The Daily Agenda: Walking back illegal contracts
Ducey's parting gift comes back to bite him ... Hickmans prison labor camp has a nice ring to it ... And if you fear commitment, consider a fish instead.
Last month, we broke the story that former Gov. Doug Ducey rewrote dozens of contracts doling out hundreds of millions of dollars in federal COVID-19 funds for the next three years in an attempt to ensure his successor couldn’t spend the money as she saw fit.
Gov. Katie Hobbs was furious at the time and her team accused the Ducey administration of attempting to thwart her authority as governor while offering unethical no-bid contracts to his buddies.
Now, the Hobbs administration thinks it found a technicality that invalidates more than a dozen of those contracts signed in the final days of the Ducey administration, which total about $210 million. And they think they discovered a a drafting error that will let the governor cancel any of the other ongoing contracts that Ducey tried to lock in place, potentially giving the governor hundreds of millions of additional dollars to distribute as she likes, within the broad confines of what’s allowed under the federal American Recovery Plan Act.
The first technicality boils down to miscounting the days.
Back in March 2020, Andy Tobin, Ducey’s head of the Department of Administration, signed a waiver of the state’s competitive bidding process. That’s allowed under the law, and the waiver lasted until the governor’s pandemic emergency order expired in March 2022. Tobin then extended the waiver until September 30, 2022.
But on October 4, after that extension had expired, Matt Gress, a Republican lawmaker and one-time Tobin aide who was by then serving as the head of the governor’s Office of Strategic Planning and Budgeting, asked Tobin to extend it again by 90 days.
Ninety days from October 4 would have carried through Ducey’s full term as governor. But 90 days from September 30 fell on December 29, three days before Ducey left office. In those three days, Ducey’s office handed out more than $430 million in contracts, $210 million of which went to 16 private organizations.
Because no waiver was in effect and there was no competitive bidding on those contracts, Hobbs believes those contracts are illegal1. On Tuesday, her office told those organizations that their contracts are void. In total, Ducey obligated nearly $1 billion of the state’s $3 billion allotment from ARPA in a flurry of contracts in those final three months, the Hobbs administration said.
That’s not the only problem with the rush-job contracts, according to the Hobbs administration. When rewriting a larger pool of existing contracts in an attempt to permanently lock them in before he left office, Ducey’s staff added a provision stating, essentially, that the Governor’s Office couldn’t cancel them except for in cases of malfeasance, like companies misusing the funds.
But Ducey’s team forgot to take out another portion of the contract that refers back to the state’s uniform terms and conditions. That provision says that the state can cancel contracts at any time if it’s “in the best interest of the state.”
“It’s clear when you look at the amendments that were made by the Ducey administration in the 11th hour that they were trying to tie the hands of the Hobbs Administration,” Governor’s Office lawyer Sean Berens told reporters, adding that despite Ducey’s best attempts, “we retain the right on behalf of the taxpayers to terminate other contracts that are legal but are not in the best interest of the state.“
The “best interest of the state” is a super broad allowance — and the Hobbs administration is now reviewing all contracts that the Ducey administration approved. They expect to cancel other contracts as well, saying those that aren’t in the state’s best interest or have little to nothing to do with COVID-19 may be on the chopping block.
Many of the contracts Ducey handed out in the last-minute rush to obligate all of the state’s ARPA funds seem hard to justify as COVID-related, like, for example, the grant to the Today Foundation, a conservative nonprofit started by former President George H. W. Bush’s Education Secretary, Bill Bennett, who is now a Fox News contributor. Based on the organization’s one-page proposal to develop a history course with an anti-critical race theory bent, the state signed a $7 million contract that was finalized on Sunday, December 31, Ducey’s second to last day as governor.
The price of eggs: In the early days of the pandemic, women prisoners who worked at Hickman’s Farms were moved into a prison labor camp at Hickman’s, the only private company that did so while other off-site jobs for prisoners were shut down, former Phoenix New Times reporter Elizabeth Whitman writes in an in-depth story about the operation for Cosmopolitan. The “hastily launched labor experiment” involved subpar housing, low wages and dangerous working conditions, women who worked there told Whitman.
