News

CHECKMATE?PACIFICORP'S BOLD AD CAMPAIGN HAS LEFT PINWEST LOOKING LIKE A DORK

Page 4 of 7

Cohen's ties to the Democratic party date all the way back to the Fifties, when he helped Stewart Udall engineer a putsch that grabbed power from the old-line Dems and swung support to young John F. Kennedy. Cohen subsequently went to work for the Interior Department, after then-President Kennedy appointed Udall Interior secretary, and was himself appointed to head the Civil Aeronautics Board by President Jimmy Carter in the late Seventies.

Gutierrez emerged from his years as leader of the state Senate Democrats as a figure of almost legendary political prowess. Since leaving politics to become a consultant a few years ago, he has finagled deals on behalf of an array of special interests far more controversial than PacifiCorp. (In fact, in environmental circles, PacifiCorp is one of the few "white knight" clients who have paid Gutierrez's fees: He's representing Browning-Ferris Industries in its effort to site a landfill next to the Agua Fria River in El Mirage, and ENSCO, operator of a hazardous-waste facility under construction near Mobile.)

Gutierrez has even represented PinWest in the past on other issues. "Marv [Cohen] told us we should hire him even if we didn't think we needed a political consultant, if only to prevent PinWest from hiring him," Grosswiler says. "Everyone we talked to says he's the best in Arizona."

In the past few months, Gutierrez has arranged for the PacifiCorp team to meet with Governor Rose Mofford, Phoenix Mayor Paul Johnson and the mayors of other cities within the APS service territory, and the leadership of both Republicans and Democrats in the state legislature. Gutierrez's firm also designed the daring ad campaign that has made PacifiCorp a household word in the Valley.

The PacifiCorp people have met with the heads of other utilities and with members of the Arizona Corporation Commission, and are conferring in closed-door meetings with dozens of business leaders whom they decline to name. "It's really inappropriate for us to discuss strategy at this time," Gutierrez says. "After this is over, I'll be happy to tell you all about it."

Corporation commissioners Marcia Weeks and Renz Jennings state their opinions loud and clear--both say APS and PinWest have been dishonest and greedy toward the public in the past, and they are very interested in what PacifiCorp has to offer. However, outside Weeks and Jennings, most leaders are ducking the issue.

"We've been briefed by PacifiCorp and PinWest," says Vada Manager, Mofford's press secretary. "The governor listened to both very attentively, obviously the outcome is very important to the citizens of the state. But she has not taken a position."

Mayor Johnson did not return repeated phone calls, and Salt River Project head Jack Pfister declined to make any comment, saying that federal law forbids comment that might affect stock prices during merger battles.

Officials with the institutional investors who control nearly 40 percent of PinWest stock also aren't talking. Even before the ad campaign cranked up, PacifiCorp clearly had gotten its message across to a number of small investors, however. "I would say 75 to 80 percent of the calls I get are in favor of selling," says Keith Sprinkle, chairman of the PinWest Shareholders Association, which represents about 13,000 individual investors in Arizona. "We aren't taking a position, however, until we determine if we've got a consensus."

Sprinkle recently sent a caustic letter, authored by former APS flack Bill Meek, to PacifiCorp urging a halt to the "senseless and destructive" media campaign in Phoenix. "PacifiCorp has adopted tactics that are clearly designed to inflict financial damage on the shareholders of Pinnacle West," he writes. "That's not a fair, nor is it an ethical way to conduct your business."

The effect of PacifiCorp's campaign so far has been to send stock prices up to more than double what they were before the merger offers were made. But Sprinkle says Meek and a couple of the other board members in the shareholders association are worried the campaign ads could generate political pressure on the corporation commission to deny APS' current application, which would hike residential electric rates by a record-breaking 25 percent. "If APS doesn't get the rate relief it needs, this could damage our stock value," Sprinkle explains. Sprinkle denies the shareholders board was influenced by PinWest to write the letters, but he admits that he has not received any complaints about the campaign from other association members.

"We may have gone a little overboard with the wording," he says. "The central idea is to say, `Hey, fellas, play fair. Keep the dialogue in the arena of, is this a good business offer.'"

Sprinkle says his board is also checking out a rumor that Utah Power & Light stopped buying from local suppliers after merging with PacifiCorp. (PacifiCorp officials deny there's any truth to the allegation, which Sprinkle says was told to him by a caller claiming to be a Salt Lake City businessman.) Gutierrez claims business and political leaders are hesitant to state publicly what they're saying in private. "People question the capacity of this particular PinWest and APS management to resolve their various problems," he says. "On the other hand, people question PacifiCorp. They question whether the headquarters being elsewhere will be a problem." Editorials in the Arizona Republic (owned, ironically, by the Pulliam family of Indianapolis) mirror the unease within the Phoenix 40, grouching about PinWest's incompetence even as they mutter xenophobically about absentee ownership.

KEEP PHOENIX NEW TIMES FREE... Since we started Phoenix New Times, it has been defined as the free, independent voice of Phoenix, and we'd like to keep it that way. With local media under siege, it's more important than ever for us to rally support behind funding our local journalism. You can help by participating in our "I Support" program, allowing us to keep offering readers access to our incisive coverage of local news, food and culture with no paywalls.
Kathleen Stanton