Arizona Capitol

Conservative Group Calls for Federal Investigation of Arizona Corporation Commission Chair Susan Bitter Smith

A conservative nonprofit group that helped drive former Arizona Attorney General Tom Horne from office called on the U.S. Attorney for Arizona to investigate Arizona Corporation Commission Chair Susan Bitter Smith for possible federal crimes.

In a press conference held outside the U.S. Attorney's office in downtown Phoenix, Tyler Montague, president of the Arizona-based Public Integrity Alliance, repeated many of the allegations against Bitter Smith, originally made in a September complaint to the Arizona Attorney General's Office by Chandler attorney Tom Ryan.

These are, essentially, that the Republican CorpCom chair has a conflict of interest in lobbying on behalf of Cox Communications while serving as a commissioner on the board that oversees the telecommunications portion of Cox's business.

Montague presented reporters Thursday with copies of letters from PIA to Arizona's U.S. Attorney John Leonardo and to the chief of the Public Integrity Section of the U.S. Department of Justice, asking that the federal government probe Bitter Smith's conflicts for possible violations of federal statutes. 

"How can it be possible that somebody who is a paid lobbyist for an entity simultaneously be its chief regulator?" wondered Montague.

"We believe that it is impermissible under the law," he continued. "And that it could deprive the people of Arizona of our right to the honest services of a statewide elected official."

Montague's group previously has called on Bitter Smith to cease lobbying for Cox and to resign her position as executive director of the Southwest Cable Communications Association, but Bitter Smith has refused, insisting that she has no conflict of interest and pointing out that the cable industry itself is not regulated by the AZCC.

But Montague maintains that Bitter Smith's conflict of interest is blatant.

Bitter Smith is a "registered lobbyist for Cox Communications Arizona," he told reporters, and she "receives hundreds of thousands of dollars from the Southwest Cable Communications Association," which has a board of directors that has included Cox executives.

"Commissioner Bitter Smith received payment from the very utilities she swore to regulate," Montague said. 

He observed that according to Ryan's complaint with the AG's office, Bitter Smith took part in "at least 10 votes" that affected the SCCA. Montague said he doesn't buy Bitter Smith's explanations concerning the apparent conflict.

"She's justified this by saying, well, there's a difference between the telecom portion of Cox and the cable portion," Montague stated. "I don't know about you, but they deliver services to me on one line. I get one bill. It's one entity. [The two parts of Cox] are highly interdependent [and] sell bundled services. So it's hard to claim that benefiting one aspect of Cox's business is not commingled with the rest of their business."
Montague compared the case against Bitter Smith to the one that brought down former Arizona Congressman Rick Renzi, who was convicted on federal corruption charges in 2013 and is serving a three-year sentence in federal prison. 

It was the Arizona U.S. Attorney's Office that prosecuted Renzi. One of the charges Renzi was convicted of concerned "honest services fraud," which is covered by statutes in the federal code and defined as "any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses."

Montague explained that Renzi's crimes involved a form of "self-dealing," wherein the former congressman assisted "a debtor to sell properties," without disclosing that money from the sale would benefit Renzi.

"We don't disclose our donors, principally because we go after unethical and corrupt politicians who are in a position to retaliate," said Montague. "We're here to take the hits, people can donate to us, and [allow us to] promote our message."

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The PIA president contended that Bitter Smith's alleged self-dealing was worse than Renzi's. Driving home the point, as he addressed reporters, Montague was flanked on one side by a large photo of a hangdog Bitter Smith and on the other by a photo of a smiling Renzi, with the word "Guilty" emblazoned on the ex-U.S. Representative's forehead in red.

"If the allegations are true,"said Montague, "then Ms. Bitter Smith lobbied on behalf of clients appearing before the agency she chairs and voted on matters benefiting companies that paid her six-figure salary."

Bitter Smith's office issued a statement from the embattled chairwoman, dismissing the PIA as a "dark money group...that is masquerading" as a non-profit.

"This complaint...will go the same place their previous complaints against me have gone," Bitter Smith said in the statement, "in the round file. They continue to act with reckless disregard for the truth and with malice." 
Tom Ryan's Complaint to the AG about Susan Bitter Smith

True, the PIA is a 501(c)4 non-profit organization, which, like all other such non-profits, does not have to make public its donor list.

But Montague defended his group, saying the cloak of donor anonymity allowed the PIA to target powerful politicos such as Horne and now Bitter Smith.

"We don't disclose our donors, principally because we go after unethical and corrupt politicians who are in a position to retaliate," said Montague. "We're here to take the hits, people can donate to us, and [allow us to] promote our message."

Montague told reporters to "wait till next week" when the group plans to announce another high-profile target. 

He also said he did not want to see Bitter Smith in jail but would rather see her cease her lobbying for Cox or resign from the commission.

When one reporter asked if all his group does is go after Republicans, Montague replied that he and others connected with the group are Republicans.

"In fairness to us, pretty much only Republicans are elected to statewide office [in Arizona]," he said. "I'm sure if there were some Democrats in office, we'd be going after them."

Contacted by phone for a reaction to the news conference, attorney Tom Ryan, author of the initial complaint against the CorpCom chair, said he welcomed the PIA's call for a federal investigation of Bitter Smith.

"I'm all for it," Ryan said. "The state of Arizona at this point seems frozen in its inability to root out any local public corruption. To the extent the DOJ could do something, that would be great."

Ryan said he will file a supplement to his complaint with the AG next week, and that the AG's office has been in contact with him.

"I've had two substantive phone conversations with an attorney in the criminal division [at the AG's office] who sought either clarification or additional information ," he said. 

The crusading Chandler attorney and the PIA have attacked some of the same individuals in the past, but otherwise, there's no official relationship between him and the PIA,  Ryan said, save for the common interest of the public's welfare.

"I do these things for free." Ryan said. "Nobody paid me to do this, nobody is directing me to do this. Other people may want to tag along on this...but I'm not part of any dark-money group."

Ryan called Bitter Smith "the gift that keeps on giving."

"The more she's kept in the public eye," he said, "more and more people are coming forward [to me] showing that she violated [Arizona's] public-interest rule."

Ryan said he's turning over information he has discovered to the AG's Office.

Neither Cox Communications nor the Arizona Attorney General's Office immediately responded to requests for comment.
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Stephen is a former staff writer and columnist at Phoenix New Times.
Contact: Stephen Lemons