Arizona's Own Espresso Pundit

Politics Ain't Bean Bag

People who work in a political environment without the requisite experience oftentimes get burned because they don't realize what full-contact politics entails.  The most common newbie mistake is not understanding that in a political environment everything is connected to everything else.  People are surprised when they cross someone in one arena, and that person retaliates in a different arena. 

There's an email going around the capitol that provides a little insight into how big-league hardball is played by the pros.  Chuck Coughlin is President of Highground, one of the state's premier lobbying firms.  Ken Cheuvront is a very savvy State Senator.  Chuck sent this email out last week. I've printed Chuck's original email and Sen. Cheuvront's response.  (Each with permission.)

Re:  Cheuvront Hypocrisy

Attached are the documents which were before the Arts, Culture and Historic Preservation Subcommittee of the Phoenix City Council.  The staff report recommends denial of a grant request for Actors Theatre Phoenix in the amount of $250,000.  Lobbying the Council on behalf of the Actors Phoenix was none other than the hero of anti subsidy legislation, State Senator Ken Cheuvront. Who happens to be on the Board of the Actors Theatre and owns a restaurant which caters to the Theatre crowd.

I testified against the proposed grant. The reasons that I gave were as follows:

1. It is an unbudgeted item and there are no funds.

2. If additional funds are available they should go to public safety, after all Phoenix voters are being asked for a 2/10 of a cent increase to fund public safety in September.

3. It was hypocritical for Cheuvront to be supporting and lobbying the Council for this grant, when he actively opposed legislation which would have lightened the public safety tax burden SB 1353 which provided matching funds for public safety expenditures during major events.

4. It was additionally hypocritical for Cheuvront to be supporting a grant which would in all likelihood benefit his business which has arts patrons who eat at his restaurant for dinner. The Actors Theatre is in jeopardy of going under without additional funds.

Prior to my testimony Mr. Cheuvront asked me why I was there. I responded in the same manner he spoke to Doug Cole from the Senate Floor regarding SB 1353. Mr. Cheuvront looked at Doug who was in the gallery just prior to voting on SB 1353 and said “Cole your bill is going down”. I told Mr. Cheuvront today that I was there to see that his grant was going down.  To which he responded he never said such a thing, to which I responded saying “yeah, just like you didn’t call Patrice Krause a bitch”. I told him he was out of control.

He assured me that I did not want an enemy like him. To which I responded, that I have had a lot bigger enemies than him.  At which point he left the hearing room and did not return.

Councilman Simplot and Councilman Linger decided after testimony to forward the proposal to the Council for their full consideration without taking a sub-committee vote (it was clear that Lingner was not inclined to support the proposal).  It appears that the issue will be before Council sometime in September after the summer recess and after the voters of Phoenix vote on Proposition 1.

Staff recommendation was for denial.  There was a reporter present in the room. I will not be dining at Cheuvront’s in the near future and I am looking for volunteers to start my car for the next few weeks (I’m kidding on the last one).

Happy Summer,

JCC

Here's Sen. Cheuvront's response.

Greg,
  I was really amazed about my confrontation with Mr. Coughilin.  It was totally unexpected, and it took me by surprise.

  First, I am no longer on the Board of Actors Theater.  I was helping move their grant through the city of Phoenix because they have been adversely affected by the light rail construction, and construction of the new convention center.  Last year the city awarded grants to the Symphony, Ballet and Opera because they were displaced because of the convention center.  Actor's Theater was trying to also get help to get them through the next two years of continued construction.

  Second, Chuck needs to learn the differences between tax giveaways to for profit retail developers and grants to non-profit theater companies.

Third, Chuck is mad because I supposedly said to Doug Cole that his bill was going down.  I don't think that I knew that it was Doug's bill.  I am sure that he said something to me from the gallery or put a thumbs up on the bill, and I said that the bill was dead.  I am not sure a person in the gallery can discern a tone from the floor of the Senate.  Doug must have great hearing. It was not meant to be personal.

Chuck and Doug are mad at me because I and my conservative colleagues do not believe that we need to give Glendale a million dollars to help defray their Super Bowel security cost.  Tax payers in Maricopa County have already built the Bidwells a stadium, and we don't need to also pay for their security.  Let Glendale foot the bill.  It is not a State concern.

Fourth, Chuck is really grasping for straws if he thinks that the viability of this theater company has any impact on my restaurant.  If I really wanted to help my restaurant short term, I would have tried to help
kill the light rail.   If anything is impacting my business, it is the construction of the rail on Central.

We are not sure we know how Chuck found out about my support of the issue, but we suppose that Peggy Nealy is the one who told him.  She is still mad at me for going against the $100mil giveaway to City North.  Although my bill does not address this travesty, Clint is putting together a law suite that will hopefully stop it.

At the end, Chuck helped me out.  The city staff and others were astounded by Chuck making his opposition about me and not about the theater group.

Chuck continues to be his own worst enemy.  He does not know when to leave politics at the capitol.  For every action there is always a reaction. I try to always be much more subtle in my reactions.

Ken

Here's What Really Happened to the Immigration Bill.

Before you can understand this story...

Lawmakers killed the Senate immigration bill today, voting 46 to 53 to move to a final vote on the controversial measure, 14 short of the 60 required.

The defeat is a setback for the bipartisan team of lawmakers who worked for months to craft a bill they hoped would draw enough support from both parties to pass. It represents a blow to President Bush, who threw his full support behind broad immigration reform and whose Cabinet played a key role in shaping the legislation.

You need to be able to understand this picture.

And what, you might ask, is significant about this picture?  Well that's Senator DeMint talking to Congressmen John Shadegg and Pete Hoekstra.  Undoubtedly, they are discussing this.

And even as the Senate moved forward, House Republicans late Tuesday voted overwhelmingly in favor of a resolution opposing the immigration bill -- a move that could place a significant roadblock in front of the measure even if it clears the Senate.

By a vote of 114-23, the House Republican Conference approved a statement by Rep. Pete Hoekstra of Michigan that simply read: "Resolved: The House GOP Conference disapproves of the Senate immigration bill." The vote came during a closed-door meeting.

It was the HOUSE Republican Conference vote that ultimately derailed the Senate Immigration bill.  House Democrats needed some cover and they weren't going to pass the bill without significant support from House Republicans.  With no chance of the bill passing in the House, the Republican Senators didn't want to be on record against their House counterparts so they voted against cloture.  Unable to end the debate, the Senate Democratic Leadership was forced to pull the plug. 

What the CNN fails to mention is that it is unheard of for the House Republican Conference to take a position on a pending Senate bill.  In fact, the House Leadership had no intention of hearing the Resolution. 

So why would the House Republicans vote on a resolution against a Senate Bill over the objections of their own leadership?

That brings us back to the picture of DeMint, Hoekstra and Shadegg.  Pete Hoekstra's name is on the Statement, but why would Sen. DeMint be discussing the Republican Conference vote with Shadegg?  That would be because of this. 

This is the signature page from a Resolution that reads in part:

"We the undersigned Members of the Republican Conference, hereby request a Conference meeting to consider a resolution disapproving of the Senate's immigration bill..."

The resolution has 25 signatures.  That number is significant because of this.  This would be the rules of the House Republican Conference which reads in part.

A resolution which has 25 or more signatures of Members shall be considered by the appropriate Conference committee as soon as practicable and reported back to the Conference.

Dang, there's that pesky "shall" word which trips up so many people who have their head in the sand.  The leadership "shall" consider the measure if it has 25 signatures. 

And whose signature is on the top line of the Resolution that forced the Republican Leadership to schedule a vote on the Statement that led to the demise of the Immigration bill? 

John Shadegg.

It was Shadegg who came up the the Resolution.  It was Shadegg who knew the rules and gathered the 25 signatures.  It was Shadegg who forced leadership to vote on the Statement and it was the Statement that led to the defeat of the bill in the Senate.

One guy...a guy with a rule book in one hand and a grenade launcher in the other...that's what really happened to the immigration bill. 

