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Indicted lobbyist’s ex-wife gave FBI documents

An attorney representing indicted lobbyist Jim Norton said in court today the lobbyist’s ex-wife provided more than 250 pages of documents to the federal investigation that also includes former Arizona Corporation Commissioner Gary Pierce, his wife Sherry Pierce and Johnson Utilities owner George Johnson.

The defendants were indicted in May on federal charges of felony conspiracy, bribery, mail fraud and five counts of wire fraud. They have pleaded not guilty.

Jim Norton

Jim Norton

They were were in court today to get access to various FBI interviews, case agent notes and other documents.

Prosecutors would not share some of them unless there was a court order prohibiting the defense team from sharing them with others, including the media. The government argued outside disclosure could harm another — and larger — investigation that is still pending.

Norton’s attorney, Ivan Mathew, mentioned Kelly Norton in reference to activities previously attributed in the indictment to an unindicted co-conspirator who has not been identified.

“Not one check has been turned over. How does that affect another investigation? Not one invoice between Kelly Norton and Mr. Johnson has been turned over. How does that affect another investigation?” Mathew said. “The employment agreement that’s referenced in the indictment has not been turned over. How does that affect another investigation? The confidentiality agreement allegedly between Mrs. Pierce and Mrs. Norton – how does that affect another investigation? There’s 268 pages of material provided by Kelly Norton; not one has been turned over.”

Former Arizona Corporation Commissioner Gary Pierce, with bottle, and wife Sherry Pierce, both of whom stand accused in a bribery scheme, leave U.S. District Court in Phoenix after their arraignment on June 7, 2017.

Former Arizona Corporation Commissioner Gary Pierce, with bottle, and wife Sherry Pierce, both of whom stand accused in a bribery scheme, leave U.S. District Court in Phoenix after their arraignment on June 7, 2017.

The indictment alleged the defendants conspired for Johnson to pay the Pierces through Norton and the unindicted co-conspirator in exchange for Pierce’s favorable votes at ACC. Pierce and his wife allegedly received $31,500 from Johnson.

Jim Norton allegedly directed an unnamed individual to set up a consulting firm and checking account to receive about $6,000 per month, plus expenses, from Johnson. The co-conspirator then paid Sherry Pierce $3,500, according to the indictment.

According to the indictment, Sherry Pierce was allegedly directed to send invoices totaling $3,500 to the consulting firm for “simple tasks” assigned by the co-conspirator. Sherry Pierce received payments for 10 months in 2011 and 2012.

She is also alleged to have signed a confidentiality agreement with the consulting firm to prevent her from disclosing the nature of her employment and the source of the payments.

Mathew did not explicitly state that Kelly Norton was the unindicted co-conspirator, and he declined to comment further on his statements.

Kelly Norton’s attorney Doug Behm declined to comment on Mathew’s statements.

“I think this is a situation where we’re going to have to let it play out in court and see where it goes from there,” he said.

Utility owner George Johnson, who is accused in a bribery scheme, leaves U.S. District Court in Phoenix on June 7, 2017.

Utility owner George Johnson, who is accused in a bribery scheme, leaves U.S. District Court in Phoenix on June 7, 2017.

U.S. District Court Judge John Tuchi ordered prosecutors to disclose everything they have related to this case and “find the carve outs” – items that cannot be shared apart from the defendants and their lawyers in an effort to protect the broader investigation from which these allegations stem.

“We’re glad that the court granted the motion to compel the discovery,” Mathew said.

What that order also does is ensures the defense team can actually see what the government has — and what it wants protected. At that point, Tuchi said, the lawyers then can file legal motions arguing there is no reason for restrictions on how the materials can be used.

Assistant U.S. Attorney Frederick Battista noted that, even without disclosure of the documents and interviews, there already have been media reports and speculation on what else is being investigated.

Some of that is known because both the Arizona Corporation Commission and Pinnacle West Capital Corp., parent of Arizona Public Service, have disclosed that they have been in contact with the FBI.

And Gary Pierce told Capitol Media Services after he was initially interviewed by the FBI that agents were questioning him about the 2014 election, describing the conversation as “cordial.”

Perhaps a less cordial interaction occurred between the Pierces and the FBI on May 16.

According to Sherry Pierce’s attorney Ashley Adams, federal agents showed up at the Pierces’ home and threatened to indict Sherry Pierce if her husband did not plead guilty to bribery charges.

Days later, they were both indicted.

“My client was in her robe,” Adams told U.S. District Court Judge James Tuchi.

Adams said the agents, with a draft of the proposed indictment in their hands, told Gary that if he did not plead guilty “we’re going to indict the mother of your children and the grandmother of your grandchildren.”

Battista did not address the allegation during Tuesday’s court hearing. And he refused to comment on them afterwards.

Adams and Gary Pierce’s attorney Patricia Gitre also declined to comment.

The probe appears to be an outgrowth of an investigation originally started at the state attorney general’s office. That included allegations that Pierce, while a regulator, had met secretly with Don Brandt, the chief executive of APS, and Don Robinson, his predecessor, while the utility was in the middle of a rate case before the commission.

That state investigation also was looking into $500,000 spent by the Free Enterprise Club in 2014 on behalf of Gary’s son, Justin, who was running for secretary of state. Wil Cardon, another candidate in that race, charged that the elder Pierce was using his position on the commission to get financial support for Justin’s campaign from companies regulated by the panel.

Howard Fischer of Capitol Media Services contributed to this report.

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