Federal prosecutors gave up Tuesday in their effort to convict a former utility regulator and others on charges on bribery and fraud.
In a two-page filing, Assistant U.S. Attorney Frederick Battista moved to dismiss the indictment against Gary Pierce, who had been chairman of the Arizona Corporation Commission, and three other people listed the government said were part of a scheme to funnel money to him from utility company owner George Johnson. A spokesman for the U.S. Attorney’s Office declined to comment on the move.
But the move comes less than a month after jurors in the first trial told U.S. District Court Judge John Tuchi they could not reach a verdict. And just five of the 12 jurors were in favor of conviction.
Attorney Patricia Gitre, who represents Pierce, said she did not want to comment until the judge actually signs the order.
But Ivan Mathew, attorney for lobbyist Jim Norton, said his client “is glad to have the matter behind him so that he can get back to assisting his clients.’’
Norton stepped away last year form the Axiom Public Affairs, the firm he was running. Mathew said, though, his client “of course’’ has a future in lobbying despite the indictment and criminal trial.
Axiom no longer exists, with the remaining partners having renamed the operation Compass Rose Public Affairs.
There was no immediate response from attorneys representing Johnson or Sherry Pierce, Gary’s wife.
Tuesday’s decision means more than the end of this case.
It also likely hampers efforts by the FBI in what prosecutors have admitted is an even larger investigation. That other case was considered so important that they offered no-prison plea deals to Pierce and Norton in exchange for their testimony.
Both rejected the offer, as did Johnson and Sherry Pierce who were given the same option to plead guilty to a single felony, but with no obligation to testify in any other matter, though Johnson would have had to pay a maximum $100,000 fine.
The 2017 indictment charged that Johnson funneled $31,500 through Norton and the lobbyist’s now ex-wife, Kelly, to Sherry Pierce for what the government argued was really a no-work contract. That money eventually wound up in the couple’s joint bank account.
It also says there was a plan to have Johnson purchase property for Gary Pierce in Mesa but have the paperwork recorded so it appeared the transaction was actually paid for by Norton. That deal never went thorough.
What made all that relevant, according to prosecutors, was their contention that the money and the land offer were in exchange for Pierce’s votes on two issues at the commission.
One is a change in policy that allows the owners of small utility companies like Johnson Utilities to pass along the cost of their personal income taxes to customers. The other increased the book value of the utility, a move that, in turn, increased the amount the company can charge ratepayers.
Part of the burden for the government was proving a link. This was particularly true over the claim that Pierce pushed the policy on tax treatment in exchange for the alleged bribe, as there was evidence he had been in favor of that change for years before.
There also was the fact that much of the case was built on the testimony and credibility of Kelly Norton who was listed as an “unindicted co-conspirator.’’
According to prosecutors, the money that went to Sherry Pierce came from Johnson through Norton’s consulting firm. She told jurors she approached prosecutors to avoid being charged criminally herself; she got immunity in exchange for her testimony.
But during the trial, defense attorneys presented evidence they said showed that Sherry Pierce actually did work for Kelly Norton. That is crucial, as federal bribery laws do not apply if some service actually is performed, no matter the source of the cash.
Pierce, a former state lawmaker, was first elected to the commission in 2006 and reelected four years later. He left at the end of 2014 because he had served the full two terms allowed by law.
Prosecutors never said what led federal investigators to look at Pierce or the votes.
Both the Corporation Commission and Pinnacle West Capital Corp., parent of Arizona Public Service, have disclosed they had contact with the FBI.
And Gary Pierce told Capitol Media Services after he was initially interviewed by FBI agents in 2016 that agents were questioning him about the 2014 election. His son, Justin, was running that year for secretary of state.