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December 20, 2002

Host: Michael Grant
Topics: The "Journalists' Roundtable"
In-Studio Guests:
Howard Fischer, "Capitol Media Services;"
Robbie Sherwood, "The Arizona Republic;"
Paul Giblin, "Scottsdale Tribune"

>> Cary: It is Friday, December 20th, 2002. In the headlines this week, a jury returned a $60 million judgment against Corporation Commissioner Jim Irvin, and now he may face impeachment. Governor-Elect Janet Napolitano announced several key staff appointments to fill out her administration, and Tempe has filed an injunction to stop a runway project at Sky Harbor Airport. I'm Cary Pfeffer filling in for Michael Grant. Joining me are Howard Fischer of "Capitol Media Services" and Robbie Sherwood of the "Arizona Republic" and Paul Giblin from the "Scottsdale Tribune." For the past week Arizona Corporation Commissioner Jim Irvin has been on trial in the U.S. District Court for his role in a bidding war for Southwest Gas. On Wednesday, the Jury returned its verdict. Howie, what happened?

>> Howard: You talked about the numbers at the top, $64 million. That shocked almost everyone in the courtroom, including even the plaintiff. This is a lawsuit that briefly goes back about 3-1/2 years, Southwest Gas put itself up for sale to a company called Oneok out of Oklahoma. Southern Union, which at the time was based in Texas came in and said we'll offer $100 million more. Well, somewhere in this process, Jim Irvin got himself involved as did Jack Rose who had been executive secretary of the Corporation Commission, then became Jim Irvin's handpicked, quote, unquote, loaned executive. And through all of this, Jim did things that jurors concluded went far beyond simply investigating who is there, more than informational matters. He went to the California Public Utilities Commission , because California also needed to approve the deal, and according to people there, who testified at the trial, lobbied them to support Oneok over Southern Union. And Southern Union was $100 million better. Did the same thing in Nevada. Even lobbied Kenny Guinn, the Governor of Nevada. On the day the Southwest board was getting together to consider which to approve, he first sent a letter to them, saying you should consider matters other than who has got the better finances and then finaled it up with a phone call to Mike Maffie and Tom Hartley, the two top executives at Southwest Gas, and told them, according to these two people, a Southern Union deal would never get regulatory approval. This is akin to have the judge in a case that's going to happen, tell you, here's the way it's going to come out. I talked to the jurors afterwards. They said every one of these events and the other things by themselves would not have convinced them that Jim had undermined Southern Union, but taken together, along with allegations of document shredding, allegations that --

>> Cary: Document doctoring as a matter of fact.

>> Howard: Document doctoring On related issues, they said he is arrogant and he is not to be believed.

>> Cary: And this is not just a matter of the jury coming together and making a decision. I mean, it seems like this is an angry jury.

>> Howard: This was definitely an angry jury. They said, in fact, that if the judge had given them the option of saying one of the conditions of punitive damages would be you have to leave, they would have done that and reduced the punitives.

>> Robbie: The punitive damages would have been lower.

>> Howard: Yeah, "leave" meaning resign.

>> Cary: It's important for people to understand, this is a three-person panel, so obviously, that's a major matter.

>> Robbie: These are damages that may ultimately not stick. Irvin said he's going appeal, but I think that jury intended to send a strong message. And, you know, people are now paying attention to this case. Who is this Jim Irvin guy and what did he do.

>> Cary: Which is another matter we need to talk about as far as his re-election and that sort of thing. I want to talk about the legal process here, because oftentimes somebody might observe that this is a situation that would have come first to the attention of the county attorney and action would have been taken there, and then we often see trailing behind, the civil matters and the lawsuits and all of that sort of thing. What's the status on that? I know the county attorney's office has commented.

>> Howard: The county attorney's office got involved shortly after the civil lawsuit was filed, because they had seen some of the early materials. In fact, the county attorney had served a subpoena on the Corporation Commission for records, for computer files, and this was what brought up the allegation of Jim Irvin, in fact, shredding some of the records that the county attorney wanted. He says he didn't. Somebody else who was in the office said they saw him go in the office, shred some documents, hand the file back to a secretary and said now it's ready for the subpoena. The county attorney and the U.S. Attorney's office which also had a criminal probe going agreed to set aside while the civil case was going, (A), because you don't want to have one taint the other, but more specifically, the county attorney cannot force someone to testify at the grand jury. In fact, Jim Irvin went to the grand jury and took the 5th Amendment. So they figured, fine, we're going to wait. He's going to be on the stand. In the civil case, you can take the 5th, but you cannot refuse to testify. So they waited. They have pages now of documents. They have 7 weeks of testimony, and now they are going to look and see if what he did went beyond simple civil violation and see if he's guilty of malfeasance and misfeasance in office.

