Arizona Commission Aims to Dispel Doubts as Ethics Code Develops

A draft code should be out by year-end, with a final version due in February or March, said ACC Commissioner and Ethics Committee Chairman Boyd Dunn in an interview. Dunn wants a comprehensive document that could be a model for other state commissions. After the draft’s release, the committee plans to collect public comments and might have another workshop, he said. “I want to propose provisions in every potential area and have as much discussion and give-and-take [as possible] before it goes to the dais for final approval.” The draft code will be released Dec. 29 with comments due Jan. 19, Dunn wrote in a Friday open letter: "Feedback during the drafting process is essential to the ultimate success of our Code."

“The code of ethics will be a summary of what exists” in the law, clarifying how the commission interprets that law and providing examples, said Dunn. There are already laws on elections, campaign contributions and conduct for elected commissioners, he said. Dunn said the code should be a “living document” periodically reviewed and updated by the commission.

Arizona Commissioner Robert Burns isn’t sure the effort will make a difference. “I have my doubts that it’s really going to do anything other than prepare a document that collects dust,” Burns said in an interview. “The people that are in charge here have some ethical problems.”

Dunn replied that he takes developing an ethics code “very seriously” and hopes to persuade Burns of that. All sitting commissioners have acted ethically, he said. “I’ve not been aware of any violations of ethics by the sitting members.”

Government watchdogs also raised doubts. Arizona citizen activist Warren Woodward said he has ethics concerns about most of the sitting commissioners. “If they had ethics, they wouldn’t need an ethics committee,” said Woodward, who lives in Sedona and has complained about the ACC and its members in state courts and elsewhere. The best way forward is to eliminate the money that utilities can donate to influence elections, he said. “You can’t legislate ethics. Either you have them or you don’t. What they really need to do is follow the law.”

The ACC is a “classic case” of “corporations capturing the agency,” said Public Citizen Government Affairs Lobbyist Craig Holman. Campaign contributions from regulated utilities helped elect most commissioners at the agency, which lacks pay-to-play restrictions and allows “dark money,” funds given to nonprofit organizations not required to disclose their donors, Holman said. An effective ethics code would ban political spending from regulated utilities to influence elections, he said: “Anything short of that isn’t going to fix it.”

Nobody raised political contributions as an issue at workshops, and the subject is tough to address in an ethics code, but there are disclosure laws, Dunn said. The reality is political contributions are required to run a successful election; accepting them doesn’t mean an elected official won't be fair or impartial, he said. “It’s just the nature of the beast.”

“It's a good idea for people to have rules of the road, and for officeholders to understand them upfront,” said Montana Public Service Commissioner Travis Kavulla, who hasn’t seen what Arizona is developing. Montana elects commissioners and the PSC has endorsed the NARUC code of ethics. Another elected state commissioner, South Dakota PSC member Chris Nelson, hasn't followed Arizona but said his own agency doesn’t have a formal code other than certain statutory requirements. “I believe that the voters can evaluate how I conduct myself as a public official and make their decision on what they see in me at the ballot box,” he said.

Drafting a Code

The Ethics Committee looked at codes by NARUC, other state commissions, cities and other government bodies, Dunn said. “What the challenge has been is to find something that fits the uniqueness of the ACC,” which has statewide elected commissioners “that act at times in a judicial capacity,” he said. Arizona is one of 11 states where public utility commissioners are elected; they’re appointed in the other 39, according to Ballotpedia.

The ACC will have a more comprehensive code than other commissions, Dunn predicted. Topics discussed at two ACC workshops and commissioner correspondence in docket AU-00000E-17-0079 include lobbyist registration loopholes, ex-parte communications with staff, public access to calendars and other records and stakeholders paying for commissioners’ meals and gifts (see 1709150051, 1709010057 and 1708310046). Both workshops grew tense when Burns raised concerns about alleged misconduct by other commissioners toward staff.

Dunn said he’s not sure the code should set up enforcement procedures, especially since the ACC is a partisan body. “You’re going to be paying attorney fees for all sides and you’re going to have to take on responsibility for due process and things of that nature.” The ACC could refer possible code violations to the state attorney general’s office, he said. “The most important thing about the code of ethics is to make it clear what are the responsibilities of the commission,” Dunn said. An ethics officer could train commissioners on the code and be available to answer questions as they arise, he said.

