The owner of Johnson Utilities, a San Tan Valley water company, is charged with bribing a powerful Arizona regulator to take action that jacked up water customers' bills.
The bribes to former Arizona Corporation Commission Chairman Gary Pierce were valued at about $400,000, according to a 17-page federal indictment filed this week.
The eight-count indictment alleges that Pierce; his wife, Sherry Pierce; Johnson Utilities owner George Johnson; and Johnson's lobbyist, Jim Norton, engaged in a fraudulent scheme involving cash and land directed to the Pierces.
In exchange, Pierce cast votes or steered polices that allowed Johnson pass on the costs of his company's wastewater plant, as well as his personal income taxes, to his utility customers.
The alleged crimes occurred while Pierce, a Mesa Republican, was chairman of the Corporation Commission, a five-member, elected body that decides how much Arizonans pay for water, electricity and natural gas.
Johnson Utilities is regulated by the Corporation Commission.
Pierce retired from the commission in 2014.
Last year, 12 News reported that Gary Pierce, along with APS, were being investigated by the FBI for their role in steering campaign donations in the 2014 elections. The FBI has not disclosed what came of that investigation.
Johnson Utilities has been in the news repeatedly in recent years for environmental violations in its San Tan Valley service area.
This is the second scandal besetting the Republican-dominated Corporation Commission in the last three years.
At the end of 2015, Commissioner Susan Bitter Smith resigned in the face of her possible ouster amid conflict-of-interest allegations.
Lobbyist Jim Norton, managing partner of Axiom Public Affairs, said in a prepared statement: “I am innocent and will be entering a plea of ‘not guilty.’ I look forward to my day in court, when I am confident these allegations will be shown to be without merit.”
Norton was working for R&R Partners at the time of the alleged offenses. Axiom is a public relations and political consulting firm with close ties to Gov. Doug Ducey.
The Arizona Corporation Commission issued this statement on the indictment:
The Commission was made aware at the same time as the general public of an indictment involving a former commissioner and other individuals. The Commission is currently reviewing the allegations, and the Commission believes it would be inappropriate at this time to comment on a pending criminal proceeding.