AZ spent $2.1 million on golf, Super Bowl tickets to woo CEOs. It may be unconstitutional.

State auditors say the Arizona Commerce 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 an effort to woo CEOs to relocate or expand their companies to Arizona. 

And that may violate a constitutional provision barring Arizona governments from giving gifts to businesses, auditors said. They’ve asked Attorney General Kris Mayes to weigh in on whether the spending is legal.

The auditors also noted that the ACA is giving incentives to businesses without verifying if those companies follow through on promised job creation and investments.



The ACA deems the spending on the private “CEO Forums” as “central” to its purpose, which is to help attract and retain businesses in the state and also dispenses a number of grants and incentives.

State auditors looked at the ACA’s spending as part of a regular evaluation known as a “sunset audit,” during which legislators decide whether an agency should be reauthorized for up to 10 years. As part of the audit, they looked at five CEO Forums between 2018 and 2023.

The ACA spent more than $2.4 million hosting the events, which the ACA characterized as “marketing campaigns.” 

Nearly all of that money was spent for the event in February 2023, when the CEO Forum included tickets to the Super Bowl and the Waste Management Phoenix Open: Roughly $2.1 million was spent to convince 67 CEOs to bring their companies to Arizona.

As of June 2023, the ACA reported that 23 of the 118 companies whose executives and their spouses were invited to attend any of the events since 2018 have proposed potential nonbinding investments or job commitments to the state. 

The CEOs who attend the junkets have virtually every expense covered. The ACA pays for their hotel rooms, transportation, suites at sporting events, food, alcohol and conference rooms. The state even pays for gifts, such as hats, sunglasses and bottles of wine, according to the audit. 

An example of the itinerary for one CEO provided to auditors included tickets to a private Gwen Stefani concert during the Super Bowl and a private dinner at the Paradise Valley Country Club with Gov. Katie Hobbs, Arizona Cardinals President Michael Bidwill and former Cardinals wide receiver Larry Fitzgerald. CEOs at the dinner also got to see the Lombardi Trophy. 

The ACA said that the forums provide education for the CEOs to encourage them to commit to doing business in Arizona, and tickets to the special events require the CEOs to attend educational seminars about the state. The agency said it plans to hold two more forums next year in conjunction with the Waste Management Phoenix Open and the NCAA Men’s Final Four basketball tournament, which will be held in Glendale in April 2024. 

Do expensive junkets violate the Gift Clause?

Auditors noted that the ACA does not follow the same rules for its spending as other state agencies. 

The State of Arizona Accounting Manual, or SAAM, must be followed by state agencies when using public monies for transportation, food and other expenses. SAAM also ensures that state agencies are following the Arizona Constitution’s Gift Clause, which prohibits gifting of public monies. 

However, the ACA is exempt from following SAAM requirements. This means that the agency can purchase alcohol or even provide open bars at events, which is not permitted under SAAM. It also means that the ACA regularly pays more for hotel rooms: SAAM limits lodging costs in Phoenix to $172 a night, but the ACA spent an average of $277 during its 2022 CEO Forum. 

All this led the auditors to openly question if the forums themselves violate the state 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 says. 

Auditors forwarded the question on to the Arizona Attorney General’s Office, who told the Arizona Mirror that it is currently investigating the issue and no determination on the constitutionality of the forums has been made yet. 

The ACA contends that the forums have brought in thousands of jobs and billions of dollars in investments to the state. 

The forums also were found to have issues with complying with procurement policy, auditors found. 

The ACA spent almost $115,000 on transportation expenses for the 2023 CEO Forum without filing a formal solicitation or following standard documentation practices, auditors said. The ACA told the auditors it was due to a last-minute need for additional transportation to accommodate the 67 CEOs that attended. 

Some other expenses meant to woo CEOs that auditors flagged included more than $9,00 on additional food, alcohol and other items such as guided tours, gift bags, Nike hats, sunglasses, travel tumblers, red wine and eight tickets to see “An American in Paris.” 

The ACA also spent $28,204 on VIP Birds Nest tickets to the Waste Management Open, which includes alcohol, a catered buffet and concert viewing. 

In total, the ACA spent $193,226 on lodging, resort fees and transportation to and from the Waste Management Open and other events. 

During the 2023 forum, the ACA provided 140 tickets to Super Bowl LVIII in Glendale, 140 tickets to the Super Bowl Experience, a “party loft” at the Super Bowl, gift packages for attendees that included 4 tickets and 2 premium parking passes to one Arizona Cardinals football game, 70 hotel rooms at the Arizona Biltmore and events with special speakers such as U.S. Sen. Mark Kelly. 

The majority of the $2.4 million spent by the ACA during the forums was for 2023 which $1.85 million on a sponsorship with the Super Bowl. That sponsorship led to the ACA being listed as a “community partner” on the Super Bowl Host Committee’s website, as well as tickets to the game.

Auditors: ACA is dropping the ball on incentive requirements

The CEO Forums were not the sole focus of the auditors. They also found that the ACA lacked policies to ensure that incentives given out by the state to companies to promote job growth and investment in Arizona actually lead to new jobs and investments. 

“Our review of a sample of 21 of 99 Quality Jobs tax credits totaling nearly $7.5 million that the ACA approved in fiscal years 2021 and 2022 found that its staff did not consistently review the business-reported job creation information and further, did not demonstrate that it had verified business-reported job creation information for any of the 21 tax credits, as required by its policies,” auditors wrote. 

Businesses looking to qualify for the tax credit must provide information to the ACA such as the total number of qualified employment positions, average hourly wage and total compensation paid to employees. 

The ACA said that staff verified the businesses’ information, but none of the files contained documentation that they did so. But auditors questioned that defense, noting that ACA staff they interviewed “reported that they may verify the businesses’ information but stated they do not frequently do so.” 

“Although there could be a variety of reasons for the differences, despite our repeated requests, the ACA did not provide any documentation demonstrating that it identified or investigated the reasons for the differences,” the auditors reported. 

One business was approved for a $306,000 tax credit in 2021 that required the business to make at least $5 million in capital investments to the state. However, auditors were unable to find any documentation that showed the business had met this requirement. 

Similar issues were found with four businesses with active grant agreements. Those businesses collected a total $3.4 million in cash incentives that were contingent on job creation requirements. But the ACA was unable to provide any documentation that proved the businesses met Arizona residency requirements or had created any new jobs in the state. 

“The ACA’s lack of documentation to show that it verified businesses met job and capital investment requirements before approving tax credits and distributing grant monies increases the risk of fraud and waste of public monies,” auditors said. “Specifically, businesses could submit fraudulent employment and wage information, thereby making the ACA more susceptible to fraud and waste of public monies.” 

These findings and others led the auditors to make 17 recommendations, all of which the ACA agreed with. The ACA stated in its response that it will begin looking into implementing new policies, but reiterated the economic impact the agency has in the state. 

“The ACA was established in the wake of the Great Recession, following years of lackluster growth and slow recovery. Our results since then 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,” ACA President and CEO Sandra Watson said in the agency’s response.

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