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September 24, 2009

Host: Ted Simons

Arizona Gaming Department

  |   Video
  • The Director of the Arizona Department of Gaming, Mark Brnovich, discusses the role and responsibilities of the department.
  • Mark Brnovich - Arizona Department of Gaming
Category: Government

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Ted Simons: What happens in Vegas doesn't always stay in Vegas. Casinos receiver where, and in Arizona 23 casinos are operated by 15 Native American tribes. The growth of Indian gaming makes tribes more economically self sufficient but also creates a tempting opportunity for crime. Joining me is Mark Brnovich, who has a long history of prosecuting casino crimes and in march Governor Brewer appoint him director of Arizona's department of gaming. Director of gaming, looking at tribal casinos, what else?

Mark Brnovich: The department of gaming is a law enforcement agency which is charged with protecting the public, ensuring the integrity of gaming and also monitoring compact compliance. Working hand in hand with our tribal partners, we ensure that casino operations are operated pursuant to the compact and when patrons go into those facilities they know they're operated in the safest and most professional manner. Additionally, the department of gaming also has statutory authority to investigate a criminal activity off reservation. One of -- I know the governor is very serious about protecting the public, and pursuing criminal cases when they do arise, even in these tough budget times. So one of the things that I would like to bring to the department is a much more aggressive approach to gaming occurring off tribal lands.

Ted Simons: I want to talk more about that. We think about casino crimes and it's Ocean's 11, all this sort of businesses. There's a lot going on, from defrauding to other aspects. Talk about what kind of casino crimes you often see and have to go after.

Mark Brnovich: Well, the interesting thing is that prior to my appointment, prior to Governor Brewer appointing me, I was an assistant United States attorney and I focused primarily on pursuing and prosecuting casino and gambling-related crimes. What we've seen historically is when you don't aggressively pursue and go after those gambling and casino-type crimes, we see the public erosion in confidence in the gaming establishments. Additionally it attracts organized and unorganized crimes. The types of crimes, you see everything from armed robberies or people attempting to maybe steal a cash drop, to employee and patrons-crimes of opportunity, where you have folks that are maybe tough economic times, or because of the situation they're in, decide, well, the temptation is too great. It's one of the reasons why the department does background investigations and certifies even vendors in order to attempt to try to prevent some of those types of criminal infiltrations from getting in the front door of casinos.

Ted Simons: Organized crime much of a factor?

Mark Brnovich: In Arizona, fortunately no. We have a system here, a three-tiered regulatory system. We have the national gaming commission as well as the tribal regulators and the department of gaming working hand in hand tone sure those types of influences don't come into Arizona casinos. Of course historically any time you're dealing with a cash intensive industry like the casino, the gambling industry, you're going to attract the crooks, the cheats, the criminal elements, the corrupting influences, like moths being drawn to the flame. But as the result of our vigorous regulatory structures, the result of going after and prosecuting those cases when they arise, you keep that kind of stuff out of the state.

Ted Simons: Tribes themselves, are they doing a good job in policing their own casinos? Talk about the cooperation there and how good a job they're doing.

Mark Brnovich: The department of gaming works very, very closely with our tribal partners to ensure the integrity of those gaming operations. I'm very fortunate to be appointed to work at a department with so many great and fine quality individuals that have a lot of experience and knowledge. The department has 37 sworn peace officers as well as dozens of other employees and auditors that work once again hand in hand at the tribal authorities and the tribal gaming offices to ensure the integrity of the gaming operations.

Ted Simons: Llet's talk about the compacts. You referred to them earlier. How much money does the state get from tribal casinos?

Mark Brnovich: Well, a couple things about that. One, I think it's important to clear up a misnomer. Some people say we don't know how much money is coming in that's not true. We know exactly how much money comes in. The department of gaming is charged, we have auditors, we review the tribal books and we know exactly how much money comes in. The compacts provide for 1-8% of tribal revenue ends up coming to the state. This last fiscal year was about the total was about $96.5 million. Cumulatively since 2003, since these current compacts went into effect, it's about half a billion dollars. So we're seeing a significant amount of revenue, and if I can add one thing on that, it's not only the revenue the state is getting but we've got to remember part of the reason why Congress passed the Indian gaming regulatory act of 1988 was because of the conditions that existed in Indian country. And one of the things or three of the things Indian gaming regulatory act is supposed to do is really encourage tribal self-sufficiency, promote tribal self-governance and additionally promote economic development. That's one of the things the gaming revenue is doing, providing economic opportunities in Indian country.

Ted Simons: Opportunities are there, tangible results. Seen it?