>> Cary: And it seems like there is a lot of material there.

>> Robbie: And the next step here, you have to think about is the option of impeachment. The legislature has the ability to impeach him. The guy was just elected to a four-year term, A lot of people are sending him messages subliminal and otherwise, please quit, but he hasn't gotten that message yet. The legislature may have to consider taking him out themselves. It's not as simple as putting a motion before the floor and saying "we impeach thee," you have to hire a very expensive attorney to essentially re-investigate the case. You have to -- and if the House decides that there is reason to impeach them, they hand it over to the Senate where they have to hire another set of very expensive attorneys to prosecute the case.

>> Paul: The legislature has a big issue in front of them, the budget right now. Are they going to allow themselves to get distracted, if that's the right word, with Irvin? Is this something they want to --

>> Robbie: In engaging House Speaker Jake Flake, he seems very upset by this. He is a guy who is very integrity focused. I think if push comes to shove, he might. If you're in a situation where Jim Irvin has backed them into a corner, yes, but they really don't want to. The State is broke, and to spend $100,000 or more, who knows how much it costs, to pay these guys on the clock to impeach somebody, and then there is the issue of the criminal investigation. The only -- the game plan that they are working from is the Mecham impeachment, which didn't really go so well in 20/20 hindsight. They did impeach him, but when his criminal trial occurred and he was acquitted, they came back and the legislature felt that as part of risk management they better pay his legal bills.

>> Howard: And the other piece of timing here, there's other things going on. The Attorney General's Office has tried to determine whether he violated clean elections law. Did he or his wife forge signatures on those donation forms. And depending on what the AG's Office comes back with may provide a little more pressure. There was another lawsuit which is tangentially related. When the civil charges were filed against Irvin, he fired off a press release accusing Jim Fischer, who was an aide to the Corporation Commissioner Tony West, of somehow making this whole thing up and undermining his office. Fischer filed a libel suit, which is still pending, of which the taxpayers are paying on top of the $4 million they paid to defend him in this case, have paid $100,000 to defend him in that case.

>> Cary: Given the fact that there are additional pressures, it seems like some of the subtle suggestions that he consider resignation might not be enough for many people who are watching this scene. They might expect, for example, Bill Mundell to step up and say we're not going to be able to function in this three person panel, with one person not --

>> Howard: Here's the deal, because I talked to Bill about this. As of January 1, they become a five-person panel. Bill said look, even during this 3-1/2 years, even during the 7 weeks of trial, we could function. He would show up. Even if he is somehow now off in his own little world, you have a five-member Commission taking over, and so Mundell went as far as he's going to go. He said that as far as he's concerned, Irvin should do the right thing and leave. In terms of saying the commission won't function, Irvin is there most days. He does his job. His level of understanding -- I mean, that's a separate issue.

>> Paul: He can go through the motions. Anyone can go through the motions. I could go through the motions of fulfilling that office. But the matter is, he has a $60 million judgment against him. How can he possibly pretend that he's impartial as he goes forward as he's regulating utilities? Who out there is going to believe that he's impartial.

>> Howard: And that becomes the issue, because the finding of the jury was that the process was tainted. As it turned out, Southwest never was sold. Both deals fell apart. But when a jury concludes that -- remember, Irvin was the presiding officer. He was the Chairman of the Commission, and when a jury concludes that the Chairman of the Arizona Corporation Commission tainted the process, it does cast a pall over the whole thing.

>> Robbie: One more point about the budget and the $60 million fine, it's probably the first question out of anybody's mouth that follows the legislature, oh my God, do we have to pay for this, is this going to the taxpayers. And the prevailing legal opinion is no, the State is not liable for punitive damages incurred when somebody misuses an office. They probably still are on the hook for his legal fees which top $3.7 million.

>> Cary: Right, because that happened, and there was a question as part of his official acts.

>> Howard: And they have to, because under bad faith laws, if they had not tendered him a defense, under what they call reservation of rights, he could have come back. The one other thing that is on lawmaker's minds in terms of impeachment, he was just re-elected. So they have to on the one hand assume, well, voters knew about this. Here is the problem. I'm not sure --

>> Cary: It wasn't on people's radar.

>> Howard: It wasn't on people's radar. I've got three theories as to how he got reelected.

>> Cary: And you're going to quickly go through them.

