Trial begins for ex-Arizona regulator charged with bribery

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The bribery trial for former Arizona Corporation Commissioner Gary Pierce started on Thursday. (Source: AP Photo/Matt York, File) The bribery trial for former Arizona Corporation Commissioner Gary Pierce started on Thursday. (Source: AP Photo/Matt York, File)
FILE - In this June 7, 2017 file photo former Arizona Corporation Commissioner Gary Pierce, and his wife Sherry, left, leave court in Phoenix after being arraigned on bribery and fraud charges. (Source: AP Photo/Matt York, File) FILE - In this June 7, 2017 file photo former Arizona Corporation Commissioner Gary Pierce, and his wife Sherry, left, leave court in Phoenix after being arraigned on bribery and fraud charges. (Source: AP Photo/Matt York, File)
FILE - In this June 7, 2017 file photo developer George Johnson leaves Federal Court after being arraigned on bribery and fraud charges, in Phoenix. (Source: AP Photo/Matt York, File) FILE - In this June 7, 2017 file photo developer George Johnson leaves Federal Court after being arraigned on bribery and fraud charges, in Phoenix. (Source: AP Photo/Matt York, File)
In this June 7, 2017 file photo, lobbyist Jim Norton leaves court in Phoenix after being arraigned on bribery and fraud charges. (Source: AP photo/Matt York,File) In this June 7, 2017 file photo, lobbyist Jim Norton leaves court in Phoenix after being arraigned on bribery and fraud charges. (Source: AP photo/Matt York,File)
PHOENIX (AP) -

The bribery trial for former Arizona Corporation Commissioner Gary Pierce began Thursday with a prosecutor saying the elected utility regulator reversed his positions on two proposals that he previously opposed because a water company owner had funneled $31,000 to him.

Prosecutor Frank Galati said the money was funneled to Pierce by water company owner George Johnson in exchange for the regulator’s votes on a rate increase that benefited the company and another measure that lets Johnson use ratepayer money to pay his personal income tax bill.

“George Johnson wanted something,” Galati told jurors during opening statements. “Gary Pierce was a ‘No’ vote. A scheme was devised. Money was paid, and Gary Pierce became a ‘Yes’ vote. And it’s that simple.”

[RELATED: Jury picked at ex-Arizona regulator’s trial]

Authorities say a lobbyist working for Johnson arranged to have the water company owner funnel money to Pierce and his wife through a consulting firm. They say the money was paid to Pierce’s wife, Sherry, who worked for the firm, and deposited into a bank account held by her and her husband.

Prosecutors say Gary Pierce also tried to get Johnson to buy him a $350,000 piece of land in Mesa and tried to shield his involvement in the prospective deal, which in the end was never carried out.

[RELATED: Ex-Arizona regulator charged with bribery heads to trial]

Pierce, his wife, Johnson and lobbyist Jim Norton dispute the criminal allegations against them and have pleaded not guilty to bribery and other charges.

Defense attorneys questioned the timeline offered by prosecutors of the alleged scheme, saying Gary Pierce took actions in support of the two proposals in question a year or two before Sherry Pierce started working for the consulting firm. They say Sherry Pierce was paid for doing legitimate political work.

“There is no bribe,” Patricia Gitre said, attorney for Gary Pierce. “There is no quid pro quo.”

Ashley Adams, Sherry Pierce’s attorney, said her client wouldn’t have exchanged her good name for any amount of money. “It wouldn’t have mattered if it was $31 billion,” Adams told jurors. “That’s just not who she is.”

[RELATED: Several big names on witness list in corruption trial involving Johnson Utilities]

Woodrow Thompson, an attorney for Johnson, said his client had nothing to do with the land purchase pursued by Gary Pierce. Thompson also said Johnson’s payments to the firm weren’t made in cash or through a bank account in the Cayman Islands. “This was all paid by check, in plain view, with a paper trail,” Thompson said.

Prosecutors said the consulting firm was run by Norton’s wife, Kelly Norton, who has acknowledged her role in the bribery scheme. During opening statements, Galati publicly revealed for the first time that Kelly Norton was granted immunity. She will be testifying on behalf of the government.

[READ MORE: Ex-AZ Corp. Commissioner, owner of Johnson Utilities indicted on bribery charges]

Jim Norton, who lobbied on Johnson’s behalf, is accused of acting as a go-between for Pierce and Johnson and aiding in the real estate transaction. Authorities say money for the purchase of property in Mesa was to be provided by Johnson.

[SPECIAL SECTION: Arizona Politics]

Ivan Mathew, an attorney for Jim Norton, suggested that Kelly Norton, who is now divorced from his client, may have been acting vengefully when she cooperated with federal authorities in the investigation. Mathew also criticized Kelly Norton’s immunity deal, saying a provision that required her to undergo a polygraph test was eventually removed from the agreement.

[RELATED: Former utility regulator pleads not guilty to bribery, fraud charges]

Authorities say Pierce told Jim 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.

Pierce served eight years in a statewide elected office during his two terms as corporation commissioner. Pierce left the commission in early 2015 because of term limits.

[RELATED: Lobbyist's bid to cut allegations from indictment rejected]

Authorities say 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.

[RELATED: Feds say AZ bribery scheme emerged from 'larger' FBI probe]

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 secretary of state.

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

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