A lucrative civil racketeering case involving an East Valley gambling investigation is being sent to Pima County prosecutors by Attorney General Terry Goddard, a move prompted by his decision to sever any ties to cases brought to him by Maricopa County Sheriff Joe Arpaio.
Goddard’s decision drew protests Wednesday from Arpaio, whose agency conducted the two-year investigation that broke up four alleged gambling rings that had been operating out of the East Valley and Phoenix. The civil action could be worth tens of millions of dollars and should be turned over to Maricopa County Attorney Andrew Thomas, who is handling the criminal case, Arpaio said.
The squabble is the latest twist in the ongoing battle that began when Arpaio and Thomas launched an investigation of Goddard’s office to determine whether state prosecutors improperly cut a deal with former state Treasurer David Petersen in return for a $1.9 million payment last year.
Last week, Goddard ended his agency’s involvement in all cases investigated by the sheriff’s office, concluding his agency had a conflict of interest in prosecuting those cases while under investigation by Arpaio.
Among the cases Goddard sent back to the sheriff was the gambling investigation that resulted in the arrest of 34 people and the seizure of roughly $145 million in cash, cars, homes and other property.
But rather than sending the civil forfeiture case, which could eventually allow police and prosecutors to keep the seized assets, back to the sheriff, Goddard opted to send it to the Pima County Attorney’s Office in Tucson.
That means if Pima County prosecutors are successful, they would be able to keep their share of the forfeited assets, about 20 percent of the total. The remaining 80 percent would go to the sheriff, regardless of which agency handles the case.
“I don’t think that the people of Pima County should be getting the proceeds when they had nothing to do with it,” Arpaio said. “It’s the people of Maricopa County that should receive that money through the county attorney’s office.”
Goddard said his decision to send the civil case to Pima County was to prevent the appearance he was attempting to influence Thomas’ investigation of the attorney general’s office.
“We felt we had to go to another county because the Maricopa County attorney is part of the investigation, and we would have been throwing him this huge bone, which is our ongoing forfeiture seizure,” Goddard said in defending his decision. “I don’t see how we could (counter) an allegation that we were somehow buying favor to take a very, very potentially lucrative case like that and just hand it over to the Maricopa County Attorney’s Office.”
Arpaio and Thomas announced in April that they were investigating whether Goddard cut a favorable deal with Petersen last year in return for a $1.9 million payment for legal fees in an unrelated case. After an eight-month investigation, Petersen pleaded guilty to a single misdemeanor last October.
The gambling case also broke last April. Both the criminal and civil cases were being handled by Goddard’s office, until he declared a conflict as a result of the Petersen investigation.
Dennis Wilenchik, a private attorney hired by the sheriff’s office, said in a letter sent Friday to Goddard that since Arpaio is in effect the client, the sheriff has the right to decide what agency will handle both the criminal and civil cases.
For Goddard to declare a conflict of interest, then decide where to send the civil case, smacks of retaliation for the ongoing investigation into the Petersen matter, Wilenchik said. Goddard’s decision “is less suggestive of an attempt to avoid an implication of 'bribery’ than a gesture that could reasonably be interpreted as retaliatory, petty and in direct response to the sheriff’s investigation of the Petersen bribery matter,” Wilenchik wrote.
“It is one thing for the attorney general to declare a conflict. It is another for him to try to retaliate for an investigation into his conduct in a wholly unrelated matter by refusing to comply with the sheriff’s demand for his files back.”
Barnett Lotstein, special assistant Maricopa County attorney, said that office will handle the criminal charges regardless of what happens to the civil case.