OFFICE- OF THE,, ATTORNEY------GENERAL

I -- ' . Department of Law , . - I

- Fi~cal ,Year 1993 Annual Report

Grant Woods - -A!torney Genera_} Grant Woods Attorney General

Robert B. Carey J.M. Howard First Assistant Attorney General Special Counsel

Civil Division · Criminal Division H. Leslie Hall Michael C. Cudahy Chief Counsel Chief Counsel

Human Services Division Management Services Cecil B. Patterson Thomas G. Augherton Chief Counsel Chief of Administration

TRANSMITTAL LETTER

STATE OF ARIZONA

OFFICE OF THE ATTORNEY GENERAL GRANT WOODS MAIN PHONE: 542-5025 ATTORNEY GENERAL 1275 WEST WASHINGTON, PHOENIX 85007-2926 TELECOPIER : 542-4085

November 5, 1993

The Honorable J. Fife Symington Governor of Arizona State Capitol, Executive Tower 1700 W. Washington Phoenix, Arizona 85007

Dear Governor Symington:

I am pleased to submit to you the annual report of the Office of the Attorney General, as required by ARS § 41-194(B).

During the past fiscal . year, this administration continued its focus of protecting Arizona's citizens through aggressive enforcement of state laws and providing quality legal representation to state agencies. We have vigorously defended Arizona's environment by prosecuting those that destroy our natural resources, pursued dozens of companies and individuals who prey on unsuspecting consumers, and convicted many notorious criminals for the heinous crimes they perpetrated.

We concentrated our administrative efforts into implementing cost-saving measures that allow us to prioritize our resources into retaining and compensating top-quality \egal staff. Loss of well-trained, experienced attorneys from the Attorney General's Office to higher paying private and public sector positions continues to be a problem that requires close scrutiny by the Legislature.

On behalf of the employees of the Attorney General's Office, I am pleas~ to submit this report outlining our tremendous accomplishments during the past fiscal year. I can assure you the men and women of the Attorney General's Office, attorneys and support staff alike, are committed to serving the continuing needs of our state client agencies as well as the needs of all Arizonans.

Sincerely, ~~ Grant Woods Attorney General

OVERVIEW

During the past year, the Attorney General's Office In the area of criminal law enforcement, the Office has stood by its commitment to protect Arizona's chalked up many victories for the State, but none citizens, aggressively enforce state laws, and provide more notable than the first-degree murder conviction effective legal representation to state agencies. of Max Dunlap for the killing of Arizona Republic reporter Bon Bolles. Seventeen years after this Since the inception of his administration, Attorney horrible and shocking crime, the Criminal Division General Grant Woods has stressed the importance of · obtained a conviction many thought impossible. The viewing government through the eyes of the average Office is still working on the case, attempting to taxpayer and law-abiding Arizonan. All assistant reach a similar conclusion in the trial of the second attorneys general, investigators, and support staff suspect, James Robison. members operate from a common philosophical base: the decisions of the Attorney General's Office will In order to continue providing high quality legal not be made with regard to special interests, but representation to our clients, the Attorney General's rather will respect the views of everyday citizens Office must do everything reasonable to hold down who turn to the Attorney General's Office for help. administrative costs to allow greater emphasis on attorney compensation. The State remains in danger In this regard, the Office has continued to succeed in of continuing to lose experienced, top-notch assistant many areas. For example, our Environmental attorneys general to the private sector and other, Enforcement Section again achieved outstanding better paying public agencies. Internally, the Office results, most notably the successful prosecution of has implemented many cost-saving measures in order two major corporations for illegal dumping into the to cope with the lean budgetary atmosphere of state pristine waters of one of Arizona's greatest natural government. Office policy on everything from long treasures, Lake Powell. The conviction resulted in a distance phone calls to law books has been carefully record $1. 3 million fine, the largest environmental scrutinized for maximum cost efficiency. penalty in Arizona history. The Attorney General's message was loud and clear: the state will not tolerate During the next year, the Office will remain focused the destruction of our natural resources, no matter in .the traditional areas of consumer protection, civil how big or small the violator. rights, and enforcement of environmental laws, white collar crime, drug trafficking and elder abuse. New The Office also continues its record of success in challenges will be faced as well, including juvenile consumer protection. During the past year, our crime, housing discrimination, and telemarketing Consumer Protection Section pursued dozens of fraud. The Office remains committed to serving the companies and individuals who preyed on needs of client agencies and will work to improve unsuspecting consumers in an effort to take their efficiency and cost effectiveness. · money. In addition, the Section worked in partnership with the advertising industry to develop The Attorney General's Office is proud of its guidelines aimed at making advertising more honest accomplishments in the past year and looks forward and less confusing to the state's consumer. to continued success. 0 ~ ~ ARIZONA DEPARTMENT OF LAW i Office of the Attorney General ~ ~

Grant Woods Attorney General I ~ I (j Finl Aubtant Attorney G

Elections and Opinions Financial Services Section Consumer Protection & Antitrust Section Criminal Trials Section Community Relations Stttlon .__ .__ Paul Aken Sydney Davis - :L Phillip Austin Din:ctor - Chief Counsel Chief Counsel Chief Counsel

Intergonmmental Alraln Information Services Section Land & Natunl Re:sourcts Section Drug Enrorcement ScdJon Economic Security Section - John Mad)onald .__ DougCadell - Diane Hicnton - Gary Husk Kiri: Buru:h Director DirCctor Chief Counsel Chief Counsel - Chief Counsel

L

Rqlonal Offices Pcnonnel Services Scctton Licensing & Enforcement Secttoll Environmental Enforcement Section - Harold Evans ,__ Monty Lee .__ Pat Cunningham - Director Chief Counsel Chief Counsel

Solicitor Gc-ncnt & Opinions Se:ction Organized Crime & Fnud Section Rebecca Berch Sherry Stephens - Chief Counsel - Chief Counsel

~ Tai: Section Tucson Criminal Section - Gale Garriott - John Davis Chief counsel Chief Counsel

Tnnsportatlon Section Richard Allemann - Chief Counsel TABLE OF CONTENTS

OFFICE OF THE ATTORNEY GENERAL

Deparlment of Law

Fiscal rear 1993 Annual Report

Arizona Rules of Professional Conduct ...... Page 2

Role of the Attorney General ...... Page 4

Chronology of Attorneys General ...... : .· ...... Page 5

Summary of Attorney General Opinions ...... Page 7

Administration Division/Management Services ...... Page 9

Attorney General's Workforce Composition ...... ·. . . Page 13

Civil Division ...... : ...... Page 15

Criminal Division ...... Page 55

Human Services Division ...... ·...... Page 81

Volunteer and Internship Programs ...... Page 93

Funding and Expenditures ...... Page 95

Outside Legal Counsel ...... Page 99

Telephone Directory ...... : ...... Page 102 ARlzONA RULES OF PROFESSIONAL CONDUCT PAGE2

A lawyer is a representative of clients, an officer of A lawyer should be mindful of deficiencies in the the legal system and a public dtizen having special administration of justice and of the fact that the poor, responsibility for the quality of justice. and sometimes persons who are not poor, cannot afford adequate legal assistance, and should therefore As a representative of clients, a lawyer performs devote professional time and civic influence in their various functions. As advisor, a lawyer provides a behalf. A lawyer should aid the legal profession in client with an informed understanding of the client's pursuing these objectives and should help the bar legal rights and obligations and explains their regulate itself in the public interest. practical implications. As . advocate, a lawyer zealously asserts the client's position under the rules Many of a lawyer's professional responsibilities are of the adversary system. As negotiator, a lawyer prescribed in the Rules of Professional Conduct, as seeks a result advantageous to the client but consistent well as substantive and. procedural law. However, a with requirements of honest dealing with others. As lawyer is also guided by personal conscience and the intermediary between clients, a lawyer seeks to approbation of professional peers. A lawyer should reconcile their divergent interests as an advisor and, strive to attain the highest level of skill, to improve to a limited extent, as a spokesperson for each client. the law and the legal profession and to exemplify the A lawyer acts as evaluator by examining a client's legal profession's ideals of public service. legal affairs and reporting about them to the client or to others. A lawyer's responsibilities as a representative of clients, an officer of the legal system and a public In all professional functions a lawyer should be citizen are usually harmonious. Thus, when an competent, prompt and diligent. A lawyer should opposing party is well represented, a lawyer can be a maintain communication with a client concerning the zealous advocate on behalf of a client and at the same representation. A lawyer should keep in confidence time assume that justice is being done. So also, a information relating to representation of a client lawyer can be sure that preserving client confidences except so far as disclosure is required or permitted by ordinarily serves the public interest because people the Rules of Professional Conduct or other law. ' are more likely to seek legal advice, and thereby heed the legal obligations, when they know their A lawyer's conduct should conform to the communications will be private. requirements of law, both in professional service to clients and in the lawyer's· business and personal In the nature of law practice, however, conflicting affairs. A lawyer should use the law's procedures responsibilities are encountered. Virtually all difficult only for legitimate puI]Joses and not to harass or ethical problems arise from conflict between a intimidate others. A lawyer should demonstrate lawyer's responsibilities to clients, to the legal system respect for the legal system and for those who serve and to the lawyer's own interest in remaining an it, including judges, other lawyers and public upright person while earning a satisfactory living. officials. While it is a lawyer's duty, when The Rules of Professional Conduct prescribe terms necessary, to challenge the rectitude of official action, for resolving such conflicts. Within the framework of it is also a lawyer's duty to uphold legal process. these rules many difficult issues of professional discretion can arise. Such issues must be resolved As a public citizen, a lawyer should seek through the exercise of sensitive professional and improvement of the law, the administration of justice moral judgment guided by the basic principles and the quality of service rendered by the legal underlying the rules. profession. As a member of a learned profession, a lawyer should cultivate knowledge of the law beyond The legal profession is largely self-governing. its use for clients, employ that knowledge in reform Although other professions also have been granted of the law and work to strengthen legal education. powers of self-government, the legal profession is ARlzONA RULES OF PROFESSIONAL CONDUCT PAGE3 unique in this respect because of the close relationship has a responsibility to assure that its regulations are between the profession and the processes of conceived in the public interest and not in furtherance government ~nd law enforcement. This connection is of parochial or self-interested concerns of the bar. manifested in the fact that ultimate authority over the Every lawyer is responsible for observance of the legal profession is vested largely in the courts. Rules of Professional Conduct. A lawyer should also aid in securing their observance by other lawyers. To the extent that lawyers ·meet the obligations of Neglect of these responsibilities compromises the their professional calling, the occasion for independence of the profession and the public interest government regulation is obviated. Self-regulation which it serves. also helps maintain the legal profession's independence from government domination. An Lawyers play a vital role in the preservation of independent legal profession is an important force in society. The fulfillment of this role requires an preserving government under law, for abuse of legal understanding by lawyers of their relationship to our authority is more readily challenged by a profession legal system. The Rules of Professional Conduct, wbose members are not dependent on government for when properly applied, serve to define that the right to practice. relationship. ·

