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APS CEO Don Brandt won’t discuss electric bills, dark money

The APS CEO continues to avoid questions about rate hikes and donating corporate dollars to campaigns aimed at opposing the Red for Ed movement and a solar energy initiative.

PHOENIX — One of Arizona’s most influential figures in business and politics has managed to avoid answering direct questions from 12 News and other media outlets about his role in several controversial chapters of Arizona's largest utility company dating back to 2013.

Don Brandt has overseen Arizona Public Service (APS), and its parent company Pinnacle West Capital Corporation, during an unprecedented era of political activism by the utility. Most recently, Pinnacle West donated millions of dollars to two prominent messaging campaigns aimed at opposing the Arizona school funding movement and a solar energy initiative.

Two reporters from 12 News have repeatedly requested interviews from Brandt for several years, to no avail. Brandt also denied a request to provide an interview with the Arizona Republic around 2014. Generally speaking, the influential CEO uses written statements and company surrogates to respond to probing questions.

“Yeah, I think he is generally mysterious,” said Jim Small, editor of the nonprofit news organization Arizona Mirror. Small has covered politics in Arizona for more than 15 years for The Arizona Capitol Times and the Arizona Center for Investigative Reporting. “There are a lot of people in politics you are able to trade war stories about. There aren't many people who have talked to him or who have direct access to him.”

Criticism and questions of accountability

It would be one thing if APS was just another corporation, but as a regulated monopoly, the utility company is in a unique position of public trust. It provides electricity to more than 1.2 million Arizonans who have no choice but to buy their electricity from APS.

Pinnacle West uses a portion of the wealth gained from APS customers to wield considerable political power.

“One of the things they are very good at doing is currying favor among elected officials at all levels of government,” Small said.

Brandt’s decision to avoid direct questions from news media about the company’s activities is in contrast to how he described himself in a newly released YouTube video created by the Arizona Chamber of Commerce and Industry’s “Chamber Business News” earlier this month.

“I get the privilege of being the spokesperson— so to speak— for the company, and I represent 6,300 men and women who have accomplished a lot,” Brandt said.

Critics accuse Brandt of only appearing in public when there is a charity announcement or a carefully orchestrated event that shield him from scrutiny.

“When it comes time for some accountability for the company to answer questions about their role in public life here, about their rate hikes, then you can’t find him (Brandt),” said David Pomerantz, director of the Energy and Policy Institute, a utility watchdog organization that promotes renewable energy policies. The California-based institute receives funding from nonprofit environmental foundations, Pomerantz said.

Most recently, APS has come under fire from hundreds of customers who signed a petition challenging the way a 4.5 percent rate increase has been implemented. They secured a hearing at the Arizona Corporation Commission to address their concerns.

During the public comment portion of the hearing last week, customers described experiencing sticker shock at receiving monthly electricity bills that were much higher than a 5% increase. New “on-peak” rate plans are intended to give customers more options to save money according to their usage. A spokesperson for APS says one month's bill can be misleading. But there is confusion. Some customers speculate the system is rigged against them.

They accuse APS of purposely making the billing process complicated. Several customers who spoke out last week made references to Brandt and his annual compensation (reported by The Arizona Republic last year to be more than $15 million dollars).

“We’re talking about someone who is making over a million dollars a month,” said Stacey Champion, a business owner and APS customer who filed the petition against APS on behalf of customers. “It seems if Don Brandt has time to hold fundraisers for politicians he should definitely make the time to speak to the media, as well as the millions of people in this state, who have questions about the practices of the company that he runs.”

One could argue it’s not necessary for Brandt to answer direct questions on behalf of the company. APS attorneys and employees testify before the Corporation Commission, providing ample information about the intricacies of electricity policy. Media-relations employees issue statements defending the company’s integrity.

But Brandt has a vantage point of APS operations that no one else has.

Pomerantz says APS's political influence is unlike most utility companies across the country.

“APS has been pretty exceptional at how brazen they’ve been about trying to dominate the entire political system in Arizona,” said Pomerantz.