My Mom is So Proud

While I am still trying to decide what to be when I grow up, my younger sister has been kicking some serious corporate butt.  She's Vice President and Controller of RSC Equipment Rental and just helped take them public.  Here's a picture of her at the opening bell on the day they went public.  She's pretty easy to find on account of her being the only woman on the platform. 

Which Side Would you Want to Err On?

Well, this is awkward.

On June 8, his wife, Rebecca, asked doctors to remove his food and water tubes. But Jesse's family took her to court, and a Maricopa County Superior Court judge ordered the tubes reconnected and appointed an independent attorney to mediate between the families and to talk to Jesse's doctors.

Now, he can hug and kiss, nod his head, answer yes and no questions, give a thumbs-up sign and sit in a chair.

Republicans were roundly criticized for their conduct of the Terri Shiavo affair but where is the national outrage over near killing of Jesse Ramirez?  Think what a tragedy it would have been if the wife's demands to starve Mr. Ramirez to death had been accomplished.  How often does this happen? 

So we now have two diagnoses that are widely viewed as mistakes.  The pull-the-plug crowd will argue that Terri Shiavo was clinically brain dead and that her food and water should have been removed much earlier. 

Mr. Ramirez is alive when last week doctors were one the verge of starving him to death. 

Mistakes happen.  But as for me, I want to err on the side of life. 

Frankly Speaking II

Last April, I received a copy of a beautiful, 11x17 glossy, four color, full bleed mass mailing from my Congressman Harry Mitchell.  The piece was designed, printed and mailed at taxpayer expense.  On April 11th, I made this observation. 

Congressmen are allowed to use the US Postal service to send mail to their districts for free.  This "franking" privilege is an important right, but it is subject to abuse.  Over the years constituent communications have begun to look more and more like campaign brochures and less and less like constituent communications.

I recently received this email from Congressman Jeff Flake. 

Greg,

It was your blog post that spurred introduction of this legislation.  Keep it up!

Jeff

The email included a link to this article.

WASHINGTON - Laws dating to the earliest days of Congress let lawmakers send out official mail to constituents for free. That privilege, known as franking, is supposed to help lawmakers answer questions from voters and keep the people they represent up to date on business in Washington.

But much of the franked mail that goes out in a typical year - an average of nearly $22 million from the House and $3.2 million from the Senate - looks like the campaign mailings that pile up in election years.

A bill introduced this week by Jeff Flake, R-Ariz., would let voters see how much their lawmakers spend on mass mailings.

Flake, long a critic of wasteful government spending, spent far less - $1,406 - on mass mailings in 2005 than most of his Arizona colleagues, who spent tens of thousands of dollars or more on franked mail. Two Arizona congressmen, Republican John Shadegg and Democrat Raul Grijalva, did not send any franked mail in 2005.

Mailings within 90 days of an election are prohibited, but that leaves the rest of the year to send out tailored messages.

A Congressional Research Service report found that mass mailings peak just before the deadline, as members rush to squeeze in more publicity.

"By the very fact of placing a story in your junk-mail newsletter that you're doing so many good things for your district, that's already building positive regard," said Pete Sepp, a spokesman for the National Taxpayers Union, a nonpartisan watchdog group in Alexandria, Va., that advocates for lower taxes and objects to franked mail's cost. "It subverts the principle that challengers and incumbents ought to be on a reasonably equal footing under the law. They're not."

Flake admits his bill might not get very far in a Congress where Democrats and Republicans alike indulge in franking.

Party leaders sometimes privately encourage members to send out mailings. But he hopes better disclosure about the costs might shame some lawmakers into restraining their postage costs.

"It's very difficult to get any campaign reform that benefits challengers, but this is something that I think when the public knows how bad it is, they'll demand a change," he said.

Lawmakers in both parties take advantage of the free postage.

The National Taxpayers Union produces an annual study of House office expenses, focusing closely on franked mail. The most recent study found House members spent almost half as much on taxpayer-funded direct mail to voters in the 2003-04 election cycle as challengers spent on their entire campaigns in those years.

The average House member spent more than $50,000 on mail in 2006. The average Senate office spent about $34,000, according to the Congressional Research Service study.

The National Taxpayers Union's 2005 study found Flake spent only $4,782 on mail that year -the vast majority on letters, not mass mailings - and ranked him the 7th most frugal House member for office expenses.

Flake says he sends out mass mailings only to announce things like deadlines to apply for U.S. military academies.

Of Arizona lawmakers, only Rep. Rick Renzi, a Republican, ranked in the top 20 for mass mailed franking. He spent $124,270 in 2005, according to the group.

Even if it became law, Flake's bill might not make a dent in the flood of mail coming from Capitol Hill.

Consultants who work on franked mail say their clients get hardly any criticism from voters who receive mailings.

But Flake is pushing forward nonetheless.

"Every decade or so, it just becomes so blatant or so bad that the pendulum swings back the other way, and I think we're there - or we're almost there," he said.

Come On Guys, this is Getting Sad

No one can reasonably expect the major newspapers to be as accurate as the blogs, after all, bloggers have much more experience and better qualifications than reporters.  But one would expect that the levels of bureaucracy at major newspapers would at least provide a check on fundamental errors.

Take the Republic's story on the Immigration bill sitting on Governor Napolitano's desk.  The point of the story is that Arizona has passed one of the strictest bills in the country.  The entire story is built around the Draconian features of the immigration bill.  Unfortunately for the Republic, the reporters used the House version of the bill for their story. 

(In a bicameral (two chamber) system, bills have to get the approval of BOTH the House AND the Senate in order to be forwarded to the Governor.  The Senate has the ability to change (amend) House bills and only the language that BOTH chambers agree on can become law.  So writing a story based on the bill as passed by the House can lead to, you know, mistakes.)

Here's the statement that the Republic uses to demonstrate that the Arizona law is one of the two strictest in the country.

Introduced by state Rep. Russell Pearce, R-Mesa, it requires each business to sign a sworn affidavit that it does not employ undocumented workers. It imposes fines up to $150,000 for filing a false statement.

Prosecutors would be required to act within three days on written complaints alleging illegal hiring.

Well, the first part's right.  It's a Pearce bill.  However, the other three parts--the affidavit, the fines and the prosecutorial requirements--were eliminated from the final version. 

This is the second example this week of a "never mind" mistake.  That's a mistake that is so fundamental to the article that the entire reason for the story disappears. 

Last week the Republic's Pat Kossan lamented the fact that the International Baccalaureate program bill died--when in fact it was moved to the budget.  Editorial writer Joel Nilsson then relied on the incorrect story when he wrote a "quick hit" complaining about the Legislature's myopia. 

So here's note to the editorial board.  If you are going to write about the Draconian employer sanctions bill, make sure you read the final version.  Or just keep reading the blogs.

Can a Nice Guy Finish First?

The Star has a good profile of Senate President Tim Bee. 

For a guy who is, by all measures, the most conservative elected Republican in Southern Arizona, state Senate President Tim Bee has built a network of approval.

Hardly anyone — not even Democrats — has bad things to say about him.

Hugh Hewitt on Jon Kyl

Arizona’s Jon Kyl, perhaps the single most effective and principled conservative in the United States Senate, is the model of what every senator should be –smart, hard working, humble about his occupying the office, and aware of the obligations of that office. He is also a gentleman and a scholar –a genuine authority on Constitutional law, and a man of genuine character. Kyl’s also a fighter for conservative causes, especially the fortunes of President Bush’s judicial nominees.

Jon Kyl is also the workhorse for the GOP caucus on the immigration bill, doing his best to make the bill as workable as possible from the position as point man of the minority party.

This unenviable task has earned Senator Kyl an enormous amount of enmity from very vocal opponents of the bill, especially those for whom the issue is the single most important piece of legislation. Suddenly Jon Kyl’s impeccable record on the war, cutting taxes, the life of the unborn, spending restraint, and of course judges matters not at all, and the airwaves are full of spleen. The attacks on Kyl haven’t just been harsh, they have been full of the sort of venom usually seen in the fever swamps of the left directed at George Bush for waging the war against the Islamist jihadists.