The legal profession's autonomy caries with it special Reprinted from the Attorney General Ethics Manual. responsibilities of self-government. The profession ROLE OF THE ATTORNEY GENERAL PAGE4

The Office of the Attorney General was created by Arizona statutes require the Attorney General to the Arizona Constitution in Article V, S~tion 1. The render a written opinion upon demand by the Attorney General has no common law or independent Legislature or either house thereof, any public officer power, and may exercise only those powers and of the state, or a county attorney, upon any question duties conferred upon him by the Constitution or by of law relating to their offices. Legal opinions issued state statute. The Legislature has set forth the general by the Attorney General are public records made powers and duties of the Attorney General in Title 41 available for public consumption and the use of the of the Arizona Revised Statutes. As the chief legal Governor, President of the Senate, Speaker of the officer of the State of Arizona and director of the House and any state agency affected by the legal Department of Law, The Attorney General's primary oplDlon. Opinions of the Attorney General are responsibilities include orgaruzmg the office, advisory and they do not have the same effect as employing legal counsel, representing various decisions of a court of law .. departments and agencies of the state, settling claims and lawsuits against the state, .issuing legal opinions In his capacity as prosecutor, the Attorney General on questions of law, and prosecuting certain criminal presents evidence of criminal conduct to the State offenses. The Attorney General employs assistant Grand Jury and prosecutes all indictments returned by attorneys general to support his Constitutional and the jury. Basically, the State Grand Jury and the statutory duties. .. Attorney General have jurisdiction over white collar crime, organized crime, public corruption, and crimes The Attorney General has the statutory duty to advise occurring in more than one county. Examples of the various departments and agencies of the state and such offenses are vi9lations of securities; welfare, coordinate their legal services. As the agency's labor, insurance, and racketeering laws. advisor, he represents the agency in both the enforcement of the agency's statutes, rules and The Attorney General is elected to office for a four­ orders. Because the Attorney General is elected by year term. He is required to have been a practicing the people of this state, he has, in addition to his attorney for five years prior to election. The obligation to represent state agencies, an obligation to Attorney General devotes his full attention to the the people of the state to ensure that the laws duties of the office and neither he, nor his assistant empowering state agencies to act are carried out in a attorneys general, directly or indirectly engage in the manner consistent with their intent as prescribed by private practice of law in an occupation conflicting the Legislature. with their official duties. CHRONOLOGY OF ATTORNEYS GENERAL PAGES

English Perspective. varied from colony to colony. Nevertheless, duties such as preparing indictments for murder, theft, In the Old World, the King of England appointed a mutiny, sedition, and piracy were common throughout "King's Attorney" to perform certain duties and to all colonial establishments. Richard Lee of Virginia initiate actions to recover rent and land, to proceed was the first Attorney General in the New World against individuals who pronounced sentence of (recorded in 1643). Lee, and many subsequent excommunication against royal servants, to guard the Attorney Generals of various colonies, were subjected King's right to present to churches, to investigate to much criticism because of their inability to execute homicide, and to determine what issues pertained to the responsibilities of their positions. One common the Crown. element of this inability resulted from the lack of qualified appointees. Lawrence del Brok is recorded as England's first "King's Attorney." Appointed by King John during In the Carolinas, the Attorneys General provided the mid-thirteenth century, Brok's authority also opinions on various issues when requested by the included initiating legal action to protect state Governor. Statutory laws were implemented from property and employees. Brok also exercised official Sweden, Netherlands, Roman Law and Indian Law. discretion to prosecute serious criminal cases as well Such statutory implementation resulted from the as conduct special investigation at the ~· ..edion of the diversity of the colony's population. executive authority. State Perspective During the late 1200's, royal appointments were made to the first Council of Attorneys and Sergeants From a total of fifty states, thirty-four continued or to represent the King's interests at the King's Bench created an "Office of the Attorney General" which and Court of Common Pleas. In 1461, the Crown was included in their first state constitution. Eight appointed John Herbert as the first "Attorney General other states established the office upon statehood. of England." In the early 1500's under the reign of Today all fifty states, including the six jurisdictions of King Henry m, the Attorney General served as a the District of Columbia, American Somoa, Guam, liaison between the House of Lords and the House of the Northern Mariana Islands, Puerto Rico and the Commons. As years passed, the Attorney General Virgin Islands, have an Attorney General or Chief gave legal advice to all departments of state and Legal Officer. appeared in court on their behalf. Thl'.oughout the r years, the Attorney General became less the King's Arizona Perspective Attorney, but more a public official responsible for justice. In 1861, Arizona was established as a Confederate Territory. Upon this establishment, M. H. McWillie Colonial Perspective was appointed ~s the Attorney General for the Confederate Territory of Arizona. In subsequent Much of the New World Attorney General's years the following distinguished individuals have responsibilities were patterned from the Old World served as Attorney General of Arizona: concepts. A Colonial Attorney General's duties CHRONOLOGY OF ATTORNEYS GENERAL PAGE6

TERRITORY

Coles Bashford 1866-1866 Office Abolished 1867-1870 James E. Mccaffrey 1871-1874 Office Abolished 1875-1882 Clark Churchill 1883-1886 Briggs Goodrich 1887-1888 John A. Rush 1889-1889 Clark Churchill 1889-1890 William Herring 1891-1892 F. S. Heney · 1893-1894 T. D. Satterwhite 1895-1896 J. F. Wilson 1897-1897 Cassius M. Frazier 1897-1898 C. F. Ainsworth 1899-1902 Edmund W. Wells 1903-1903 Joseph H. Kibbey 1903-1904 E. S. Clark 1905-1908 John B. Bright 1909-1911

STATE

George Purdy Ballard 1912-1915 Wiley E. Jones 1915-1921 W. J. Galbraith 1921-1923 · John W. Murphy 1923:-1929 K. Berry Peterson 1929-1933 Arthur T. LaPrade 1933-1935 John L. Sullivan 1935-1937 Joe Conway 1937-1945 John L. Sullivan 1945-1948 Evo DeConcini 1948-1949 Fred 0. Wilson 1949-1953 .. Ross F. Jones 1953-1955 Robert Morrison 1955-1959 ' Wade Church 1959-1961 Robert W. Pickrell 1961-1965 Darrell F. Smith 1965-1968 Gary K. Nelson 1968-1973 N. Warner Lee 1974-1975 Bruce E. Babbitt 1975-1977 John A. Lasota 1978-1979 Robert K. Corbin 1980-1990 Grant Woods 1991,- SUMMARY OF ATTORNEY GENERAL OPINIONS PAGE7

OVERVIEW oplfilon. Rarely has an opinion been issued with only an 11 R" number. There is a conversion table, Legal opinions have been issued by the Attorney however, at the Attorney General's Law Library and General since 1883. Arizona Revised Statutes § 41- at the Department of Library, Archives and Public 193 (A)(7) authorizes the Attorney General's Office Records to convert the citation into the proper 11 I 11 to render opinions to the Legislature, state public number. In addition, some letter and concurring officers and county attorneys on legal questions opinions have been designated with a suffix. Letter pertaining to their offices. opinions had an 11 L 11 suffix (e.g. 72-9-L) from 1953 to 1973 and concurring opinions a "C 11 suffix (e.g. There are three types of Attorney General opinions: 62-1-C) from 1962 to 1976. Since that time only 11 R 11 formal, letter and concurring. Formal opinions and 11 I" numbers have been used. concern issues of major statewide importance. Letter opinions are those of limited importance. Concurring Written opinions are issued to public officials on opinions are those issued on various school matters questions of law relating to their offices. Opinions by county attorneys and II concurred II by the Attorney are never issued on any matters pending before a General. ARS § 15-253 (B) and 15-1448 require that court and are not generally given on the copies of school opinions written by county attorneys constitutionality of legislation. Opinions of the be furnished to the Attorney General. The Attorney Attorney General are advisory only and not judicially General may concur, revise or decline to review the binding. Public officials, however, are protected opinion. Failure to act within 60 days results in an from personal liability for any official acts based on opinion's affinnation. a good faith reliance on these opinions.

If the Attorney General affinns an oplfilon, it is ARS § 39-121.0l(D)(l) authorizes the Attorney applicable for the entire state. But if the Attorney General to make copies of these opinions available for G~neral denies an opinion, it is applicable only for public distribution. Although requests for opinions the issuing county. regarding violations of conflict of interest laws are confidential, the issued opinion is a public record An opinion rendered by informal letter is also (ARS § 38-507). considered a legal opinion. The content, however, is protected by attorney-client privilege and is not for SUMMARY OF ATTORNEY GENERAL public distribution .. Legal advice rendered orally is OPINIONS · never considered an official opinion. 92-005 (R92-006) July 7, 1992 - Proposed School The procedure for issuing an opinion is as follows: Districts The First Assistant Attorney General assigns a request to an Assistant Attorney General for research and The Attorney General concurred with the opinion put writing. Each request is assigned an 11 R 11 number for forth in an April 21, 1992 Opinion Letter which reference (e.g. R90-001) . The draft opinion is stated that, with regard to districting, the specific reviewed and edited by the Attorney General's boundaries of the proposed districts should have been · Opinion Review Committee. The opinion must then defined and approved by the participating districts' be approved by the committee and the First Assistant governing boards and submitted to the voters for Attorney General before it is forwarded to the approval in the general election of 1990. Approval Attorney G~neral for final review and signature. should occur before governing board members are elected from the newly constituted district. All Once an actual opinion is issued, and "l 11 number is participating school district governing boards must designated and the opinion filed (e.g. 181-111). Both approve the boundary lines pursuant to ARS § 15- 11 R" and 11 1" numbers are usually found on an 393(A)(l). The boards may implement an alternative SUMMARY OF ATTORNEY GENERAL OPINIONS PAGES

election system under ARS § 15-393 (B). The 93-001 (R92-001) January 15, 1993 - State Hatch Attorney General revised the opinion to indicate that Act since the redistricting plan was not sufficiently specific in the initial definition of boundaries of the The question of whether state employees may work single districts, a new plan should be formulated on an election board depends on the nature of the pursuant to ARS § 15-393 . . position and the manner of appointment to the election board. 92-006 (R92-049) July 8, 1992 - County Library Systems 93-002 (R93-009) June 23, 1993 - County Parks' Rules The Attorney General, in revision of an opinion to the President of Northland Pioneer College, The Arizona Attorney General need not certify county concluded that in absence of statutory authority to parks' rules under the Administrative Procedures Act, operate a county library system, a community college nor must the rules be filed with the Secretary of district is not authorized to enter into an agreement State. with another county agency or entity under which the community college district would undertake to operate 93-003 (R93-008) July 28, 1993 - Resign-To-Run a countywidf? free library system. Laws

