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May 21, 2013

Host: Ted Simons

Arizona National Guard

  |   Video
  • Governor Jan Brewer asked for an investigation of alleged wrongdoing within the Arizona National Guard after a report by the Arizona Republic. The guard’s top officer has unveiled about a dozen reforms in response. Arizona Republic reporter Dennis Wagner will talk about the problems within the organization.
  • Dennis Wagner - Reporter, Arizona Republic
Category: Military   |   Keywords: military, national guard, arizona, jan brewer, reform,

View Transcript
Ted Simons: Good evening and welcome To "Arizona Horizon." I'm Ted Simons. A federal appeals court today struck down Arizona's Ban on abortions performed after weeks of pregnancy. The 9th circuit court of appeals ruled that the law violates several U.S. Supreme Court rulings on abortion, including Roe V. Wade. Today's move reverses a Lower court ruling that Upheld the law passed by the legislature and signed By the governor two years ago. Allegations of sexual, ethical, and criminal misconduct by top commanders At the Arizona National Guard were first exposed by the "Arizona republic" reports that led to state and federal investigations. A department of defense Report outlined evidence of fraud, sexual harassment and cover-ups in a culture that failed to pursue perpetrators or protect victims. Major general Hugo Salazar, The leader of the Arizona National Guard, recently unveiled reforms to address the reported problems. Here to tell us more is "Arizona republic" reporter Dennis Wagner, who broke the story. And quite a story it turned out to be. Thank you for joining us. When did you begin this investigation and why?

Dennis Wagner: It started around May of last year with a phone call from an officer, turned out to be several officers, who came to me and they said that they had uncovered, even investigated in some cases, widespread corrupt conduct. We are talking about recruiter fraud, sexual abuse of recruits, embezzlement of funds. Drunken driving that went unpunished a whole slew. And they said in their view, there was a corrupt climate and that it was tolerated by the upper levels of the guard in part because some of them were compromised by fraternization and -- all of those complaints were referred back to the administration of the guard and nothing was done. They said they came to me as a last resort when nothing else was working and what one of them said to me was, you know, at this point, the honor of the guard is so lost. I wouldn't let my daughter join.

Ted Simons: Oh, my goodness. More than one whistle blower here, correct?

Dennis Wagner: Multiple.

Ted Simons: Multiple. How long had these things been going on?

Dennis Wagner: It goes back years. Depending on who you talk to, I've had people say, well, you know, you only went back to 2005, 2006. You should have seen it in the late 90s or the early 00s.

Ted Simons: My goodness.

Dennis Wagner: I really don’t know the answer to that.

Ted Simons: We are talking, again, you mentioned a number of things here, drug dealing was also -- paintball attacks on homeless people mentioned as well.

Dennis Wagner: Right, there was a whole network of -- there was an FBI investigation of smuggling narcotics out of Mexico where they used the national guard Humvee and filled it with cocaine and what they thought was cocaine from the airplane, brought it to Las Vegas to distribute up there. The paintball attacks were -- they were called BUM hunts. And recruiters would take new recruits and other privates out and sometimes in the National Guard vehicle and drive around north Phoenix with paintball guns and they would sometimes hunt homeless people and shoot them with paintballs. Sometimes they would get them to dance for them or do other humiliating things.

Ted Simons: So, who are alleged to have been involved and how high up did they go?

Dennis Wagner: The guard is 8,000 personnel, military and -- most problems occurred with the full-time guard, constituting a forth of that number. The majority of the people in the National Guard are weekend soldiers. They have civilian jobs often. They're dedicated to what they're doing. There is an entrenched full-time personnel situation. People were, I think, in one side of the guard, I think, the average period of time being in the guard is 20 years. That's how entrenched it is. Oftentimes it is cousins, brothers, friends get hired and they have relationships, they are beholding to one another and that kind of thing goes on.

Ted Simons: You did your report.

Dennis Wagner: Uh-hmm.

Ted Simons: Department of defense becomes interested here, I would take it. We can understand why. They release a report, I think, what, earlier this month, something along those lines.

Dennis Wagner: What actually happened. I did my report and the governor announced she would have an independent investigation. She asked the National Guard bureau, a branch of -- umbrella organization over national guards, Pentagon organization. She asked them to assign an investigator. They assigned a gentleman from the Oklahoma National Guard named major general Rickey Adams. He brought in a team. They investigated for weeks or months actually here to see what they would find.

