Utility regulator’s fraud trial nears
Ex-chairman, 3 others also face bribery charges
It has been nearly a year since former Corporation Commission Chairman Gary Pierce, his wife, Sherry, the lobbyist Jim Norton and water utility owner George Johnson were indicted on eight counts of bribery, fraud and conspiracy.
Trial is scheduled for May 30 in U.S. District Court in Phoenix, but the defendants were back in court Tuesday — or at least their attorneys were there on their behalf.
Johnson was the only one of the defendants to appear at the hearing, which was held to hammer out what testimony and evidence will be admissible during the trial, and what will be left out.
The charges date to 2011 and 2012. Prosecutors believe that Johnson, who has a long history of wheeling and dealing as a developer and utility owner, especially in Pinal County, funneled $31,500 through Norton and an “unindicted co-conspirator” — referred to in court documents as the UCC — to Sherry Pierce. The money was an incentive for Gary Pierce to persuade other commissioners to approve higher wastewater rates for Johnson Utilities in the East Valley and Pinal County, prosecutors maintain.
Pierce voted in 2011 to allow a rate increase for Johnson Utilities that the staff at the Corporation Commission opposed. He also voted in 2013 for a controversial change that allowed the utility to raise customer rates to pay the company owners’ personal income tax. Majority votes of the commission approved both hikes.
The indictment further alleges Pierce planned to buy a $350,000 land parcel with funds provided by Johnson. The indictment does not state whether that transaction took place and the U.S. Attorney’s Office would neither confirm nor deny the transaction.
The UCC is believed to be Norton’s ex-wife, Kelly Norton, from whom he has been divorced since 2016. The prosecution mostly refers to her in court as the unindicted co-conspirator, while the defense attorneys call her by name.
Norton tried unsuccessfully to block her testimony under the concept of marital privilege, designed to protect someone from testifying against an accused spouse, much the way doctors, lawyers and priests are protected from divulging things discussed with clients or parishioners.
Tuesday’s hearing centered on potential testimony by a former Corporation Commission employee.
Thomas Broderick was the commission’s director for utilities in 2015 and 2016. The U.S. Attorney’s Office in Phoenix retained him last August as an expert to analyze records from Johnson Utilities.
Sherry Pierce’s attorney filed a motion to preclude his testimony, arguing that Broderick claims that Gary Pierce
“unduly influenced” the other commissioners leading up to the vote favorable to Johnson.
During Tuesday’s hearing, Judge John Tuchi expressed his concern that Broderick’s initial report seemed a mix of expert testimony, which is supposed to be impartial and analytical, and layman’s testimony, in which Broderick may be expressing the opinions of a person who worked in the office.
Tuchi raced through other pending motions, including ones from Johnson asking that his political contributions and personal wealth not be divulged lest it unduly prejudice him in jurors’ minds.
Separately, Johnson remains under scrutiny by the current Corporation Commission.
Commissioner Andy Tobin has been battling with Johnson in court over access to financial data related to Johnson Utilities’ contract to provide water and wastewater services for the town of Queen Creek.
But Johnson secured a temporary restraining order against releasing the information because of a nondisclosure agreement between the town and the utility. The Arizona Court of Appeals upheld that order.