A recorded conversation between former state Treasurer David Petersen and his family that is now in the hands of the county sheriff had an unusual source — Petersen himself.
The recording, which was released along with transcripts by Maricopa County Sheriff Joe Arpaio on April 12, is part of an ongoing investigation into a $1.9 million payment from the Treasurer’s Office last June to the office of Attorney General Terry Goddard.
A document obtained from the Arizona Department of Administration through a public records request states that “Petersen and his family recorded themselves accidentally on a state digital recorder.”
The transcript of the recorded conversation begins with Petersen asking his son Paul, “Does that mean it’s on, though?” and then stating, “Oh, I see it’s off now.”
Further conversation into the recording revealed Petersen considered approaching Goddard about his investigation into several felonies he allegedly committed as a public official — and whether settling a disputed legal bill with the attorney general could help secure leniency.
Goddard has denied any sort of deal was struck for the money, which was a payment he said the office was entitled to for helping the state and local governments recover a portion of $131 million lost in investments from National Century Financial Enterprise in 2002.
He has pledged to cooperate with the investigation by Arpaio and Maricopa County Attorney Andrew Thomas regarding the payment.
In October, Petersen pleaded guilty to a single misdemeanor charge for failing to disclose a $4,200 commission he received for selling teaching materials for a character education program.
Treasurer resigned in November
He originally faced felony charges of theft, fraud and conflict of interest, and resigned Nov. 30 as part of a deal reached with Goddard. He was also ordered to pay $4,500 in fines and put on supervised probation for three years.
Petersen raised suspicion in June when he made the payment because it was originally withheld by then-Chief Deputy Treasurer Blaine Vance, who wished to seek an opinion from the solicitor general if Goddard’s office was entitled to the money.
Members of the Board of Investment, which oversees the state’s $10 billion investment portfolio, expressed displeasure upon learning about the payment to the Attorney General’s Office from the Arizona Capitol Times in July.
Vance and Tony Malaj, Petersen’s former chief of staff, have filed whistleblower claims with the Department of Administration on grounds they were retaliated against for cooperating with the investigation of Petersen.
The pair is mentioned in the recorded conversation, which is believed to have occurred sometime in May. Petersen’s son Paul said “Blaine (Vance) doesn’t do anything,” and his father related the concerns of another employee that he was a “negative manager” and “didn’t take initiative.”
According to the transcripts, Paul Petersen also instructed his father that he “could get rid of him (Tony Malaj) whenever you want.”
On April 18, at a Board of Investment meeting, current Treasurer Dean Martin said he will seek to hire outside counsel to determine if the Attorney General’s Office should receive its 35 percent recovery fee for additional settlement funds coming in from the NCFE settlement.
He maintains a Texas firm — Gibbs and Brun — hired to pursue the fraud portion of the settlement did most of the work, and $5.6 million in newly recovered funds in the NCFE case have been placed in escrow until the matter is settled.
“Terry Goddard and the former treasurer signed a contract that they (Gibbs and Brun) are our outside counsel, not the attorney general,” said Martin.