Irvin resigns, remains defiant
Commissioner faced impeachment, will sue state

The Arizona Republic
Robbie Sherwood
Sept. 24, 2003

Arizona Corporation Commissioner Jim Irvin resigned Tuesday rather than face impeachment in the House.

On his way out the door, he fired a few parting shots: He'll sue the state to recover his legal costs, estimated at $579,000, and to pay for a $60 million federal jury award against him for interfering in an aborted 1999 takeover of Southwest Gas by Southern Union.

"I will prevail in my fight, protecting myself, my family and the citizens of Arizona against the unreasonable charges brought against me," Irvin wrote in his two-page resignation letter.

"Most importantly, I hope that the state's actions in this matter will not discourage other capable candidates from pursuing public office due to fear of betrayal by the state."

Melvin McDonald, a special investigator hired by the House to look into Irvin's actions, said he'll finish his impeachment report by the end of the month. House Speaker Jake Flake said that the report will be made public and that no deals were cut with Irvin for his resignation.

McDonald did not say whether his investigation uncovered anything that could spawn criminal charges. State, county and federal prosecutors have refused to prosecute Irvin over the Southern Union case.

Irvin entered Arizona politics a decade ago as an energetic tough-talking millionaire who critics said was looking to buy his way into an office. He leaves with his reputation in tatters, resigning just ahead of a likely impeachment over an array of claims that he misused his office to benefit friends.

In his resignation letter, Irvin said that he never put his personal interests ahead of those of his constituents and that the past few months have been "very difficult for my wife and family." Irvin said he could not continue to hold public office, pursue his appeal of the federal jury verdict in the Southern Union case at his own expense and pursue his claim against the state. The state has paid about $4.5 million to defend Irvin but has refused to pay any more.

Flake commended Irvin for doing "the responsible thing" but said he took exception to some of his parting comments.

"We don't feel like we have betrayed anybody. We feel like we did what we had to do," said Flake, R-Snowflake, of the three-month impeachment investigation he launched. "It wasn't something we enjoyed doing, we just felt like we had to do it to protect the integrity of the state of Arizona."

Flake confirmed that Irvin approached McDonald last week about an unspecified deal to resign last week.

McDonald has deposed former Irvin aide Jack Rose, who previously had refused to testify about his role in the case under protection from self-incrimination.

"It's unfair to second-guess the prosecutors," McDonald said. "The report will outline some instances where I believe there is clear and convincing evidence (of criminal wrongdoing). But for a criminal prosecution the evidence must be beyond a reasonable doubt."

Maricopa County Attorney Rick Romley has said he would want to see the report before he'd consider immunity for Irvin. However, he said, the case more appropriately falls under the jurisdiction of U.S. Attorney Paul Charlton. Charlton declined to prosecute Irvin earlier this year.

Outrage over lawsuit plans

Both Flake and Gov. Janet Napolitano, who must appoint Irvin's replacement, were indignant that Irvin plans to sue the state to pay his jury fine.

"It's an outrageous attempt by Jim Irvin to saddle the taxpayers with the bill for his misdeeds," said Kris Mayes, Napolitano spokeswoman.

A U.S. district judge has said she believes Irvin should be personally liable for the $60 million. There is precedent for the state paying an elected officials' legal expenses. In 1994, lawmakers agreed to pay almost $300,000 in legal fees for Gov. Evan Mecham's 1989 impeachment.

Napolitano, a Democrat, must appoint another Republican to replace Irvin. Mayes said the governor is working from a short list of candidates that includes Betsey Bayless, director of the state Department of Administration, and Jack Jewett, a member of the Board of Regents.

Irvin, in his resignation letter, accused Southern Union of helping lawmakers build an impeachment case in an effort to recoup the $60 million judgment from taxpayers. Southern Union attorney Eric Herschmann said he believes Irvin, not taxpayers, is liable for his conduct.

"Jim Irvin's resignation is the first true step that he has taken that benefits the citizens of Arizona," Herschmann said.

Irvin's four Republican colleagues on the commission were relieved to hear he had quit. They called for his resignation in March.

"It's been a long period of time with a black cloud hanging over the commission," Commissioner Jeff Hatch-Miller said. "There's some blue sky now."

Great promise, controversy

Since he first stepped into the political ring in 1993, Irvin has been a politician of great promise and constant controversy. A political novice using his own cash, Irvin took on longtime House Speaker Jane Hull for secretary of state. He outspent Hull 3-1 and ran what critics called a negative campaign, but he narrowly lost. In 1996, Irvin again put up his own money in a race for Corporation Commission and won. Hull went on to be appointed governor when Fife Symington resigned in 1997.

The impeachment case against Irvin had three prongs:

1. The aborted 1999 hostile takeover of Southwest Gas. Irvin and his handpicked aide Jack Rose tried to persuade regulators in Nevada and California to block a takeover bid by Southern Union in favor of a company called Oneok, which was offering less money.

The quasijudicial commissioners are not supposed to prejudge cases. But Irvin and Rose traveled to California and Nevada to persuade regulators to reject Southern Union's bid. Irvin never stood to gain personally; however, Rose, who resigned before the trips, stood to make millions as a consultant if Oneok succeeded.

When Southern Union sued the pair in federal court, Rose refused to testify under the Fifth Amendment protection against self-incrimination and settled for $75,000.

The jury slapped Irvin with a $60 million punitive-damages verdict for his role.

The trial spawned an impeachment charge against Irvin of fraud on the court. The charge claimed his wife, Carol, attempted to introduce fabricated notes as evidence.

The handwritten notes related to an purported 1999 telephone conversation between Carol Irvin and Rose. The notes purport that Rose admitted using Carol's husband as an innocent stooge during his interference in the Southern Union case.

When Southern Union attorneys said they would subject the notes to a forensics test, she admitted she wrote the notes the night before they were presented at trial.

Carol testified that her attorney had advised her to copy the notes from the 1999 originals, which she then threw away, to make them more legible.

McDonald told House members that Rose did not back up Carol's story.

2. A libel case against Irvin by former commission employee James Fisher, who had raised questions about the Southwest Gas case. Fisher claimed Irvin libeled him during a 1999 dispute. The state settled with Fisher, paying $441,480.

3. A series of commission enforcement actions against American National Mortgage Partners.

Irvin had recused himself because a relative of one of his campaign staffers worked for the company. Before recusing himself, Irvin questioned a commission Securities Division lawyer about the case during a December 2002 hearing. In January, after agreeing to stay away from the case, Irvin again questioned division lawyers about their handling of the case during a hearing. His statements suggested he had spoken with American National executives before the hearing, which is prohibited.

Staff reporter Max Jarman and the Associated Press contributed to this article.