Johnson Utilities bribery trial goes to jury
Jurors will now decide whether $31,500 paid to a former utility regulator’s wife and a failed $350,000 realestate deal constitute federal crimes of bribery and conspiracy that could send four people to prison.
Lawyers made closing arguments Thursday and Friday in a federal courtroom in Phoenix in the case involving a former Arizona Corporation Commissioner that has damaged the credibility
of the commission, often called the fourth branch of Arizona government.
The government is charging former Commissioner Gary Pierce, his wife, Sherry; lobbyist Jim Norton; and water company owner George Johnson with a bribery scheme from 2011 to 2013.
The government asserts that Pierce helped pass a rate increase and a beneficial tax policy for Johnson Utilities in exchange for cash paid to his wife and an attempt to have Johnson fund the land deal.
The approximately 30,000 Johnson Utilities customers in Florence, Queen Creek and the San Tan Valley area today are paying about $10 a month more on their utility bills because of the Corporation Commission votes in 2011 and 2013.
“All of (the customers) have the right to not have utilities funneling money into the joint bank accounts of
the regulators,” Assistant U.S. Attorney Fred Battista said.
Defense lawyers said that the government failed to present any evidence connecting Pierce’s actions to the money paid to his wife and the land deal.
“Ladies and gentlemen of the jury, there is no bribe in this case,” said Woodrow Thompson, defense attorney for George Johnson.
Battista said jurors don’t need to see a document explaining the arrangement between the utility and the regulator to conclude there was bribery.
“In a bribery scheme, people don’t … write out a contract,” he said. “These are things that are done over coffee.”
Some facts of the case are undisputed: Kelly Norton, whose husband Jim was a lobbyist for Johnson Utilities, set up a consulting company in 2011 called KNB Consulting. George Johnson paid KNB $6,000 a month, and KNB paid Sherry Pierce $3,500 a month for nine months.
Sherry Pierce’s husband, Gary was then serving as a Corporation Commissioner, and his duties included setting rates and policies for Johnson Utilities and other regulated monopolies in the state.
Kelly Norton was given immunity in the case in exchange for her testimony.
Although some may see a conflict of interest for a utility regulator’s wife being paid to work for a utility, that was not part of the case.
What is at issue is whether the political work Sherry Pierce did was a real job for which she earned her paycheck, or a sham set up to accept bribe money in exchange for Gary’s votes in favor of rate hikes.
“This is not bona fide wages,” Battista said. “This is part of a bribe.”
Prosecutors also showed the jury how Gary Pierce did not disclose his wife’s income from the arrangement in his 2011 and 2012 financial disclosure forms with the state, something required of those holding public office.
Defense lawyers tried Friday to argue that the documents were not properly placed into evidence but were overruled.
Nor did Sherry Pierce list her work for the consultancy on her résumé, which Battista also showed to the jury and said was evidence the parties tried to conceal the arrangement.
Defense lawyers took pains to show that Sherry Pierce was producing actual work, attending meetings and earning her $3,500 a month working for Johnson.
Witnesses included one current and one former congressman she worked for, Andy Biggs and Matt Salmon, who testified to her political expertise.
Defense lawyers throughout the case suggested that Kelly Norton only came forward with her testimony out of spite for her ex-husband.
Sherry Pierce’s lawyer, Ashley Adams, said the case boils down to whether jurors believe Kelly Norton or Sherry Pierce.
“The government’s entire case rests on (Norton’s) credibility,” Adams said.
Kelly Norton testified that she did not come forward with her story until after she was contacted by the FBI amid a separate investigation, and that she decided to share her information because