By Will B. Greene
Special interests won the day in the race for the Arizona Corporation Commission (ACC) in 2012, while the Arizona public got legally swindled.
On Tuesday it was revealed the Arizona and National Association of Realtors spent $186,000 supporting Republican ACC candidates, Bob Stump, Susan Bitter-Smith and Bob Burns, who beat Democrats Paul Newman, Sandra Kennedy, and Marcia Busching on November 6th. The realtors, and Chicago based utility-giant Exelon (who contributed $10,000 for good measure) made their purchase under the political committee moniker “Taxpayers’ Voice Fund”, with the money funding two mailers targeting swing voters just days before election day.
In a clean elections contest where general election funds are limited to $137,811 per candidate, the realtor’s expenditure could have plausibly made up the deficit between the candidates (roughly 70,000 votes separated Democrats Newman and Kennedy from Susan Bitter-Smith). The ACC is a lower profile race, meaning each dollar spent can make an “oversized” impact on the race, as name recognition often carries the day. The Democrats did not receive independent expenditure support.
Incumbent Newman was the closest statewide Democrat to gaining an electoral victory, finishing closer to Susan Bitter-Smith than Richard Carmona came to Jeff Flake or Barack Obama came to winning Arizona over Mitt Romney.
And the reason for the realtor’s intervention was simple. As Commissioners, Newman and Kennedy objected to the practice of granting free electric line extensions for homes constructed away from existing utility poles. Newman and Kennedy believed it unfair for the public at large to subsidize line extensions for poorly planned housing developments, increasing rates for everyone so that a few could get a sweet deal.
Those in the sustainability world would call the handout a “subsidy for sprawl”. Those in the economics world would call it interference in the marketplace.
It’s hard not to also see the expenditure as a form of regulatory capture (ie: a legal form of corruption) flying in the face of the purpose of the ACC to act as Arizona’s prominent regulatory body and ‘public interest protector’, guarding ratepayers from monopoly utilities and investors from fraud.
The realtors were reportedly surprised by Newman and Kennedy’s stance, which threatened to yank their handout at any moment. Tom Farley, the head of the Arizona Association of Realtors resolved “never (again) to be apathetic about folks that were running for that office.''
It cannot be a good omen for our new Republican Commissioners, who will take the oath of office on January 7th, that their support for a corporate handout was the issue that potentially raised them to office.
The realtors and the Republican team for the ACC did not violate Arizona election law with their independent expenditure. And perhaps that is the most troubling aspect of the matter. Even in a race where all six major-party candidates ran “clean”, a special interest was legally empowered to intervene and purchase the commissioners that would protect their subsidy – at the expense of Arizona’s ratepayers.