Did Ducey Have Authority To Pull Funds From Nike?

By Steve Goldstein, Lauren Gilger
Published: Tuesday, July 23, 2019 - 1:21pm
Updated: Wednesday, July 24, 2019 - 1:48pm
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STEVE GOLDSTEIN: Governor Doug Ducey's decision to pull up to $1 million in incentives for Nike continues to raise questions because it wasn't his decision alone to make. Arizona Commerce Authority CEO, Sandra Watson, is responsible for awarding grants from the Arizona Competes Fund, and she unlike other agency leaders doesn't take orders from the governor. Jeremy Duda of the Arizona Mirror wrote about this, and joins us for a few minutes. Jeremy, good morning.

JEREMY DUDA: Good morning.

GOLDSTEIN: So, you reported Ducey has no apparent legal authority on this, so what authority does he in fact have in this case?

DUDA: Well, certainly he has a bully pulpit, he has influence. I mean he's the chair of the 19-person Commerce Authority board of directors or 19-voting members, there's a lot of non-voting members. He's the chair or the co-chair, so obviously he has kind of a position of prominence there. But the Commerce Authority CEO, Sandra Watson, she's not an agency-head, in the same sense of all the other folks who get appointed by the governor or... like the old Department of Commerce which the Commerce Authority replaced back in 2011. You know, it’s this board of directors that hires the CEO. She takes her direction from them, not necessarily from the governor. So, when the governor says, I'm ordering the Commerce Authority to withdraw this million dollar offer of an incentive to Nike over the shoe imbroglio, he doesn't, you know, that's not a binding order. Sandra Watson does not have to follow, now she did, but that's not something she necessarily has to do.

GOLDSTEIN: Well, the governor was compared, in some cases, to President Trump in that way, in that he was sort of barking out things via Twitter to say, this is going to be done. Almost, it doesn't seem like he needed have the authority, as you said, the bully pulpit was there for him.

DUDA: Yeah, sure. I mean, it does not look like there was a lot of debate over there. I mean, Sandra Watson very quickly... sort of very quickly decided it was going to kind of follow suit. Said, you know we have, the way they put it to me, is that we have, we followed, did this under his direction, we agreed with his decision. So, we move forward with it. Now, they still haven't answered questions for me, of why they would follow an order like that. You know, when the governor does not have, necessarily have the authority to make it. I mean, obviously this is an organization and the CEO is a person whose, their entire job is to foster economic development in Arizona, and withdrawing an offer of a million dollar grant from the Arizona Competes Fund, tt's not necessarily going to be good for this project. Now, Nike is coming to Goodyear anyway but you know, it could have gone the other way.

LAUREN GILGER: Is there any sense, Jeremy, of the repercussions that the Commerce Authority has faced for this? Are people mad at them? Or... has all of this sort of fizzled or gone toward the governor?

DUDA: I think everything can kind of go into the governor, whether you loved his decision or hate it, everyone's kind of training their fire on him. Now, I think, one kind of side note, side issue you may see coming out of this, is the Arizona Competes Fund, the deal closing fund as it is often known. This has not always been especially popular, especially with conservatives, who don't like to see things like government incentives, government interfering in free market decisions. The funds been kind of whittled down a little bit over the years anyway. And the fact that Nike decided that losing this million dollar grant wasn't going to deter it from opening this manufacturing facility in Goodyear. I think that's definite, that could definitely put kind of a target on the Arizona Competes Fund next session.

GOLDSTEIN: Yeah, for many people it does come up, whether it's GPAC or something else. If this place is so appealing, as governor Ducey likes to say and sells how great Arizona is economically, why do we need these kind of incentives at all? Do you see, just based on your crystal ball and knowing these things, is this something that the governor, based on what Lauren said, the governor... sort of felt a little backlash on this, and maybe more tentative stepping in? Or is this maybe a new governor Ducey, perhaps?

DUDA: I don't know, it's hard to say. I mean this seemed, I think for those of us who covered the governor for a long time, it seemed very out of character and very like, he's a kind of Trumpian in the way that this 2:00 a.m. tweet storm. You know, Governor Ducey is generally a much more cautious person, much more tentative. The kind of thing that we saw... it is very out of character. So, I don't know if we'll see that more often. If we do, that's definitely going to be kind of a new Doug Ducey.

GOLDSTEIN: Is there any possible reassessment with the legislature have to do anything with the Commerce Authority? I mean, would there be any changes we could potentially see there because of this?

DUDA: I mean like I said, I think some folks might have their eye on the Arizona Competes Fund now, it's silly. It started out as a 25 million dollar fund, I believe it's a bit less now. And still,. and the commerce are still very active with it. So, I don't know that's something that, you know, the governor is never going to spend. Especially a big fan of these kind of government incentives but... the economic development community, I think, if the legislature were to target that I think there'd be definitely, kind of some uproar there.

GOLDSTEIN: Jeremy Duda of the Arizona Mirror. Jeremy, I don't see you wearing Nike's but thanks for being here anyway.

DUDA: Thanks for having me.

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