92-007 (R92-008) July 31, 1992 - Open Meeting Creation of a local, state, or federal exploratory Laws committee to consider the possibility of candidacy by an incumbent not in the final year of his tenn does Advisory committees created by the Governor, by not violate Arizona's resign-to-run laws. However, issue of executive order, !1fe not public bodies and, the mere creation of the committee does not therefore, not subject to open meeting laws. automatically shield the incumbent from the resign-to­ run laws if other statements or conduct constitute a formal public declaration of candidacy. I> i ARIZONA DEPARTMENT OF LAW Office of the Attorney General ~....._ Administration Division ~ n~

.~ ~ .. ~ ~ Grant Woods ~ Attorney General

Flnt Asslstant Attorney General Robert B. Carey

Communications Elections and Opinions Inter:ovemmental Affaln Legislative Affain Regional Offices Steve Tscffos John MacDonald

·~ ~ \0 > • I ARIZONA DEPARTMENT OF LAW ; Office of the Attorney General ~ Administration Division ~ Management Services ~

,i

Grant Woods Attorney General

Chief of Administration 00. Thomas G. Augherton ; n tr1 Jim E. Sawyer Paul A Akers Douglas D. Caddell Harold L. Evans Lucy A Trujillo Cl)

Facilties Management Budget Operations Client Services Employee Relations

Administrative Operations Purchasing Technical Services Employee Benefits

General Ledger Application Senices

Accounting Operations ~ ~ i,,,,,,,. 0 ADMINISTRATION/MANAGEMENT SERVICES PAGE 11

ADMINISTRATIVE SERVICES SECTION to be a challenging undertaking.

The Administrative Services Section is responsible for INFORMATION SERVICES SECTION managing, staffing and implementing the central· services to the office. These services include The Information Services Section is responsible for facilities management, mail services, photocopy the planning, design, implementation, operation and services and reception for Management Services . . The maintenance of all computerized information systems section also researches and initiates many of the within the Office of the Attorney General. During ,Attorney General's Office operating policies and the past year the section has continued its focus on procedures. improving client service and applying Local Area Network (LAN) technology as a long-tenn Employee safety and building security continue to be replacement to its aging computer infrastructure. The a top priority for the Administrative Services Section. Office's computer facilities are structured aro·und an As security procedures and equipment were finalized intrastate network of ten medium- to large-sized for the Law Building, they were immediately put into WANG computers and seven. LANs. An eighth LAN place in the Capital Center Building. The Capital is in the implementation stage. The Office's older Center improvements, including the installation of a systems and their associated software are negatively new, more reliable security access system, were made impacting the ability of the Office to remain with the cooperation and assistance of building co­ competitive against outside counsel. tenants, the Arizona Department of Water Resources. In addition, Capitol Police Officers were hired on an The twelve person Infonnation Services staff off-duty basis to provide visible security support in reorganized in March 1992 to increase its ability to the Law Building and Capital Center Building. serve its clients. This restructuring resulted in a shift of personnel from back-room operations to front-line FINANCIAL SERVICES SECTION support of the Office's staff. In conjunction with this client services orientation, the Information Services The Financial Services Section has primary Help Desk was established to provide office personnel responsibility for accounting, budgeting and with a single point of contact for all computer related procurement for the Office of the Attorney General. problems. The section also established a new training The section has been significantly impacted by the center which provides fonnal training to all office July 1, 1992 implementation of the Uniform personnel in office-specific areas of computer use. Statewide Accounting System (USAS). A large These efforts have continued and have been improved ·number of staff hours have been spent training staff upon during the past year .. The section's staffing to utilize USAS and to change internal procedures to level has remained constant since 1985 although more effectively interface with the system. A lot of computer usage has increased by over 750 percent. time was also spent designing spreadsheets to fill the gap between the reporting capabilities of VSAS and In the . prior fiscal year a program was begun to the financial management requirements of the agency. identify and prototype new LAN computer technology We are hoping the implementation of PC to eventually replace existing WANG VS systems, a DATAQUERY will reduce our reliance on this process which is occurring throughout the legal manual · process of transferring data from various industry. In July 1992 a successful model using the USAS reports to internally generated spreadsheets. Banyan VINES operating system was implemented which allowed the section to confirm the office's Continued emphasis is being placed on developing overall technological direction and acquire requisite service measurements to enable the agency to more technical skills. During the past year additional objectively access the financial impact of decisions. Banyan networks have been implemented. All LANs Translating activities into measurable data has proven and WANG systems are integrated into an office-wide ADMINISTRATION/MANAGEMENT SERVICES P AGE 12 network. This network uses the office's large In a recent poll taken by the American Association of WANG system as a . server for office-wide Law Libraries a firm with 120 or more lawyers has applications. Additional network implementations are an average library support staff of ten, but not less based upon available funding ~nd usage restrictions than seven. We provide a hybrid of services to our identified by the funding source. lawyers comparable to, if not more comprehensive than any of the largest firms in the State of Arizona, LIBRARY /RESEARCH SERVICES SECTION with a staff of two.

The Library/Research Services Section is responsible PERSONNEL SERVICES SECTION for providing research, reference, consultation, support and inter-library loan services, as well as The Personnel Services Section is responsible for a expert computer research assistance and training on myriad of employment functions . These functions Lexis and .Westlaw, to the Office of the Attorney include, but are not limited to, personnel recruiting, General. Extensive legal reference and emergency applicant evaluations, preparation and certification of research services are performed daily in the areas of hiring lists, employee orientation, employee Criminal, Administrative Law, Child Support counseling, consulting on personnel rules and Enforcement, Civil Rights, Prison Law, Tort, applicable statutes, coordination of employee benefits, Eminent Domain, Consumer Fraud, Real Estate and conducting exit interviews, maintenance of personnel i? any other area requested. files, computer inputting of personal/position information data in the Department of Additionally, the Library staff continually reviews all Administratio11' s Human Resources Management Arizona cases from the appellate courts and all other System, as well as our own system, preparation of jurisdictions, state and federal, as well as any rule or computer reports, employee and/or position status statute changes, to keep abreast of the most recent changes, workforce analysis studies, grievance legal occurrences locally as well as throughout the procedures, fingerprinting, coordinating of activities United States. associated with performance evaluations, conducting training programs on the Employee Performance The limited staff accepts and completes more than Appraisal system and Personnel Action Request 2,400 requests per year. System, and performing other activities that are common to a personnel operation. ATTORNEY GENERAL'S WORKFORCE COMPOSITION PAGE 13

This administration is committed to increasing the from 4.85% (11 staff members) to 9.59% (26 staff percentage of racial and ethnic minorities in its members), which represents an aggregate minority workforce. Particular emphasis has been directed increase of 15 attorneys. toward our attorney staff where significant gains have been made in our goal to achieve a diverse The following graphs reflect our workforce demographic representation of all minority groups. composition. Graph A illustrates attorney workforce composition, Graph B illustrates support composition During the past three years, our minority attorney and Graph C demonstrates the combined workforce staff (excluding non-minority females) has increased composition.

GRAPH A Attorney Workforce Composition

(43.9%) Non-Minority Female

· (5 .5%) Minority Female

(4 .1%) Minority Male

(46.5%) Non-Minority Male ATTORNEY GENERAL'S WORKFORCE COMPOSITION PAGE 14

GRAPH B Support Workforce Composition

(59.6%) Non-Minority Female

(4 1%) Minority Male

(19.5%) Non-Minority Male (16.7%) Minority Female

GRAPH C Combin ed Workforce Composition

(53.6%) Non-Minority Fem ale

I ,I (4 .1%) Minority Male I

(12.5%) Minority Female

(29.8%) Non-Minority Male

I (j ARIZONA DEPARTMENT OF LAW Office of the Attorney General ~ Civil Division ~ ~ Grant Woods ~ Attorney General ~

Chief Counsel Leslie Hall

Administrative Licensing Land & Natural Transportation Law Section Enforcement Resources Section Thomas McClory Section Section Richard Allemann Chief Counsel Montgomery Lee Diane Hienton Chief Counsel Chief Counsel Chief Counsel

Solicitor General Consumer Tax Section Insurance &Opinions Protection & Gale Garriott Defense Section Section Antritrust Chief Counsel Tom Prose Rebecca Berch Section Chief Counsel Chief Counsel Sydney Davis Chief Counsel

Health Services Consumer Fraud Corrections/Civil Tax Rights

Education Civil Income Tax Liability Defense Racketeering

Procurement Agency Proper:ty Tax

~ Employment Law Antitrust Motor Carrier and Fuel Tax > ~ General Law Collection i,,,-. Enforcement ~ CIVIL DMSION PAGE 16

ADMINISTRATIVE LAW SECTION part, on the schedules issued and approved by DHS.

The Administrative Law Section provides legal Southwest's challenge encompassed events from 1985 representation to a large number of entities including when it was a participant in a hearing before DHS to the Governor's Office, the Secretary of State, the be granted an initial Certificate of Necessity and. to Courts, the Board of Pardons and Paroles, the establish initial rates, fares and charges. The Department of Health Services, the Department of complaint included the period through September, Education, the Department of Administration, and 1991, when an amendment to A.RS. § 36-2239 numerous smaller agencies and boards. Additionally, became effective and authorized Southwest's most the section provides services fot virtually all state controversial billing practices. agencies and boards in the rule certification process and the employment grievance process. The Superior Court determined that the schedules issued by DHS should have been adopted as rules The Administrative Law Section is divided into five pursuant to the Administrative Procedures Act. This units. Additionally, several lawyers with the section Office filed a Notice of Appeal on behalf of DHS to an; assigned to special projects. The units are the obtain clarification o{ whether the DHS may lawfully Health Services Unit, Procurement and Contracts adopt the schedules as part of an adjudicative rate Unit, Education Unit, Empioyment Unit, and General setting proceeding or whether it must employ rule Law Unit. making to adopt a schedule after it approves a change in ambulance service's approved rates, fares and Health Services Unit charges in an adjudication.

