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Arizona Corporation Commission defends ethics policy as lawmakers gripe

Arizona Corporation Commission defends ethics policy as lawmakers gripe

  • The Arizona Corporation Commission's legal team insists its ethics rules are legal and justified.
    Arizona Mirror/via FacebookThe Arizona Corporation Commission's legal team insists its ethics rules are legal and justified.

The Corporation Commission rejected legislative staff’s assertion that its ethics policy restricting campaign contributions from regulated utilities is illegal, arguing that it doesn’t violate state law or the Arizona Constitution.

At the request of Sen. Rick Gray, R-Sun City, the Legislative Council in September examined the commission’s ethics policy, and found a number of alleged legal deficiencies

Most notably, Legislative Council concluded that a provision of the ethics policy limiting commissioners’ ability to vote on matters involving utilities that have provided funding for their campaigns, overstepped the commission’s legal authority by prohibiting its members from participating in their official duties. The policy may also violate the First Amendment’s free speech protections, which includes political spending, Legislative Council said.

The commission asked its legal counsel to review the finding, and reached a different conclusion. The ethics policy does not bar them from participating in official commission activities, said the commissioners’ response to Legislative Council, and does not violate state law or the state constitution.

With the exception of some circumstances for traditionally funded candidates who don’t run using the state’s Clean Elections system of public campaign funding, recusal is left to the discretion of each commissioner, the response read. The commission's legal counsel says the only time recusal would be mandatory is when a non-Clean Elections candidate unknowingly accepts a prohibited contribution and is either unable or unwilling to return it. 

“In restoring the public trust, there may be circumstances that warrant recusal,” read the commissioners’ Nov. 3 letter to Gray, Sen. Sine Kerr, R-Buckeye, and Rep. Gail Griffin, R-Hereford. “Public confidence in the Commission is eroded if the public perceives that a Commissioner is not acting impartially.”

Most commission candidates run using the Clean Elections system, which requires candidates to collect a minimum number of $5 qualifying contributions from voters in order to receive a lump sum of public funding for their campaigns. Four of the five commissioners ran as Clean Elections candidates.

The commissioners noted that the code of ethics was first enacted in 2017. The policy, and subsequent amendments in 2019 related to campaign spending, were enacted in response to high-profile and controversial campaign spending by Arizona Public Service parent company Pinnacle West in 2014 and 2016. The commissioners also noted that the bribery indictment of a former commissioner, who was later acquitted, also helped prompt the creation of the ethics code. 

“An independent, fair, and impartial Commission is indispensable to this state,” the commissioners said in their letter. “Because the Commission’s jurisdiction touches upon numerous aspects of the day-to-day life for the people of Arizona, the Commission constantly strives to ensure its conduct instills the greatest public confidence in its independence, impartiality, integrity and competence.”

Gray, whose inquiry prompted the back-and-forth between the Corporation Commission and Legislative Council, isn’t happy about the commission’s response. But he sees no way for him to challenge the ethics policy, either in the legislature or the courts.

“What I’ve been told is basically there’s nothing I can do unless there’s somebody with standing (to sue). So if I was running for Corp Comm I might be able to sue them,” Gray told the Arizona Mirror. “I think their decision is wrong. I think it’s inappropriate. But again, as it comes down with so many legal issues, if you don’t have standing there’s nothing you can do about it.”

Gray and other critics of the ethics policy’s intent to curb campaign spending by Pinnacle West may find solace in the fact that the policy applies not just to regulated utilities but to others with business before the commission as well. It applies to any contributions or outside spending by anyone involved in a generic docket or rule-making decision before the commission who is a registered lobbyist or represented by some who’s registered with the commission. That would apply to non-utilities, such as solar companies that have spent heavily in commission races in recent years. 

Commissioners must publicly disclose the spending, but except for the narrow circumstances involving privately funded candidates, they aren’t required to recuse themselves. 

This report was first published by the Arizona Mirror.

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