- Associated Press - Thursday, May 25, 2017

PHOENIX (AP) - A former Arizona utility regulator has been indicted on bribery and fraud charges in what prosecutors said was a scheme to funnel $31,000 in payments to him and arrange his purchase of a $350,000 property in exchange for favorable votes for a utility.

Former Corporation Commissioner Gary Pierce, his wife Sherry Ann Pierce, utility owner George Harry Johnson and prominent lobbyist Jim Norton were indicted Tuesday on eight federal charges.

The indictment said Gary Pierce voted in 2011 to let Johnson’s company request that Johnson’s personal income taxes be covered by the utility’s customers in Pinal County if regulators were to allow such a practice in the future. Pierce also is accused of taking bribes to push rate increases through the commission that would boost returns for Johnson Utilities.

The indictment said Johnson paid the owner of a consulting firm, whose name hasn’t been publicly revealed, to funnel monthly payments to Pierce and his wife. Sherry Pierce worked for the consulting firm.

Norton, who lobbied on behalf of Johnson, is accused of acting as a go-between between Gary Pierce and Johnson and aided in the real estate transaction. The indictment said the money for the real estate deal was to be provided by Johnson.

Pierce told Norton in a December 2011 email that he would advise a real estate agent to take Pierce’s name off a letter on the intent to purchase the property and instead leave the lobbyist’s name on the document, according to the indictment.

Messages left on Gary Pierce’s cellphone Thursday seeking comment on the charges were not immediately returned.

Efforts were also made to reach him and his wife through a family member. Messages and emails seeking comment from Norton also weren’t immediately returned.

Tom Irvine, attorney for George Johnson, said he had just learned of the charges. Irvine said he was reviewing the case and had no immediate comment.

Johnson is a wealthy developer with several projects in Arizona, including housing developments and golf courses.

He also owns a water company that supplies water and provides sewer service to thousands of homes in eastern Phoenix suburbs, many in his developments. The community in San Tan Valley known as Johnson Ranch has several thousand residents, a golf course and an elementary school.

The utility has run afoul of environmental regulators on several occasions after residents made complaints about raw sewage and filthy water. As the owner of the utility company, he has had to seek approval from the Corporation Commission to raise rates for customers.

The indictment says the scheme began as early 2011 and continued through 2013.

Pierce left the commission in early 2015 because of term limits. Last year, he acknowledged to reporters that he was questioned by FBI agents investigating the 2014 election, where 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. In that same election, Pierce’s son Justin was running for secretary of state.

The parent company, Pinnacle West Capital Corp., disclosed in public filings in August 2016 that it had received federal grand jury subpoenas seeking information on the 2014 commission and secretary of state elections.

The FBI said at the time that it was “currently conducting a long-term investigation related to the financing of certain statewide elections in the 2014 election cycle,” but it has not named APS.


- This story has been corrected to show the indictment was handed up Tuesday instead of Wednesday.

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