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Star witness testifies in bribery case

The government’s star witness in the “Ghost Lobby” trial, Kelly Norton, took the stand on Wednesday, visibly nervous at the head of a crowded courtroom hanging on her testimony.

For weeks prior, documents and statements in the case hinted at the personal details she would share. Details of the collapse of her broken marriage to Jim Norton, an indicted lobbyist accused of participating in a bribery scheme. Details about what drove her to reveal her own part in that scheme. And details of why she was involved to begin with.

Her voice shook even in response to minor questions, and she gave only a thin smile when Assistant U.S. Attorney Fred Battista greeted her on the stand.

Kelly Norton, an unindicted co-conspirator in the case, cooperated with the government because she “didn’t want to go to jail,” she said.

Kelly Norton

Kelly Norton

In exchange for immunity, she provided evidence of a bribery scheme now alleged in the federal indictment of Jim Norton, former Arizona Corporation Commissioner Gary Pierce, his wife Sherry Pierce and water utility owner George Johnson.

Johnson allegedly paid the Pierces $31,500 in exchange for Gary Pierce’s favorable votes on the Arizona Corporation Commission regarding a utility rate increase and the ability to pass on his income tax liability to Johnson Utilities customers. Jim Norton allegedly directed his now ex-wife to hire Sherry Pierce under her firm, KNB Consulting, through which she was paid by Johnson.

However, the defense contends Sherry Pierce did legitimate work on behalf of George Johnson in exchange for the payments, and the defense has sought to further dismantle the government’s narrative by poking holes in the timeline of events – namely the timing of Gary Pierce’s votes relative to his wife’s employment at KNB Consulting.

The defendants have pleaded not guilty, and they turned down plea deals before the trial began.

Kelly Norton said her then husband told her she had to hire Sherry Pierce, even after she said she wasn’t comfortable doing so because she knew the arrangement was wrong.

She said he told her not to worry because they would “make it look legit.”

And she said Jim Norton told her the Pierces needed money, that they were losing their second home. She said she was unmoved by that argument – she didn’t have a second home, so why should she care, she told him.

But he wasn’t swayed by her trepidation, she told the court.

She said her husband was “very angry” and gave her the silent treatment until she agreed to do as she was told.

Jim Norton

Jim Norton

Jim Norton has maintained his innocence in this matter.

Kelly Norton also tearfully testified that she filed for divorce not because of money, as defense attorney Ivan Mathew alluded to in his opening statement, but because she had discovered Jim Norton had “another girlfriend” – she said that wasn’t the first time.

She said a Facebook post about karma that has been offered on several occasions as evidence of her vengeful state of mind was not about her ex-husband.

Her voice broke as she gave her definition of karma: “What goes around comes around. And if you break the law, it comes back to get you.”

“Who were you thinking of when you posted that?” Battista asked her.

“Me,” she said.

And, as she was already contemplating divorce, she said she found a diagram detailing how Jim Norton was “carving up” and selling his business to other lobbyists. She said she was alarmed, knowing that could mean she would receive less than half of their assets in the divorce – she ultimately did receive half, which she said satisfied her.

Two weeks before the trial began, an attorney representing Jim Norton through the divorce, Daniel Zanon, requested that the divorce and property settlement agreement be unsealed. The reason: so that it may be used as evidence in the criminal trial.

According to the motion, Kelly Norton’s attorney, Douglas Behm, made no objection.

Zanon’s motion explained that while still married, the Nortons were involved in lobbying, governmental relations and other political activities on behalf of various companies belonging to George Johnson, and that Kelly Norton will now serve as the “premier witness” against her ex-husband regarding some of those activities alleged to have been illegal.

The motion did not explain what information relevant to the criminal case, if any, may be in the divorce file.  

Kelly Norton was on the stand for less than two hours Wednesday, but she’s expected to return for several days of intense examination by the government and the defense.

One item of her testimony will almost certainly come up again soon.

She testified that KNB Consulting was established as a DBA, or “doing business as.” The importance of that statement was not immediately addressed in front of the jury, but has been raised by counsel in regard to a missing 1099 form from Johnson to Kelly Norton.

Kelly Norton did provide a 1099 tax form to Sherry Pierce – and as the defense has noted, the Pierces did claim the income at issue on their personal income taxes, a sign they believe demonstrates the work was above board.

U.S. District Court Judge John Tuchi ruled that any party may now address the absence of a 1099 from Johnson to Kelly Norton.

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