>> Howard: I'm going to very quickly go through them. Number one, clean elections. $107,000 per candidate. If you're the incumbent it benefits the incumbent on the lower races. Number two is the fact that on those lower races, the person who is in the party with the higher voter registration wins, again, Republican. And number three, quite frankly, I didn't see a lot of attention being paid by most of the reporters in the state to this issue. I mean, look, I can talk about what I wrote in my papers and what they ran. But the fact is, the "Associated Press," a major metropolitan morning daily that's published in Phoenix, had 5 or 6 stories in the 3-1/2 years. When they don't do it, TV and radio doesn't follow. I don't think voters understood the essence of what was coming out. All of this information had been in the public record before the trial.

>> Robbie: I'll let that lie and I think that that's a fine criticism to make. I didn't cover that race. However, I also think there is another aspect that you can add to that, I'm not trying to take those points away, but I think that the Republican party knew what they had there. It seemed to be more important to them that they have a 5-0 majority on the Corporation Commission rather than like a 4-1 majority. And they said they must preserve the seat for the Republican party.

>> Paul: Howie is largely right. We had big races going on.

>> Cary: People weren't paying attention to other things.

>> Paul: Right, they were paying attention to the Governor's race. They were paying attention to the gambling initiatives. People don't know what the Corporation Commission does.

>> Cary: All right. We're moving on. In just over two weeks, Janet Napolitano will be sworn in as the Arizona's next Governor. This week she made several appointments. Robbie, who are these latest people and what can we determine from them?

>> Robbie: Well, probably the most profound appointment that she made was the department of economic -- Department of Environmental Quality, sorry, where she named Steve Owens who ran for congress against J.D. Hayworth, a Democratic party operative. She made a few others, Gilbert Jimenez, a Bank One executive, will head Commerce. Margie Emerson who is heading Commerce now, a Hull appointee, will move over and take over the Department of Tourism. The reason I bring up Steve Owens, first, he is probably the one who may engender a fight. You may see him ultimately, if you are talking to people in the Senate who confirmed these appointments, he might take one for the team on this one. He got some people on the Judiciary Committee, House Speaker Jim Weiers. He's going to chair that committee when he comes over to the Senate. People think he's a little too liberal on environmental stuff. He's not that kind of guy. He might have a fight on his hands.

>> Cary: Beyond that, though, what's interesting to me, you have a Democratic Governor who seems to, other than the Owens appointment, be understanding the lay of the land and trying to incorporate those thoughts.

>> Robbie: I think it's a very bipartisan event. She named Susan Gerrard, a recently defeated Republican, a lawmaker from North Central Phoenix, to be her health policy advisor. Betsey Bayless, Department of Administration. Emerson is a Republican, she's moving her to Tourism. The big fear is that Emerson is keeping that seat warm until Janet can get the political muscle to combine Tourism and Commerce together and do some shrinking of government in the face of the budget.

>> Paul: That's one of the interesting points. She told Mark McDermott, the current head of the Office of Tourism, to take a hike. He's done a good job while he's been there. That's a bad omen for people associated with the tourism industry to see that office being folded as you suggested and, again, that's an industry that takes a lot of hits. It's the second leading industry as far as employment in this state, and yet when people want to smack around an industry, it invariably is the tourism industry, which is bad business, because the tourism industry brings money to Arizona, unlike a lot of other businesses where we exchange money that's already here. Tourism industry brings money from L.A., Chicago or wherever. People leave their money here and then go away. It's new money. It's a good industry.

>> Howard: The problem becomes, is -- given the budget of the Office of Tourism, which is tiny anyway, versus the money being spent by the Visitors and Convention Bureau, the money being spent by the private hotels and everything else, do they really make a difference, or could we take half of that money, give it to different groups, give it to different chambers of commerce and say, we don't need this bureaucracy here to tell us how to spend more money. That's what I think the issue is.

>> Robbie: You have a lot of conservatives in the legislature making the argument, is this a proper role of government. That's why they kick those around. It's sort of nebulous. Yeah, they are bringing it in, but how do they do it, can they prove they do it?

>> Cary: It's hard to put a specific number on what that office has done.

>> Robbie: The former senator, I'm sure he wouldn't like me to mention his name, but his attitude is close them both. You couldn't keep business and tourists out of Arizona if you posted the National Guard at the border with six bayonets. He thinks they are promoting something that will happen anyway.

>> Cary: Paul, the question is, it may be a problem with, for example, the Office of Tourism not doing its job and explaining what it does, and sort of promoting itself to the lawmakers.