An ethics code with no enforcement mechanism is “toothless,” Holman said. “Everyone on that commission would claim that they are fair and open-minded and balanced.”

Burns Seeks Probe

Burns said a serious ethics effort would investigate recent resignations of two top ACC officials.

The commissioner alleged that not long after colleague Andy Tobin’s appointment in January 2016, Tobin approached then-Utilities Director Thomas Broderick and demanded that the director fire an employee. That was inappropriate and resulted in Broderick resigning, Burns said. Tobin and then-Commissioner Tom Forese approached the agency’s executive director, Jodi Jerich, and asked her to fire the employee in question, but the director also refused, said Burns. Later, when Forese learned he had the votes to be chairman -- but before he had the position -- he told Jerich that she was fired even though he didn’t yet have authority to terminate, Burns said. After Jerich said he couldn’t fire her, the Arizona Department of Administration (DOA) called the director to assist with her termination, Burns said. But DOA lacked authority, too, because the ACC is an independent agency, Burns said. Jerich resigned in late December and the commission on Jan. 3 elected Forese as chairman.

Dunn said the current draft of the code “specifically address[es]” interactions between commissioners and employees. It cites an existing Arizona law that bars commissioners from using political influence “with corrupt intent” to cause firing, promotion or demotion of employees, or hiring or failure to hire any applicant, he said. “You can’t get more direct than that.” The commission appoints the executive director under Arizona law, and ACC staff is part of the state personnel system run by DOA, a department spokeswoman clarified. State employees serve at the pleasure of the appointing authority, which in this case is the commission, she said. DOA doesn't comment on specific personnel issues, she said.

Separately, Burns is pursuing a lawsuit partly to learn the source of $3.2 million in anonymous contributions to the 2014 election campaigns of Forese and ex-Commissioner Doug Little, who is now with the federal Department of Energy (see 1709140026). In August, Burns voted no when the ACC approved a rate increase for electric utility Arizona Public Service (APS). He sued the other commissioners to overturn the decision, but the Arizona Supreme Court declined to intercede. Burns sued APS in Maricopa County Superior Court to subpoena APS financial records, with oral arguments in case CV2017-001831 set for Dec. 19.

“If the records that we are requesting were to show that there was collusion between the utility and the candidates, the candidates would be at risk of being sued by the” Arizona Citizens Clean Elections Commission, Burns said. The case eventually could reach the Arizona Supreme Court, he said. APS didn’t comment.

“This code of ethics is separate from the legal case,” Dunn said. “It really has nothing to do with it.” The Ethics Committee chair has seen no evidence of any undue influence on sitting commissioners, he said.

Past Controversies

Previous Arizona commissions faced controversies. In 2015, then-Chairwoman Susan Bitter Smith resigned after Arizona Attorney General Mark Brnovich (R) asked the state Supreme Court to remove her due to conflict of interest. The AG alleged Bitter Smith was a registered lobbyist and executive for the Southwest Cable Communications Association (see 1512180034).

“We also had a previous chairman who’s been indicted,” said Burns, referring to former Chairman Gary Pierce, under investigation by the FBI and indicted in May on charges of bribery and conspiracy. Dunn said that case was one reason he suggested a code of ethics. “The FBI investigation has put a spotlight on something that was certainly … a surprise to everyone,” he said.

Burns himself was on the receiving end of conflict-of-interest allegations related to his continued registration as a telecom lobbyist while being a commissioner. Burns said that was an administrative error, AZ Central reported in 2015. Woodward, the activist, filed a complaint about Burns with Brnovich, but the AG didn’t pursue it, so the citizen activist asked the Arizona Supreme Court to compel Brnovich to proceed. In June 2016, the Arizona Supreme Court declined to accept jurisdiction of Woodward’s petition for special action, the citizen activist said.

“They let [Burns] slide,” but Woodward said he's glad the commissioner has since pursued subpoenas in the APS case: “Somewhere along the line, I think he got sincere in this.” Holman said he sees one positive aspect of the agency’s ethics effort: “Some of the commissioners are recognizing they’ve got a problem.”