This unit includes four full-time attorneys and one Southwest filed a Motion to Dismiss the Appeal half-time attorney, a full time paralegal and a alleging that the Court of Appeals lacked jurisdiction paralegal trainee funded through a Tribal JTPA grant. over the case because the Decision was final since the The unit handled a number of significant matters and amount of fees had not been set. The Court of issues during the year: Appeals rejected that argument but suspended jurisdiction for the Superior Court to set the amount Southwest Ambulance, Inc., v. Arizona Department of of attorneys' fees. The Superior Court established Health Services the amount of fees to which Southwest was entitled. This Office filed its opening brief with the Court of Southwest Ambulance, Inc. filed a complaint Appeals and Southwest recently filed its response. challenging the ambulance service schedule issued by the Department of Health Services (DHS) approving In The Matter of the City of Tucson d/b/a the City of the services and rates that Southwest was authorized Tucson Fire Department to provide and bill. An ambulance service schedule is required by DHS rules that requires that DHS The City of Tucson filed an application with the DHS issue such a schedule as a prerequisite for providing to become a certificated ambulance service providing any service to the public. advanced life support (ALS) services within the city's legal boundaries. During the past six and a half Southwest initiated this civil challenge after learning years, the city had allegedly operated an illegal that the Criminal Division of the Attorney General's ambulance service when it transported · patients on Office has scheduled the presentation of a case. to the which it initiated ALS treatment without a statutorily State Grand Jury that Southwest and its owner required Certificate of Necessity, Ambulance Service fraudulently billed Medicare and AHCCCS, the License and Ambulance Registration Permits. This state's insurance program for the indigent, for Office represented DHS in the pre-hearing and ambulance transports. The criminal case relied, in administrative hearing phases which included the CIVIL DMSION PAGE 17

presentation of DHS' case in support of the because, Defendant's counsel states, Ms. Ford wants application. The Hearing Officer recommended that to be "exonerated." Ms. Ford's deposition revealed the city be awarded a Certificate and a Decision by that her insurance carrier is paying for the litigation. the DHS director is expected shortly. Plaintiff's Motion for Immediate Settlement State v. Corliss Ford Conference was filed with Superior Court on July 8, 1993. A case that received attention from the news media was State v. Corliss Ford: Ms. Ford had been J.K. v. Caldwell (formerly Josh L. v. Symington) operating various unlicensed residential elder care homes for over two years. DHS had issued several An important case continuing from last year was Josh administrative orders and had imposed $14,000 in L. v. Symington, a class action lawsuit in the U.S. civil penalties on Ms. Ford, all of which she ignored. District Court, originally filed in May, 1991. The She filed bankruptcy just after the civil penalties Complaint was amended in March 1992 and became final. It became clear that she was not going denominated J. K. et al v. Caldwell et al. Arizona to obey administrative orders. During February, Center for Law in the Public Interest and Southern 1992, DHS monitoring visits founds some disturbing Arizona Legal Aid were substituted of plaintiff's evidence of neglect. A Cease and Desist Order was counsel. In the Amended Complaint, plaintiffs issued by DHS at the end of March 1992 and was alleged that adequate mental health services are not ignored by Ms. Ford, she did not request a hearing or provided to children in Arizona who are entitled to judicial review. treatment and who are eligible for Title XIX (Medicaid) services. The gravamen of the Complaint In May and June, DHS again found a pattern of is that the approved rates are insufficient to enlist neglect in Ms. Ford's home. Because DHS can only enough providers to meet the needs of eligible prohibit unlicensed activity and the Attorney General children; providers claims are not paid timely, is the only person who can bring elder abuse and causing providers to refuse to accept or continue with neglect charges and receive permanent injunctions, Title XIX clients; a sufficient provider network is not DHS requested that the Attorney General institute an available to provide all medically necessary mental action based on elder neglect which would preclude health services to all eligible clients in a timely Ms. Ford from ever operating a home again. manner; and the amount, duration and/or scope of medically necessary services is arbitrarily reduced · On June 12, 1992, a temporary restraining order was due to the client's diagnosis of mental illness and/or issued and a criminal investigation started against Ms. developmental disability. AHCCCS is a co­ Ford. A week later, preliminary and permanent defendant. injunctions were issued which bar Ms. Ford from operating a borne until the outcome of the, neglect Since answering the Complaint, DHS has argued that proceedings, which will probably go to trial in the the system which the Complaint addresses is not the near future. The state alleged that Ms. Ford delivery system as it exists currently, and has neglected and severely injured three of her residents attempted to demonstrate that DHS has implemented from February through June, 1992. vast changes in the mental health service delivery system. DHS responded to general discovery Depositions of Defendant's and Plaintiff's witnesses requests. A discovery · stay was effected in June have been taken with exception of Plaintiff's expert 1992. witness, which is scheduled for July, 1993. The original trial date of July 19 has been continued to In November 1992, as a condition to continue the August 16. By letter dated July 6, 1993, DHS stay, DHS agreed to participate in visits to each of proposed terms of settlement which was rejected the local mental health agencies (RBHAs) with CIVIL DMSION PAGE 18

plaintiffs' counsel. The purpose of the visits was to dollars. Motions for Summary Judgment was give plaintiffs' counsel a perspective on how the submitted argued and granted in favor of DHS in system was really working. OHS' condition was that Caldwell and DHS v. ADAPT on October 13, 1992, "infonnation gleaned from the interviews is only which resulted in recovery by the state of an addition admissible if plaintiffs can otherwise establish the sum in excess of one million dollars. infonnation through nonnal discovery. " Roe v. Beveridge et al. In addition to the attorneys' RBHA visits, OHS was treated to a visit by the federal review agency, U.S. On August 13, 1992, a Complaint was filed in Pinal · Department of Health and Human Services, health County Superior Court No. CIV 40638 challenging Care Financing Administration (HCFA). The draft DHS' new policy requiring all contracted providers to report issued after the HCFA review found numerous submit personally identifying infonnation to DHS deficiencies in the management of Title XIX mental regarding clients who receive state subsidized mental health services by the 'state, acting through DHS and health services. The challenge is based on · the AHCCCS. As a result, plaintiffs' counsel filed a anonymous plaintiff "Jane Roe's" constitutionally Second Amended Complaint (adding two named protected privacy rights and certain federal plaintiffs and alleging an additional area of non­ regulations. It included a contract claim by the compliance with federal regulation involving appeals) provider Tri-Community Counselling Services and and Motions for Class Certification and Summary sought· a preliminary injunction and declaratory Judgment. The Motion for Class Certification was judgment. Answer was filed and the injunction briefed and argued on June 21, 1993. The Court request denied. Numerous motions have been filed entered an Order certifying the class on June 28. seeking to focus of the litigation according to the Cross-Motions for Summary Judgment will be argued point of view of the various litigants, including cross­ on August 2, 1993. Specifically, plaintiffs alleged -a motions for summary judgment. A protracted trial is complete denial of adeq~ate behavioral health services anticipated by the end of this year if the summary in the Tucson area. judgment motions are not dispositive.

DHS v. ADAPT Arnold V. DHS

In May, 1992, two "Entities" (private, non-profit DHS, the Arizona State Hospital (ASH) and the corporations) with which DHS contracted to provide Maricopa County Board of Supervisors (County) are community-based behavioral health care in specific defendants in Arnold v. DHS, a class action suit that geographic areas of the state (ADAPT and CCN) requires the defendants to provide community services were identified as retaining funds that were .to have to the seriously mentally ill as proscribed by A.RS. been used for patient services, but were instead § 36-550 et seq. The final compliance agreement in eannarked by the Entities to be used for unauthorized the case, reached on May 6, 1991, placed 246 purposes (severance pay, etc.). Both ADAPT and individual requirements on the defendants to be CCN indicated that they considered the money to be accomplished over a five-year period. This theirs for their administrative costs, despite their compliance agreement is called the Implementation contractual obligation to the contrary. The Health Plan. The Implementation Plan was entered as a Unit coordinated the preparation and filing of a court order, and therefore, defendants' noncompliance Complaint and Request for Temporary Restraining with any of these tasks may result in court sanctions. Order and Pennanent Injunction, seeking to restrain the Entities from spending any of the funds before The Court Monitor in Arnold issued her third and trial, and to have the funds returned to DHS for the fourth progress reports (November 1, 1992 and May use intended. CCN subsequently stipulated to return 17, 1993). Compliance as reported in the third report the funds, which amounted to over one million was "uneven." The Monitor reported that although Civa DMSION PAGE 19

major system changes had been rapidly implemented, Many of the foregoing recommendations are outside attention to improvement at the client level and the the statutory control and authority of DHS. required II smooth transition II of these changes had not Consequently, at a rec~nt status conference, Judge occurred. The third report found defendants' Dougherty requested the presence of the Governor's compliance, specifically at the client level, severely Office to address these issues as well as the lacking. The fourth compliance report showed Governor's commitment to the Implementation Plan. increased stabilization. The Monitor expressed The Governor's Office declined to appear in person, concerns regarding the · management of the current but corresponded regarding its willingness to administrative system, including problems with coordinate these inter-agency issues. provider contracts and payment, organizational difficulties between the Regional Behavioral Health The Attorney General's Office has been primarily Authority (RBHA) and the case management agency, responsible for representing DHS and ASH in Arnold. and difficulties of the parties in reconciling system Outside counsel is also provided. The attorneys have compliance issues. However, she also noted participated in every phase of the Implementation improvements in the system of care for the seriously Plan including but not limited to participating in each mentally ill in Maricopa County during this reporting meeting, court appearance and negotiation session, period. Moreover, the Monitor attributed the major drafting and negotiating all contracts participating in problems encountered to the RBHA, rather than drafting the rules and implementation plan and . DHS. providing DHS with legal advice on all issues raised by the Center for Law in the Public Interest and the A fifth report from the Monitor's office is anticipated Court Monitor. DHS has relied and is continuing to during the fall of 1993. Judge Dougherty has stated rely on the Attorney General's Office daily to in open court that if the defendants cannot participate in every level of the planning and demonstrate significant improvement in compliance at implementation process. that time, he will order and evidentiary hearing. Representation of Arizona State Hospital The Monitor's office has expressed the need for support from the Governor's Office, the legislature On a daily basis, the attorney who represents the and other agencies (i.e. Department of Economic Arizona State Hospital (ASH) is called upon to give Security, AHCCCS) for DHS' efforts to comply with advice on the general operation of the hospital. In the Implementation Plan. DHS requested $20 million addition, she prosecutes approximately 15 civil in new FY 1994 funding for the seriously mentally commitment hearings per month and also appears ill. No new state funds were received. As a result, regularly in criminal court regarding not guilty by the Monitor has requested an increase of outside reason of insanity acquittees who are seeking their available resources for expansion of services in FY release from the hospital, and before the Juvenile 1994 by at least $15 million. The Monitor suggests Division in matters relating the commitment of court that such an increase could be accomplished wards to ASH. throughout he intensified efforts of other state agencies, to-wit: an increase in the categorical The attorney has significantly changed the procedures eligibility for Medicaid, an increase in the vocational for handling civil commitments and discharges, rehabilitation intergovermental service agreement, an judicial reviews, having patients brought back to the increase in Title XIX capitation rate, etc. The hospital from outpatient treatment (if they fail to Monitor has also recommended that DHS forward to comply with the conditions of their release), tracking the Governor, as its first priority, an increase of at guardianship renewals, and processing criminal least $25 million for the statewide community service matters. She has streamlined the affidavits used in system for the seriously mentally ill for FY 1995. court proceedings, so that they are more tailor-made for the particular basis of commitment, and so that CIVIL DMSION PAGE 20

