Kelly Norton drew a crowd to U.S. District Court Judge John Tuchi’s courtroom on June 6 as observers clamored to hear what was sure to be scintillating details of her personal life.
She did offer an emotional glimpse of the circumstances leading up to her cooperating with federal authorities to expose an alleged bribery scheme she participated in.
But Norton, a co-conspirator turned star witness for the government, also reviewed extensive records she kept in the midst of that scheme to protect herself if – and ultimately when – the authorities came looking for answers.
In exchange for immunity, Norton revealed to the FBI details of the scheme now alleged in the federal indictment of her ex-husband, lobbyist 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 at Kelly Norton’s 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 her share of the payments to Kelly Norton’s firm. 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 cooperated with investigators because she “didn’t want to go to jail,” she said on her first day of testimony.
She explained on the witness stand why she kept meticulous records as the alleged scheme unfolded.
“I wanted to keep copies of everything just in case… because I was worried about getting in trouble,” she told the court on June 7.
Assistant U.S. Attorney Fred Battista reviewed with her copies of checks from Johnson, the water utility owner, emails and other documents she retained for her records and ultimately turned over to investigators.
Among those records were emails between Kelly Norton and Sherry Pierce, often but not always referring to Johnson only as a “client.” She said they had been directed to keep his identity hidden.
And the emails made two things clear: Sherry Pierce was completing tasks she was assigned by Kelly Norton, and her husband, then-Corporation Commission Chairman Gary Pierce, was helping her. They also indicated the Pierces were aware that the money Sherry Pierce was receiving came from Johnson.
Johnson’s water utility company, Johnson Utilities, is regulated by the Corporation Commission, of which Gary Pierce was a member at the time.
Norton testified that Sherry Pierce’s work on behalf of Johnson was to remain a secret, too, because of her husband’s position.
Still, Norton told the court she tried to do everything by the book on her firm’s part, including issuing a 1099 tax form to Sherry Pierce.
“It wasn’t without an argument,” she said, explaining Jim Norton was not pleased with the decision. “But I wanted to make sure I was doing everything the right way for my business in case it ever came back to me.”
The Pierces subsequently claimed her income from KNB Consulting on their personal income taxes, which the defense has said demonstrates the work was above board.
However, Norton said she, too, should have received a 1099 from Johnson. She testified that KNB Consulting was established as a DBA, or “doing business as,” but never received the appropriate tax documentation from her client.
“I wasn’t going to be getting a 1099,” she said, recalling an explanation she got from her husband, “and if I didn’t get a 1099, nobody would know that I got the money.”
In fact, she placed the blame for her involvement in the scheme squarely on Jim Norton.
She took the stand visibly nervous as he looked on.
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, details about what drove her to reveal her own part in that scheme, and details of why she was involved to begin with.
Though the government prompted her to reveal those details early on in her testimony, prosecutor Battista largely strayed away from the personal details, focusing instead on the meticulous records kept by Kelly Norton.
Her voice shook even in response to simple questions, and she gave only a thin smile when Battista greeted her on the stand.
And that was even before attorneys for the four defendants had their chance to cross examine her.
In opening statements and motions to the court, the defense has sought to bring Kelly Norton’s credibility into question, suggesting she sought not to do the right thing by revealing federal crimes but to get revenge on her husband.
In the first two hours of her testimony, she accused Jim Norton of forcing her to take part in the scheme, and she acknowledged she filed for divorce because she found him with “another girlfriend” – that hadn’t been the first time, she said.
Judge Tuchi reminded the jury that the defendants are on trial only for the charges in the indictment, nothing else – including infidelity.