to support its regulator’s son’s run for secretary of state?

This is the question that was not asked at the Sept. 4 hearing. This is the question that may never be answered if the commission doesn’t soon ask it.

A monopoly at least owes us answers

Imagine for a moment that the answer is, “We just really liked that guy for secretary of state.” That somewhere at APS, someone just really liked their regulator’s son so much for that office at that moment that it risked it all to secretly support him.

Now imagine that the person that made that decision, for that reason, still works at APS. Seems unlikely.

Many are simply unconcerned with getting an answer to this question or dismiss it as old news. To these critics I say that a company that is granted by the government the gift of no competition, the gift of a captured customer base, and the gift of a guaranteed return on its investments, owes something more to the public.

At the absolute least, when a regulated monopoly does something in secret that smacks so clearly of potential corruption, it owes us all answers. Tell us how this was not done with nefarious intentions. Set the record straight. Tell us someone made a terrible mistake and explain why that person, despite that mistake, still has a job. Tell us the truth.

This is the question that must be asked, the question that wasn’t asked, and the question I want answered while there is still time.

Court Rich focuses on renewable energy, regulatory and land-use issues. He represents clients that often contest APS policies. On Twitter, @Court_Rich.