there is less room for confusion in the evaluation in these cases. process. Of great significance to the relationship between this Office and ASH administration was a This past legislative session, the ASH attorney series of meetings, established by the ASH attorney participated in the drafting of a bill that repealed the and facilitated by a systems analysis expert who she "not guilty by reason of insanity finding" (NGRI) and recruited. A detailed analysis of the procedures and substituted a new finding of "guilty except insane" policies regarding the flow of paper between ASH (GEi). Although a similar bill was introduced the and the Attorney General's Office was performed. previous year that failed, this year's statute passed and will become effective in January 1994. In The ASH attorney is actively involved in ongoing addition to changing the standards under which an continuing education for hospital staff and family individual can claim criminal insanity, the statute groups to understand· the commitment process and establishes a psychiatric security review board meets weekly with the Superintendent and Chief (PSRB), which will review discharge requests from Medical Officer of ASH to discuss issues with them. patients who have been found to have committed crimes involving serious physical injury or death. We have worked with the Maricopa County Superior Under this new stati;te, it will be ·necessary to seek Court this year to attempt to persuade the Court to approval for discharging such patients from the hold hearings for court-ordered treatment involving PSRB, rather than the courts. Because there are ASH patients at the hospital. Since there is a great numerous patients already .committed under the prior deal of inconvenience that results from having statute, the hospital will be required to operate a dual hearings off-grqunds, the Court has contemplated system for seeking release of patients found NGRI making this accommodation. This issue has not yet and GEi. been resolved, primarily because there is a lack of funding to achieve this goal. · The Arizona Supreme Court adopted the proposed changes to Rule 25, Arizona Rules of Criminal As a result of the promulgation of new rules of Procedure, which the ASH attorney proposed nearly procedure for OHS following the decision in Arnold two years ago. That rule change should become v. Sam, ASH is now responsible for dealing with effective in the near future. grievances and appeals by patients regarding their treatment. ASH has been involved in one action in The hospital is anticipating an increase in legal work which a patient is challenging the definition of associated with the new "guilty except insane" statute, "serious mental illness" and the type of services that as well as with th~ commitments by tribal courts and sbe should receive to combat anorexia. Although the grievance and appeals processes. It is contemplating hospital is a nominal party in that matter, it has yet to funding an additional attorney to assist with the·ever­ be dismissed from the action. Our attorneys are expanding workload of the hospital. working with a task force of others to revise some of the rules related to court-ordered treatment, and In re Gila County Mental Health No. MH .92-020, grievances and appeals. CA-MH93-003

The attorney representing ASH submitted an article to A petition for spec~al action was filed in a matter in I the Arizona Bar Journal on the subject of not guilty which the Gila County Superior Court waived local by reason of insanity acquittals, which was published mental health treatment requirements under A.RS. § I in the October, 1992 edition. The hospital hoped 36-541, despite language in the statute that reserves that, through publication of the article, there would that discretion only to the Arizona State Hospital be less confusion regarding the handling of these Superintendent. The . Court of Appeals declined cases. There have still been numerous inquiries from jurisdiction. county agencies regarding procedures to be followed CIVIL DMSION PAGE 21

,. The Attorney General then filed an appeal in the resident Native Americans .to the Arizona State matter which addresses the responsibility of the Hospital (A.R.S. § 12-136). The statute was passed counties to provide, and pay for, local treatment for with the last session and represents a most important individuals who are found to be "persistently or step in improving state-tribal relations, because the acutely disabled. " A decision in this case will serve Inter-Tribal Council had been trying unsuccessfully to define the relative responsibilities between the for several year to implement such legislation. As far various counties and the state to provide "local" as we know, no other state has such legislation, and treatment for county residents. Arizona's statute and the procedures to be developed will be viewed as a national model. As a result of the legislation, we have been working with the Inter­ Tribal Council to develop a standard IGA between The Health Law Unit has been extensively involved OHS and the various tribes in Arizona. Although no in helping OHS fine-tune the Adult Care Home rules agreements have been finalized, we have been in order to better protect the elderly residents of those working with the tribes on an ad hoc basis to homes. At the same time, the unit helped the Adult accommodate their needs when they are Care Home Managers Board to write rules contemplating committing a tribal member to ASH. establishing minimum qualifications for managers as We will continue to work on developing these well as curriculum for the manager's training course, contracts and to try to unify the method. by which the and reviewed the Adult Day Care Home rules. tribes commit their members to the hospital.

The Health Law Unit assisted OHS with advice on The unit assumed responsibility for drafting IGAs the Alcohol Concentration, Hearing Aid Dispenser, with each of the Arizona Tribes who wish to contract Home Health Agency, Emergency Medical Services with OHS for the provision of behavioral health Base Hospital, Emergency Medical Technician and services on their Reservation. This has become a Ambulance, Office of Vital Records; Child Care complex task because two state agencies (OHS and Facilities, Disease Prevention, Prepaid Dental plan AHCCCS), two behavioral health programs and Behavioral Health Licensing rules. (Medicaid and fully state funded) and six separate Tribes (Navajo, Pasqua-Yaqui, White Mountain An attorney in the unit has assumed responsibility for Apache, Colorado River Indian Community, Salt processing the certification of AHCCCS rules, which River-Pima-Maricopa and Gila River Indian has experienced lengthy delays in the past. Community) are involved. Each Tribe wishes to implement a program tailored to its own needs and Review of Intergovernmental Agreements capacities which, nevertheless, must conform to the statewide programs being implemented. The Health Law Unit initiated a new contract review procedure with OHS' Procurement Office to expedite We are also actively involved with OHS in drafting legal approval of Intergovernmental Agreements amended IGAs with the Department of Economic (IGAs) and upgrade contract content.' The unit Security and the Administrative Offices of the attorneys responsible for contract approval, review Arizona Supreme Court which have responsibility for the contracts prior to execution and provide input and delivery of behavioral health services to designated training to OHS staff when necessary. Final review populations. is done efficiently because problems are resolved and corrected early in the contract review process. The unit reviewed 256 contracts for OHS during FY 1993. In 1992, two of our attorneys participated in drafting a statute that will allow state courts to recognize tribal Procurement and Contract Law Unit court orders involuntarily comm.itting Reservation CIVIL DMSION PAGE 22

The Procµrement and Contract Law Unit has three As in prior years, the Department of Education and full-time attorneys. The attorneys are responsible for Board of Education were parties to major lawsuits in advising all state agencies, in particular the both state and federal courts. Our record in Department of Administration's Procurement Office providing representation in these lawsuits has been · and General Services Division, on contract and outstanding. The stipulated settlement reached last procurement law issues. This activity includes the year in Hodges v. Bishop, a federal class action suit defense of bid protests, contract and lease claims, and by the Arizona Center for Law in the Public Interest construction contract disputes. over residential placement of special education students, remains in effect. The unit has devoted The unit has also been given the responsibility for hundreds of hours in consultation with the providing day-to-day legal services to the Department's Division of Special Education to ensure Departments of Commerce, Tourism, and the State compliance with the stipulation, as well as with state Lottery. and federal statutes, in the provision of special education services. As a result of these efforts, the The reporting year is the unit's first full year of Department has developed a systematic approach to operation. In this period, the attorneys provided special education matters; this has served special direct review of over 1 ,4:50 contracts, grants, IGAs education students and avoided costly litigation for the and interagency support agreements, with a total state. value in excess of $210,000. The unit also prevailed in Dreher v. Amphitheater In addition, the unit was heavily involved in several Unified School District and Bishop, another action significant issues. The unit assisted the Governo(s over the provision of special education services. In Office on contract issues relating to Indian Gaming this matter, we successfully urged that the Federal Compacts. Substantial assistance was provided to the District Court adopt a more equitable interpretation of Department of Transportation regarding privatized toll federal statutes defining the role of the Department of road proposals. Further, the unit participated in a Education in the area of special education. major revision and simplification of the Standard Terms & Conditions utilized in all state goods and We expect to be equally successful in pending services contracts, as well as the complete revision of litigation as well. We have advanced an aggressive the contract form utilized for both state and school defense in Miranda v. State Board of Education, a district facility construction. newly filed Federal Court action over funding for bilingual education. Additionally, we continue to Education Unit zealously represent the Department in special education appeal matters, as exemplified by Poolaw The two attorneys assigned to the Education Unit v. Diane Bishop and Parker Unified School District, devoted much of their time this year to the day-to-day presently before the U.S. District Court. responsibilities entailed in representing the ... Department of Education, Board of Education and the The Attorney General's role in education litigation . Arizona Schools for the Deaf and Blind. These also extends to matters of teacher decertification. responsibilities included regular review (pursuant to The Board of Education bears exclusive responsibility the Attorney General's statutory obligation) of county for professional disciplinary action against teachers attorney education opinions, attendance at all Board found to have engaged in immoral or unprofessional meetings, and daily contact for legal advice to the conduct. Most notable among our successes in this Superintendent of Public Instruction and the Board, area has been Cilley v. Arizona State Board of I including their staff. While time spent in these Education, et al. The Board received substantial -efforts was substantial, it comprised only one element evidence that Ms. Cilley, a school teacher, had of the services provided. former improper relationships with various students, CIVIL DIVISION PAGE 23