If I was a member of the United States Senate I would not vote for cloture on the immigration bill, even though this version is bound to be much better than the version that failed to gain enough votes on the last go around. I wouldn’t vote for it because the border fence “trigger” is only 375 miles instead of the 700 authorized by last year’s border security bill. There may be other reasons to oppose the bill, but in an on-air conversation yesterday with Senator Kyl –the transcript is here —the senator indicated that many of the other major problems in the bill are being worked on. Whether those fixes are sufficient to remove some of those concerns --such as the treatment of illegal immigrants from countries with deep jihadist networks in the same fashion as illegal immigrants from Mexico—remains to be seen. Senator Kyl is clearly working to improve the bill as much as is possible.

For this effort he deserves thanks. This will evoke many comments denouncing Kyl as a turncoat and a traitor, but the obvious utility of making the best of a bad situation needs to be mentioned here, and more than merely mentioned, praised.

If the bill is going to pass the Senate, I want it to be the least bad bill possible.

If the bill is going to pass the Senate, I want as many of the drafting errors corrected and loopholes closed as possible.

If a GOP senator has to lead the effort to put lipstick on the pig, I want that senator to be the smartest, most principled senator available.

I am grateful to Senators DeMint and Sessions and Thune and others for blasting away at the bill and forcing the debate to be serious and sustained. But I am also grateful that Jon Kyl has the spine necessary to stay in there and take the heat so as to keep the improvements coming. It would have been far easier for him to side with the conservative critics of the bill and leave the negotiations and drafting to, say, Lindsey Graham. Instead he is doing the conservatives and border security advocates a great, great --if completely unappreciated-- service, and doing so without any of the outbursts that have marked other proponents of the bill.

Kyl isn’t complaining in the least. He isn’t whining. He isn’t attempting to deflect or dodge, and –and for this I am greatly appreciative—he isn’t ducking or dissembling. He answers the questions candidly and repeatedly, and when told that he hasn’t persuaded, he acknowledges his regret but doesn’t get angry or testy or even combative.

Kyl has not branded opponents of the bill as racists or nativists. He hasn’t condemned talk radio. He hasn’t refused interviews with critics. Kyl is taking the pounding like a senator should be willing to do when he’s opposite many of the folks who sent him to Washington.

I don’t expect many among the bill’s opponents to accept this perspective, but it makes it no less true. Jon Kyl is doing the hardest thing in politics –standing against his base for reasons of personal conviction and perhaps against his every political instinct in order to do his job as best he sees fit. I appreciate him for the manner in which he has done so, even if I can’t agree that the end result deserves to become the law of the United States.

I really, really wish I and others had persuaded Senator Kyl and through him the majority of the Senate of the absolute necessity of building all 700 miles asap, regardless of expense. When the I-10 Freeway collapsed in the aftermath of an earthquake in California, then Governor Pete Wilson didn’t worry about bidding rules and costs, he let a contract with a huge premium for early completion. And the job got done early.

A broken border is much more important than a broken freeway, but there is none of the urgency that should attend the construction effort. Senator Kyl, Secretary Chertoff, President Bush and other supporters of the bill just don’t see the great upside that I and others do in getting that fencing erected and the Border patrol expanded in record time.

But when the debate is over and the bill either passes or is defeated, Jon Kyl is the same guy who stood rock solid since the war began in defense of the prosecution of that war and in support of the troops, in defense of Chief Justice Roberts, Justice Alito and scores of other judicial nominees, and on the side of countless other conservative causes over a dozen years in the Senate and eight years in the House. He deserves much better than he is getting. When he writes that “If I were the only one writing this bill, it would be very different,” he has earned our trust in his good faith.

We don’t owe Senator Kyl our agreement or our silence, of course, but we do owe him a hearing and a respectful though vigorous and full-throated dissent, one that is coupled with a recognition of his past, present and future service. If you have trouble giving him both, then you have lost track of the central proposition that distinguishes conservatives from the far and sometimes not-so-far reaches of the left: Justice.

Pullen His Punches

Folks like to criticize Randy Pullen for taking on the Congressional delegation but he occasionally pulls a punch.  Here's quote from an interesting article from the London Times that details McCain's troubles. 

Randy Pullen, chairman of the Arizona Republican party, said: “He’s a battler, so I’d expect him to carry on, but everyone is waiting to see what his new fundraising totals are. That’s pretty critical. If he doesn’t have the money, he won’t be able to run.”

I think that's a fair assessment.  Immigration is discussed later in the article, but there's no mention of amnesty. 

McCain is learning that the Gray Lady is a fickle mistress.  You can do well with the intelligentsia if you turn against the base, but when you eventually acknowledge the party regulars, the New York Times crowd moves on to a fresh "maverick."

John McCain's Very Bad Year

McCain is best known for his support for the Iraq war, the McCain/Kennedy Immigration bill and the McCain/Feingold and Campaign Finance reform law.  The first two have clearly been an albatross and now the Supreme Court has slapped him on Campaign finance reform. 

The Supreme Court loosened restrictions Monday on corporate- and union-funded television ads that air close to elections, weakening a key provision of a landmark campaign finance law.

The court, split 5-4, upheld an appeals court ruling that an anti-abortion group should have been allowed to air ads during the final two months before the 2004 elections. The law unreasonably limits speech and violates the group's First Amendment rights, the court said.

The decision could lead to a bigger role for corporations, unions and other interest groups in the 2008 presidential and congressional elections.

The case involved advertisements that Wisconsin Right to Life was prevented from broadcasting. The ads asked voters to contact the state's two senators, Democrats Russ Feingold and Herb Kohl, and urge them not to filibuster President Bush's judicial nominees.

Judging the Judges

Tom Jenney and Chad Kirkpatrick have written an op ed on Judge Collins Legislative prowess.

Normally the Arizona Federation of Taxpayers comments on the policy positions of Arizona legislators, not federal judges.

But through his judicial decisions in recent years, U.S. District Judge Raner Collins has effectively appointed himself to the Arizona Legislature.

Mistake Upon Mistake

I pointed out yesterday that the Republic's Pat Kossan wrote a condescending story about the death of the International Baccalaureate bill but she didn't realize that the provisions of the bill had simply been moved into the state budget. 

The Republic refused the Legislative staff's request to correct the A1 story and tried to remedy the problem by slipping a reference to the budget into the on line version. 

Mistakes pile on mistakes.  Republic Editorial writer Joel Nilsson relied on the original story and wrote this "Quick Hit" in response.

The myopia of our state lawmakers never ceases to amaze. An international studies program in the global economy makes tremendous sense. My boys went through the International Baccalaureate high school program. They were challenged and taught to think. That's what good education programs should do. A bill to set up more schools and begin a foreign language in kindergarten was shot down by lawmakers who can't think outside their failing school boundaries. What a shame!

If the Republic had acknowledged that the fundamental premise of the original story was incorrect, Nilsson wouldn't have been made the fool in his quick hit. 

Members of the Editorial Board already complain privately that the legislative coverage is so weak that there isn't enough fodder for editorials.  This isn't going to help alleviate the tension. 

That's Strange...

When I log on to Hot Az it Gets, I'm getting redirected to Sonoran Alliance.  Is that just me, or is anyone out there having the same issue?

UPDATE:  I just got this explanation.

Greg,

There is a line of code in hotazitgets’ html that automatically transfers visitors over to the sonoran alliance web site.

I can’t imagine that hotazitgets would have put the code in their own web site, and that leaves open the possibility that it was hacked. The code was also inserted toward the bottom of the html, and normally, by convention, meta-tags are placed towards the top. It looks like it was a modest attempt to hide the code from being discovered quickly.

Republic Botches it--Will they Correct it?

The Republic loves to write stories that make Arizona look like a backwater.  The pervasive theme from the Republic's marble halls is that Arizona is not ready for prime time because the Legislature is populated by unsophisticated atavistic knuckle draggers.

