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Report: AZ Commerce Authority Lacks Needed Transparency

Since the start of 2011, the Arizona Commerce Authority has disclosed checkbook-level detail online for 59 percent of the $41.5 million awarded to companies in grants and tax credits. Checkbook-level detail on the other 41 percent  or $17.0 million  is not readily accessible to the public.
Since the start of 2011, the Arizona Commerce Authority has disclosed checkbook-level detail online for 59 percent of the $41.5 million awarded to companies in grants and tax credits. Checkbook-level detail on the other 41 percent or $17.0 million is not readily accessible to the public.
May 17, 2012

PHOENIX - More than 40 percent of the taxpayer-funded corporate subsidies doled out in the first year of the Arizona Commerce Authority have not been disclosed, either by amount or recipient, according to a new report.

The study from the Arizona Public Interest Research Group (PIRG) Education Fund calls for more transparency from the state-created corporation set up to replace the Arizona Department of Commerce.

Report author Serena Unrein, PIRG's public-interest advocate, says the information is being kept confidential for nine of the 13 subsidy programs run by the Commerce Authority.

"Taxpayers really don't have confidence about where their money is going, because at this point we simply don't know."

Unrein says the amounts and recipients of all grants and tax credits should be posted online with checkbook-level detail, allowing taxpayers to see which individual companies and vendors are benefitting.

The report also calls for the Commerce Authority to specify the economic-development benefits expected for every grant or tax credit, something that is rarely done now. Unrein says money should be reclaimed from companies that don't perform.

"If companies aren't providing a good return and following through on the promises that they've made, then taxpayers absolutely should be able to claim that money back if companies aren't following through on those promises."

Most of the Commerce Authority board members are high-level executives of Arizona corporations. Unrein says safeguards against conflicts of interest need to be strengthened to prevent board members from voting for subsidies that will benefit themselves or friends.

"Right now, there is a conflict-of-interest policy in place for the Commerce Authority, but to my knowledge, it hasn't been used - and if it has, then it hasn't been clearly noted in the minutes where there have been conflicts of interest."

In its first year, the authority awarded more than $41 million in grants and tax credits. It says the incentives attracted nearly 11,000 jobs and $9 billion in investments.

The PIRG report is online at arizonapirg.org.

Doug Ramsey, Public News Service - AZ