Another shoe drops in the Tom ‘banned for life by the SEC’ Horne scandal

Posted by AzBlueMeanie:

I posted about this back in early April Tom 'banned for life by the SEC' Horne under investigation by the FBI when the Arizona Republic broke the story that Attorney General Tom "banned for life by the SEC" Horne, is under investigation by the FBI for campaign finance law violations.  Attorney General Tom Horne under investigation:

The FBI is investigating whether Arizona Attorney General Tom Horne illegally worked with an independent expenditure committee that raised and spent more than $500,000 in 2010 to run negative ads against his Democratic challenger.

The Republic learned that Horne was under investigation by federal officials about two months ago, but could only determine that it was tied to Horne's possible illegal involvement in an independent expenditure committee created in 2010.

* * *

A complaint was filed in February by a whistle-blower, who worked for Horne. Former prosecutor Don Dybus — who also worked on Horne's campaign — alleged Horne worked with the committee and later hired the chairwoman.

The complaint was filed in February, and the Arizona Secretary of State's Office released it Monday.

The complaint http://www.azcentral.com/ic/pdf/0402-horne-complaint.pdf

Well, another shoe dropped this week in the Tom "banned for life by the SEC" Horne scandal. Legal claim accuses Arizona AG Horne of cover-up, seeks $10 million:

[A] $10 million legal claim filed (.pdf) by Margaret "Meg" Hinchey, a longtime state criminal investigator, accuses Attorney General Tom Horne of engaging in a cover-up and attempting to destroy records that potentially show criminal activity.

Federal and county law-enforcement officials have been investigating allegations that Horne collaborated with an independent expenditure committee to raise a significant sum for his 2010 bid for office. State law prohibits a candidate from having any involvement in the operation of an independent campaign committee.

Hinchey alleges that Horne and his staff sought to destroy investigative materials, that the office overlooked potentially criminal behavior by Horne and favored staff members, and that it retaliated against her after she reported the information to the FBI.

Hinchey's claim states that she has evidence of Horne's involvement in the illegal activity.

The notice of claim, a precursor to a lawsuit, portrays the state's top prosecutor as a man willing to bend the rules — and break the law — in an effort to protect himself and his allies from prosecution.

* * *

The Republic has learned that some of the FBI's information has been turned over to the Maricopa County Attorney's Office, which has issued grand-jury subpoenas. Neither agency on Thursday would confirm the existence of an investigation.

The 19-page claim says that Hinchey was the first to blow the whistle on potentially illegal conduct within Horne's office and that she was penalized by Horne and his allies for taking the information to federal agents. The claim says Hinchey stumbled upon the information about Horne's alleged involvement with the independent expenditure committee while investigating another matter.

One of the office's top investigators, Hinchey oversaw some of the agency's high-profile investigations, most recently its inquiries into illegal campaign contributions by high-level Fiesta Bowl employees and improprieties by county officials.

Don Conrad, who supervised her during his past tenure as the Arizona Attorney General's Office criminal-division chief, said Hinchey's reputation is "impeccable."

"I trust her with my life," Conrad said. "Anybody that would try to convince me that she is involved in wrongdoing of some kind — or lying or misrepresenting facts — would have a very tall hill to climb with me."

In July 2011, Horne handpicked Hinchey, a supervising special agent in the criminal division, to conduct "a confidential internal investigation," according to the claim. The Republic was told Horne wanted her specifically to determine if someone within the office had leaked information to the Phoenix New Times regarding his hiring of Carmen Chenal, a longtime Horne confidante and employee whose state Bar license had been suspended.

During that investigation, Hinchey learned of Horne's alleged involvement with an independent expenditure committee. Kathleen Winn, whom Horne hired to be his director of community and outreach and education, ran the committee called Business Leaders for Arizona.

* * *

Hinchey's claim contains allegations that:

Horne retaliated against staff who were Democrats or who supported attorney Felecia Rotellini, his Democratic opponent in the 2010 election.

Prior to taking office, the claim said, Horne met with Attorney General's Office employees to "vet out" those "who may be members of the wrong party" or supported Rotellini. Hinchey changed her party affiliation on July 22, 2011, from Democrat to independent, fearing retaliation.

* * *

The office submitted to the Arizona Governor's Office a grant application that may have contained fraudulent information. Horne had been told of the allegations, the claim said, and he asked staff to look into it.

However, an employee discussing the application with Hinchey alleged that he or she was threatened with firing "if he or she brought this type of information forward in the future."

Hinchey, who served as a task-force officer in the FBI's Public Corruption Squad, reported the allegations to the FBI for further review.

* * *

Around Sept. 27, 2011, Horne's spokeswoman, Amy Rezzonico, visited Hinchey's office "and through the course of the conversation spontaneously disclosed" that independent expenditures had occurred for Horne at his direction during the 2010 campaign.