Here's a great example.  The Republic is unhappy that a bill supporting International Baccalaureate programs died in Committee.  Check out the condescending tone.  It takes years of Journalism school to perfect this tone. 

Everyone agrees: The world is shrinking.

Businesses need people skilled in world languages and economics. The government has gaping holes in diplomacy and intelligence. Universities are begging for more students with sophisticated learning.

It all gives credence to a bill in the Arizona Legislature to create international schools to help make students globally competitive.

But, in the end, the bill died. As its supporters learned, "international" is a dirty word among some at the Capitol.

Key leaders there suggested the bill was un-American and part of a slippery slope to a U.N. takeover and the end of U.S. sovereignty.

Wow that's great writing.  Without actually saying it, the reporter has managed to imply that the typical Legislator is barely qualified to play the banjo. 

The only problem with the story is that its fundamental premise is completely wrong.  The bill didn't die, it was moved into the budget.

D.  The department of education may use the monies in the fund to provide technical assistance and to distribute American competitiveness project grants to schools and other local educational agencies that offer academic programs that emphasize each of the following:

1.  Foreign language acquisition. 2.  International business. 3.  World history.

Now the Republic will demonstrate another J-School trick--the retraction in the form of a correction.  The entire underlying premise of the story is wrong.  The point of the story is that the bill was killed and the implication of the story is that Arizona is just a Redneck state.  But the reporter got the essential element of the story wrong.  The bill was not killed.  It was passed in a different form. 

So does the Republic issue a retraction?  Does the reporter admit that he got the story wrong.  Of course not.  The Republic will issue some type of lame correction, or even worse a "clarification" saying that the bill was passed as part of the budget.  The paper will never admit that the reporter got the entire story wrong...it will claim that the story should just be "clarified."

Everybody makes mistakes.  Admitting those mistakes is what separates the professionals from the amateurs.  I think we know which side of that divide the Republic is on.

UPDATE:  The Republic has slipped in a correction in the on line version. 

So the bill did not survive its first round in the Legislature. Instead, a measure was put in the state budget authorizing Tom Horne, Arizona superintendent of public instruction, to seek private donations for such a program. Horne said he didn't need the authorization and plans to bring the proposal back for state funding next year. In the meantime, he'll look for private and federal grants to move the project ahead.

The section in bold has been added since I wrote the original piece.  It's clear that the new language undermines the entire article.

UPDATE:

Wow, there was no correction or even clarification.  They simply added a sentence to the online version and ignored the print version. 

McCain Update

Interesting commentary from Powerline.

A Mason-Dixon poll of likely Republican primary voters in South Carolina shows Fred Thompson in the lead with 25 percent, followed by Rudy Giulinai (21 percent), Mitt Romney (11 percent), and John McCain (7 percent). Thompson's showing isn't all that significant -- if he can't outpoll two centrists and a yankee Mormon in South Carolina, he has no shot. The significance of this poll (unless it's an outlier) is McCain's dreadful showing of 7 percent. Polls taken a month ago (albeit by different organizations) showed him with two to three times that level of support (I discount the results of the American Research Group, which always seems to tilt heavily in McCain's favor).

Giuliani and Romney seem to be holding steady in South Carolina. What's changing is the Thompson-McCain split. An Insider Advantage poll from late May had McCain at 17 percent and Thomsson at 13 percent. The Mason-Dixon poll shows the combined Thompson-McCain support at essentially the same level, but with Thompson claiming about 70 percent of it.

It may be that the only thing standing between a two-man race between Giuliani and Thompson is Mitt Romney.

UPDATE: On the Democratic side, it's John Edwards who gets the bad news. In the state where he was born, he receives about half the support of Hillary Clinton and about one-third of Barack Obama's level.

Policing Their Own

The most difficult issues for the Legislature to get right are vice issues.  If a legislator raises a question about laws governing prostitution or pornography, he or she is inevitably branded as soft on porn, or pro prostitution. 

That's why mere possession of child pornography carries a life sentence without possibility of parole.  Lot's of Legislators think that's too harsh, but no one is able to change it.  Senator Barbara Leff, for example, tried to raise the culpability standard from "knowingly" to "intentionally" possessing child pornography and was unfairly pummeled by one of the local blogs.

Frankly, it's the blogs and the political opponents who are usually guilty of making unsophisticated claims that "Legislator Jones is soft on porn."  The mainstream media doesn't usually fall for this trick.  It's not likely that you are going to see a headline that says "Legislator Opposes Child Prostitution Bill."

Well, I'll say that the mainstream media doesn't usually fall for this trick.  Until now. Check out this A1 above the fold Tribune article by Dennis Welch. 

Legislator opposes child prostitution bill

A bill that would stiffen penalties for those who force children into prostitution has new life, despite an influential East Valley lawmaker’s attempts to kill it.

Rep. Eddie Farnsworth had the guts to point out that the child prostitution bill might be more harsh than the Legislature actually intended.  As Judiciary Chairman, Farnsworth had the power to stop the bill. 

Now, I don't want to get all stereotypical on you, but one wouldn't expect a Republican East Valley Mormon Legislator with six daughters and political ambitions to point out that the proposed child prostitution statute may be too severe.  And if he does--especially since he's an attorney--it's probably a pretty good idea to pay attention to what he says.

Instead of trying to figure out if Farnsworth was right, Tribune Reporter Dennis Welch went for the easy hit piece.   

Normally, that's when I would have a few espressos and write a 1,500 word screed about how lame and unsophisticated Welch's story is.  But in this case, I don't have to.  In a stunning move, the Tribune's own Editorial Board took Welch apart before I could get to him.

Tribune writer Dennis Welch reported Monday the bill has been delayed for weeks because Rep. Eddie Farnsworth, R-Gilbert, opposed removal of that defense. Farnsworth courageously argued heavy felony punishments should be applied only to those who actually intend to commit the crime involved. This may seem to be a subtle distinction, as adult prostitution also is illegal, but it’s an important difference in the pursuit of justice.

The Tribune Editorial Board seemed to go out of its way to let readers know it was specifically rebutting its own reporter.

Farnsworth has been accused of not caring about the dangers of child prostitution, Welch reported, a criticism that is blatantly unfair. Farnsworth wants to prevent unintentional harm to more children, and adults, through an unjust law.

Wow.  Good for the Trib!  Newspapers gain a lot of credibility when they are willing to call out their own reporters.  Front page hit pieces shouldn't be tolerated and it's great to know that the bloggers aren't the only ones paying attention.

 

Growing Rich off the old land-exploitation Model

Soon after arriving in Arizona, former Republic columnist Jon Talton made it clear what he thought about people who made money in real estate. 

We know what must be done. But the business elites that grew rich off the old land-exploitation model refuse to change.

About that time, Talton bought a gorgeous 2,423 square foot house on an 11,000 square foot lot in the historic Willow neighborhood.  It was built in 1910 and has a large pool, 2 car garage and 800 square foot guest house. 

He bought the house for $409,000 with $20,000 down.

Since the house is in an historic neighborhood, Talton paid half the annual property taxes that the rest of us pay. 

Talton has resigned from the Republic and is moving to Seattle.  His house is on the market, and as you can see, even in a down market, he's asking $950,000. 

Isn't that great?  The guy writes three columns a week for seven years moaning about the "real estate industrial complex" and then he makes a tidy $500,000 profit on a $20,000 cash down payment. 

Gosh I love living here. 

It's a Whole New World

Michael Barone has an excellent analysis of the current state of American politics. 

We seem to be entering a new period in American politics. We have come through a period of trench warfare, in which two armies of approximately equal size faced each other across the battlefield and tried to rally their sides to achieve the incremental gains that would make the difference between victory or defeat. There were few defections from either army in this culture war, and almost no one crossing the lines. Like the trench warfare of World War I, our politics in this period, which stretched from 1995 to 2005, was a conflict of many bitter battles and no final victories.