Ted Simons: And what did they find?

Dennis Wagner: They confirmed with my reporting essentially. They said that they found all of that, and they said they found more. They said they found a climate where misconduct was not appropriately addressed. They found a climate where leaders did not have the moral high ground to hold others accountable under them. So that the culture progressively had gotten worse.

Ted Simons: Basically, I'm not going to do anything to you, because if I do, you're going to come after me because we both have done something wrong.

Dennis Wagner: Either because I owe you something, I have leverage over you. There is multiple possible ways that that can work.

Ted Simons: One of the quotes in the report, rules are flexible, fraternization common, risk for punishment low, does that sound about right?

Dennis Wagner: That is what the gist of it was.

Ted Simons: What happens with major general -- who is major general Hugo Salazar?

Dennis Wagner: He is the commander of the National Guard, adjutant general, reports to the commander in chief, which is the governor. A full career officer. He was the assistant adjutant general for a couple of years before he became the man in charge. He was the chief of staff before that. He has a long career there.

Ted Simons: Okay. So, the governor, I would take it, or someone at the governor's office not happy I would imagine with what is going on at the guard. What actions did they take regarding Salazar?

Dennis Wagner: When the investigation -- the investigative report came out, 107 page report, the governor announced that the findings meant that the National Guard was not broken that the findings were not an indictment of the National Guard. She announced that she was going -- that she was disappointed in some of the findings and she was going to have major general Salazar prepare for her an action plan which came out last week to deal with the areas of problem.

Ted Simons: So, she said the system wasn't broken. Wasn't there an anonymous report in the federal investigation, 15 sexual assaults in just the past year?

Dennis Wagner: That was among those who responded to the survey, which wasn't even half of the soldiers and airmen. There was -- there is obviously far more that actually occurred. Sexual harassment and assault singled out in the report as a particular area of concern. Investigators found it was facilitated by the fact that so many command officers had fraternization issues that they were not in an issue to challenge what others are doing.

Ted Simons: That apparently is not broken enough to relieve Salazar of his position and he is now in fact in charge --

Dennis Wagner: He has come out with a list of reforms, changes. There were severe problems in structure. There were a lot of problems. They couldn't even do court marshal. This past year at the Arizona National Guard -- we are talking about serious crimes here. There have been death threats and people bringing guns into work and all kinds of things going on. And people just weren't getting punished.

Ted Simons: With that in mind, seen some of the reforms listed by General Salazar here. Report if you see something wrong. Investigate misconduct. Change policies to better enact discipline. Critics are wondering why this guy is A, still around, and, B, investigating things that happened on his own watch.

Dennis Wagner: I'm not going to say whether he should still be around or not. That is up to the governor. All my job is to do to tell the story, what happened, and what I say happened -- what the soldiers and airmen who have come to me. I talked more than 50 of them. They all say the same thing. You are exactly right in what you report and keep reporting. I am reporting what they said --

Ted Simons: I was going to say, have you -- are you hearing from folks still in the national guard or hearing a lot from folks --

Dennis Wagner: Every day. Every day. Phone calls, emails from people in the national guard. Don't let up.

Ted Simons: Don't let up. Do we know what's happening next in the story? Where do we go from here?

Dennis Wagner: I think it is at this point, I don't see a next chapter except are these reforms going to be put in place and are they just paper or is there going to be real action?

Ted Simons: Again, requiring reports of misconduct by senior leaders. Tracking investigations. Changing policies to better enact discipline. I think a lot of people would be surprised that those things weren't done prior.

Dennis Wagner: Well, that's the task of major general Salazar. He has announced when the report came out, actually it was announced that he is retiring this year. But that he has been tasked to carry out this mission first.

Ted Simons: How cooperative has he been with your investigation? With the media?

Dennis Wagner: Initially, he was very cooperative. After my first series of articles, I did a series that came out in October after that came out, he informed me by email that he would not talk to me again. And they have stopped providing any public records that are required to be provided under state and federal law.

Ted Simons: Is it true that there has been a new effort to maybe tighten target even whistle blowers? Whistle blowers becoming a threat here at all as far as you understand?