>> Paul: The Office of Tourism did a study recently. I don't recall the details, but they were getting $7 to $8 in spending for every $1 that they spent.

>> Howard: Wait a second. I had covered state government, and I keep seeing these studies. Everybody claims credit. The Department of Commerce claims credit; GPEC claims credit. The Department of Commerce claims credit, and the Tucson Chamber claims credit, and the Phoenix Chamber claims credit. Everyone is claiming that same thing. It's the same thing with the Tourism dollar. We keep seeing the $7 for every every dollar spent. Nobody has been able to figure that if we stop spending the dollar, that $7 wouldn't come in. I don't buy it.

>> Paul: We might have had a good opportunity to test that theory if Napolitano does --

>> Cary: Would we all agree that seems like that's the logical --

>> Robbie: I think there will still be a tourism function, you know, it's not closing it like my friend had suggested. I think this is combining it. Everybody that ran for Governor, including the winner, ran with a budget plan that included some consolidation. And you have to start somewhere, and that, I think that's where they are going to start.

>> Howard: The other thing about Janet's appointment is that she has decided that Margie Emerson and Betsey Bayless, if there is no real reason to make a change now, don't. John Clayton heads the Department of Economic Security. She did tell him, we're going to do a national search. We would like you to reapply, but we're not kicking you out just because we can. Pat Corning at the Department of Veterans Services made a decision there wasn't anything horrible going on there, why not keep him there. You pick and choose the things that you want to give to people who support you philosophically versus what are you going to fight with?

>> Robbie: And on the Clayton one, too, I'm not going to question her motives on that, but Clayton was the only African American member of Hull's cabinet, and I think that may factor into why he got a little bit different treatment. Yeah, we're not going to send you to the street, we'll give you a chance to reapply, but that agency, that says a couple of things or could be read that a couple of different ways because that agency has come under fire with the way it handled Child Protective Services. She is saying I'm not going blame you, I'll give you the benefit of the doubt, but also --

>> Cary: We may look to other situations.

>> Howard: One other appointment of note, because of the political fallout was Ramon Valdez was the state senator who was just reelected. She is taking him to look at economic issues, particularly in southern Arizona. This is the second reelected Democratic state senator who she has decided, the first being Herb Guenther, the head of the Department of Water Resources, and she's setting up a situation, yes, these people will be replaced by Democrats, but they'll be replaced by Democrats by inexperienced Democrats or maybe house Democrats who will have to be replaced by someone else, and so --

>> Cary: She's weakening her own sort of --

>> Robbie: The experience at the legislature was already at an all-time low because of the turnover that we had in the elections, and a guy like Guenther is, I believe she has her reasons for putting him where he's at, but you'll see him missed on his midnight budget meetings when it's time to --

>> Cary: Because Republicans can talk to him. And he's a go-between.

>> Howard: That's exactly the point. She needs somebody working with the Republican legislature who the Republicans do trust. You may remember two years ago when we went with a 15-15 senate, the Republicans trusted him so much, they said to him, you be the senate president and we will back you. He's gone.

>> Cary: Let's talk briefly about other appointments being made, specifically in the Attorney General's Office for Terry Goddard's office. Any interesting points there?

>> Howard: Bob Meyers is an interesting one. He is a trial lawyer who became the presiding judge in Maricopa County superior court. Had an interesting run there, developed a reputation of being mercurial in his mannerisms. He's very bright. It shows that Terry is looking for somebody with that depth of experience, because Terry's experience is not so much in the courtroom. I mean, Terry is an administrator.

>> Cary: He takes the administrative side and hands the court side over to an experienced --

>> Howard: Obviously Bob shares a lot of the liberal philosophies that Terry does, some of the tort reform stuff. There'll be no conflict there. It'll be interesting to see how active a role Bob takes. We have a history in the State when Bob Corbin was attorney general, Steve Twist was very much out front there and played a very activist role. Depending on what Terry wants to do --

>> Cary: How visible will that be?

>> -- Howard: how visible Bob Meyers will be.

>> Robbie: I thought the appointment of Jessica Funkhauser, she was Betsey Bayless elections director and expert on elections law. She had a slight hiccup there with the whole Matt Salmon investigation and clean elections, you know, we'll see how that's resolved, but I think overall, it's hard to find somebody that knows more about that subject matter.

>> Cary: All right, we will chat more about that as the new administration takes shape.

>> Cary: There was a new development this week in the ongoing feud between Tempe and Phoenix over Sky Harbor Airport and, Paul, Tempe went ahead with this injunction and the on going feud just keeps on going.

