Bitter Smith resigns from Corporation Commission

Posted at 2:20 PM, Dec 17, 2015
and last updated 2015-12-17 22:41:34-05

Arizona Corporation Commissioner Susan Bitter Smith, accused of having a conflict of interest for allegedly lobbying for companies the commission regulates, announced Thursday that she will resign effective Jan. 4.

Bitter Smith, a Republican who currently chairs the five-member commission, said she believes she's on solid legal ground but the issue has become a distraction to the important work of the commission. 

Her resignation came after her lawyer had urged the Arizona Supreme Court to reject an effort by Attorney General Mark Brnovich to remove her from office. Her attorney, Ed Novak, wrote in a filing with the high court that Brnovich's conclusion that Bitter Smith lobbies for a company the commission regulates is false.

"The continuing media furor and attention is certainly causing great distraction," Bitter Smith said at a news conference where she said she had no conflict but then announced her resignation. "I just think it's important for the voters to know that the rest of the commission, the commissioners, are going to be focused on the decisions they have to make as opposed to all the outside noise."

The state's high court was set to discuss the case at its Jan. 5 closed-door meeting. 

Novak wrote in Wednesday's filing that the cable association Bitter Smith leads, the Southwest Cable Communications Association, and the cable company she lobbies for are not involved in regulated telephone services.

Novak noted that while that some members of the cable association provide telephone service, they do so over the Internet and are therefore unregulated. The cable company, Cox Communications, runs a company that provides regulated telephone service, but the two companies are separate.

"The issues before the Court are simple and the facts can lead to only one conclusion: Petitioner's request must be denied because Ms. Bitter Smith holds no official relation to, and has no pecuniary interest in, any entity that is subject to regulation by the Commission," Novak wrote.

Brnovich said at a Nov. 30 news conference that there's no difference in ownership involving cable companies and telephone companies.

"Those cable companies that pay the dues, pay the fees to the SWCCA do indeed all of them offer bundling services, they offer phone services," he said. "She does indeed serve as a lobbyist not only for those cable companies, but those companies have direct affiliates that are controlled by those parent companies."

Brnovich filed a petition with the high court late last month seeking her ouster, citing a cited a state law that says a person employed by or having an official relation to a regulated entity cannot hold office as a commissioner. He said the removal was necessary to protect the commission's integrity and to restore voters' faith in the electoral system.

"Those companies did provide bundling services," Brnovich said last month.

Smith doesn't see it his way. 

"Cable television systems are regulated by cities and counties in the state of Arizona," she said.

Bitter Smith said no one opposed her run for office in 2012 because "there was no conflict." Brnovich acted after a September complaint filed by Chandler attorney Tom Ryan said her work for the cable association and cox was a conflict merited her immediate removal from office.

"I served here faithfully and with great success for three years," Bitter Smith said. "Nobody ever mentioned it until of course obviously it came up through some dark-money activity aimed at really attacking the commission."

"I think it's very clear that we have a strong point of view. I stand on my principles. I stand on what the brief suggests," she said. "Again, I think the court may have an opportunity to resolve it."

Bitter Smith said she wants the high court to act on the merits of Brnovich's complaint and settle whether she indeed had a conflict. She accused Brnovich of taking such a sweeping view of corporate ownership that almost anyone would be barred from the commission.

Gov. Doug Ducey will appoint her replacement.