Dennis Wagner: One of the problems pointed out in the National Guard report and my report, whistle blowers -- especially victims of sexual harassment and abuse become targets of retaliation. The National Guard has a firm policy against retaliation. But the new policies, new code of ethics that came out also has a firm prohibition against talking to reporters like me. And you can't blow the whistle that way.

Ted Simons: Okay. Fantastic work on this. I have a funny feeling you're still going to be working on this for quite a while. Don't you?

Dennis Wagner: Afraid so.

Ted Simons: Thank you for joining us. We appreciate it.

Denis Wagner: Thank you.

Electric Deregulation

  |   Video
  • The Arizona Corporation Commission may be looking at the issue of deregulation for electric utilities again. The commission is taking steps to set up public hearings about the issue. Former commissioner Jeff Hatch-Miller and current commissioner Bob Burns will discuss electric deregulation.
  • Jeff Hatch-Miller - Former commissioner, Arizona Corporation Comission
  • Bob Burns - Current comissioner, Arizona Corporation Commission
Category: Energy   |   Keywords: arizona, electric, deregulation,

View Transcript
Ted Simons: Deregulation of electrical power markets swept the Nation more than a decade ago. But the effort produced Massive failures, including the infamous Enron case. Now, the Arizona corporation commission is taking early and decidedly cautious steps at what is being called Retail competition in a landscape changed by an increase in power sources outside the regulatory domain of the commission. Here now with more on the future of electric Jeff Hatch-Miller -- also joining us is the current corporation commissioner, Bob Burns. Thank you for joining us.

Bob Burns: Thank you.

Ted Simons: Give us a better definition of electric deregulation.

Jeff Hatch-Miller: It is to designate that certain components of electric delivery, like generation are opened up to outside providers prior to --

Ted Simons: Is that how you see it as well?

Bob Burns: Yeah, well, I think there is -- I need to qualify my statements because I'm in a position of not taking any sides. Now, coming out of the legislature, I used to be able to take sides. But not anymore. This is a different situation. The responsibility of the corporation commissioners is to represent the rate payers. And so, we end up in these issues of people on one side or the other and our responsibility is to represent the rate payers. We want to be able to get the best deal for the rate payer obviously. And there are a number of people out there saying that the way to do that is by retail competition, deregulation, open market, so forth. We have a -- regulated Monopoly, model in place now, and so a transition away from that is going to be a major, major effort. We want to at least take a look, but look very, very closely at it. And study it very, very closely before we make any movements in any direction or the other.

Ted Simons: The idea of the best deal for rate payers, I mean, there is the best deal as to what you pay, and there is the best deal as far as public policy and infrastructure and the whole nine yards. Talk to us more about that.

Jeff Hatch-Miller: Most people want a low rate and reliable service. It is pretty -- reliable service is even more important here in Arizona because of our hot summers. You want to make sure that your air conditioning is going to run pretty much every day. So, the -- as Bob said, the commission's role is to balance the needs of the rate payer and the utilities to make sure that they're getting a fair profit off of their activity. And that balancing act is really important. But for the average user, you know, Joe and Mary, they're basically saying, I'd like to have reliable, affordable electricity.

Ted Simons: And I guess some people would look at this and say is there a problem that deregulation would fix?

Bob Burns: Well, and that's a statement that a lot of people make. What's broke?

Ted Simons: Yes.

Bob Burns: But there is also the other statement, there is always the better mouse trap. And now the pressure that's coming from those people, those organizations, those different types of energy production that are outside of the control of the corporation commission. You've got independents building power stations out there. You've got the solar issue. You've got the wind. All of these other different mechanisms that weren't around when the last debacle happened. It is a different landscape. And so, I think it is imperative that we, the commissioners, representing the rate payers get out in front of this issue. We need to understand as much -- as best we can what the options are out there and then make decisions based on that. This is the reason why we voted to put this into a study category if you will to take a closer look and better know what all is out there, as far as the options are concerned and how it will impact at the bottom line the rate payers.

Ted Simons: Is it a different landscape than back in the California energy crisis/Enron days? That was a debacle and then some. Have things changed?

