BREAKING: Federal Grand Jury Has Subpoenaed APS For Info and Communications Re: Its 2014 Dark Money Election Activities

Not only is the Arizona Corporation Commission looking through the pile of documents delivered by APS about its secret spending on 2014 elections, but a federal grand jury is, as well. This new piece of information could be critical to understanding the real reason why APS suddenly changed its long-standing tune and delivered the information to regulators.

Arizona Public Service Co. - the state's largest electric utility - finally publicly admitted on Friday night that it had spent $10.7M to elect favorable Corporation Commissioners; most of that had gone to dark money organizations, where the public was unable to see that APS had contributed the money.

The Arizona Republic's Ryan Randazzo did a great job reporting all of the newly-visible angles on a Friday night.

The fact that a federal grand jury had subpoenaed similar documents from APS's parent company, Pinnacle West, was recently disclosed* to the Securities and Exchange Commission.  The grand jury is looking at the 2014 races for Secretary of State and the Corporation Commission. APS indicates that it is "cooperating fully" with the subpoenas requesting "records involving certain Pinnacle West officers and employees, including the Company's Chief Executive Officer, as well as communications between Pinnacle West personnel and a former ACC Commissioner."

The CEO of Pinn West is Donald Brandt. APS would not confirm to Arizona's Politics this afternoon that the grand jury subpoenas have yet been responded to. Instead, spokesperson Suzanne Trevino sent a copy of the letter sent to the Corporation Commission indicating that the voluntary disclosure to them was "in the spirit of putting behind us any further debate regarding political spending, and with the hope that we can focus on the future to further the energy and economic goals of the state." (Signed by VP of Regulation Barbara Lockwood.)

Last year, a mistrial was declared in a bribery trial that included a former chairman of the Corporation Commission (Gary Pierce), his wife, a lobbyist and the head of Johnson Utilities. It was reported at the time that the underlying conduct had arisen during a "much larger investigation" by the FBI into the Corporation Commission. This new revelation about the grand jury would appear to be another part of that "much larger investigation." The Pierces' son, Justin Pierce, was running for Arizona Secretary of State in 2014, and lost in the primary election.

Arizona's Politics has reported extensively on the political efforts by APS, and its use of hiding the source of funds. We have utilized a scale dubbed the #50ShadesOfDarkMoney (primarily as a result of that 2014 campaign, which was awash in it). In 2016, we reported on the IRS filings of America Encore - a dark money outfit run by Arizona's Sean Noble (that had become nationally known for its work with the Koch brothers' money network).

When that report is combined with the new disclosures from APS, it is now clear that there was a convoluted web of contributions, transfers - and, probably re-transfers - that involved APS, Noble's operation, the Arizona Free Entrerprise Club, former Governor Ducey Chief of Staff Kirk Adams and others. It is also clear that some of the new disclosures may slightly contradict APS's previous public statements to the Arizona Republic and more clarity is still needed.

*Clarify, 5:20pm: APS has disclosed the grand jury subpoenas earlier. They just re-disclosed it in February, and would not respond to Arizona's Politics' questions about whether they concurrently sent the information about their 2014 political activities to the ACC and the grand jury. If we receive that information, we will update the article as warranted.

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