Mark Brnovich: I think anyone that's lived in Arizona as I have, grew up here, you can see just in the last decade, last 20 years, the positive results that Indian gaming has brought to tribal land. We see everything from new police stations, fire stations, dialysis centers. We have educational opportunities, scholarships for tribal members. We're seeing a lot of positive results in Indian country, but obviously there's a lot more that can be done.

Ted Simons: As far as the money coming into the state, where's that money going?

Mark Brnovich: There's basically by statute as a result of the voters passing prop 202 in 2002, the money is allocated to certain funds. And the tribes make contributions to local communities, but additionally, the funds come into everything from education funds, to trauma and emergency Services funds, to the wildlife fund, tourism fund. So the money is being used to fund various state functions.

Ted Simons: There are those who say that maybe the tribes should be contributing a little more than they do. Is that a valid argument?

Mark Brnovich: Well, once again, we have to look at the reasons why we have Indian gaming. These aren't for-profit private entities. These are government entities, and as folks know, I'm sure, that have been around in Indian country, there's a lot of economic development, a lot of infrastructure, a lot of development that needed to take place. So this is a little different than your traditional MGM or Caesars private gaming establishment. What we're talking about here is a gaming that's being used to fund vital government functions, and ultimately the voters in 2002 were presented with various options, and these are the compacts that the voters enacted, which became part of state law.

Ted Simons: Voters also are presented with an option for RACiNOS, the idea of casino games at race tracks. Does that -- obviously when you talk about compacts, you talk about the wherewithal of gaming, that changes the whole ball game.

Mark Brnovich: It's definitely a game-changer. The landscape here in Arizona would change dramatically if indeed Gaming was allowed to go off reservation. The compacts provide that tribes can operate casinos without regard to limitation as to size, number of games, types of games. So it's a game-changer. Frankly the voters had a chance to run that in 2002 and they overwhelmingly rejected it.

Ted Simons: Would you have a staff if RACiNOS were looked at again and approved?

Mark Brnovich: The department of gaming has the expertise and knowledge to handle gaming operations investigations, but obviously there would have to be a ramp-up if gaming did go off reservation.

Ted Simons: Good to have you here. Thanks for joining us.

Mark Brnovich: Thanks, I appreciate it too.

New EPA Rules

  |   Video
  • New rules by the EPA require big businesses to monitor and report greenhouse gases. Benjamin Grumbles, the new head of the Arizona Department of Environmental Quality, discusses the new rules.
  • Benjamin Grumbles - Director,Arizona Department of Environmental Quality

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Ted Simons: The environmental protection agency recently issued rules that require big companies to monitor and report greenhouse gas emissions. How does the Arizona department of environmental quality see the new rules? Here to answer that question is Benjamin Grumbles, director of ADEQ. These new rules, these are meant to what, make requirements more flexible, reporting more flexible? What's happening?

Ben Grumbles: We think that reasonable reporting requirements help reduce emissions, reward stewardship, and inform policy decisions, so this rule while not -- while not perfect, it's a good solid step forward. It basically is providing information for the first time ever, national, uniform information system to help inform all of us how to reduce greenhouse gas emission and have a greener economy.

Ted Simons: Some would say more flexible-yes-but that may be at the cost of comprehension and getting the job done. Your response?

Ben Grumbles: My response is that the rules have to be cost effective, and flexible. And pragmatic. So this is a good step, it's going to provide information. The rules cover 85% of the national greenhouse gas emissions. We're comfortable with many aspects of the rule because we and our partners in the western climate initiative made it very clear that there need to be some thresholds, you need to look to reduce reporting, and you need to make sure that small entities are not caught up in the reporting system.

Ted Simons: Talk about the relationship between the western climate initiative and what's happening on a federal national level here. Was the western climate initiative a bit of a precursor, an inspiration?

Ben Grumbles: The western climate initiative has been providing some impetus to develop a national approach. Arizona continues to be a partner, and a member of this western climate initiative of different states throughout the west. We think it's important, it provides us an opportunity to provide an Arizona-specific or a western-specific view to EPA, and to Congress as they consider broader national approaches.

Ted Simons: So Arizona still involved with the western climate initiative. I know there are some lawmakers and some folks around the state who would rather that not happen, want to get us out of this whole thing. Your response?

Ben Grumbles: And Governor Brewer's response is that it's important to be engaged, to be protecting Arizona's interests. It's important that the old saying that if you're not at the table, you may be on the menu. It does hold true in this instance. So we're providing valuable input. We do push back. We have robust discussion was some of our other western states and most importantly, we provide information to Congress and to EPA to say, look, we need to be more flexible or more cost effective in certain ways, and much of that is reflected in this final rule.

