By Linda Bentley | DECEMBER 2, 2015
AG files to remove Bitter Smith from
Arizona Corporation Commission
Bitter Smith has three categories of conflicts, each of which is sufficient on its own to find her ineligible to hold office as an ACC commissioner
Arizona Attorney General Mark Brnovich
PHOENIX – On Monday, following an investigation that began as the result of a complaint to his office last September, Arizona Attorney General Mark Brnovich filed a special action petition with the Arizona Supreme Court to direct Arizona Corporation Commissioner Susan Bitter Smith to cease functioning as a commissioner.
According to the petition, Bitter Smith is ineligible to serve as a commissioner per A.R.S. § 40-101, Interest of commissioner or employee prohibited in corporation subject to regulation, which states:
“A person in the employ of, or holding an official relation to a corporation or person subject to regulation by the commission, or a person owning stocks or bonds of a corporation subject to regulation, or a person who is pecuniarily interested therein, shall not be elected, appointed to, or hold the office of commissioner or be appointed or employed by the commission. If a commissioner, or appointee or employee of the commission becomes the owner of such stocks or bonds, or becomes pecuniarily interested in such a corporation involuntarily, he shall within a reasonable time divest himself of such stocks, bonds or interest. If he fails to do so, he thereby vacates his office or employment.”
AZ Corporation Commissioner Susan Bitter Smith
Brnovich states Bitter Smith is ineligible under the law for multiple reasons, the first of which he states, “[S]ince long before her election in 2012 and continuing to this day, Ms. Bitter Smith has been a lobbyist … for two affiliates of Cox Enterprises, Inc. – CoxCom, LLC and Cox Communications Arizona, LLC. She therefore holds ‘official relation[s]’ to those entities, which are ‘subject to regulation’ by the commission.”
He notes a Cox affiliate provides phone service regulated by the commission, while both CoxCom and Cox Communications must report information and obtain Arizona Corporation Commission (ACC) approval for certain transactions.
The petition goes on to state Bitter Smith is, and was since long before her election to the ACC, the executive director and designated lobbyist for the Southwest Cable Communications Association (SWCCA), a trade association for cable companies.
That role, according to Brnovich, creates “official relation[s]” to the members of SWCCA, including the Arizona cable affiliates of Cox, Comcast Corporation, Cwquel Corporation and Time Warner Cable Inc., all of which are “subject to regulation” for reporting requirements and transaction approval by the ACC.
Third, the petition claims Bitter Smith is, and was since long before her election, “pecuniarily interested” in SWCCA’s members and their afficliates because she is paid over $150,000 per year for her full-time role at SWCCA.
That salary is on top of the annual salary of $79,500 Bitter Smith is paid to serve as commissioner.
SWCCA’s revenue is derived primarily from membership dues and Bitter Smith’s salary constitutes 40 percent of its budget.
Brnovich asserts each of these “official relation[s]” and “pecuniary interest[s]” prohibited by § 40-101 makes Bitter Smith ineligible to hold office.
Because these conflicts existed when she won election in 2012, Brnovich, citing case law, stated, “[S]he cannot remedy them but instead must ‘cease functioning as a commissioner.’”
Brnovich asks the Arizona Supreme Court to accept jurisdiction because the “case involves a statewide official’s eligibility for office, requires prompt resolution, can be decided solely on issues of law, and the Arizona Constitution and state statute vest the court with original jurisdiction to issue a writ of quo warranto (requiring the person to whom it is directed to show what authority they have for exercising some right or power they claim to hold) to a state officer.
He advises the court that it has exercised original jurisdiction in quo warranto cases at least 10 times, two of which specifically involved eligibility of ACC commissioners under § 40-101.
Brnovich points out Bitter Smith’s recusal history itself demonstrates her ineligibility, stating recusal is not a permissible means to cure a conflict under the law.
Bitter Smith filed a letter with the ACC identifying her relationship with SWCCA’s members, actually recused herself on Cox and Time Warner matters and stated it was a mistake when she did not recuse herself on a different Cox matter and a Suddenlink matter.
According to Brnovich, Bitter Smith is in business with regulated entities and is not merely doing business with them as a customer.
In conclusion, Brnovich stated Bitter Smith has three categories of conflicts, each of which is sufficient on its own to find her ineligible to hold office as an ACC commissioner, and requested the court accept jurisdiction and issue a writ of quo warranto to Bitter Smith directing her to cease functioning as a corporation commissioner.
