Phone records show close contact between regulator, APS and 'dark money'

Extensive communications between the state's top utility regulator, Arizona Public Service Co. and a non-profit that spent heavily on campaigns for two new regulators in 2014 have been uncovered by a non-profit clean-energy group.

Debates over solar energy — and a flood of money from non-profit groups into the campaigns for those who sought to regulate utilities — marked the 2014 Arizona Corporation Commission election.

During that time, Commission Chairman Bob Stump sent more than 50 private text messages to an APS executive and 46 to a political "dark money" organizer, according to the non-profit investigating the commission.

Critics of commission members say that the regulators should not have such close contact with the utilities they oversee, and the utilities should not be participating in political campaigns, which could violate election laws and rules that prevent elected officials from campaigning with public resources.

Stump, who still is in office but no longer serves as chairman, sent 56 texts to Barbara Lockwood, the general manager for regulatory policy at APS from July to September 2014, according to the Washington, D.C.-area Checks and Balances Project, which is largely funded by a non-profit called Renew American Prosperity, which supports sustainability. The primary election was Aug. 26.

APS is widely believed to have contributed to groups that supported two Republicans in the Corporation Commission race, but utility officials will neither confirm nor deny such contributions.

The commission did not release the content of the text messages, but a representative of Checks and Balances, which has been investigating Stump, says it is continuing to press for those records, if they are available from Verizon.

Stump also sent about 180 texts to Republican candidates Tom Forese and Doug Little in the months ahead of the primary. Those two won election.

Forese and Little benefited from more than $3.2 million in political advertising by independent groups. The money was spent on ads in support of Forese and Little and hit pieces opposing their rivals.

That kind of independent support is legal as long as the candidates don't coordinate with the non-profit groups advertising on their behalf. Forese and Little said they never communicated with such groups, but the phone logs show Stump frequently texted Scot Mussi, president of the Arizona Free Enterprise Club.

The Free Enterprise Club spent about $154,000 helping Forese and Little in the primary. In June and July, ahead of the primary election, Stump messaged Mussi 46 times, and contacted him 100 times from May 2014 through March of this year, according to Checks and Balances.

"When you look at the text messages, and how they are grouped around the election, and grouped with Stump's communications with Forese, Little and Mussi ... it raises questions," said Scott Peterson, executive director of the Checks and Balances Project.

Stump said he did not discuss the political campaigns with Mussi, Forese and Little, who he said are all his friends.

"I wasn't aware of Scot's involvement (with Free Enterprise Club) until it hit the papers," he said. "I learned when everyone else did."

Stump said he did not recall discussing elections with Lockwood from APS, either.

"I would note that Checks and Balances, a left-wing, dark-money group, is cherry-picking text logs to paint an absurdly distorted picture," he said.

Stump said he sent 898 texts to a lobbyist at the Residential Utility Consumer Office, and 70 to the lobbyist at the Southwest Energy Efficiency Project, as well as 285 to a solar group.

"It would be ridiculous for me to institute a moratorium on speaking to friends in the solar or political community at large simply because we were in campaign season," he said. "I continued to be in contact with representatives of SolarCity, for example, even though TUSK (a solar advocacy funded by SolarCity) was actively involved in the 2014 campaign for Corporation Commission."

Forese said that throughout the campaign, he would learn what non-profit groups were supporting his campaign the same way most voters did, by reading the messages on the bottom of mailers. He said nobody in the Forese-Little campaign team communicated with the non-profit groups.

"We would talk regularly about the importance of making sure we were always very rigid in our adherence to the rules to not communicate with parties we had found out from the bottom of fliers that they were supporting us," he said.

Forese said Stump, a friend, was usually texting him messages of support, but not information regarding campaign funding.

"What would be discussed with Bob was general campaign strategy and the vast majority of it was encouragement as we got through the race," he said.

Little said he did not know Stump and Mussi were close.

"Bob and I would text about a variety of things during the campaign since he was endorsing us," he said. "We did not discuss any activities by the Free Enterprise Club either before or after the election. ... I met Scot (Mussi) once in January 2014 since he was interested in meeting me after I had declared as a candidate. We had coffee for about 45 minutes and discussed my background and my positions on a number of issues. That was the last time I saw or spoke with Scot until after the general election."

Peterson, of the Checks and Balances Project, said besides the possible breaches of election laws, the relationship between Stump and Lockwood at APS appears "chummy," and not at a professional arm's length.

"The bottom line with all of this is the Arizona Corporation Commission was created to regulate utilities on behalf of the citizens of Arizona, not to further the interests of utilities such as Arizona Public Service," Peterson said. "It looks unseemly. Bob Stump's credibility is at stake. His text messages and e-mails appear to show he is working far too closely with monopoly utilities."

Former Corporation Commissioner Renz Jennings said the frequent texts between Stump and APS and the dark-money campaign were "egregious" but representative of how APS has been exerting influence on elections.

Jennings, who served on the commission from 1985 to 1999, joined several protesters Wednesday at a shareholder meeting for APS' parent company, Pinnacle West Capital Corp. They were advocating for more disclosure from the company regarding its political spending.

He mentioned how APS is thought or known to have engaged in the elections for treasurer, attorney general and other offices.

"Stump has done his reading," Jennings said. "He knows that if you don't make your book with APS, they will come after you. The Republican primary elections are now decided by APS, and it is a Republican state, so they decide the election."

The rooftop-solar industry supported two other Republicans who lost the primary election for the commission, Lucy Mason and Vernon Parker. Mason, a former state representative, has since been hired to provide membership and development consulting services for the Arizona Solar Energy Industries Association.

Stump posted near-daily support for Forese and Little on social media sites during their campaign and had harsh words for the rooftop-solar industry during their swearing-in ceremony at the commission earlier this year.

"We need more light and less heat from the people who appear before us," Stump said. "We need more steak and less sizzle. One way to accomplish that is to put a stake through the heart of Chicken Little."

The "Chicken Little" comment was a reference to solar companies and their advocates who suggest the regulators are harming the industry in Arizona by imposing new fees for solar customers.

The Checks and Balances Project launched its investigation into the state utility regulators because of the solar fees approved in 2013.

The non-profit, which advocates for clean energy, has decided to home in on Stump because he was chairman of the commission when it approved a $5 average monthly fee increase for APS solar customers.

APS recently asked the commission to consider increasing that fee to an average of $21 a month.

Reach the reporter at ryan.randazzo@arizonarepublic.com.