and even sanctioned sexual activity between students The Administrative Law Section has the principal at her home. Following a lengthy administrative responsibility for dealing with the administrative proceeding, the Board ordered that Ms. Cilley's hearing process for disciplined and terminated teaching certificate be revoked. We successfully employees. The Employment Unit was created only defended in Maricopa County Superior Court against a few years ago and has been able to handle the a vigorous challenge by Ms. · Cilley to the Board's personnel proceedings for most state agencies. The action and the Board's order remains intact. state has several boards which hear personnel appeals including the Personnel Board, Law Enforcement This year, as in past years, the Board of Education Officer's Merit System Board and Judicial Merit has been active in the area of administrative rule System Board. making; and again, as in past years, we devoted hundreds of hours to aid the Board this year in In recent years, the state has sen a steady increase in researching, drafting and adopting a variety of the number of personnel proceedings probably administrative rules. Our attorneys guided the Board attributable, at least in part, to the economic through its promulgation of rules containing extensive conditi_ons. It is anticipated that in the coming year, guidelines for school districts to follow in the the numbers of hearings .and other demands for legal · administration of cmporal punishment. We also assistance will continue to increase. provided counsel in the enactment of school curriculum waiver rules, affording school districts General Law Unit greater flexibility in instruction over essential skills. The General Law Unit has a combined total of four Currently, we are working with the Board to create full-time attorney positions in Tucson and Phoenix rules which will streamline the function of Board with an additional two attorneys assigned to special advisory committees. The final enactment of these projects. The General Law Unit has a wide range of rules will inevitably result in a more efficient and clients, however, the bulk of the client representation fiscally responsible advisory committee system. involves workfor the Courts, the Secretary of State, Additionally, we provide continuing guidance and and the Board of Pardons and Paroles. expertise in the Board's promulgation of special education rules, to ensure compliance with a complex The unit saw an increased number of lawsuits by and dynamic federal special education law. prison inmates appealing denials of parole applications by the Board of Pardons and Paroles in This year, our education attorneys assumed a primary FY 1993. Additionally, with the reinstitution of the role in numerous other undertakings iat the behest of death penalty in Arizona, the unit has been called our clients. For example, the Department of upon to provide representation to the Pardons and Education and the Board have requested that we Paroles Board at commutation hearings. conduct a_detailed review of procedures presently in effect for the decertification of teachers found to have As a result of its representation of the Secretary of engaged in unlawful conduct. Following our review, State's Office, this unit has been delegated the which includes a survey of other states' procedures responsibility of conducting lobbyist proceedings. and exhaustive legal research, the Attorney General's Recent changes in the laws governing lobbyists have Office will propose extensive revisions to the current placed enforcement in the Attorney General's Office. decertification scheme. The result of our efforts will For lobbyists who violate the law (i.e. failing to file be greater assurances of safety and improved expenditure reports) the Secretary of State notifies the education for public school students. Attorney General who is then authorized to conduct hearings and issue fines against the lobbyists. Thirty­ Employment Unit nine such proceedings were instituted in FY 1993 against lobbyist principles. It is expected that there CIVIL DMSION PAGE 24

could be as many as several hundred proceedings result of the combined efforts, not only was the claim which need to be instituted in the coming fiscal year of Centex-Rodgers denied, but the state was awarded against individual lobbyists and lobbyist principles. a similar amount on its counterclaim for problems in the construction. This result is extremely significant Over the last three or four years, the demands for since it demonstrates to contractors doing business services by the Courts have virtually doubled. This with the state that they cannot inflate their bills and has occurred both in connection with employment and expect to receive unearned compensation. personnel matters and in general areas of representation. ·The unit is frequently called upon to Hale and Fuller v. ARCOR Industries, No. 88-15785; defend special actions brought against the Superior 89-15162 (9th Cir. 1993). In this en bane decision, Courts regarding Superior Court polices on the Ninth Circui.t reversed a prior panel decision and assignment of judges and payment of fees. held that the federal Fair Labor Standards Act's minimum wage provi~ion does not include state In addition to specific client representation, the prisoners among its 90,verage. This decision was not General Law Unit is called upon to review industrial further appealed by the Plaintiffs and therefore it is development bond offerings and lease-purchase the settled law in the Ninth Circuit. This is a major agreements. The unit is also responsible for victory for all states in the Ninth Circuit and beyond. managing the rather extensive rules certification process. The certification process employs one Roosevelt School District v. Bishop, Arizona Supryme attorney on a full-time basis·. In FY 1993, the unit Court No. CV-93-0168-T-AP. In this school finance managed to reduce the typical certification time from lawsuit regarding the funding of capital 90 days to 60 days in accordance with legislative improvements, the Superior Court dismissed the mandate. However, this reduction effectively resulted Complaint based on stare decisis because the Arizona in 13 months' worth of certification work being done Supreme Court had in 1978 upheld the school finance in a 12-month period. While this was a one-time scheme in a similar state constitutional challenge. compression of work, it did place extra burdens on Shofstall v. Hollins, 110 Ariz. 88 (1973). The the unit during the fiscal year. ' Arizona Supreme Court has granted Plaintiff's request to transfer the appeal from the Court of Appeals, Special Projects Division One, and it will hear oral arguments later.

The Administrative Law Section participated in a Indian Oasis y. Bishop, Ninth Circuit No. 93-16089. number of special cases which were assigned to it Indian Oasis and Whiteriver, two school districts, either because of expertise residing in the section or challenged the recently enacted state law which because of ties to other work being done by the requires the reversion of a part of their cash balances section. The following is a list of some of the more at the end of the fiscal year. Plaintiffs claim that all significant matters: their cash balances are federal impact aid funds and that the state law cannot take such federal money Centex-Rodgers Construction Co. v. DOA, CIV91- away from them. The U.S. District Court dismissed · 0235. Centex-Rodgers constructed a special the Complaint on standing grounds and the Plaintiffs management unit for the prison complex in Florence. have appealed to the Ninth Circuit Court. It brought a claim against the state in the amount of $2.5 million for "extras" allegedly resulting from Chinle Unified School District v. Bishop, _U.S. changes and delays caused by the state. Although the District Court No. CIV 92-0166 PCT EHC, Navajo state was represented during the arbitration of this County Superior Court No. 92 CV-150. In the two matter by outside counsel, section attorneys were parallel cases, Plaintiffs claimed that the state should heavily involved in gathering information, doing not have reduced their state aid duri_ng the pendency discovery, and assisting in case preparation. As a of the state's application for certification as an 1 CIVIL DMSION PAGE 25

equalized state to the U.S. Department of Education. disputes may impact on Arizona right to ownership of The dispute covers fiscal years 1989 through 1992. these beds. To date, the parties have stipulated that Congress enacted legislation in 1992 which deemed the water rights disputes do not impact on claims or Arizona certified for those years. Plaintiffs argued title to riverbeds. that the legislation did not moot their claim for monetary recovery amounting to several million Colorado River riverbeds. Cases such as Norton v. dollars and that the legislation would · be Arizona, Superior Court No. 87-09328 are still in unconstitutional if it mooted their claim. The U.S. escrow . We have settled these cases for $100,000 District Court has heard oral arguments and a some years ago but due to the complexity of legal decision is expected shortly. descriptions, change of ownership and heirship, the papers are not all in to close the escrow. In the Hancock v. Symington, District Court No. CIV 91- meantime, other riverbeds, including those mentioned 1081 PHX CAM; Zislds v. Symington, District Court in Arizona v. California, are or will be subject to No. CIV 92-2221 PHX RGS; and Excell v. potential purchase by interested parties. Symington, District Court No. CIV 93-186 TUC WDB. These cases are filed by independent CONSUMER PROTECTION AND ANTITRUST candidates for state elective offices. They challenged SECTION all state laws which treat independent candidates differently from party candidates on First Amendment Consumer Fraud Unit and Equal Protection grounds. These cases are awaiting decision by the U.S. District Court. Attorney General Woods throughout his term as Attorney General has placed emphasis upon Arizona v. California, No. 8 Original, October Term enforcement of the Arizona Consumer Fraud Act. 1989. This replay of the long-running Arizona v. This year the Tucson and Phoenix offices received California concerns the boundaries if three Indian more than 10,000 written complaints from consumers. reservations - Fort Yuma, Fort Mohave and Colorado In an effort to resolve more individual complaints, River Indians. The boundaries dispute, if resolved, summer interns were added to the telephone would impact on these tribes' allocation of Colorado conciliation program that is staffed year-around by River water which in turn will affect the states' volunteers. The result of this mcreased effort was allocation of Colorado River water. The Fort Yuma $596,000 in money, goods, and services voluntarily boundary dispute concerns land in Arizona and hence returned to consumers. This was twice the amount Arizona's (non-Indian) entitlement to water rights. returned last fiscal year. The Special Master has ruled in favor of the states on res judicata grounds and it is expected that the tribe In an effort to provide guidance to businesses, will file and exception to that decision when the advertisers and consumers, the Attorney General Special Master's decision on all matters is reviewed adopted advertising guidelines. The guidelines deal by the Supreme Court. As to the Fort Mohave with: truth in advertising, sales, comparative pricing, boundaries, the parties have stipulated and settled the endorsements and testimonials, and bait and switch. controversy, with Fort Mohave Tribe getting some Before their adoption, proposed guidelines were sent additional water rights (coming out of California's to over 300 businesses and associations around the allocation). The Colorado River Indian Tribe's state. Hearings were held in Yuma, Flagstaff, dispute has been heard by the Special Master and is Tucson and Phoenix. As a result of comments made awaiting decision. In both cases, Arizona's interest at the hearings, modifications and improvements were is not water rights since the disputed boundaries are made in the final guidelines. in California. Arizona does have an interest because of the presence of abandoned Colorado River beds are One of the Attorney General's goals is to "protect within these disputed boundaries and the boundaries consumer in their everyday activities. " Thus, false CIVIL DMSION PAGE 26

