Sessions’ First Move at DOJ Should be to Clear Rep. Rick Renzi

Reprinted from The Hill
By Rachel Alexander

Jeff Sessions

Jeff Sessions

Once Sen. Jeff Sessions (R-Ala.) is confirmed as Attorney General, he must work with Congress to clean up the corruption within the Department of Justice. One of the first cases he should review is the prosecution of former Congressman Rick Renzi.

As a former Assistant Attorney General for the state of Arizona and a former prosecutor with the Maricopa County Attorney’s Office, I have never seen a more egregious political prosecution as well as corrupt electioneering by a foreign interest than the DOJ’s crusade against Renzi.

 

Some may remember that Renzi was convicted in a split verdict on some corruption counts involving two proposed federal land exchanges. What I’ve found since casts grave doubt on the legitimacy of the investigation, prosecution, and conviction.

Rick Renzi

Rick Renzi

The DOJ’s investigation of Renzi originated with a South African citizen named Bruno Hagner, who was the head of Resolution Copper. The foreigner wanted Renzi to give his company the right to mine on federal lands that were sacred to Renzi’s Native American constituents. When Renzi sought to change Hagner’s proposal to mitigate the environmental fallout and help the Apaches, Hagner decided that he wanted someone else to hold Renzi’s congressional seat. Hagner launched a plan to take out Renzi that he called “Operation Eagle,” which involved paying off a retired FBI agent to pass along false allegations against Renzi to Tucson FBI Agent Daniel Odom.

Odom took the case to Assistant U.S. Attorney Gary Restaino, whose wife was former Arizona Governor Janet Napolitano’s general counsel. A savvy politico, who saw the potential political threat Renzi posed to Napolitano, Restaino seized the opportunity to pursue a Republican congressman along with Odom.

Odom soon identified Philip Aries, who had also approached Renzi about a potential land exchange, as a potential witness he could manipulate. But during their initial meeting, Aries told Odom that he had developed his land exchange proposal with one of Renzi’s aides — not with Renzi himself. Still, Aries agreed to try to get evidence by recording phone calls with Renzi, but he soon backed out. That’s when Odom told him that he could be paid if he could help the government prosecute Renzi. Aries agreed to continue. He eventually testified that he hoped to be paid for his help, that getting $10,000 would be a “home run,” and that getting $25,000 would be like “winning the lottery.”

Evidence that a witness has a financial stake in the outcome of a case must be turned over to the defense. Restaino and Odom knew this, but they concealed the evidence about Aries’ financial motives from Renzi and his defense team. As a result, the jury never knew that the principal witness against Renzi expected to be paid for changing his story to convict him. Hiding evidence of a witness’s bias is prosecutorial misconduct, plain and simple.

That’s not the only misconduct, though. The DOJ used a wiretap to record Aries’ calls with Renzi, and the FBI also recorded Renzi’s calls with his lawyers. Remarkably, the DOJ illegally recorded, monitored, and reviewed attorney-client privileged calls. The FBI even prepared transcripts of several privileged calls, which only emerged when the defense exposed the misconduct in an extensive evidentiary hearing. The courts eventually ruled that the DOJ had lied to the court supervising the wire tap and that it had illegally spied on Renzi. It suppressed the entire wiretap, which did not contain anything incriminating anyway.

If the evidence against Renzi had been overwhelming, then maybe we could attribute the DOJ’s misconduct to overzealousness. But the evidence of corruption was fabricated. The land exchange proposals Renzi supported involved a property that conservationists and the military alike had sought for years because of its importance to Fort Huachuca. In fact, prior to the trial, the district court forced the DOJ to admit that Fort Huachuca was “essential” to national security and that Renzi’s efforts to preserve the water was “in the public interest.”

Renzi filed a motion for a new trial, and the judge ruled that the evidence proved that the FBI had concealed “important” information about its meetings and offers of money with Aries, that Odom had induced Aries to continue cooperating by dangling a financial reward, that Aries believed that he deserved a reward for his cooperation, and that the prosecutors’ argument about Aries having not received “one thin dime” was, in the court’s words, “disingenuous” and “misleading to the jury.” Yet bizarrely, the court dismissed its own findings, saying they were “immaterial,” and denied the request for a new trial.

