Watchdog Group Threatens Lawsuit Over Arizona Utility Regulator's Text Messages

By Kristena Hansen
Published: Thursday, June 25, 2015 - 9:15pm
Updated: Friday, June 26, 2015 - 8:45am
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Regulatory capture. It’s a decades-old theory associated with a Nobel prize that’s a fancy term for what happens when a regulatory government agency gets too cozy with the very industries they were created to regulate.

It’s also the basis for a new initiative launched this year by a nonprofit watchdog group in Washington D.C., which has zeroed in on the utility industry and how it influences its state regulators.

The Checks and Balances Project started the probe in February and is focusing on at least seven states, including Arizona.

In recent weeks, it’s turned into a fiery brawl with the Arizona Corporation Commission over Commissioner Bob Stump’s text messages.

“There’s an expectation that if you’re a member of the Arizona Corporation Commission, that you’ll be impartial and act on behalf of the public,” said Scott Peterson, the executive director of Checks and Balances. “But the Arizona Corporation Commission seems to be going to extraordinary lengths not to give the public access to public records.”

Through public records requests initially submitted in March, Peterson learned that, leading up to the primary election last August, Stump had exchanged hundreds of text messages with an Arizona Public Service official; current Commissioners Tom Forese and Doug Little, who at the time were running for office; and the head of the Arizona Free Enterprise Club, a so-called 501(c)4 "dark money" group.  

The text exchanges were taking place while the Free Enterprise Club was spending millions of dollars trying to help Forese and Little get elected. APS is widely believed to be the source of that cash, and Peterson wants to see the actual text messages that were exchanged during that time.

He’d also like to know who Stump was texting, and the content of those exchanges, an average 70 times a day during the controversial net-metering debate in 2013 involving APS and solar companies.

“The commission’s sort of final response is, ‘Well yes, he used his cell phone to conduct public business but he’s deleted those messages. Too bad, so sad, those messages don’t exist anymore,’” said Dan Barr, Peterson’s attorney at Perkins Coie LLP in Phoenix.

But they do, in fact, exist, according to a leading forensic expert who Peterson hired. All they need, Peterson said, is an hour with Stump’s cellphone to extract the metadata and recover the texts.

If that doesn’t happen by 5 p.m. Friday, Barr said he’ll immediately file a lawsuit in an effort to obtain a subpoena.

“It doesn’t matter if he’s texting or emailing or writing written letters and sending by snail mail,” Barr said. “They’re all public records, and if they exist, then we have a right of access to them.”

Jodi Jerich, the commission’s executive director, said they'll respond by the deadline, but declined further comment.

She provided the most recent letter the commission’s outside attorney, David Cantelme at Phoenix-based Cantelme & Brown PLC, sent to Barr earlier this month. Cantelme said in the letter that Stump did nothing wrong by deleting the texts, citing a certain records retention law by which the commission abides.

He said the commission has also exhausted its efforts to retrieve the messages, but he simply can’t hand over something that doesn’t exist.

“Obviously, the messages that were once hosted on Commissioner Stump’s (former) iPhone 3 cannot be retrieved under any circumstances, because the device itself no longer exists,” Cantelme said. “Nor does the law require the commission to go to extraordinary measures to retrieve text messages hosted on the iPhone5, currently in use by Commissioner Stump, because he deleted them in compliance with the Director’s retention protocols.”

Former Commissioner Bill Mundell, who served from 1999 through 2009, said it’s “disheartening” to see the commission’s integrity and credibility being questioned so often in recent years.

He noted that it violates Arizona Administrative Code when a commissioner privately communicates with persons involved in an open case or hearing. When they do, he said it raises questions of bias and unfairness.

“The commissioners are like judges. They’re not legislators, and they’re not supposed to be having one-on-one conversations with any of the parties to a proceeding on matters of substance,” Mundell said. “If commissioner Stump has nothing to hide, why is he fighting so hard to keep the texts secret?”

Stump wasn’t available for an interview because, according to Jerich, he’s out of town.

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