Federal Case Against Gary & Sherry Pierce, Jim Norton & George Johnson Heads into Third Week

Federal Case Against Gary & Sherry Pierce, Jim Norton & George Johnson Heads into Third Week

After more than a year of extensions, the federal trial for Gary Pierce, Sherry Pierce, Jim Norton and Johnson Utilities owner George Johnson finally started May 30, 2018 with a day of jury selection.  The initial pool of 77 potential jurors was reduced to 12 jurors with 4 alternates, made up of 10 women and 6 men.

Testimony began May 31, 2018 with opening statements from the prosecution alleging Gary Pierce, who served as the Chairman of the Arizona Corporation Commission in 2011, was bribed by George Johnson through Jim Norton and Gary Pierce's wife, Shelly Pierce. The prosecution alleges George Johnson did not get what he wanted from the Arizona Corporation Commission in August of 2010 and he wanted to change that. Johnson wanted two things: 1) a large positive rate base so that he could increase the amount he charged his customers and 2) the ability to pass his income tax onto his customers. Both requests were denied in a 5-0 vote in August of 2010.

While Gary Pierce, Sherry Pierce, Jim Norton and George Johnson are all charged with conspiracy, bribery and mail and wire fraud, an unindicted co-conspirator is the fifth person involved in this bribery scheme, according to the prosecution. That fifth person is Kelly Norton who was married to lobbyist Jim Norton during the time the alleged events took place. Kelly Norton and Jim Norton were divorced in Dec of 2015.

The prosecution alleges that George Johnson instructed Jim Norton to have his wife Kelly Norton, hire Sherry Pierce as an independent contractor through Kelly Norton's consulting business, KNB Consulting (KNB). Johnson was going to pay KNB $6000/mo of which $3500/mo was to be paid to Sherry Pierce totalling $31,500. In addition, George Johnson, through Jim Norton, was going to purchase land in Mesa for Gary Pierce valued at $800,000 for just over $300,000. Land we've been told, Gary wanted to use to open a used car dealership in Mesa, AZ. The real estate transaction, according to the defense however, never happened.

The prosecution promises that their case is not about votes or actions of any other commissioners, or whether Gary Pierce or Sherry Pierce are nice people. The prosecution will present facts to show that Gary Pierce's change in votes was meant to help George Johnson and give him the results he wanted.

While the prosecution promised facts, the defense kicked off their opening statement letting the jurors know that crime is not something that is in Sherry Pierce's DNA. The Pierce's lives are dedicated to "family, faith and service". They have been married for 45 yrs, are "nice people" with "friends in high places" because they have served the state "for a long time". The defense explained that Gary and Sherry Pierce have four sons and 13 grandchildren and while the government "wants you to believe that Sherry Pierce would give all of this up, for $31,500, Sherry wouldn't have done it for $31 million."

The defense alleges that the timeline just doesn't add up as votes were taking place before and after Sherry Pierce was hired by KNB Consulting. They also stated that since the land transaction never took place, it was nothing more than Gary Pierce looking for land on his own and was not part "of any bribe". The defense then attacked Kelly's motives, claiming that she was just seeking revenge against her husband at the time, Jim Norton, for his affair, that according to Kelly Norton wasn't his first.

By the end of opening statements it seemed that the jurors were going to be asked to decide who they believed and/or liked more - Sherry Pierce or Kelly Norton.

Was this case going to be about facts or a popularity contest?

The first few days of testimony were technical in nature. Testimony started with Chris Mays, the Chairman of the Commission during the August 2010 votes rejecting Johnson's requests.

The courtroom was pretty quiet, with few watching during those beginning days. The prosection's star witness was co-conspirator Kelly Norton, who had been given immunity for her testimony in the case. That is the witness everyone wanted to hear from. Finally Kelly Norton was up. On Wednesday afternoon, in a room full of people, Kelly Norton stepped on to the stand, visibly nervous, even breaking down on the stand a few times while she was questioned by the prosecution. She stayed on the stand all day Thursday, Monday and Tuesday, when testimony finally wrapped up around 4:15 p.m.

Dozens of emails and invoices were admitted into evidence by the prosecution in an attempt to present the facts of the case. George Johnson, who not only wanted to control the candidates on the Arizona Corporation Commission, also wanted issues handled in Pinal County. Johnson had strong feelings against the Curis Mine, against San Tan Valley incorporation and was determined to find an LDS Republican woman to run for the Pinal County Board of Supervisors - specifically to challenge Republican Bryan Martyn.