There’s a new AG in town: Elected officials and advocates are pushing back against election deniers more strongly across the country, including in Arizona, where new Attorney General Kris Mayes reiterated to the Washington Post that she’s refocusing the election integrity unit to focus mostly on protecting access to voting and protecting elections officials. She said she’s opened an investigation into the fake electors scheme and has talked with Maricopa County Sheriff Paul Penzone about how to protect drop boxes and polling locations.
“We’re going to be going back to a time when the Attorney General’s Office didn’t waste taxpayer dollars on chasing conspiracy theories,” Mayes said.
Crash still causing problems: A major crash that spilled hazardous material on the I-10 near Tucson on Tuesday kept the highway closed yesterday and forced the evacuation of people who lived near the deadly crash site, where liquid nitric acid leaked from a crashed trailer.
Better than a deficit: New governors in nine states, including Arizona, are coming into office with budget surpluses, Politico reports. The new crew is looking toward tax cuts, new programs and increased rainy day funds to use up the added money. Arizona’s budgeting of a $1.8 billion surplus will prove the most contentious, though, with a Democratic governor and GOP Legislature largely out of step on how to craft the budget.
The little-known backstory: The Republic’s Mary Jo Pitzl profiles new Republican House Speaker Ben Toma. He was born in Romania, and his parents worked to get asylum in the U.S. for their family. Toma, now the “highest-ranking U.S. politician of Romanian heritage,” cites his upbringing in a Communist-controlled country for his political views.
Red meat issues: Republican lawmakers have introduced a host of “law and order” bills this session, including legislation to create harsher drug penalties, crack down on panhandling and attempt to prohibit filming in the vicinity of police after last year’s attempt was ruled unconstitutional, the Republic’s Miguel Torres writes. In the Arizona Mirror, Caitlin Sievers details Republican lawmakers’ attempts to beef up the state’s existing laws mandating health care for fetuses that are delivered alive during abortions. The bill, which cleared a Senate committee this week on party lines, would charge doctors with a felony for not providing care. Finally, Republican lawmakers are putting a new spin on a bill from last year that would have required teachers to post all of their lesson plans online, the Mirror’s Gloria Gomez writes. The new version would require schools post links to purchased curriculum, rather than having teachers post lesson plans. And while all those bills are moving closer to a veto from the Democratic governor, environmental activists at the Capitol are seeing their priorities stall out, the Republic’s Joan Meiners writes.
Always an Arizona angle: A white nationalist who carried a tiki torch while marching in Charlottesville in 2017 and was captured in one of the night’s most iconic photos killed himself while awaiting trial in Arizona District Court in Tucson for allegedly smuggling more than 30 pounds of fentanyl across the U.S.-Mexico border in exchange for $4,000 pesos, or about $200 U.S. dollars, the Arizona Daily Star’s Danyelle Khmara writes, based on reporting from independent journalist Molly Conger.
They’re playing the long game: After Cochise County supervisors and Recorder David Stevens created such an “outrageous and physically and emotionally threatening” atmosphere that county Elections Director Lisa Marra resigned in protest, the supervisors are now going forward with a plan to hand over her duties to Stevens, the Herald/Review’s Shar Porier reports. Stevens had urged supervisors not to certify the results of their 2022 November election until a court intervened and forced them to certify.
“The elections department should remain independent. The further from electeds the better. Shame, shame on you,” local resident Albert Anderson told the board.
Debt free is the way to be: Gila County announced it had officially fully funded its retirement system for public safety employees after the small eastern Arizona county’s pension debt, like that of other municipalities, skyrocketed during the Great Recession. The county sold $16 million in bonds to raise the money to fully fund the system, which will save it money on interest payments in the long run, the Payson Roundup’s Peter Aleshire writes.
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