"A legal form of corruption"

According to public campaign reports, Pinnacle West, under Brandt’s leadership, has donated at least $23 million through Political Action Committees and campaign donations since 2014. It is widely believed that Pinnacle West donated at least $3 million of so-called “dark money” to support corporation commission candidates in the 2014 election. Pinnacle West donated more than $4 million to support Corporation Commission candidates in the 2016 election.

Ethical questions have been raised about whether those donations create a conflict of interest.

“I would describe it as a legal form of corruption,” said Pomerantz.

Republican Commissioner Bob Burns has filed a lawsuit attempting to force groups who donated to comission campaigns to disclose if they received money from Pinnacle West. He also attempted, unsuccessfully, to force Brandt to answer questions to the commission last year.

“I did everything I could in my power but I was ultimately voted down by the other four commissioners,” Burns said, speaking to 12 News in a phone interview in August.

Burns was referring to an APS rate settlement hearing in June 2017. Burns requested that the judge overseeing the proceedings issue subpoenas to Brandt and other APS leaders to testify for the purpose of “fact finding.” Burns also proposed a motion to launch an investigation into whether the other commissioners should be disqualified for alleged conflicts of interest.

As 12 News has previously reported, the FBI opened an investigation examining the relationship between campaign contributions and APS during the 2014 election. This past week, a spokesperson for the FBI Phoenix office declined to comment on whether the case is closed.

There was also the whistleblower in 2015 who alleged there were more than a dozen “secret meetings” between Brandt and a former commissioner, as well as Brandt's predecessor and the same former commissioner.

Those developments prompted Burns’ motions, but the other commissioners lashed back against Burns, labeling his motions irrelevant. Commissioner Andy Tobin called Burns “out of control.” They argued that simply because they receive donations from independent action committees that are funded by Pinnacle West, does not indicate they are cozy with APS officials or act with bias.

“If, for example, the CEO of APS walked into this hearing room I wouldn't recognize him. I’ve never met the gentleman,” said commissioner Boyd Dunn during the 2017 hearing. “Whoever is involved, in a rate case, I will treat every case similarly.”

Brandt provided a written statement to The Arizona Republic in 2015 regarding certain anonymous political contributions, defending his right not to disclose some donations. According to the Republic, the statement reads: “Compelled disclosure about political contributions that APS or its affiliates may have made out of shareholder profits would go beyond what is required of all corporations under Arizona campaign-finance law, and would impinge on APS’ First Amendment rights.”

Pinnacle West is a key donor to the Arizona Education Project

Pinnacle West’s opposition to this year's historic school funding movement has also prompted criticism. In January, the Arizona Republic reported the identity of the donors of the Arizona Education Project, a messaging campaig intended to counter the “Save Our Schools” project, which subsequently morphed into Red for Ed. Pinnacle West donated an undisclosed amount of money to the commercials along with the Arizona Chamber of Commerce.

“That (messaging campaign) was really aimed at trying to stop that movement in its infancy and, to whatever degree, it was successful. I think at the end of the day teachers had the momentum, they had the support,” Small said.

When the commercials began airing, 12 News requested to interview Brandt about why a company in the business of delivering electricity would take interest in funding a campaign opposing the school funding movement. At the time, Governor Ducey was holding firm to his proposed one percent raise for teachers. Brandt declined the interview through a spokesperson.

Regarding political contributions, Pinnacle West’s written policy states that it may support candidates and organizations that “share an interest in public policy that furthers our business objectives."

The policy continues, "the company’s contribution decisions are based on what is in the best interest of Pinnacle West and not based on the personal preferences of our executives."

"A great corporate citizen"

Though members of the news media rarely communicate with Brandt in on-the-record interviews, he is well respected by politicians and business leaders, Small said.

Brandt serves as Chair of Greater Phoenix Leadership, an organization of CEOs with the mission of furthering pro-business policies in the state.

Governor Doug Ducey told 12 News recently he considers Brandt “a friend and a leader in this community.”

Brandt and APS helped fund the Yarnell 19 State Park Memorial dedicated to the firefighters who perished in 2013, Ducey said. APS is well-known for charitable causes benefitting veterans' groups and schools.

“I consider Don Brandt a great corporate citizen,” Ducey said.

This story was updated to clarify that the Energy and Policy Institute publicly identifies itself as a watchdog group funded by nonprofit environmental organizations.

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