Now we seem to be entering a new period, a period of open-field politics. It seems to be a time when there are no permanent alliances, when new leaders arise with new strategies and tactics, when the voters, instead of forming themselves into two coherent and cohesive armies, wander about the field, attaching themselves to one band and then another, with no clear lines of battle and no landmarks to rally beside.

As they say, read the whole thing. 

"Hey, Let's go to the Drive In Theater"

Well, this was inevitable.

Advertisers have realized that newspapers have declined in both circulation and influence.  So naturally advertisers are demanding lower rates.  The newspaper industry looks like one of those slow-motion videos of a building that's being demolished.  You see the puff and hear the boom, and for a moment, the building just stands there, but the collapse is inevitable.  Here's an example. 

Va.-based Media General Inc. reported Thursday that ad revenues at its newspapers fell $6.1 million, or 14.9%, in May -- led by huge declines at The Tampa Tribune.

Media General President and CEO Marshall N. Morton said the economic downturn in Florida hammered results in Tampa, where the company owns the Tribune, WFLA-TV, and TBO.com. The company was also hurt by "significant weakness" in classified.

"We were very disappointed to see the retail category decline, a reflection of major retailers holding back on spending in virtually every market," Morton said in a statement. "We saw a few bright spots in May, including increases in real estate classified advertising in Richmond, a market that has not yet been severely affected by the national housing downturn. In addition, national revenues increased at The Richmond Times- Dispatch, the Winston-Salem Journal and in our community newspaper group."

Big declines at the Tampa Tribune, however, offset that growth, he added.

Newspaper classified overall fell $3 million, or 16.9% -- principally on a free-fall of 38.2% at the Tampa Tribune, Media General reported.

The Tribune's real estate linage, for instance, plummeted 46.7%.

Help-wanted linage at the company's three metro newspapers decreased 27.8% -- again pushed by Tampa, where recruitment fell 41.5%.

There were big drops in help-wanted as well at the Richmond Times-Dispatch, down 19.4%, and the Winston-Salem Journal, off 25.7%.

Automotive linage for the three metros decreased 18.8%, with the Tribune again leading the way with a 27.5% decline.

Overall real estate linage for the three metros was down 25.2%.

Retail advertising revenues in May decreased $2.5 million, or 13.1%, at the three metros. Tampa Tribune, and its associated newspapers fell 17.5% on weakened home improvement, financial, grocery store and medical advertising.

Retail was down 9.9% at the Richmond paper, on department store and drug store weakness. The Winston-Salem Journal reported a 17% decline on lower spending in the department store, grocery store and home improvement categories. Retail at General Media's community newspaper group fell 10.2%.

Media General said its total May 2007 revenues increased 2.8% to $75.4 million, including the revenues of four NBC television stations acquired June 26, 2006. Excluding the new stations, total revenues declined 7.8%, it said.

Overall publishing division revenues fell 12.8%, and broadcast, on a same-property basis, declined 1.9%.

Media General said its Interactive Media Division total revenues rose 43.1%.

The company set its outlook for the second quarter as earnings per share in the range of 20 to 25 cents, compared with 77 cents from continuing operations in the second quarter of 2006.

Un Plugged

The Republic's Plugged In Blog is down, and I've had quite a few people ask me to find out why.  I emailed Joe Garcia who edits the Viewpoints section and he said it's just a technical glitch and they are working on it. 

Until then, Matt, Mary Jo, Tom and Amanda can just send their posts to me via email and I'll post them.  Ha, I slay me. 

UPDATE:  Plugged In is back up with pretty new software.  Check it out. 

This is How it Should Be Done...

I have had a lot of feedback from my "Tribune Reporter Showers Nude" post.  My point was that it's easy for a reporter to make someone look bad by emphasizing a story without providing context.  Here's an example of the fair way to write the story.  The early paragraphs are about Democrats, but there's plenty of Republicans mentioned and no one is targeted, and it's clear that the practice is widespread. 

Lawmakers Profit from Gold Mines, Books

WASHINGTON (AP) -- Sen. Harry Reid, whose leadership post depends on holding onto a fragile majority in the Senate, can always fall back on his gold mining claims in Nevada. Banking Committee Chairman Christopher Dodd pads his income with rent from a cottage in County Galway, Ireland.

House and Senate lawmakers filed their annual financial disclosure forms Thursday, revealing a variety of income sources well beyond their salaries.

Rank-and-file House and Senate members last year received $165,200 in pay. Reid, D-Nev., and House Speaker Nancy Pelosi, D-Calif., both got $183,500 for their previous roles of minority leaders in the Senate and House.

Former Speaker Dennis Hastert, R-Ill., now a regular member, will take a pay cut of almost $47,000 this year after earning $212,100 last year as speaker.

The story goes on to emphasize that many lawmakers have outside jobs and provides examples from each party.  The story is about the fact that lawmakers have outside jobs.  It is not about any particular lawmaker's job. 

It would be simple to pick a lawmaker whom the reporter doesn't like and write a hit piece about, say, Senator, Smith who owns a bookstore.  That would be a classic example of a Nude Shower Story.

Buggy Whip Sales Decline

Well, it's almost like buggy whips.

NEW YORK (AP) -- The New York Times Co. said Thursday that advertising revenue from continuing operations dropped 8.5 percent in May as national, retail and classified ads all declined.

The company said its total revenue from continuing operations fell 5.8 percent compared with May of last year.

Our Most Sincere Condolences

This very sad email was forwarded to me this evening.  Perhaps this is widely known, but it's the first that I've heard of it. 

As many of you may have heard Ruth Gartell, wife of Legislative Report editor Barry Gartell died Saturday in a one-car accident on the Beeline Highway.  I know many of you know Barry either from his current edition with Capitol Times, or from his days as a staff member here at AACo.

My prayers go out for Barry and the entire Gartell family.   

This Guy Gets All the Breaks

Gotta' Love These Judges

In yet another victory for school choice in Arizona, Maricopa County Superior Court Judge Bethany Hicks today ruled that the state’s school choice programs for special needs and foster children are constitutional.  The Institute for Justice and its Arizona Chapter represent six families who intervened in the case to defend the new scholarship programs.

        “This is the fifth lawsuit that school choice opponents have filed against educational aid programs designed to help Arizona schoolchildren most in need, and it is the fifth time that courts have sided with kids,” said Tim Keller, executive director of the Institute for Justice Arizona Chapter.  “It is time for opponents of genuine education reform to get the message and stop these frivolous legal battles.  All our clients want is a good education that meets their children’s unique needs.”

        The Arizona Education Association, the ACLU Foundation of Arizona, and the People for the American Way, among other groups, filed suit against the programs in February, alleging they violate the state Constitution’s Blaine Amendments and its educational provisions.  School choice opponents had asked the Arizona Supreme Court to take the case in November 2006, without it going to the trial and appellate courts, but the Supreme Court declined that request in January, forcing opponents to re-file in the Maricopa County Superior Court.

        Relying on U.S. Supreme Court and Arizona Supreme Court precedent, including 1999’s Kotterman v. Killian case upholding Arizona’s first tax credit scholarships program, Judge Hicks rejected opponents’ claims that the new scholarship programs violate the state Constitution’s Blaine Amendments and its education guarantee.

        “This is a complete vindication of vouchers in Arizona in the face of persistent and relentless legal attacks by those who prefer the educational status quo,” said Chip Mellor, IJ’s president and general counsel.  “That yet another court rejected the favorite legal claims of school choice opponents should give heart to proponents of equal educational opportunity nationwide.”

        IJ, the nation’s leading legal advocate for school choice, is currently defending Arizona’s corporate and individual tax credit scholarships and helped secure the Kotterman victory for school choice.  The Institute also helped win a victory in the U.S. Supreme Court for school choice in Cleveland, and successfully defended vouchers in Milwaukee and tax credits in Illinois.

The Decline and Fall of Arizona Public Service

The Arizona Corporation Commission will rule this week on Arizona Public Service's latest request for a rate increase.  APS is requesting a $449 million increase and the Commission's Hearing Officer has recommended an 11% or $286 million increase. 

