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Regulators look at Arizona water utility company in bribery scheme

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PHOENIX — The Arizona Corporation Commission voted unanimously to review the rates, operations and finances of a San Tan Valley water utility company connected with a suspected bribery scheme.

The commission will also have a consultant look at a 2013 policy change that allowed 28 utilities officials to pass a part of their personal income tax burden onto customers. Under the change, Johnson Utilities charged customers $3 per month for getting water and wastewater services through the company, reports said.

Pinal County Supervisor Mike Goodman has called the tax change a bad policy.

“I don’t think it’s fair to the customer to be paying that rate to pay someone’s personal income taxes,” he said.

The decision Tuesday comes after a former commissioner was accused of accepting bribes from company manager George Johnson. Gary Pierce was given $31,000 to approve higher rates, according to the indictment. Pierce was on the commission from 2007-14 and served as a chairman.

The indictment states the money was handed down to Pierce through his wife, Sherry, and lobbyist Jim Norton.

Pierce also supported the policy change, reports say.

Johnson, Norton, Pierce and his wife all pleaded innocent to the charges last week. A trial is scheduled for Aug. 1.

Pierce’s former staff adviser John LeSueur, who currently works with the Attorney General’s office, has offered to help the commission’s hired consultant understand how the tax policy changes were made.

It is unclear whether customers would receive refunds if commissioners decide to overturn the policy.

“If something has been done inappropriately, they deserve it,” said commission Chairman Tom Forese.

The commission is also considering having an outside consultant determine whether the current utilities management, including Johnson, are still eligible to run the company or if they need to be removed.

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