and deceptive advertising remained a focus for the sweepstakes, promotions and coupon offers that unit. Eleven assurances of discontinuances were consumers routinely receive. Most of these offers are entered between mattress advertisers and the Attorney bogus, offering something consumers do not need or General's Office. The businesses agreed to change requiring them to buy over-priced, worthless trinkets. their advertising and ensure that sales prices actually The campaign urges consumers to take the mail reflected reductions from the price at which the solicitations and throw them away. As part of the mattresses were regularly sold. Similarly, an campaign, consumers were also told how to have assurance of discontinuance was entered into by their names removed from mailing lists to stop the Safeway, Inc. regarding in-house advertising specials unwanted solicitations. on soft drinks. The advertised special price, sometimes denoted a reduced price, but in most cases One specific postcard give-away scheme resulted in a was Safeway's everyday price. Safeway agreed to suit against Allied Marketing Group, Inc. and Audio use the term "special II to only refer to reduced prices. Telecom; Inc. of Texas. Consumers received an "official notice" stating they has won at least two In times of economic recession, credit repair valuable prizes in its sweepstakes clearinghouse companies proliferate. An extensive investigation of promotion. Consumers were urged to call an 800 these companies was undertaken. Over 40 companies number to learn more about their prizes. were contacted. A number had not complied with Unfortunately when the toll-free call was made, statutory bonding requirements and other statutory consumers were told to stay on the line and requirements. As a result of this contact, 12 unbeknownst them were charged $15.60 by Audio companies posted bonds. Six companies promised Telecom. Subsequently, they were sent a bill that consumers that they would improve their credit resembled an actual AT&T telephone bill, falsely profile when, in fact, the companies had no means of leading consumers to believe they were receiving a directly affecting the consumer's credit rating. These legitimate phone bill and must pay it. In the companies were sued and four judgments were judgment, Allied agreed to pay the full $15.60 to the entered and two suits are still pending. appro~ately 3,500 Arizonans who were taken in by this scam. In the area of health care fraud, a California man who promoted a fountain of youth, miracle cure for Arizona joined in multi-state efforts against two drug old age was sued. Gilbert Randolph ran a business manufacturers to assure truth in advertising for over called Health Education Institute, had scheduled eight th~ counter and prescription drugs. An assurance was seminars in Arizona and advertised in newspapers entered into with Sandoz Pharmaceutical, the maker throughout the state. At the seminar, Randolf of Triaminic for allegedly deceptive new and misrepresented that a deep facial rejuvenation process improved claims for its cough syrup. Sandoz had was completely safe, caused no scarring and lasted changed the formula for Triaminic, reducing by half two or three times longer that a chemical peel or the active ingredients and doubling the amount of plastic surgery. In fact, this process uses an syrup. To mask this change, the compa.ny kept the extremely corrosive. chemical and its side effects can bottles the same size, same price, but inconspicuously include infection, scarring and potential cardiac the required dosage while claiming the product was arrhythmias. As a result of the lawsuit, Randolf "new and improved." Sandoz agreed to stop saying agreed never to do business in Arizona again. the product was "new and improved" and to highlight that there was a new and correct dosage. An During National Consumer's Week, Attorney General assurance was entered into with Ciba Geigy regarding Woods kicked off a consumer protection campaign its nicotine patch product. The company agreed to that consists of a simple three-word slogan aimed at change its advertising to accurately reflect the reducing mail fraud - "Just Toss It. 11 The campaign effectiveness of the patch. is aimed at the hundreds of unsolicited flyers for CIVIL DMSION PAGE 27

In an effort to protect legitimate Indian crafts people make antitrust violation in connection with any and dealers, six businesses in Scottsdale, one in government contract per se illegal and a class four Sedona and one near Sanders were sued for claiming felony. .. the products the sold were authentic, hand-made Indian jewelry or rugs, and that the goods were on Arizona, along with 38 other states, participated in 11 sale. 11 In fact, the lawsuit alleged that the goods the settlement of a national cable television antitrust were not Indian made and that most of the companies case, which alleged that joint venturers conspired to were advertising continuous factitious 50% off sales. deter the development of non-cable systems and alternative technologies that could reduce cable Antitrust Unit operator's dominance in the market. This settlement secured injunctive relief that prevented the joint The Antitrust Unit investigates and prosecutes federal venturers from unduly restricting ·access . to cable and state antitrust violation seeking damages, programming. injunctive relief, civil penalties and other remedies on behalf of the State of Arizona, its political Arizona participated in United States Supreme Court subdivisions and consumers within the state. The unit briefing in a case involving 38 states, alleging that also counsels state agencies regarding antitrust major insurance companies had engaged in a boycott matters, particularly relating to government that was outside the protection of federal law procurement and bidding, and a~vocates competition immunizing insurance companies from antitrust law. and free enterprise as a matter of policy before the The Supreme Court recently ruled in the states' favor Arizona Legislature and other public and private on the boycott issue and following remand, the organizations. Antitrust Unit will be involved in this massive litigation at the District Court level. The Antitrust Unit was instrumental in securing a final settlement of the seventeen year old gasoline Arizona also joined with 23 other states and the price-fixing In re: Refined Petroleum Products Virgin Islands in objecting to the settlement of a Litigation, MDL-150, bringing · the total cash private price-fixing case against major airlines, on the settlements achieved in the case to over $138 million. grounds that the settlement was not sufficiently Arizona's share of that recovery, to be divided among favorable terms on reimbursement coupons and in the plaintiff states of Arizona, California, Oregon and reducing attorneys' fees. Washington, will likely exceed $6 million. The Attorney General awarded the Antitrust Unit a The Antitrust Unit was busy with a number of certificate of achievement for its extraordinary efforts involved investigation, including a procurement in the petroleum case. The unit is now pursuing undercover investigation in cooperation with the efforts to recover up to $1. 2 million in attorneys' fees Attorney General's Criminal Division, and with and to seek appropriate distributjon of the settlement inquiries into health care delivery systems, retail proceeds for the benefit of Arizona government gasoline pricing, towing services and a bid repository. entities and consumers. The unit also settle favorable a longstanding bid-rigging case involving the sale of Agency Unit public lands. The Agency Unit provides legal advice and represents Along with the United States Department of Justice, the Banking, Insurance and Real Estate Departments, Antitrust Division, the unit sponsored a procurement and the Securities Division of the Corporation initiative to educate procurement purchasing officials Commission, in judicial and administrative cases. about bid rigging. Bid rigging enforcement has been These cases involve applications for cease and desist a priority of the Antitrust Unit, and due to its efforts, orders, denial, revocation and suspension of licenses, the Arizona Uniform Antitrust Act was amended to and injunctive actions. In addition to litigating cases, CIVIL DMSION PAGE 28

the unit spends substantial time in drafting and Azstar involved a multi-state investigation which the reviewing rules f9r agencies and researching complex unit directed and several months of intense litigation issues involving financial regulation. In connection before the company was placed in receivership. The with the agency assignments, the unit is also unit has continued to work on matters involving other responsible for representing the Arizona Property and insurers that are in receivership. Casualty and Life Disability Insurance Guaranty Funds, Real Estate Recovery Funds, and the Real The Agency Unit also spent substantial resources Estate Advisory Board. pursuing unauthorized insurers in administrative actions in order to protect the public-from possibly Banking fraudulent or non-existent insurance coverage. The unit also spent substantial time in advising the The Agency Unit prosecuted cases on behalf of the Director of Insurance on legal matters and assisting · Superintendent of Banks that involved embezzled trust her in drafting rules relating.to the certification of the funds and fraudulent schemes perpetrated by persons Department by the National Association of Insurance holding escrow, debt collection and debt management Commissioners. The NAIC certifies only those licenses. The unit also prosecuted cases against insurance departmen~s that meet minimum standards persons who failed to obtain licenses in Arizona under relating to legislation, rules, staffing· and various banking statutes. The unit continued to work administrative procedures. on cases such as CSC Financial Services, an escrow company that had a substantial trust account Real Estate deficiency. The unit has provided advice to the Superintendent regarding complicated legal issues The representation of the Real Estate Department w.as involving the interpretation of state and federal primarily directed at administrative litigation and statutes that impact this jurisdiction. providing legal advice on numerous questions directed to the Attorney General by the Real Estate Insurance Commissioner and his staff. Allegations of misconduct and violations by agents and brokers of The Agency Unit has prosecuted numerous various statutes and rules regulating agents and the administrative and civil actions regarding insolvent sale of real estate are usually at issue. The Agency insurers, the issuing of unauthorized and fraudulent unit prosecuted numerous cases involving agent insurance, embezzling funds, misappropriating misconduct, subdivision violations, and license insurance premiums, and other violations of the denials. These cases involve misrepresentation or Insurance code. The unit has also prosecuted many embezzlement by agents, or the failure of subdividers matters involving the fitness of applicants to be to disclose defects in property or to provide licensed as insurance agents. In addition, the unit improvements as represented in subdivision reports. also acts as counsel to the Arizona Property and The unit has begun a project with the Real Estate Casualty and Life Disability Insurance Guaranty Department to review the laws relating to real estate Funds which are under the supervision of the Director brokers and sales persons. of Insurance. In that capacity, the unit filed a declaratory judgment action to determine if Securities guaranteed investment contracts are annuities and covered by the Life and Disability Fund. The Agency Unit represented the Securities Division of the Corporation Commission in actions filed in During the year, the unit filed successful receivership Superior Court, as well as administrative proceedings . actions against insolvent insurers, such as Azstar before the Commission. In most cases, the Superior Insurance Company and . United Life of North Court actions were filed jointly by the Commission America Insurance Company. The action against and the Attorney General to enforce the Securities CIVIL DMSION PAGE 29 and Consumer Fraud Acts, in matters involving Files Opened _ fraudulent investment schemes impacting hundreds of Phoenix 8,495 victims. , Tucson 1,535 TOTAL 10,030 Typical cases involved real estate limited partnerships, precious metals investment programs, Files Closed and investment contracts. The unit also prosecuted a Phoenix 17,856 number of cases involving registered broker/dealers Tucson 1,550 and salesmen for misconduct in sales of securities, TOTAL 19,406 involving suitability and disclosure issues. In the Sales & Marketing Specialist case, the unit D. Antitrust Unit Complaints successfully defended and administrative order in the Arizona Court of Appeals which held that the Sales & Informally Resolved 80 Marketing Company had committed securities fraud Files Opened 19 by operating a pyramid-type scheme. The scheme TOTAL 99 involved an investment coupling the purchase of Files Closed 0 oveipriced coins and the recruitment of other participants. The court found that although the E. Formal Consumer Fraud Investigations (CFI) program was made to appear like a retail sales operation, the evidence showed that it was, in reality, Files Opened 162 an investment scheme. The unit also spent substantial Files Closed 94 time in advising the Securities Division on rules to Total Files Still Open 202 enhance investor protection and streamline the regulation of securities. F. Formal Antitrust Investigations (CFI)

