PHOENIX — Arizona's strategy of attracting corporate executives to the Grand Canyon State by paying for lodging and sporting events violates the state's constitution, the state attorney general said.
Attorney General Kris Mayes said Tuesday that the Arizona Commerce Authority can no longer keep trying to entice executives to do business in Arizona by gifting them premium packages to the Super Bowl or Waste Management Phoenix Open.
In a letter sent this week, Mayes told the ACA its "CEO Forum" events were violating Arizona's gift clause and warned the state agency to discontinue offering these types of events.
"As they currently exist, the CEO Forums violate the Gift Clause of the Arizona Constitution," Mayes' letter stated. "The current structure of the CEO Forums confers significant value on invited private executives and their guests without obtaining any value cognizable under the Gift Clause."
The ACA spent nearly $2.1 million on last year's CEO Forum, which included $1.8 million on a Super Bowl sponsorship package. State auditors found that the Super Bowl deal resulted in the forum attendees getting up to 140 game tickets, 70 rooms at the Arizona Biltmore, and a Super Bowl loft party.
The stated goal of these forums is to influence an executive's decision to eventually bring business to Arizona. Since 2018, the ACA forums have hosted 136 executives from 118 businesses.
But Mayes has determined that these forums break Arizona's gift clause because "they give valuable benefits to a limited class of private persons without receiving any legally cognizable benefit in return," the attorney general's letter states.
The clause is intended to prevent the state from wasting public resources on expenditures that don't yield a public benefit.
Mayes said her office "will seek to prevent any future illegal payment of public monies to private entities by the ACA."
Public records show the ACA operated with a budget of about $100 million in fiscal year 2023, with its revenue coming from the state general fund and federal grants. A Republican state senator has introduced a bill this year to repeal the commerce authority.
The attorney general's letter can be read below:
*Editor's Note: The above video is from an earlier broadcast*
UP TO SPEED