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US drops bribery case against ex-Arizona utility regulator

Posted at 12:01 PM, Aug 08, 2018
and last updated 2018-08-08 15:01:13-04

Federal prosecutors said Tuesday that they are dropping the bribery case against former Arizona Corporation Commissioner Gary Pierce and three others after their trial ended three weeks ago with a mistrial.

The U.S. Attorney's Office informed a judge in a court filing that all charges will be dismissed against Pierce, his wife Sherry, water company owner George Johnson and lobbyist Jim Norton. Cosme Lopez, a spokesman for the U.S. Attorney's Office, declined to comment on what led prosecutors to dismiss the case.

The mistrial was declared in mid-July after jurors deadlocked. All four defendants vigorously denied that they participated in an influence-buying scheme.

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Prosecutors had said the bribe money was funneled to Gary Pierce by Johnson and that Pierce tried to get the water company owner to buy him land worth at least $300,000.

In exchange, they have said Pierce voted for a rate increase that benefited Johnson's company and approved a measure that allowed Johnson to use ratepayer money to pay his personal income tax bill.

Authorities had said the money was paid to Sherry Pierce, who was hired by consulting firm owned by Norton's wife, and deposited into a bank account held by her and her husband.

Sherry Pierce insisted she was paid for doing legitimate political work.

Norton, who lobbied on Johnson's behalf, was accused of facilitating the bribery scheme and assisting in the real estate transaction.

Authorities have said money for the purchase of land in Mesa was going to be provided by Johnson, but that the deal was never finalized.

Patricia Gitre, an attorney for Gary Pierce, said in a statement the case was difficult for her client and his family and said the legal system ultimately worked the way it should.

"Gary Pierce and his family, as all of the defendants, stood firm, maintaining their innocence throughout the past year and five weeks of trial, turning down plea offers that carried no jail time, choosing to maintain their innocence, no matter the cost," Gitre said.

Phone messages left Wednesday morning for attorneys representing Sherry Pierce, Johnson and Norton were not immediately returned.

The government's key witness was Norton's ex-wife, Kelly Norton, who owned the consulting firm that made the payments to Sherry Pierce. Kelly Norton, who is now divorced from the lobbyist, has acknowledged her role in the bribery scheme and was granted immunity.

Gary Pierce served eight years as a member of the Arizona Corporation Commission and left in early 2015 because of term limits.  The commission regulates electric utilities, water companies, railroad safety and securities.

Authorities have said the bribery allegations were discovered during a larger, unrelated federal investigation, though prosecutors have declined to reveal its focus.

Pierce has acknowledged he was questioned by FBI agents investigating the 2014 commission election.

Pinnacle West Capital Corp., the parent company of electric utility Arizona Public Service Co., was widely believed to have spent $3.2 million backing Republicans for the utility commission.

Pinnacle West Capital disclosed in public filings in August 2016 that it received federal grand jury subpoenas seeking information on elections involving the commission and Arizona's secretary of state.

The FBI said it was conducting a long-term investigation related to the financing of some statewide Arizona elections in 2014, but it has not named APS as a target.