The Arizona Commerce Authority spent over $2 million on gifts, including tickets to the Super Bowl, in an effort to bring businesses to the state, state auditors found.
According to a report released by Arizona Auditor General Lindsey Perry, that the authority spent $2.4 million on travel, luxury hotel rooms, alcohol, and tickets to events — including Super Bowl LVII and the Waste Management Phoenix Open — in the last six years. Auditors found that during the 2023 forum, the ACA provided 140 tickets to Super Bowl LVII in Glendale, 140 tickets to the Super Bowl Experience, a “party loft” at the Super Bowl, gift packages for attendees including parking passes to a Cardinals game, and 70 hotel rooms.
Out of the $2.4 million spent by the ACA during the forums for 2023, $1.85 million was spent on a sponsorship with the Super Bowl, leading to the ACA being listed as a “community partner” on the Super Bowl Committee’s website.
While the ACA said that this spending is “central” to its purpose to attract and retain businesses in Arizona, auditors said this might violate a constitutional provision barring governments from giving gifts to businesses. The constitution reads:
Neither the state, nor any county, city, town, municipality, or other subdivision of the state shall ever give or loan its credit in the aid of, or make any donation or grant, by subsidy or otherwise, to any individual, association, or corporation, or become a subscriber to, or a shareholder in, any company or corporation, or become a joint owner with any person, company, or corporation, except as to such ownerships as may accrue to the state by operation or provision of law or as authorized by law solely for investment of the monies in the various funds of the state.
Auditors asked Attorney General Kris Mayes to weigh-in.
According to the AZ Mirror, ACA said that 23 of the 118 companies whose executives and their spouses were invited to attend events since 2018 have proposed nonbinding investments or job commitments to the state; these events included expenses like hotel rooms, transportation, suites at sporting events, food, alcohol, and conference rooms, the audit found. One CEO’s itinerary showed tickets to a private Gwen Stefani concert during the Super Bowl, a private dinner with executives, and the Lombardi Trophy showing, according to the audit.
While the State of Arizona Accounting Manual (SAAM) must be followed by state agencies, the ACA is exempt from this requirements. Auditors questioned if this violates the constitution’s Gift Clause.
“The ACA reported that it consulted with in-house legal counsel since the private CEO Forums’ inception and third-party attorneys to ensure these Forums comply with all State rules and regulations,” the report said.
In response, ACA President and CEO Sandra Watson said in a statement that the authority’s results have been “transformative.”
“Since 2011, the ACA has successfully won 1,180 competitive projects, representing a projected 267,000 new jobs with average wages of $60,000 and over $113.4 billion invested in Arizona communities across the state,” Watson said.
Read the full audit report here.