Jeff Hatch-Miller: Not to my vantage point, no. I mean, there are different forms of generation solar and wind primarily. But the issues are still the same. It is the same group that is coming in and applying pressure. Wanna be electric power brokers, big power users. Mainly deregulation is to help lower prices for big multinational corporations. The big box retailers. The mines, industrial activity. Most -- the average smaller rate payer really isn't in this game. It is a big money deal. And there’s lobbyists. In Congress, in the last decade, they spent over $50 million just lobbying this effort in Congress. It is a big money game. People from outside, like Enron did years ago. They came from outside and they wanted a share of the money to be made in the power business. From that vantage point, it's the same group, pretty much identical players, actually, wanting to get back into the power market and sell to the big users of electricity.

Bob Burns: Well, I think there’s some additions to that. With all of these rooftop systems that are going into place, as that footprint grows, that has an impact on the utility company's ability to recover the costs of building the plant. And so, that issue is also out there to be -- to be dealt with. I've heard recently in a couple of conferences that I've been at that the development of fuel cells, and if they become successful, there was even the talk of a refrigerator-size fuel cell for the homeowner, which would basically put you almost 100% independent. Now, there is always going to be that back-up system in case of some kind of failure. But -- so those issues need to be rung out, I believe. So we understand as commissioners what works and what will not work. This pressure of the outside entities, fuel cell people, there is talk of a break through possibly. Who knows when -- on batteries which would have a tremendous impact on the rooftop community. If they could have batteries and that all comes back as a smaller base for the utility to operate off of.

Ted Simons: We talked about this before. There may be a new normal coming very quickly as far as utilities are concerned. Especially when you talk about net metering and a variety of other issues that could put lots of homeowners, very independent of whatever is happening with the major utility. Is this just a step toward that direction, or is -- have things not changed in the grand scheme of things that much.

Jeff Hatch-Miller: Fuel cells, we were talking about that back in 2001 and 2003. Same issue. Solar we were talking about. Wind we were talking about. You know, the kinds of issues are the same ones. The same group that is basically in the dialogue. For me, I was a proponent of deregulation back in the late 1990s. I even went to some of the American legislative exchange council meetings where they touted it and met with Enron officials in Washington, D.C., where they touted it. It wasn't until the big meltdown, as you already mentioned, first California, 2000, 2001, basically the electric system in California melted down to the point they were having rolling blackouts all of the time. It was a fiasco. The governor lost his job because of it. Rate payers paying huge rate increases from that. And then Enron. Enron fell apart and it cost hundreds of millions -- billions of dollars to Arizona's -- to America's economy. Those things happen. And to me, I don't see any lessons learned yet that protect us from that downside.

Ted Simons: Is there, from what you've seen so far, and I guess from -- obviously you are studying as opposed to deciding right now, have other states, or other states using these ideas, similar to Arizona? Can you compare and contrast? And how do you keep Enron from happening again?

Bob Burns: Well, I think we obviously have to learn from mistakes that were made. There are other states out there, my understanding Texas and Pennsylvania have some model in place. But that's part of this process. We establish the process to do the study to make sure that we don't get into this situation that happened before. I mean, that's -- and I think everybody on the commission is very, very sensitive to that issue. All of the employees there are sensitive to that issue. That was a big, big mistake. And so, we definitely don't want to make that mistake again. But we do need to be able to understand the developments taking place and a lot of development I believe has taken place. There may be some of the same types of units, solar and fuel cells and so forth, but those things evolve. And at some point, they break through and they become usable and very -- a lot less costly to use. So --

Ted Simons: With that in mind, is it the best scenario that we can find right now for all of us to have these two major utilities with boundaries as -- as the rule for whether or not you use X or Y.

Jeff Hatch-Miller: Rates in Arizona are as low or lower than almost every deregulated state. If you look at the deregulated states, big northeastern industrialized pretty much democrat, governmental controlled states. And their rates are way higher. We pay about 9.5 cents for kilowatt hour here. They are paying 14, 15 cents there. They are primarily the total group of the most expensive states in the nation. Issues we have to resolve. I'm supportive of the commission taking a look at the issue. That's appropriate. I think they're doing a good job to move slowly and cautiously into that. But this has to come down it is not just for the big rate payers. This has to be for Joe, Mary, average little guy in the community.

Ted Simons: Very quickly.

Bob Burns: Well, we put the priority, rate payers to the individual and small business people are in that category of needing the protection, that we are there to provide.

Ted Simons: Very good gentlemen. Good discussion. Good to have you both here.