>> Paul: Keeps on going. Tempe is suing Phoenix and this time they are suing them about remodeling of one of the runways. Actually, they are just upgrading one of the runways. It's not a new runway. Phoenix would like to smooth it out so that airplanes can take off and land there with some degree of efficiency. For Tempe, this is an issue. Anything having to do with Sky Harbor is an issue.

>> Cary: The topic comes up.

>> Paul: Right. So they sued again alleging that they will create an environmental difficulty, despite the fact that the runway has been there for years.

>> Cary: I remember one of the original issues, there was not enough of an environmental study done about the impact of this work that's being done even though it's basically repaving.

>> Paul: Right, airport officials believe they have done plenty of environmental impact and Tempe will grasp at anything, really, to slow down the airport.

>> Howard: Let's get serious here, this is the warmup fight for the next big fight which is runway number 4, the new north runway. Tempe sees that as further increasing the number of flights going out. I mean, it's already happened with the two south runways now, where you have one used for takeoff, one for landing. You're increasing the number of flights that can be pushed out of there. You do the same thing on north side and all of a sudden, the folks living in north Tempe say what the hell hit us. So this is the warmup. This is to keep them busy and maybe keep them from rushing ahead with that fourth runway here.

>> Paul: What I can't understand is why the people in north Tempe keep saying "what the hell hit us"? Do they not notice as they are getting on planes and flying back to Duluth, do they not notice it's the 6th largest airport in the world sitting right there?

>> Howard: That's an interesting question, I have no sympathy for people who build when the airport is there, but the question is, there are some established neighborhoods there, and the people who were there when this was two runways and they had small jets, and didn't have anywhere near the number of flights, that's an understanding. What are you expected to accept in terms of changes? And the other part of it is that Phoenix has been unwilling to even look at a reliever airport, unwilling to say that most other major communities, L.A., Chicago, New York, have a second airport where you don't need to have everybody landing right off of 24th Street.

>> Paul: But Howie, Phoenix is not L.A. Phoenix is not New York. Phoenix is not Chicago. These cities have double, triple, quadruple our population. We don't need a reliever airport. What we need are for people to realize is that there is an airport and planes do fly over their head.

>> Howard: Why don't we need a reliever airport? You do have --

>> Paul: We're too small to support a reliever airport.

>> Howard: Look at the number of flights. If we're the 6th busiest airport as you say, how can you suggest that having some of the cargo stuff, which is taking up space, and B, some of the companies that are connecting right here, have them do it out of Williams or somewhere else.

>> Paul: They can go somewhere else.

>> Cary: Williams is going to be the answer to all of this.

>> Paul: Why hasn't Williams been the answer yet? It's been out there and no one goes to it. Why would any airline want to go to Williams, when the people who fly in need to make a connection at Sky Harbor? It doesn't make sense. Why would the delivery operations go to Williams when they have to do overnight delivery, and they have to drive to the far end of the Valley?

>> Robbie: There are a lot of opinions on this subject, and I only shared the one I have -- If Phoenix hadn't messed up the stadium deal for Tempe, they might not be so litigious when it comes to environmental concerns. You never know but --

>> Cary: Another thing we should end with here, as far as the airport is concerned, the amount of traffic, it's obviously not going to be Tempe that's going to be weighing in here.

>> Howard: You've got issues in terms of the flight patterns. That's where you get Cave Creek and --

>> Cary: And more information seems to be coming up and people are going to get more and more angry over the process.

>> Howard: That's the issue. If you are living under one those flight patterns, the question is what should you have known. I live under one of those flight patterns in southwest Phoenix. I knew that when I bought the house. You're not going to see me filing a lawsuit against the FAA.

>> Cary: Will you defend yourself because --

>> Howard: Well, but there are people who think, I bought a million dollar home up in north Scottsdale, and I don't want my peace and quiet disturbed. I'm sorry, hello, you're living in the 9th largest city with the 6th largest airport. The planes have to come in somewhere, and not only over the poor neighborhoods.

>> Cary: We will see what happens there. And we appreciate your being here, Howie, Robbie, Paul. Thank you very much. Are we doing this for the new year as well? You'll look ahead next Friday, and we'll have your predictions?

>> Howard: There is a prediction show, Mark and Doug McEachern from "The Republic" and I will prove once again that --

>> Cary: To see a transcript of tonight's show, you may want one, or to share views or contact us, visit the Channel 8 Web site, www.kaet.asu.edu. click on "Horizon" on left side of the screen and follow the links. Thanks very much for watching. Good night.