The company argues that the $286 million increase is inadequate and that the company faces the prospect of having its credit rating downgraded to junk status.  APS places the blame for its plight squally at the feet of the Corporation Commission.

Shareholders have the right to be disappointed with APS's performance.  Here's a chart that compares the Dow Jones Utility Average to APS's parent company Pinnacle West Corporation (PNW).  As you can see, the Dow Jones Utility average is up 80% over the last five years and PNW has actually fallen over the same period. (Click to enlarge the chart.) 

However, rather than blame the Corporation Commission for APS's poor performance, I believe the fault lies with APS management.  Over the last 10 years, APS management has inserted itself into every policy debate from tax increases for education and transportation to TGEN and the Civic Center.  Meanwhile APS has made a series of managerial mistakes that have cost the company hundreds of millions of dollars, devastated its credit and stock price and left it poorly positioned to respond to the needs of the fastest growing state in the nation.

Now APS, facing the possibility of further downgrade, complains that the $286 million the ACC hearing officer has recommended is inadequate and virtually dares the ACC not to give the company what it wants. 

Here is a chronology that, in my humble opinion, explains what went wrong with APS.  All quotations are out of the Arizona Republic for the date listed. 

(Disclosure:  I don't generally write about APS or the ACC because I practice in front of the ACC and have had extensive dealings with APS.   As RUCO Director, I signed the 1996 and 1999 APS Settlement Agreements, and I currently represent the merchant power plants based at the Palo Verde hub.  My comments in Espresso Pundit are my own and do not reflect the views of my clients.) 

Let me set the stage.

In 2000 California is in the midst of a power crises and the wholesale price of electricity is at record highs.  APS makes millions selling its surplus power into the wholesale market.  APS President Bill Post is Chairman of the Greater Phoenix Economic Council.  Palo Verde is the largest and one of the best performing nuclear plants in the nation. 

December 20, 2000

In order to further capitalize on record high power prices, APS breaks ground on a $1 billion gas-fired power plant called Redhawk. 

"It is a merchant plant, built to sell directly to a wholesale market," APS spokesman Foote said. "It is intended to operate exclusively in a competitive market. All of its electricity will be sold in a competitive market."

April 2001

"Stockholders in Pinnacle West, the holding company for Arizona Public Service Co., have watched their investments increase 59 percent over the past 12 months.

Besides producing stellar returns for investors, Pinnacle West Chairman and Chief Executive Officer Bill Post said the sale of the company's excess electricity elsewhere will help the company keep electricity prices low for Arizonans."

November 2001

CEO Bill Post forms a Business Coalition to address the state's shortfalls. "We have no approved action plan for transportation, further reforms are needed in education, and we need to tackle the issue of open spaces."

August 18, 2001

Pinnacle West Capital Corp. announces to build a $400 million gas-fired power plant in southern Nevada to provide electricity to the Las Vegas market.  The plant is to be named Silverhawk.

January 2002

Wholesale power prices collapse.

"Just a year ago, Pinnacle West was reaping the windfall of California's energy crisis and poised to expand its energy capacity, but energy prices have since collapsed and with them the profits and plans of energy firms."

"Exposure to the Enron debacle and a 90 percent plunge in wholesale power prices produced a 14.3 percent slide in fourth-quarter earnings reported Monday by Pinnacle West Capital Corp."

March 2002

"Bill Post, chairman of the Greater Phoenix Economic Council, which spearheaded the coalition formation, said Wednesday that a council will be set up to make sure the effort doesn't lose steam. Formerly taboo business topics such as raising taxes and user fees and tough talk on growth were brought up, if gingerly."

April 12, 2003

"According to a proxy statement filed for the parent company of Arizona Public Service Co., Post's total compensation was up 26 percent, pushing it past the $2 million mark, from $1.6 million the previous year. The biggest boost came from a 67 percent increase in his bonus, which jumped to $900,000 from $540,000 the year before.

Pinnacle West's net income rose 3 percent, to $312.17 million, in 2001, though its stock price slipped 12 percent.

April 23, 2002

Substantially lower wholesale electricity prices produced a 9.6 percent drop in first-quarter net income reported Monday by Pinnacle West Capital Corp.

July 24, 2002

"Reeling from the collapse of its wholesale power marketing business, Pinnacle West Capital Corp. said Tuesday that it would eliminate 600 jobs, or about 8 percent of its workforce, by year's end."

October 21, 2002

Bill Post, chairman and CEO of Pinnacle West Capital Corp. and chairman of the board of Arizona Public Service, will receive the National Americanism Award at Thursday's Anti-Defamation League dinner. He has twice been chairman of the dinner.

October 29, 2002

Mild summer temperatures, severance costs and a feeble wholesale power market produced sharply lower third-quarter earnings for Pinnacle West Capital Corp.

Also contributing to the lower earnings were a $15 million loss at Pinnacle's El Dorado Investment Co. unit and a $1 million loss at its SunCor Development real-estate unit

November 2002

"Greater Phoenix Business Leadership Coalition are working together like never before and have thrown their support behind the expansion of Phoenix Civic Plaza."

"I think we're on a path where we can make real major additions to the kinds of things that the community needs to do," said Bill Post who is a coalition founder and chairman of its CEO-led steering committee.

November 27, 2002

Governor Elect Napolitano names a blue ribbon panel to analyze Arizona's tax structure.  She names Bill Post Co Chair.

December 11, 2002

Post is appointed to the Board of TGen and the Super Bowl Bid Committee.

February 5, 2003

"Pinnacle West Capital Corp. reported its first quarterly loss in a decade Tuesday after one-time charges for canceled contracts and an accounting change eroded profits already weakened by rising fuel costs and an unusually mild winter."

February 26, 2003

Post earns the praise of the Republic Editorial Board for his active support of the publicly-financed Downtown Civic Center.

March 28, 2003

Meanwhile the Redhawk and Silverhawk plants do not earn enough to cover the debt payments and APS seeks permission to loan its competitive affiliate $500 million to cover the shortfall.

"With a 4-1 vote Thursday, the Arizona Corporation Commission approved a $500 million loan from APS to Pinnacle West Capital Corp. to help pay off construction loans associated with its Red Hawk, West Phoenix and Silver Hawk power plants. The move required the commission's approval because APS would have to borrow the money to lend to its parent, which could put ratepayers at risk." 

Spring 2003

Governor Napolitano's Blue Ribbon Tax Commission is meeting nearly every week state wide.  Post says "the long-term recommendations could include a revamping of the state's property tax system, closing some sales tax exemptions and other tweaks to Arizona's tax code."

May 27, 2003

Meanwhile, The Company's investment in Redhawk and Silverhawk have soured.

"APS Chairman Bill Post said Wednesday that the company would seek to recover from ratepayers the $1 billion cost of two power plants built by an affiliate and at least $234 million in deregulation-related costs."  (So much for the plants being built for the "competitive market.")

June 28, 2003

After a decade of rate decreases, Arizona Public Service Co asked regulators Friday for a $175 million per year rate increase.  It is the first rate increase sought by the utility since 1991 and would substantially erode a 15.7 percent drop in rates since 1994.

June 30,  2003

The Blue Ribbon Commission announces an interim report "Perhaps the most controversial is the goal of "vertical equity," with taxes increasing along with the ability to pay."

August 1, 2003

The Republic prints an Op Ed column containing the sentence. "There is one superstar who does seem to stand out and I'd like to throw some kudos at this gentleman because he does seem to rush in where angels fear to tread. His name is Bill Post."

October 23, 2003

After meeting almost constantly for nearly a year the Blue Ribbon Tax Committee issues its recommendations.

"The entire package would broaden the tax base by levying more than $800 million in new taxes on services, property, real estate transactions and businesses that lost exemptions."  Additionally, the package would shift $600 million in taxes from businesses to homeowners.