Ted Simons: The role of the department, the environmental quality, so people that are -- can become more familiar with what you do, talk about roles and responsibilities.

Ben Grumbles: Well I'm honored to be the agency's new director. The agency has the important mission of protecting public health and the environment throughout the state. There are about 600 employees, and we focus on ensuring the air is cleaner, the water purer, the land better protected, and we focus on climate change and on issuing permits and ensuring standards are in place. And work with business and industry to advance the state's public health and welfare.

Ted Simons: How about budget cuts? What are you facing, what are you seeing?

Ben Grumbles: Well our agency like all state agencies are affected by the budget cuts. It's an opportunity for us to look for ways to be leaner and greener, to reduce red tape. It does have an impact, and we want to be sure that we have the people in place to run the programs that protect the environment. I think we're making headway, we're finding ways to be more efficient. But it also means we have to work harder to build partnerships with the private sector, to look to fees, to various innovative financing so we can run environmental programs throughout the state and work with business communities to make environmental progress, while maintaining our state's economic competitiveness.

Ted Simons: Is there a way of innovative financing that has caught your eye?

Ben Grumbles: There are several aspects. When it comes to leveraging federal dollars, it's very important to look for ways to have cost sharing, to have innovative public-private partnerships, that's particularly the case with water and wastewater infrastructure systems. Fees are very important aspect of sustainability. So as we look to maintain our programs and to build partnerships, provide the services that we provide, we know that fees for air and water permits are going to be an important part of the process.

Ted Simons: Federal stimulus money, how does it affect your department?

Ben Grumbles: It's a very important part of ensuring environmental protection throughout our state. We -- I think the state should be quite proud of how agencies in the state, particularly our agency, is moving quickly to get those dollars in place so that the shovels are in the ground. $80 million in new money for water and wastewater infrastructure systems have been provided and are being distributed. $3 million for cleaning up underground storage tanks and revitalizing brownfields. So federal stimulus dollars, we shouldn't rely on them forever, they can help jump-start good ideas and projects and we're doing exactly that.

Ted Simons: I can't let you go without commenting on uranium mining near the Grand Canyon. A lot of controversy and a lot of concern. How is that mining operation good for the quality of the environment?

Ben Grumbles: Well, I'm glad you asked that. One of the key -- we feel one of the key aspects of a sustainable energy policy for the nation involves nuclear power. In Arizona, nuclear power provides about 24% of the state's energy supply. Electricity supply. Uranium is a key part of that. Our agency, whose job it is to protect husband health and the -- public health and the environment, feels it's so important to protect the Grand Canyon and the natural resources throughout our state. There are some opportunities in the northern portion of Arizona to allow for uranium mining to go forward if proper and strong environmental safeguards are in place. We have worked very hard over the last several years to ensure that permits are in place for a few particular mines, and frankly I'm encouraged based on the air safeguards and the water safeguards for one of the permits we just issued that we're going to see progress by having uranium mining done in a protective way, and also provide a valuable carbon-free fuel for the future.

Ted Simons: I know the major concern, though, is for Colorado river water and for groundwater in the area. From where you sit, can you tell those that are concerned about that that safety is being looked at and those things will be protected?

Ben Grumbles: Absolutely. And the concerns are well placed that we always want to make sure that this state's precious groundwater supplies and water supplies, whether it's the Colorado river, or other water bodies throughout the state are protected. For uranium mining, we're looking extra hard and carefully to make sure that pollution does not migrate into groundwater, or into the lower or upper Colorado rivers. And that's important. So for some of the pending permits, we haven't made our final decisions. But for at least one of them we feel we've got some safeguards in place, and any good permit is going to require continuous monitoring and accountability. That is a key component. And we're absolutely committed to that.

Ted Simons: All right. Very good. Thank you for joining us. We appreciate it.
Ben Grumbles: Thank you.

Solar Power Trip

  |   Video
  • Members of the Greater Phoenix Economic Council traveled to Germany to encourage solar companies there to relocate to Arizona. Barry Broome of GPEC discusses the trip.
  • Barry Broome - Greater Phoenix Economic Council
Category: Business/Economy   |   Keywords: gpec, barry broome, solar energy,

View Transcript
Ted Simons: Good evening, and welcome to "Horizon." I'm Ted Simons. The criminal case against county supervisor Don Stapley was officially dismissed today. Maricopa County superior court judge Kenneth Fields dropped all charges against Stapley at the request of the special prosecutor in the case. Those charges can be filed again. Stapley originally faced 118 counts related to financial disclosure forms, but about half of those counts were dropped last month because the county never properly implemented rules for financial disclosure. The rest of the charges were officially dropped today because they relied on those previously dismissed counts. In addition to all this, Stapley was arrested Monday on suspicion related to a campaign for president of a national county officials group. Prosecutors have yet to press charges in that case.
Representatives of the greater Phoenix economic council are in Germany this week encouraging solar companies to relocate to the valley. They no doubt are using Arizona's new renewable industry tax incentive bill as a major selling point. Here now to talk about the trip is Barry Broome, president and CEO of GPEC. Good to see you again.

