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Defense says government short on proof in bribery trial

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.

Defense attorneys in the so-called “Ghost Lobby” trial said “normal folks” might not find the activities of the defendants acceptable, but the government failed to prove corruption was their driving force.

And if U.S. District Court Judge John Tuchi agrees, he must acquit.

The influence of money in the American political system is unavoidable, said defense attorney Steven Cheifetz, who represents indicted lobbyist Jim Norton. And that may make the public squeamish, he said, but that does not give federal investigators license to cast a wide net in their search for corruption.

“Today is the government’s day of reckoning, your honor,” Cheifetz said on June 14, the day after prosecutors rested their case. “And we urge this court to hold their feet to the fire.”

The defense argued Tuchi should dismiss the case before they present witnesses on behalf of indicted former Arizona Corporation Commissioner Gary Pierce, his wife Sherry Pierce, Norton, and water utility owner George Johnson. The trial carried on without an immediate ruling from Tuchi on whether the government had met its burden of proof.

As they argued prosecutors had not met that burden, the defendants’ attorneys sought to dismember one piece of the government’s narrative in particular.

According to the prosecution, George Johnson bribed Gary Pierce in exchange for Pierce’s favorable votes while he was on the Corporation Commission. The bribes allegedly included monthly payments of $3,500 to Pierce’s wife through KNB Consulting and a land deal involving Pierce and Norton, which Johnson allegedly agreed to finance.

The prosecution has asserted the Pierces participated in the alleged bribery scheme because they were in financial trouble.

But the defense offered evidence that Pierce did not need Johnson to fund the deal, which ultimately failed anyway.

Sherry Pierce’s attorney, Ashley Adams, revealed while questioning the government’s star witness, Kelly Norton – Jim Norton’s ex-wife, that Gary Pierce had intended to do a 1031 exchange with a property he owned in Yuma to finance the purchase of the new property in Mesa.

According to the Internal Revenue Code, a 1031 exchange allows someone to sell a property, reinvest the proceeds in a new property and defer all capital gain taxes.

The real estate agent assisting Pierce with the proposed property deal, Rex Griswold, testified he was unaware of the intent to use a 1031 exchange but did recall Pierce was going to sell the Yuma property.

The deal originally involved Gary Pierce and Jim Norton, according to emails and an early letter of intent Griswold drew up for the property’s owner. But after Norton pulled out, Gary Pierce went to his son, Ryan Pierce, asking if he wanted to get in on the deal – the property was intended to be used for a used car lot, a business opportunity Ryan Pierce said he had discussed with his father in the past.

And Ryan Pierce testified that he was going to be the one to purchase the land, not Johnson.

“George Johnson was not going to have any part or any role in this business,” he said, adding Johnson’s name was never even mentioned when his father discussed the land deal.

Ryan Pierce said he already had cash on hand that had been set aside to purchase a new home, and he planned to get a loan to make up for the rest, suggesting the Pierces would not have needed Johnson’s help.

Upon cross examination, though, Assistant U.S. Attorney Frank Galati tried to demonstrate to the jury that Ryan Pierce may not have known everything going on behind the scenes.

Ryan Pierce testified he had no specific knowledge of Jim Norton’s part in the deal before he was brought in on it.

It was Norton who allegedly claimed Johnson would be paying for the land, according to testimony by his ex-wife, Kelly Norton.

As for the arguments for acquittal, Galati told the judge the defense simply presented classic questions for the jury to contemplate: Does the evidence, circumstantial or otherwise, prove there was a quid pro quo agreement, and does the government’s timeline align with the alleged bribery scheme?

“What you’ve heard, may be a good closing argument for the jury,” he said. “But this is not the time for that.”

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