Kelly stated that Sherry had very little real work to do. It was a "no show" kind of position. "Jim told me it had to look legit, so that's what I did", Kelly said on the stand. "Legit" meant opening a separate bank account for KNB Consulting, getting an independent contractor agreement and confidentiality agreement signed by Sherry Pierce, giving Sherry basic tasks, reporting the $3500/mo in expenses she paid to Sherry Pierce on the Norton's joint tax returns in 2011, 2012 and 2013, (but not the $6000/mo she received from George Johnson). The defense challenges that if Sherry Pierce did any work to justify the $3500/mo payments than the money couldn't have been a bribe and she was simply being paid for the services she provided.

After three and a half days of testimony, Kelly Norton was excused from the witness stand and almost half of the courtroom followed her out. With Kelly stepping down around 4:15 p.m., most thought the day would be cut a few minutes short, but the prosecution called another witness and that is when the real esate bomb dropped.

Rex Griswold was called to the stand. Rex moved to Arizona from San Diego, California in the mid 1980's. He worked in the restaurant industry and moved to Mesa in 1990. Years later he ran for Mesa city council and served almost two terms, before resigning to run for Mayor. "I got a silver medal in that race", joked Griswold while on the stand. After leaving the restaurant business around 2006, Griswold later became a commercial real estate agent in 2010. He originally worked for Keller Williams and later worked for Commercial Properties, Inc. (CPI) While he knew both Gary and Sherry Pierce before he became a commercial real estate agent, his connection to the case was laid out in less than fifteen minutes to the jury. Griswold was the real estate agent who was facilitating the real estate transaction that the prosecution alleges, was part of the bribery scheme, involving Gary Pierce, Jim Norton and George Johnson.

The property was located at 10545 E Apache Trail in Mesa. Griswold testified that he spoke with Gary Pierce about the property. Gary wanted to sell his auto dealership in Yuma and open another used car dealership in Mesa on Main Street. Griswold stated that the sellers were motivated to sell, as the bank was preparing to foreclose on the property. Rex put together an LOI (Letter of Intent) to purchase the property. He attached the LOI rough draft and emailed it on Dec 28, 2011 to Gary Pierce (as well as the seller and another recipient, Leroy), along with a question: "Gary, what address should I use for Jim Norton?"

Rex testified that Gary Pierce had asked Rex to have Jim Norton's name added to the documents and responded to Griswold that he'd get Jim Norton's address and get back to him. On Dec 29, 2011, the LOI listed the property valued at $800,000. The LOI suggested that the lot be sold for $300,000, with $10,000 of that posted as earnest money with an estimated close date of Jan 31 2012. The LOI was prepared for both Gary Pierce and Jim Norton. Griswold explained that an LOI was non-binding and was meant to simply start discussion regarding an offer. The following day, Griswold asked Gary Pierce to sign the LOI, while adding that Jim Norton would need to sign the purchasing agreement. Jim Norton's address was added to the LOI and signed by the seller and Gary Pierce on December 30, 2011. The signed document was faxed to Griswold by Pierce, which was then sent to the seller to get to the bank in an attempt to stop the foreclosure. The seller however offered less money than was owed and the bank declined the offer.

On Jan 11, 2012 another LOI was produced, this time however the LOI had a price of $325,000 (instead of the $300,000 of the previous LOI) and Ryan Pierce, Gary Pierce's son was listed as the new purchaser. This offer was also rejected by the bank. On Jan 18, 2012, an email including a draft purchasing agreement was sent from Griswold to Gary Pierce. "It was a last effort to revive the deal" testified Griswold. Gary Pierce responded to the email that he was "having a hard time putting all the players together." Rex asked if Pierce could present $329,000 within 30 days to save the deal. The deal died.

With the defense's opening statements mentioning a "1031 exchange", the prosection ended the day asking Griswold if a 1031 exchange had been discussed between Pierce and himself. Griswold stated that he had never heard that term, until he met with Jim Norton's attorney, prior to the trial who asked Griswold if this transaction was a 1031 exchange deal. Griswold said no. "A 1031 exchange would be included in the LOI, and it never was."

The prosection will continue with questioning tomorrow, followed by cross examination by all four defense attorneys.

Will Griswold's testimony dismiss the defense's position that since the transaction was never completed, it didn't exist? Stay tuned for more!