Gov. Katie Hobbs gets more financial backing from APS after utility supported Kari Lake in election

Arizona’s largest electric company made another six-figure donation to benefit Democratic Gov. Katie Hobbs after her election last year, bringing the influential utility’s financial support of the new governor to over $360,000.

The $100,000 donation from Pinnacle West Capital Corporation, the parent of Arizona Public Service Co., to the Arizona Democratic Party was not previously reported by news outlets. The donation to the "governors fund" came in addition to $250,000 the company paid to support Hobbs’ inauguration, as well as several smaller donations to Democratic groups after the November election.

The contribution offers another data point showing how the deep-pocketed power company seeks to influence decision-makers, including potentially making amends with the new governor after backing Hobbs’ Republican opponent last year.

It also shows that APS didn't fully disclose its political spending to state regulators last year.

APS doesn’t have to file campaign finance reports because it is not a political entity, but does disclose its spending to the Arizona Corporation Commission.

After The Arizona Republic found several discrepancies between what APS reported to the commission earlier this year and its political contributions that were documented in other public reports, the utility updated its disclosure, adding an additional $320,000 in spending it didn't initially disclose. The utility blamed a timing issue between when it reported to the commission and made information available on its website.

While the power company updated its report to the commission after The Republic's inquiries, Commissioner Anna Tovar on Wednesday asked the utility to again update its disclosure and include an affidavit "certifying the veracity" of its filings with the commission. She gave the company a deadline of Aug. 15.

Broadly, the company cast its donations as a routine course of business.

"We advocate for sound, forward-looking public policy that creates shared value for our business, our community and a vibrant Arizona economy,” APS spokesperson Sherine Zaya said in an email. “We believe that this participation helps to create more robust and better-informed policy outcomes.”

Zaya did not respond to a follow-up question about what policies the post-election donations were meant to support.

Hobbs’ senior campaign adviser and spokesman, Joe Wolf, declined to comment or answer questions for this article on behalf of the campaign. Wolf also does consulting work for APS, and his Phoenix lobbying firm Fillmore Strategy was hired by the utility this year, state records show.

Pinnacle West’s political spending has a notorious past in the Grand Canyon State, though it was associated with conservative candidates and their causes.

The company spent over $10 million to help elect two regulators to the Corporation Commission in 2014, a campaign that helped draw attention to the role of dark money, a type of political spending by groups that don’t have to disclose their donors. That race prompted the commission to begin scrutinizing political spending, and Pinnacle West later pledged not to play a role in the election of its regulators.

In 2018, the utility’s fight against a renewable energy ballot measure called Proposition 127 helped make it the state's most expensive ballot measure fight on record. Pinnacle West poured over $39 million into defeating the measure, campaign finance records show.

Discrepancies in reports

The latest donation came to light in quarterly reports filed by the Arizona Democratic Party, though it also was publicly disclosed by Pinnacle West on its corporate website about the same time, in April.

Though the party reported in campaign finance filings that the $100,000 donation was made by APS on Jan. 4, the utility said it was made in late 2022. Morgan Dick, executive director of the state party, confirmed the check was received in late 2022, but not cashed until early January, after the holidays.

One effect of the delay was the money was not disclosed by the party on state-required reports until April, instead of mid-January.

In late January, Tovar asked utilities in the state to share spending details for 2022, continuing the tradition of asking utilities to provide an accounting of their political spending.

APS’ initial response did not disclose the contribution and also did not include several other donations from 2022 that were reported in state campaign finance and Internal Revenue Service records filed by the political groups that received the money.

After inquiries from The Republic, APS updated its report to the corporation commission, adding 11 contributions to both Democratic and conservative groups, totaling $320,000 in spending. Those contributions include the $100,000 to the Arizona Democratic Party and $25,000 to the Arizona Democratic Legislative Campaign Committee, an affiliate of the state party that seeks to win Democratic majorities in the Legislature. Hobbs helped start the group in 2015 when she was a state senator.

It remains murky why those donations made in 2022 were initially left off of APS’ April report to the corporation commission.

Zaya, the company spokesperson, pointed to a timing issue between March 1, when APS reported its spending to the corporation commission, and April 15, when the parent company disclosed its political spending on its corporate website. The website included the donation, but the earlier report to the Corporation Commission did not because it “was developed prior to the finalization of the content on the Pinnacle West website,” Zaya said.

Zaya did not respond to a follow-up question about what would have changed between March and April, when the donations were made at least three months prior.

Tovar said in a statement she believed “disclosure is in the public interest and utilities should report all contributions and political expenditures to the Commission.”

Spending in the 2022 cycle — and after

While the utility and its employee political action committee give money to groups and candidates of both major parties up and down the ballot, in the 2022 governor’s race it tipped far in favor of Republican nominee Kari Lake — at least until Hobbs’ victory.

Pinnacle West gave over $850,000 to the Republican Governors Association before the November election, and the political group, in turn, spent nearly $14 million trying to elect Lake.

The utility gave $60,000 to the Democratic Governors Association, which seeks to elect Democratic governors across the nation, last year. Of that, $50,000 came in after Hobbs’ election, according to the association’s tax filings with the IRS. That money was one contribution not initially reported to the corporation commission.

For Hobbs’ January inauguration ceremony, APS was the largest single donor, kicking in $250,000 — the highest sponsorship level and enough to cover the cost of the entire event, according to information released by Hobbs’ campaign following public pressure.

The governor took political heat for initially refusing to reveal which private interests were donating how much to her inauguration fund. That secrecy came despite her campaign pledges to be transparent, and after her campaign manager went a step further to create a dark money group to receive the funds.

The Hobbs campaign ultimately did disclose some information about who was funding her inaugural festivities, but the early-term controversy for the new governor led to action by the state Legislature.

Lawmakers sent Hobbs a bill, which she signed into law in May, that will cap donations for future governors’ inaugurations and require any extra cash to be spent on projects in the state’s interest, as prior governors have chosen to do.

Reach reporter Stacey Barchenger at stacey.barchenger@arizonarepublic.com or 480-416-5669.

This article originally appeared on Arizona Republic: APS makes another six-figure donation to support Arizona Gov. Hobbs