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Fri, May 24

Embattled regulator resigns from ACC

PHOENIX — Corporation Commissioner Jim Irvin resigned Tuesday, avoiding impeachment proceedings launched in the wake of a jury verdict that he tried to influence a corporate bidding war.

Irvin, a Republican, also filed a formal claim Tuesday with the state, asking that it pay approximately $61 million — a $60.4 million jury award against him and nearly $600,000 in post-trial legal fees — to avoid a lawsuit.

Irvin is under court order to pay the $60.4 million jury award in a lawsuit that a company filed, accusing him of secretly maneuvering to block its proposed merger with a utility regulated by the commission.

Citing "very difficult" pressure placed on both him and his family in recent months, Irvin said in his resignation letter that he couldn't remain on the commission despite his wish to continue protecting consumers.

"We're closing a chapter that needed to be closed," said Marc Spitzer, chairman of the Arizona Corporation Commission (ACC).

House Speaker Jake Flake said the House will release the report it expects its investigator, former U.S. Attorney A. Melvin McDonald Jr., to submit.

"There (were) no deals cut" with Irvin for his resignation though someone made a proposal on his behalf, Flake said, declining to elaborate. "I commend him for doing the responsible thing."

The House had launched the impeachment investigation in June after Judiciary Committee Chairman Steve Tully concluded that "sufficiently serious" grounds existed to warrant the investigation.

The centerpiece of the investigation was the lawsuit that produced the $60.4 million award.

The state paid more than $4 million in legal fees to defend Irvin and Jack Rose, a former executive secretary for the commission, in the case. But Gov. Janet Napolitano said the state wasn't obligated to pay the judgment because the court found Irvin wasn't acting in his official capacity.

As he has said before, Irvin's claim filed Tuesday argued that he was acting in his official capacity and that the state must protect him financially.

Napolitano spokeswoman Kris Mayes said the state will fight the reimbursement claim, the filing step before anyone can sue the state. "It's just an outrageous attempt to saddle the taxpayers with the bill for his misdeeds," Mayes said.

Other elements of the impeachment investigation include a commission employee's libel suit against Irvin — which the state paid $441,480 to settle — and Irvin's continued involvement in a securities case after he stepped aside because of a possible conflict of interest.

Two other elements of the investigation included possible fabrication of evidence in the bidding-war case and possible forgery of contribution slips submitted to qualify Irvin for public financing of his 2002 campaign, McDonald said.

In the midst of the civil trial in federal court, Irvin won re-election in November to the $79,500-a-year seat on the commission, which regulates utilities, telecommunications, securities and railroads. His four-year term would have run through 2006.

Voters first elected Irvin, one of five commissioners, to the ACC in 1996.

Napolitano, a Democrat, will appoint a replacement who must be a Republican.

While numerous state officials had called on Irvin to resign for months, Irvin attorney Jeff Walsh said his client waited as long as he could so he could keep working on behalf of consumers.

In the resignation letter to Secretary of State Jan Brewer, Irvin said he was proud of his tenure on the ACC.

"I have, in all circumstances, voted my conscience and I have never put my personal interests before those of my constituents," Irvin said in the letter.

U.S. District Judge Roslyn Silver in July upheld the Dec. 18 jury ruling, saying Irvin's conduct regarding the case involving Southwest Gas Corp. was reprehensible, violated the public trust and involved "intentional trickery and deceit."

The jury found Irvin improperly influenced the 1999 bidding war for Las Vegas-based Southwest Gas. The jury slapped him with $60 million in punitive damages and $382,000 for actual losses claimed by Houston-based Southern Union Co., the company that failed in its efforts to acquire Southwest Gas.

Though the award was against Irvin personally, legislators were angry that taxpayers paid at least $4 million for legal costs in connection with the case because Irvin claimed his actions were part of his job.

Southern Union accused Irvin and Rose of interfering with its attempt to buy the utility. Although Southern Union's offer was $90 million higher, the company went to Tulsa, Okla.-based Oneok Inc. after Irvin said regulators in Arizona or other states would not approve a deal with Southern Union.

Irvin traveled secretly to California and Nevada to try to line up opposition to a Southwest Gas-Southern Union merger. The other regulators balked but Southern Union argued in its lawsuit that efforts by Irvin and co-defendants who agreed to settlements were enough to sway Southwest Gas.

Irvin acknowledged back-room dealings involving the companies during the trial, but he said he was unaware that people were using him in an attempt to discredit Southern Union.

A preliminary House report said Irvin's apparent motivation in trying to scuttle Southern Union's proposal to merge with Southwest Gas was a desire to enrich Rose, his friend and former aide.

Rose had a business arrangement with a financial-service company and stood to make millions of dollars if Oneok Inc. merged with Southwest Gas and used the company as the underwriter, the report noted.

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