December 19, 2019
By Timothy Sandefur
Pima County’s been playing favorites in its hiring practices—and the Goldwater Institute’s challenging it.
When Pima County officials decided in January 2016 to build a $15 million headquarters and launchpad for a private company called World View to use for its balloon-launching business, it needed an architect and a contractor to design the project. Fortunately, it already had a few handy. That’s because half a year earlier, the county had begun holding private meetings with an architect and a contractor that had been handpicked by Pima County Administrator Chuck Huckelberry. For five months, these companies planned out the project to such a degree that by the time Huckelberry informed the Board of Supervisors that the project existed, it was already a third of the way finished.
That, of course, gave the Board all the reason they needed to hire the architect and contractor—who, after all, had such a head start that the Board thought nobody else could possibly finish the project on schedule.
All of this is illegal favoritism. Arizona law sets out a detailed procedure for hiring contractors and architects—and among other things, the law requires counties to enter into written contracts for such services, and to pay for such services. But rather than follow the law, the county planned the World View project through five months of secret meetings for free. The contractor and the architect participated because, as they later testified, they hoped the county would reward them by later giving them the contract.
Not only is it illegal for Pima County to get services like this for free, but it’s also illegal for the county to give a head start to contractors in this way. In fact, experts refer to this kind of favoritism as “unequal access to information” favoritism; it happens when the government gives information to one contractor that makes it impossible for any other contractor to compete. And as with all favoritism, it hurts taxpayers because public contracts end up going, not to the cheapest or best qualified companies, but to those who happen to be wealthy enough already to afford giving the government free services—or well connected enough that Chuck Huckelberry invites you to participate.
The county argues that it doesn’t have to follow the procurement laws because doing so would have been “impracticable.” And it’s true that the law includes an “impracticability” exception. But that exception only applies to urgent necessities, like if a flood washes out a bridge. It wasn’t designed to allow county officials to disregard the law simply because following it would be inconvenient. Nevertheless, waiving state law is par for the course in Pima County, which in the past five years has invoked the “impracticability” exception almost 80 times. That’s more than once per month.
Simply put: Pima County regards following the state’s procurement laws as optional.
We sued over this arrangement on behalf of Pima County taxpayers. Unfortunately, the Court of Appeals ruled that the case had taken too long, because construction on the World View project had finished before the court ruled. In a petition we filed today with the Arizona Supreme Court, we argue that that’s not good reason to deny taxpayers their day in court. On the contrary, the court can still rule that county officials violated the law—and should, because the county has made clear that it will certainly do the same thing again next time.
And that would be a shame, because the World View project has been a predictable failure. Although the county claimed that spending $15 million in taxpayer money to fund this private balloon tourism company would help create jobs, World View announced earlier this year that it was laying off staff, not hiring more. It has never fulfilled its promise to employ 100 workers, as agreed to in its arrangement with Pima County, and although it told the county that it would be taking tourists on rides, it also changed its mind about that in February—around the same time that it replaced the CEO who had championed the company’s arrangement with Pima County. Meanwhile, the county continues to raise taxes, and was rated this summer as the worst place in Arizona to try starting a business in—a title it’s held for years.
In other words, if you’re a business owner in Pima County, it’s not what you know, but who you know.
It’s not surprising that government is bad at picking winners and losers in the economy. Economic growth results from consumer demand, not from political deal-making. And if there had been a consumer demand for World View’s services, it could have obtained start-up funding from a bank or from private investors. Instead, it had to get government subsidies, paid for by taxpayers who had no real say in the matter—precisely because nobody would voluntarily take on such economic risk. As we explained in 2017, there’s a better way for Pima County to improve its economy: by focusing on the ordinary business of governing, instead of trying to play kingmaker—a role it’s obviously not well suited for.
Timothy Sandefur is the Vice President for Litigation at the Goldwater Institute.