"Rezzonico implied she thought Horne had already told … Hinchey about this," the claim said. Previously, Rezzonico said she was unaware of any coordination between Horne's campaign and the independent expenditure committee. (The FBI has interviewed her).

* * *

Around Sept. 29, Hinchey was again told about the grant application and the campaign-finance allegations. She went to Chief Special Agent Andy Rubalcava. Together, they reported the information to then-criminal-division chief Jim Keppel.

The next day, Hinchey reported the newest allegations to the FBI.

Around Dec. 12, 2011, Hinchey learned Deputy Attorney General Rick Bistrow and Horne had asked Keppel whether they could destroy documents from Hinchey's internal investigation file and "wipe her computer of all related documents," the claim said.

Keppel told them it would be illegal to destroy public records. Bistrow asked if they could title Hinchey's documents as "drafts" or if they could place the records in a personnel file to prevent them from becoming public. Keppel said he did not believe that would change their status as public records. The next day, Hinchey made copies of her files fearing they might disappear. She gave a copy to law enforcement.

Though Bistrow asked her not to finish writing memos from interviews she had conducted in the probe, Hinchey did so anyway. On Jan. 11, 2012 — the same day the FBI requested information from the Secretary of State's Office about Winn's independent expenditure committee — Bistrow told Hinchey the internal investigation was "suspended" and that she should take no further action. Hinchey later learned Bistrow told another employee the opposite: to keep the investigation in an "open" status. Documents in an open case typically are not subject to public disclosure.

On about Jan. 23, the claim said, attorney and GOP supporter Mark Goldman told Horne he was under investigation by the FBI.

* * *

From mid-January through Feb. 3, Hinchey claims to have learned Horne had begun to make inquiries about her abilities, trustworthiness and loyalty to him. On Feb. 3, the claim alleges, Horne and Bistrow told Keppel that Hinchey "can't be trusted" but would not say why. Bistrow asked Keppel if he thought Hinchey would notice if her case-file notebook disappeared from her office. Keppel said she would: "She is not stupid."

The alleged smear campaign continued between Feb. 17 and Feb. 20, the claim states, when Horne called an assistant attorney general to talk about Hinchey. Horne, according to the claim, told the attorney that Hinchey was having a personal relationship with Rotellini. Hinchey has been in a committed relationship for 25 years and is a mother of three.

* * *

During that weekend conversation, the claim said, Horne called her a "political hack." He also inquired about her party registration. On March 22, Horne and Bistrow told Keppel that Hinchey "cannot be trusted because she went to the FBI reporting alleged baseless criminal activity by AG Horne related to campaign finance."

Hinchey's attorney on March 23 demanded in a letter that Horne and Bistrow stop the smear campaign. Horne responded days later saying there was no smear campaign. On March 27, Keppel acknowledged to Bistrow that Hinchey had reported the alleged criminal activity to him and that the information had been relayed to the FBI. Keppel then handed two envelopes to Bistrow, one for him and one for their boss. The envelopes contained notice of Keppel's resignation.

Tom Horne is continuing his smear campaign against Hinchey:

Horne disputed [her] characterization, saying the charges are politically motivated.

"This is an attack from a partisan Democrat who enjoyed working under Democrats … and resented working for a Republican who was elected by the people of Arizona," he said Thursday. "It is sad that good and honest people have to be dragged through the mud."

Yeah, that kind of confirms the allegations of the Notice of Claim that Tom Horne has a political test in the AG's office, now doesnt it?

In an unrelated matter:

On April 5, days after Horne first publicly denied allegations that he had engaged in illegal behavior, Hinchey's boss learned that three Phoenix police officers had filed a notice of claim against the state and Hinchey. The claim was tied to an investigation she had conducted involving overtime abuse. Horne's top aides, according to the claim, suggested an internal investigation to examine Hinchey's actions in the investigation. Hinchey's boss suggested the investigation should be performed internally, the normal process to examine the conduct of sworn agency personnel, the claim said.

According to a May 3 memo, the Attorney General's Office hired outside counsel, Dale Danneman of Lewis & Roca, to investigate Hinchey's conduct. The next day, Hinchey went on long-term medical leave. The claim states she has stress-related health issues.

* * *

Horne said his office had refused a demand from Hinchey's attorney to stop an investigation into whether Hinchey had fabricated grand-jury evidence in an unrelated case. That investigation is ongoing.

So the chief law enforcement officer in Arizona is under investigation by the FBI and a grand jury for a variety of offenses that can be boiled down to the generic "political corruption."  It seems that Tom "banned for life by the SEC" is on the wrong side of the law once again.