October 24, 2003

"The response was quick and vehement Thursday to proposed tax reforms that could affect life in Arizona from haircuts to home sales to satellite television installations."

"Republican lawmakers said the recommendations will never fly. Realtors set aside $2.1 million to fight the proposals. Small businesses, ranging from bug sprayers to chiropractors, vowed to continue their fight against potentially costly changes in the tax code."

Commission Chairman Bill Post, chief executive officer of Arizona Public Service Co., said through a spokesman Thursday that he didn't want to respond to critics of the recommendations until the plan was finished.

December 18, 2003

Napolitano abandons the Blue Ribbon Commission. 

"Gov. Janet Napolitano will not push for tax reform in the 2004 legislative session. The reason, she said, is that her handpicked task force has not delivered its ideas to modernize and streamline the tax code."

January 2004

Nuclear Regulatory Commission officials call in Palo Verde managers to discuss concerns raised over allegations of deteriorating relations between management and workers.

January 15, 2004

Valley leaders on Wednesday launched an intense lobbying effort to persuade lawmakers to place a $15.8 billion transportation plan on the May 18 ballot. "It would mean drivers would spend more time on the road," said Marty Shultz, vice president of government affairs for Pinnacle West Capital Corp. and a key lobbyist for the transportation plan.

February 3, 2004

Unit 1 is shut down when radioactive water is discovered dripping from a drain line.

Also on February 3, 2004

Business leaders and elected officials beat back efforts to wreck the 20-year regional transportation plan of freeways and transit."This sends one of the most important signals we've sent in a long time," said lobbyist Marty Shultz, who played a key role in talks at the Legislature. Shultz, was deputized by Pinnacle West boss Bill Post to push the measure...

February 19, 2004

Unit 2 is shut down when radioactive water is found leaking from a tube in the unit's steam generator. The NRC launches an investigation.

February 29, 2004

Unit 3 is shut down because of electrical problems. Later, boron is found on a heater sleeve, indicating a leak of radioactive material.

March 6 2004

The “Business Coalition” holds its second summit, its top issue: improving the state's education system.  Bill Post continues to act as Chair of the groups "Leadership Council."

May 2004

NRC team sent to Palo Verde to investigate a potential erosion of a "culture of safety" after allegations of management-employee disconnect.

June 7 2004

Unit 3 shut down after turbine control fails.

June 14, 2004

Units 1, 2 and 3 are shut down when a power surge cuts off outside power to the plant. NRC sends a team to investigate.  Investigators conclude that  bird droppings knocked out a transmission line  taking down all three reactors and plunging the Valley into a power crunch.

July 4,2004:

A fire at Westwing substation destroys five transformers and restricts power imports.

July 20, 2004:

A fire at Deer Valley substation cuts power to parts of the Valley.

July 29, 2004

All units are taken offline as air is found in a line that provides water for emergency cooling for the plant's three reactor cores.

July 30, 2004

Earnings fall of 11% per share is masked by $21 million one time gain on sale of PNW's ownership in the Phoenix Suns.

August 15, 2004

Bill Post helps launch "Mainstream Arizona", a group “building a big war chest, which it is using to help moderate Republicans win their legislative primaries in the ongoing battle for the soul of the Arizona GOP.”

August 20, 2004

NRC sends team to Palo Verde to evaluate July 29 waterline issue and follow up on investigation of June 14 outage.

September 5, 2004

"Marty Shultz, the quintessential political insider, a lobbyist for Pinnacle West, articulates the growing concerns of corporate Arizona.  Shultz has concluded that the current conservative legislative leaders are retreating from the realities of the state's economic and social agenda.

Who was it, he asks, his voice rising, who resisted the Civic Plaza, designed to bolster tourism, a major employer in the state?* "Who resisted the university research for bio-sciences?"* "Who opposed (all-day) kindergarten? It was always the same guys," Shultz said.

September 8, 2004

Mainstream Arizona's mailings trigger matching funds from the Clean Elections Commission and a handful of "Mainstream" incumbents lose their elections.  Mainstream Arizona pays a fine for failing to register as a political committee and is disbanded.

February 10, 2005 

Unit 1 is shut down  to repair a faulty breaker.

March 19, 2005

"Valley power supplies could be tight this summer because of a delay in the arrival of new transformers to replace those destroyed in last summer's disastrous Westwing substation fire."

March 29, 2005

"Arizonans will see their monthly electric bills increase an average of 4.34 percent as a result of a rate increase granted to Arizona Public Service Co. on Monday by state regulators."

"The agreement allows APS to recover from ratepayers a $700 million investment in the Redhawk plant made by its parent, Pinnacle West Capital Corp."

"APS is granted a "power-supply adjuster" (PSA) that allows APS to pass on to ratepayers 90 percent of the increases in the costs of fuel for its power plants and electricity that the company must buy to make up supply gaps."   However, APS agrees to a narrow trading band.  If gas prices rise dramatically, APS pays the excess.

April 17, 2005

Among utilities, Pinnacle West Capital Corp., parent of Arizona Public Service, pays a dividend exceeding 4 percent. That's about twice the payment of Unisource Energy, parent of Tucson Electric Power. 

May 22, 2005

Plant operators shut down the Unit 3 reactor May 22 to repair a coolant pump oil leak. While repairing that problem, plant operator Arizona Public Service Co. discovered some problems with the plant's heaters that help regulate pressure in the reactor's cooling system.

July 23, 2005

"Four months after winning approval to increase rates, Arizona Public Service Co. late Friday asked state regulators for another increase in electricity bills to help offset the rising cost of fuel."

"APS wants state regulators to approve an "adjuster" that would raise the typical residential customer's bill 2.1 percent to $110.66 from $107.92. The utility said the increase is warranted under terms of a state-approved rate plan that allows the utility to pass along its fuel costs."

July 28, 2005

Pinnacle West Capital Corp., which reported a second-quarter profit drop largely due to a $59 million after-tax loss from the sale of Silverhawk power plant near Las Vegas.

(Silverhawk is other merchant plant that PNW built at the height of the market.  Recall that the ACC put the sister "Redhawk" plant into ratebase, PNW's disastrous foray into merchant power is over.)

August 30, 2005

Hurricane Katrina wipes out most of the Gulf Coast Natural Gas industry.  Gas prices break through the PSA trading band almost immediately.  Leaving APS on the hook for nearly $500 million in higher gas costs.

September 28, 2005

"Arizona Public Service wants its customers to help pick up the tab for more than $30 million the utility paid to replace energy lost this year when a string of unplanned outages at Palo Verde Nuclear Generating Station shut down the plant's reactors."

October 4, 2005

A reactor at the Palo Verde nuclear power plant has been shut down for the third time this year due to a leaking oil seal.

October 13, 2005

"The Palo Verde Nuclear Generating Station, 50 miles west of downtown Phoenix, was idle Wednesday after two of its three reactors were shut down because of safety concerns. A third unit at the nation's largest nuclear power plant was taken off-line Oct. 7 for refueling and repairs."

Also on October 13, 2005

The Republic's John Talton gushes "Chairing the Arizona Bioscience Roadmap Steering Committee is Marty Shultz, vice president of government affairs from Pinnacle West Capital Corp., parent company of Arizona Public Service. Shultz is a power broker in the tradition of Arizona business leadership, widely trusted and well positioned to be a mediator."

October 14, 2005

"Pinnacle West Capital Corp.'s stock hit a 52-week low Thursday as investors reacted nervously to the shutdown late Tuesday of the Palo Verde Nuclear Generating Station west of Phoenix."

October 20, 2005

Pinnacle West Capital Corp. said Wednesday that its board approved a 5.3 percent increase in annual dividend payments.

The board's vote means shareholders will see an annual 10-cent increase in dividends to $2 per common share. The new dividend rate of 50 cents per quarter is payable Dec. 1 to shareholders of record as of Nov. 1.

November 5, 2005

"Arizona Public Service is seeking to raise electricity rates 20 percent to pay for soaring energy costs, power plants and distribution lines needed to keep pace with the Valley's rapid growth.

