Arizona Treasurer David Petersen said in a December interview the best advice he’s been given is to “take each day as it comes because you’re not promised tomorrow.”

On Feb. 22, Mr. Petersen, the subject of a criminal investigation by the Attorney General’s Office, took the day to say there will be no tomorrow in his political career — he will not seek reelection.

“I’m sure the next treasurer will benefit from the experience and dedication of the staff at Treasury,” Mr. Petersen, a Republican, said in a brief news release issued an hour after two attorney general investigators were seen leaving his offices in the Capitol.

Ironically, it was a former Petersen employee and at least one current official who complained about mismanagement of the office that led to the investigation.

The Treasurer’s Office manages all the state’s money, about $9 billion in banking, cash management, investments and accounting services. It has about 30 employees.

“The state’s money is safe,” Tony Malaj, Mr. Pedersen’s chief of staff and confidant told Arizona Capitol Times, declining further comment about the investigation.

The probe, which a source close to the situation said was “an ongoing criminal investigation,” so far has included the seizure of computers and documents, a list of which was to be presented to Maricopa County Superior Court on Feb. 24. The court approved a search warrant for Mr. Petersen’s office.

“A criminal investigation can be about anything,” said a Republican lobbyist and Petersen ally, who asked not to be identified. “It doesn’t mean he’s done anything wrong.”

Report: Ex-employee complains; county treasurers quit talking to Petersen

But a former executive secretary at the Treasurer’s Office, Wanda Simeona, has accused Mr. Petersen of mismanagement and “constant harassment” that has led to a 130 percent employee turnover. She made the allegations about two months ago in a scathing four-page letter to Mr. Petersen on state treasurer letterhead shortly before she quit her job.

Ms. Simeona, who has not responded to reporters’ phone calls, filed a personnel complaint against Mr. Petersen with the state.

Additionally, Deputy Treasurer Blaine Vance “made the rounds” with complaints about Mr. Petersen, Capitol sources said, including Senate President Ken Bennett. Also, a former treasury employee told Arizona Capitol Times that some county treasurers and other local government officials had cut off their working relationships with Mr. Petersen.

Governor Napolitano was among seven state officials who received copies of Ms. Simeona’s letter. “I didn’t respond personally, but those kinds of things are referenced to the Attorney General’s Office,” she said.

Spokesman: Resignation not in the plans

Mr. Malaj denied rumors that Mr. Petersen, 55, might resign in the wake of the investigation. The treasurer, never a favorite in his own party, received pressure to resign, said a Republican source, who spoke on background about the investigation.

“I’m the person he confides in, as well as the Chief Deputy Blaine Vance . . .” Mr. Malaj said Feb. 21. He said he had discussed an announcement of his boss’s plans with Mr. Petersen the week of Feb. 13, “and the word ‘resign’ was not in it.”

Mr. Malaj said his challenge since the investigation began is to keep employees from being distracted by it.

“There are some solid people in there, some with 30 years’ experience,” a former treasury official said.

Mr. Petersen has spent most of his time away from the Capitol since the investigation began.

Republican lawmakers consider run for office

Sen. Dean Martin, R-6, says he will file for the treasurer’s job, and Rep. Laura Knaperek, R-17, says she’s considering a run for the office. Gilbert Democrat Richmond Vincent has filed for treasurer.

Ms. Simeona’s resignation letter accused Mr. Petersen, a former state senator, of being absent from work “for over 50 percent of the time that I have worked here.” She said his actions belied the character education sessions he taught, that he created “a hostile work environment” and “drove off many secretaries in the eight years you were in the Senate.”

Her letter continued: “I hope the taxpayers of Arizona find out about your kids using your state computer . . . and the cost to the staff having to restore your calendar and files on your computer after you had allowed unauthorized people to use it and screw it up.

“You treated me unfairly and allowed [former state representative] Sylvia Laughter to abuse me and other staff members…”

Democrat and Republican sources say Ms. Laughter was hired at the Treasurer’s Office as a favor to Jeff Groscost, former House speaker. Ms. Laughter, who no longer works there, could not be reached for comment, and Mr. Groscost did not return phone calls when the Capitol Times went to press Feb. 23.

“You have taken a good office and turned it into a prison,” Ms. Simeona’s letter said.

She also accuses Mr. Petersen, who sponsored several bills in the Senate regarding character education, for turning speeches about the Treasurer’s Office into promotions for character education.

Mr. Petersen’s or the state’s relationship with Character First, an Oklahoma City-based character education training institute, is unclear, but Mr. Malaj, who also has taught character education within the office, said there is no contract between the Treasurer’s Office and Character First.

Arizona Capitol Times was unable to reach John Burnett, director of Character First, by press time Feb. 23.

Appearance on 60 Minutes

A former Senate majority whip, Mr. Petersen won the 2002 Republican primary for state treasurer with 60 percent of the vote over Richard Petrenka, a long-time employee of the Treasurer’s Office and the party’s choice that year to succeed Republican Carol Springer.

He went on to win the office in the general election, with a 51 percent to 49 percent margin over former Democratic Sen. Ruth Solomon.

Mr. Petersen gained national publicity with an appearance CBS’s 60 Minutes about his call to state treasurers to cease investments in companies that do business with countries that sponsor terrorism. An Arizona law now requires the treasurer and the manager of the Public Safety Personnel Retirement System Fund to submit reports twice a year with a list of companies in the state portfolio doing business with terrorist-sponsoring nations.

In the December interview with Arizona Capitol Times Mr. Petersen, a former private financial adviser said, “… for the most part, the state Treasurer’s Office is not investing — and I say for the most part — in companies that are doing business with a country that would promote terrorism. Having said that, we’re in the S&P [Standard and Poor’s] 500. There are some of those companies there — General Electric and others that do have minimal, but still some, projects going on.” Other companies, he said, include Haliburton and ConocoPhillips, he said.

Mr. Petersen said Haliburton went “off-shore” to avoid American taxes, and he was asked about buying stocks in companies that go off-shore to avoid American taxes.

“We certainly don’t do that,” he said. “I don’t know if that question is being asked. I’ll make a note of that.”

Leaves office ‘proud’

In his Feb. 22 news release, Mr. Petersen said he “le
aves public office proud of the positive changes made in infrastructure, telecommunications and employee experience in government accounting and other functions.”

Mr. Petersen was asked in the December interview were he to engage in another profession, what would it be≠

“Probably a minister,” he said. “That’s crazy — politician to minister.”