Renzi appealed to the Ninth Circuit Court of Appeals, which will hear his case in March. Renowned litigator Kelly Kramer, co-head of Mayer Brown LLP’s white collar criminal defense practice, and Sidney Powell, one of the nation’s best defense attorneys and author of the book Licensed to Lie, are his attorneys.

It is imperative that Congress and the new Attorney General look into this outrageous case. Renzi has been fighting this political witch hunt and clear electioneering by the DOJ, a foreign interest and the retired FBI agent the South African was paying for 10 years now, a gross abuse of taxpayers’ dollars. Correcting this wrong against Renzi would send a strong signal that this administration is going to have zero tolerance for corrupt prosecutors – and corrupt wealthy foreign interests. As for Congress, if it can happen to Renzi, it can happen to any member of Congress.

AZ Electric Utility Rates: Regulated Monopoly or Free-Market Competition?

gavel1-300x223In May, 2013, the Arizona Corporation Commission (ACC) opened a docket to gather information on how Arizona might allow competition among electric companies. On September 11, they shut down the docket with a 4-1 vote, citing “legal issues” that were apparently just too much trouble to tackle. Maybe the ACC will tell us more about that later(?).

So until & unless a new docket on the subject is opened, it’s over.  Of course, Arizona residents do still have a choice: either sign up with the one company legally allowed to provide electric service in your area or go without electricity altogether.

APS and SRP are regulated monopolies. The ACC sets the rate of return that they are allowed to earn on their capital investment in generating stations, transmission lines, and so on*. Their day-to-day operating expenses, depreciation expenses, taxes, etc. are fully covered, dollar-for-dollar, by their customers (you and me). That’s the law.

power-transmissionIs that so bad? Yes, it can be. This is the classic problem of regulated monopolies. While their rate of return is firmly capped by ACC, what are the incentives these monopolies have to hold down their capital expenditures on which they earn that guaranteed return? And what are their incentives to minimize expenses such as payroll? Technically, there aren’t any, other than their own good will and the ACC looking over their shoulder.

So can’t the ACC guarantee that the monopolies are run efficiently?  Oh, would that it were!  No, ACC politicians can’t hope to micromanage a monopoly for efficiency.  On the other hand, if there were competition, the utility would have to run itself efficiently or lose customers to a more efficient competitor that could charge lower prices.

Even when the monopolies are run by people of good will and good intentions**, they can easily slip into inefficient behaviors when there is no overriding free-market, profit-motivated, competitive incentive to stay efficient and keep prices down.

Bell_System_1939I’ve been through deregulation before. From 1969 to 1984, I worked at Bell Laboratories, the research arm of the biggest regulated monopoly ever — the old Bell System (“Ma Bell”).  We even had our own tightly coupled manufacturing arm called Western Electric.  The old Bell System was heavily regulated at the federal, state, and (in some states like Texas) local level.

In the old Bell System our advertising proudly claimed that we provided the world’s best telephone service at the world’s lowest prices. And we really did. But the DOJ Antitrust Division broke up AT&T anyway in 1984, opening the long-distance and equipment manufacturing businesses to competition. It was traumatic for us.  It was complicated.  But the job got done, and today’s telecom industry is much more competitive, innovative, entrepreneurial, and a lot cheaper than it would be if we still had one grand national monopoly.

powerlinesWouldn’t it be nice if the same thing happened with electric power in Arizona?  It could — but not until the ACC opens another docket and attacks those “legal issues” anew.

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*Correction: As shown on the ACC website, ACC regulates rates for APS, but on SRP, ACC is only involved when SRP wants to build large power plants (100 Megawatts) or very high voltage transmission lines (115 kVolts.)  ACC also regulates Tucson Electric Power (TEP).

** Regarding good intentions:  A look at the SRP and APS websites will show that these utilities are indeed responsible corporate citizens, offering ratepayers tips, a choice of rate plans, rebates, and other assistance to help customers lower their electric bills. Both utilities and their employees are involved in conservation, and I know first-hand of their contributions to public education in Arizona. But business is business, and there’s nothing like the pressure of competition and the incentive of higher profits to drive a company to run the most efficient operation and offer the lowest prices possible.