The Phoenix-based utility on Friday filed its largest-ever rate hike request of $409.1 million with the Arizona Corporation Commission, the state regulatory agency that must review and approve rate increases."

December 22, 2005

"Key executives pushed the region's progress in biosciences this year, especially pushing forward the University of Arizona medical school in Phoenix. Don Budinger of the Rodel Foundation, Marty Shultz of Pinnacle West Capital and Dick Silverman of Salt River Project played critical roles in keeping everyone together."

December 23, 2005

"Arizona Public Service Co. warned state regulators on Thursday that soaring natural-gas prices have sent fuel and power costs so high that it may need to seek an emergency rate hike early next year.

Such a move would provide immediate cash for the Phoenix-based utility and appease a Wall Street rating agency that signaled that APS' credit could be downgraded to junk status by January unless regulators allow it to charge more for electricity.

APS already has two cases before the Arizona Corporation Commission and plans a third "adjuster" case in April. All three cases seek to hike electricity bills to raise cash and recover money the utility spends on fuel for power plants and purchased electricity."

January 18, 2006

Palo Verde Unit on is shut down after APS discovers a problem with the unit's main emergency shut-down line.

January 25, 2006

"Arizona Public Service Co. won approval from state regulators on Wednesday to raise electricity bills $112 million in the first of what could be a handful of increases to ease the company's financial jam, executives said more rate hikes are needed to ensure that the firm's corporate bond rating doesn't sink to junk-bond status."

February 2, 2006

"The parent company of Arizona Public Service Co. said its fourth-quarter profits fell 37 percent because of higher fuel costs, a loss from the sale of a power plant, and lower returns from its energy-trading business.

APS executives cited many reasons for the drop in profits: higher operating costs in customer service and electricity generation, a loss from its sale of the Silverhawk power plant in Nevada and less cash generated from its energy trades. Also, the company's 2004 earnings were lifted by the sale of its stake in the Phoenix Suns."

February 3, 2006

"Arizona Public Service on Thursday asked state regulators to approve  $59.9 million increase to pay for costs related to last year's outages at Palo Verde Nuclear Generating Station and other fuel costs."

March 10,2006

"Even as Arizona Public Service Co. seeks to collect more than a half-billion dollars by raising electricity bills for customers, its parent company has rewarded investors by increasing dividends every year since 1993.

Pinnacle West Capital Corp. has been one of the most consistent dividend payers among the nation's regulated utilities.

It has increased payouts to investors by 10 cents each year since 1993, making it just one of 11 investor-owned utilities that pay an annual dividend of at least $2 per share. This year, it will return $186.7 million to shareholders."

April 6, 2006

"The Arizona Corporation Commission on Wednesday approved Arizona Public Service Co.'s request to levy a $15.3 million surcharge on customers to recover fuel costs."

April 28, 2006

"Moody's Investors Services on Thursday lowered the bond rating of Arizona Public Service's parent company to one notch above junk status, a move that threatens to significantly raise borrowing costs for the state's largest electric utility."

May 3, 2006

"Electricity bills for Arizona Public Service customers will increase 7.6 percent next month after Arizona regulators on Tuesday approved a special fuel charge that will allow the cash-starved utility to collect an extra $140 million this year."

May 10, 2006

"The Phoenix-based utility reported Tuesday that it lost $5.5 million during the first three months of this year, a sharp reversal from last year when the utility captured a $27 million first-quarter profit."

May 27, 2006

"Phoenix-area business leaders want to knock five years off the Valley's 20-year plan for updating and building freeways. They have called a transportation summit to see if they can complete the work in as few as 15 years. For business people, good transportation is critical because traffic jams cost them money, said summit organizer Marty Shultz, vice president at Pinnacle West Capital Corp. and a longtime transportation activist."

July 4, 2006

"Unit 3 shut down on Saturday after a loss-of-pressure incident that spilled thousands of gallons of non-radioactive water into the reactor's turbine building and elsewhere."

July 8, 2006

Bill Post named to the Board of Governors of Thunderbird School of International Management.

July 17, 2006

Jack Davis, president and chief executive officer of Arizona Public Service, takes over the role of board chairman of the Greater Phoenix Chamber of Commerce. 

July 22, 2006

"Sweltering heat and an influx of new residents produced a 320 percent increase in quarterly profits for the parent company of Arizona Public Service Co. But that doesn't change the utility's plans to ask for significant increases in customers' monthly bills."

July 28, 2006

"State regulators want to hold a special meeting to examine Arizona Public Service Co.'s financial condition after the utility's parent company last week reported a fourfold increase in quarterly profits."

August 11, 2006

"Even after Arizona Public Service Co. halted executive bonuses last year because of a cash crunch, seven of the utility's top executives took stock awards totaling nearly $1 million in late July and early August."

September 13, 2006

"A dozen Palo Verde Nuclear Generating Station supervisors and line workers either have been fired or transferred since February as the plant tries to ease federal regulators' concerns about oversight at the nation's largest nuclear plant."

October 28, 2006

Higher revenue from electricity sales during the summer and fuel-cost deferrals of a year ago helped Pinnacle West Capital Corp report a third-quarter profit 78 percent higher than a year ago.

December 14, 2006

"Arizona Public Service Co. announced a management shake-up Wednesday aimed at improving performance at its troubled Palo Verde Nuclear Generating Station 50 miles west of Phoenix.

The company said that Jim Levine, 57, is retiring as the company's chief nuclear officer and will be replaced after the first of the year.

Donald Brandt, chief financial officer of APS and its parent, Pinnacle West Capital Corp., has been named president of the state's largest electric utility, replacing Jack Davis, who will continue as CEO and head of power generation."

February 23, 2007

Federal regulators on Thursday downgrade Palo Verde Nuclear Generating Station into the category of most-regulated nuclear plant in the country.

April  21, 2007

"Federal authorities are accusing a former engineer at Palo Verde Nuclear Generating Station of illegally taking software codes to Iran and downloading details of control rooms, reactors and designs of the nation's largest nuclear plant."

April 21, 2007

"Pinnacle West Capital Corp. reported that Chairman Bill Post was paid $7.5 million in total compensation in 2006, according to papers filed Friday with the Securities and Exchange Commission."

May 22, 2007

Bill Post announces that the Arizona Utility Investors Association has changed its name to the Arizona Investment Council and will expand its mission to issues involving the state's infrastructure.

Also on May 22, 2007

Lehman Brothers downgrades APS stock from "Hold" to "Sell."  The stock falls 11%.

June 12, 2007

APS files a statement with the ACC claiming that the ACC's proposed $286 million increase "fails to provide an adequate financial basis for APS to maintain its credit and raise necessary capital."

June 13, 2007

Arizona Corporation Commission set to vote on $449 Million APS Rate increase.

 

So there you have it...the fall of APS.  Astonishing isn't it? 

Every milestone has been covered in the local media but no one has taken the time to present the big picture.  In retrospect the mistakes are obvious:  A billion dollar foray into merchant power, too much exposure to natural gas prices, inattention to Palo Verde. 

Now, perhaps you can see why Dow Jones Utility Average has risen 15% so far this year while PNW has fallen 5%...not the result that you would expect for the dominant utility in the fastest growing state in the nation. 

All the while, company executives chair transportation committees, blue ribbon panels, chambers of commerce and even a major university.  They spend thousands of hours advocating for higher taxes, light rail, consolidated school districts, more freeways, better infrastructure, Bio Tech, the Super Bowl, and a new Downtown Civic Center.

They complain about the Corporation Commission yet it bails them out again and again. By the end of 2005, APS had three rate increase requests pending simultaneously.

On Wednesday, APS will go in front of the Arizona Corporation and once again argue that without adequate relief its bonds will turn to junk.  The Commissioners--none of whom want APS to fail on their watch--will likely once more give APS the rate relief it seeks. 

The management team will celebrate with a nice dinner and go back to what it does best, building Civic Centers, attracting Super Bowls, accepting awards and reading glowing editorials.