By Amy Silverman
By Olivia LaVecchia
By Monica Alonzo and Stephen Lemons
By Chris Parker
By Michael Lacey
By Weston Phippen
Currently, all corporations in Arizona are required to file an annual financial statement showing their general fiscal health. The short form includes values of assets, debts and other basic financial information.
The reports are a handy tool for members of the public to check out companies they might be thinking of doing business with, says Corporation Commissioner Renz Jennings. Law enforcement agencies also use them when plumbing fraud allegations.
But under the proposed law, only law enforcement agencies would be able to look at the financial documents.
Bill backers say the disclosures, not required by most states, put Arizona companies at a disadvantage. Out-of-state firms can review the forms, assess a competitor's financial standing and then underbid the competitor for contracts, says Tim Mooney, state director of the National Federation of Independent Businessmen.
"The competitive disadvantage comes when a competitor can figure out exactly what you can bid on an item or on a contract, knows how much debt you have, how much cash on hand," Mooney says. "We just don't think that's a legitimate concern for public consumption."
The bill to close once-open records was up and running before his agency ever saw a copy of it, Jennings says. Under the bill, he notes, corporations will be able to enjoy the protection from liability that accompanies corporate status without being forthright to the public about their financial condition.
"You get to be a corporation, and that's a nifty status in our society," Jennings says. "It limits your liability for things you do as a corporation, and limits your own personal liability. For that, maybe you give up some information, because it's important that a democracy operates on information."
The rush to change public access to corporate financial disclosures, Jennings says, "is a celebration of the 100-day phenomenon. If they don't care what they do about public policy, and they don't even check with the agencies affected, pretty soon this stuff slam-dunks its way through the process and they get to go home in 100 days.
"There's no reining in this crowd.