Barry Broome: Good to see.

Ted Simons: You big world, why Germany?

Barry Broome: Well, Germany's been the world's leader in solar power for about 10 years. The solar industry in Germany is about eight times the size of the solar industry in the United States. They moved to renewable energy much more quickly, and the German government has a mandate for German companies to build presence in the United States. So it's a target-rich area, very competitive, but we're excited about the new initiative provided to us by the governor and the legislature. And we're in there making our case.

Ted Simons: What kind of companies are you talking to? Manufacturers, R &D, maybe moving headquarters?

Barry Broome: Yeah, a lot of North American headquarters. That's one of our big objectives on landing the North American headquarters. Gives you the greatest intellectual connection back to the company, keeps you in the loop with decision-makers. A lot of the thin-film manufacturers. There's a big move now on getting concentrated solar power projects in the ground in the valley, there's also going to be a need for people to build materials for those as well. So manufacturing and headquarters, a little R&D, but mostly on the manufacturing side.

Ted Simons: And what is your group telling the folks in Germany? How are they selling Arizona?

Barry Broome: Well, one of the great selling strengths of Arizona is the open environment for business, lack of regulations, and of course the tax environment is more favorable than less favorable. And of course with the incentives, the biggest problem we have a tax environment in Arizona is real and personal property taxes. These companies will have a reduction of 80% of that if they come in to Arizona, produce high-wage jobs, at 125% of the state's wage plus provide health care. So the ability to come into this market and get a cost environment that works, attraction a talent, and the ability to service the southwest corridor. Most of the solar activity in the United States, probably two-thirds is occurring in California. Arizona is is a great place to Service the California market.

Ted Simons: I was going to say proximity to California is always a factor, but what about other states in the southwest? How do we shape up against New Mexico, Colorado, these sorts of places, Oregon, which isn't in the southwest, but seems to be a major player. How are we differentiating ourselves?

Barry Broome: Right now the big differentiation strategy is the demand. As you hear more solar power installations announced in Arizona, we're trying to demonstrate that Arizona is a better place to produce a consumer market for solar than places like New Mexico, who are small, places like Oregon who can't do it. Now Texas obviously is very powerful, but they've seemed to put a greater emphasis on wind. So, the ability to create demand for the technology is really important, and that's the incentives that we've gotten from the legislature are much, much better, but they're not quite what Texas does and what Oregon does. But I think the combination of our incentives and our ability to produce the solar market long-term will be our selling strategy.

Ted Simons: As far as federal law is concerned, correct me if I'm wrong, but is there some sort of deal where renewables have to be manufactured here in the United States at a certain point, or what's that all about?

Barry Broome: Really there's the 30% investment tax credit. So the federal laws are pretty aggressive, in supporting renewables. There's also some discussion probably surfacing more with China. Another big pipeline to the Valley are Chinese manufacturers. Both an opportunity and concern. But the German companies are bringing in better wages, Spanish companies better wages, and some good activity starting to occur out of Japan too. So those markets, Spain and Germany, are projected to be a 25-30% renewable within five to eight years. So Arizona, the mountain west is the new market for the European companies, and it should be a good business opportunity.

Ted Simons: What kind of timetable? When can we start hearing noise about companies wanting to move here?

Barry Broome: I'm hoping -- the program is not officially available until January 1. So we're in a little bit of a timetable to actually get to commit to a transaction. But I'm hoping we'll have announcements in the first two quarters of 2010 about companies coming to Arizona and creating some excitement, badly needed jobs for our area.

Ted Simons: And Germany is nice, China looks like a whole different ball game, a lot of trips planned there?

Barry Broome: The concern we have-quite candidly- with China is Germany, Spain, Japan, they're really engineering intensive play, so these are good-paying jobs. We want to make sure China is not treating solar in Arizona as a commodities play. We don't want to have the chip making reunion of the Japanese strategy, the '80s where the Chinese government underwrites solar technology and comes in and puts it in our market below what American companies can do. So we're excited about the China relationship, but I think it's something we have to watch and make sure it's fair and equitable to our country.

Ted Simons: Barry, thanks for joining us.

Barry Broome: Thank you.