PHOENIX — Federal prosecutors are offering to tell defendants in the Arizona Corporation Commission bribery case who and what else they’re investigating, but only if they agree not to share the information.
The proposal, made in a new court filing, comes as attorneys for former utility regulator Gary Pierce, his wife, a lobbyist, and a water company executive seek details of the FBI inquiry that led to their indictment in May on multiple federal charges. The lawyers say they need that information to prepare their defense for the Oct. 3 trial.
The prosecutors essentially admit they came across the facts that led to the bribery charges against the four “during a much larger and more intensive investigation.” They provided no specifics.
But in communications with defense attorneys, Assistant U.S. Attorney Frederick Battista, who is leading the legal team, said he does not want to tip off those other targets.
In the latest court filing, Battista conceded the government has to disclose information needed by the defense lawyers. He said they can have pretty much what they want if they keep anything not related directly to this case confidential.
“We do not seek a blanket gag order,” he told U.S. District Court Judge John Tuchi in the pleadings. “And a defense claim that we do is incorrect.”
Battista said the demand for confidentiality of his office’s disclosures not only protects the other — and larger — ongoing investigation, but ensures that others with information do not refuse to come forward because their names will “end up splashed across headlines.”
That excuse holds no water for attorney Ashley Adams, who represents defendant Sherry Pierce, saying prosecutors haven’t told her what else they’re investigating that they want to keep secret.
“I think we can all take a pretty good educated guess what it relates to,” she said.
Adams is not guessing, at least not publicly.
But the federal probe appears to be an outgrowth of an investigation originally started at the state Attorney General’s Office. It included allegations that executives of the Arizona Public Service Co. met secretly with regulators while the utility was in the middle of a rate case before the commission.
Gary Pierce confirmed to Capitol Media Services after being interviewed last year that FBI agents questioned him about the 2014 election, a race in which his son, Justin, was running for secretary of state. There also have been questions about whether Bob Stump, then chairman of the commission and not up for reelection, was coordinating spending by outside groups, including APS, on behalf of commission candidates Doug Little and Tom Forese.
APS has acknowledged that at least one of its officials also had been interviewed by the FBI.
Whatever else prosecutors are pursuing, Adams said she and the other defense lawyers should not be hampered in what they can do with the evidence disclosed to them because of that other not-yet-completed probe.
“The government decided to indict our clients at this time,” she said. “If there is another investigation that is related to this, I think they maybe should have thought about that before they indicted.”
According to the indictment, George H. Johnson, who runs a water and sewer company that bears his name, funneled money to Gary Pierce, who at the time was commission chairman, in exchange for favorable votes on two issues.
One involved a 2011 vote to increase the value of the company, a move that allowed it to collect more from customers. The other is a change in policy crafted by Pierce allowing the owners of small companies like Johnson Utilities to recover some of their personal income taxes through higher rates.
The bribe, according to the indictment, was $31,500 provided by Johnson through lobbyist Jim Norton to Sherry Pierce for what prosecutors say was minimal work, money that wound up in the couple’s joint bank account.
All four have denied guilt.
