Former AZ utility regulator, lobbyist, utility owner charged with conspiracy, bribery, fraud
By Evan Wyloge and Jim Small | Arizona Center for Investigative Reporting
Federal prosecutors on Tuesday charged former Arizona Corporation Commissioner Gary Pierce, his wife, prominent lobbyist Jim Norton and utility owner George Johnson with conspiracy, bribery, mail fraud and wire fraud, over what prosecutors lay out as a scheme to pay off Pierce in return for favorable regulation by the Corporation Commission surrounding a special $18 million wastewater plant deal.
According to the charges filed in U.S. District Court on May 23, Pierce, his wife and Norton set up a scheme to have Johnson, the head of a Pinal County water company, make regular payments to Pierce.
In all, Pierce got $31,500 from Johnson, prosecutors allege. In return, Johnson got a $18 million wastewater plant added back into the company’s base rate – essentially putting the entire cost onto ratepayers. Pierce also spearheaded an effort to allow Johnson’s company to recover income taxes by passing the cost on to ratepayers.
Norton, who at the time worked for the lobbying firm R&R Partners, and an unnamed, unindicted co-conspirator agreed to arrange the payments between Pierce and Johnson. The co-conspirator created a consulting firm that contracted with Johnson International and was paid roughly $7,000 per month. That consulting firm then paid Sherry Ann Pierce $3,500 a month for 10 months in 2011 and 2012 for what amounted to a job that included little more than “simple tasks.”
Norton and Pierce also made plans in late 2011 to purchase a $350,000 piece of land together, court documents show, using money that would have been provided by Johnson.
Federal prosecutors allege that Pierce “solicited, accepted and agreed to accept money, ultimately totaling $31,500, and solicited real property valued at approximately $350,000, from defendant (Norton)… intending to be influenced and rewarded in connection with matters Johnson Utilities LLC had pending before the (Arizona Corporation Commission)…”
They also allege that Sherry Ann Pierce, Norton and Johnson (did knowingly and intentionally aid the commission of the offense by routing payments and acting as a conduit of the money to (Gary Pierce) in order to hide the true nature and purpose of the payment of the money.”
Court records show that a grand jury reviewed several withdrawal and deposit records, emails, and invoices related to the scheme.