Statistics Files Opened 9 Files Closed 0 The following statistical report demonstrates the Total Files Still Open 13 activity of the Consumer Protection and Antitrust Section. G. Litigation (CPA)

Files Opened 385 A. Telephone Calls Received by the Complaint Files ·Closed 324 Intake Center (CIC) Total Files Still Open 804

Total Calls (Phoenix) 60,867 H. Litigation (CPA - Antitrust) Dropped Calls (Phoenix) 21,960 Complaint Forms Mailed (Phx. & Tucson) 11,483 Files Opened 4 Files Closed 0 Total Files Still Opened 40 B. Telephone Calls and Letters Received by the Antitrust Unit I. Statistics (Number of Persons) CPA

Total Calls and Letters 99 ACCOUNTS/REPORTS Cease and Desist Orders 51 C. Consumer Fraud Complaints (CIC) Injunctions - Corrective 0 Injunctions - General 26 CIVIL DMSION PAGE·30

Injunctions 0 N. Collections (Monetary Judgements and Non- License Denial 51 Judgement Resolutions License Revocations 9 State General Fund $294,138 J. Statistics (Number of Persons) Antitrust Trust Account $1,269,471 Victim - Involuntary $21,308 ACCOUNTS/REPORTS Victim - Voluntary Voluntary Assurances 2 Phoenix (money) $248,160 Settlements 2 Phoenix (value) $84,320 Divestitures 1 Tucson (money) $95,109 TOTAL 5 Tucson (value) $168,821 Revolving Funds K. Judgement' Awards (By Recipient) Consumer Fraud $1,002,140 Racketeering $78,515 Antitrust Revolving Fund $45,860 Banking $151,822 Banking Revolving Fund $130,000 Collection (CLE) $140 Consumer Fraud Revolving Fund $1,140,667 Antitrust $1,082,379 State General Fund $735,098 Other Agency Funds $1,000 Other Agency Fund $109,810 Clerk of the Court $0 Racketeering Revolving Fund $0 Receiver $884,381 Receiver $450,000 Government $0 Restitution Other $9,235 Attorney General Trust Account $830,267 TOTAL $5,390,939 Payments Made Direct $69,176,150 TOTAL $72,617,852 0. Collections (By Type)

L. Judgement Awards (By Type) Restitution $2,768,571 Cost $995,766 Costs (Antitrust) $45,860 Penalties $1,265,031 Restitution (Antitrust) $63,163,356 Settlements (Antitrust) $361,571 Costs $357,610 TOTAL $5,390,939 Penalties $1,757,966 Restitution $7,293,060 P. Attorney/Paralegal Hours Charged (By Client TOTAL $72,617,852 Program)

M. Judg~ment Awards (By Client Program) Antitrust 4,377.6 Arizona Corporation Commission 239.9 Antitrust $63,209,216 Banking Department 1,358.9 Banking Department $642,500 Building & Fire Safety (OMH & FHL) 530.8 Consumer Fraud $1,320,245 Consumer Fraud Enforcement 33,179.4 Insurance Department $250,002 Funeral Board 336.4 Manufactured Housing $4,875 Insurance Department 6,208.9 Funeral Board $15,000 Legislature 0.0 Anti-Racketeering $72,750 Open Meeting Enforcement 34.4 Real Estate Department $212,810 Opinion Review Committee 3.3 Securities Division $6,890,454 Public Information 77.9 TOTAL $72,617,852 Racketeering Enforcement 447.1 CIVIL DMSION PAGE 31

Real Estate Department 4,671.1 Departments provided legal assistance for matters Securities Division (Corp. Commission) 2,219.3 related to the Heritage Fund monies arising from the Division Admin. Matter (CPA) 256.2 initiative approved by Arizona voters. A Heritage Other Clients/Programs 379.6 Fund grant program was developed by the attorney TOTAL 54,~20.8 for Parks. Parks' ambitious program of rehabilitating older parks and building new infrastructure for new LAND AND NATURAL RESOURCES SECTION parks with Heritage Fund monies has increased the legal demands relative to design and construction During FY 1993, the Land and Natural Resources contracts for those projects. Section consi~ted of nine attorneys. One of these attorneys was specially assigned during the entire The attorney for Game and Fish handled several fiscal year to handle matters related to Indian gaming. acquisitions for the department under its Heritage The · remaining eight attorneys provided legal Fund program including the "Winema Property, " representation for the following state agencies: the which contains critical habitat for native endangered State Land Department, Game and Fish Department species. Nearing completion with the assistance of and Commission, Department of Agriculture and the Land and Naturai Resources Section is Game and related councils, Mine Inspector, the Department of Fish's acquisition of the White Mountain Hereford Mines and Minerals, Real Estate Appraisal Board, Ranch at a purchase price of approximately $3 .4 Department of Racing and the Racing Commission, million. The White Mountain Hereford · Ranch and several smaller agencies such as the Oil and Gas contains extensive endangered species habitat as well Commission, State Geologist, Boxing Commission as lush winter range forage for the state's elk and the Prescott Historical Society. The matters population. handled covered the full spectrum of legal representation including trial and appellate court Major Litigation litigation, administrative hearings, transaction negotiation and documentation, rules drafting and The Land and Natural Resources Section continued to general client advisory matters. Some of the areas of handle major litigation stemming from the downturn note during the year include the following highlights: in the real estate market as additional parties sued to rescind their purchases or leases of state trust land. Revenue Generated or Saved In Waddell v. State, suit was brought by the purchaser to void a sale of state trust land and to Representing the state in federal condemnation recoup in excess of $5 million. Judgment in the matters, the Land and Natural Resources Section Superior Court was for the plaintiff on the grounds collected $1,939,147 in condemnation proceeds in FY that the sale violated acreage limitations for sale of 1993. In defe~ding claims of Fann Contracting agricultural lands. The Land Department's position against the Game and Fish Department, the section is that the land was commercial land. The matter has settled the matter for $700,000 less than the claims reached the appellate level and have been briefed and made by Fann, saving that amount for the agency. In argued. addition, section attorneys directly support a major revenue producing agency, the State Land In Princess Plaza Partners v. State, the lessee sued to Department, which reported revenues of $56,721,421 void a long term commercial lease and for the return of new revenue in FY 1993 in addition to over $45 of more than $800,000. The Superior Court held the million in earnings on the permanent fund. sale void because a document showing that the Land Commissioner had appraised the lease value was Heritage Fund missing from the lease file. This ruling has significant impact on all agencies whose records are Section attorneys for th.e Parks and Game and Fish open to the public and has been appealed following CIVIL DMSION PAGE 32

the entry of a Rule 54(b) judgment. The main case northeast Phoenix. The whole community consists of is proceeding to a trial on damages. 5,700 acres. The Land and Natural Resources Section provided extensive legal assistance in the In State v. Klump, the state sued in trespass and quiet structuring of the first · disposition within Desert title after the Klump Brothers recorded a claim to Ridge, which will occur in early FY 1994. Questions ownership of all state trust lands within their ranch of first impression included the mechanism for and locked out Arizona hunters and fishermen. The achieving the installation of millions of dollars of state's effort was don in conjunction with the U.S. infrastructure. Attorney's Office which simultaneously brought suit in federal court to stop the Klump's unlawful In Core North, two auctions were held this year in enclosure of federal lands in the ranch. Judgment on connection with the project. Two separate golf the state's case was entered in favor of the state. The course leases were sold at one such public auction . matter is pending on appeal. Each golf course lease will generate $2,245,000 over their 59-year terms. In addition~ a total of 1,612.44 American Greyhound Racing Inc. v. Yavapai County acres were sold at public auction for the sum of Fair Association and the State of Arizona was an $22,900,000 of whicn $2,290,000 was paid as a down attach on off-track betting on horse races simulcast payment together with $229,000 as a selling and into Arizona from out of state in competition with administrative fee under A.RS. § 37-108. The land dog races. Summary judgment was granted for the sale includes the Land Department's first participation state and is now on appeal. contract under new legislation. Under the participation contract, the Department will receive In Platt v. State, the section successfuUy defended the payment upon subsequent dispositions by the state's right to establish water rights. Both the purchaser of lands in the project. The exact amount Apache County Superior Court and the Court of the Department will receive under the terms of the Appeals, Division Two, ruled that it was appropriate participation contract may vary, but the Department for the Land Commissioner to provide in the lease is guaranteed at least $800,000 in additional income that the establishment of water rights be done in the over and above the amount paid at auction. name of the state. The Platts have filed a petition for review in the Supreme Court; a response has been Central Arizona Pro1ect filed. The Land Department is significantly affected by the Urban Lands - Master Planned Communities current financial problems of the Central Arizona Project (CAP) canal. The state holds a contract for Following enabling legislation, the Land Department municipal and industrial water and also has extensive moved significantly forward this year in the land holdings in CAP agricultural irrigation districts. development of master planned communities of state The Land and Natural Resources Section represented trust land. These extremely complex transactions . the Land Department this year in regard to the were supported fully through negotiation and proposed restructuring of the municipal water documentation assistance provided by section repayment schedule, as well as with respect to tax attorneys. Two of the larger such projects include defaults by state land lessees in CAP irrigation Core North and Desert Ridge. In addition to the districts. In the Harquahala Valley Irrigation District, transactional work generated by these projects, the section is representing the state in negotiations challenges to the projects by third parties have also pertaining to the relinquishment of its CAP allocation given rise to litigation at the administrative hearing under the Fort McDowell Indian Settlement Act. and appellate levels. Although the District distributed the rest of the proceeds directly to all of the other landowners in the Desert Ridge 1s a master planned community in District, it has held up the distribution of CIVIL DMSION PAGE 33 approximately $700,000 related to state trust lands in section continue to assist the Department concerning the District pending resolution of claims by state land the cleanup of aluminum dross in the Tucson/Davis lessees to part of the proceeds. Monthan AFB area and the cleanup chromium contamination at the Hexcel site, among others. Bankruptcies Advice and assistance concerning environmental trespasses, such as the New River auto fluff dump As more and more state lessees declared bankruptcy, was also provided. The Land and Natural Resources the Land and Natural Resources Section found it Sections also works with the Department to provide necessary to handle more bankruptcy matters for the transactional negotiation and documentation in the are Land Department during the fiscal year. An average of lease prov1s1ons containing restoration of 35 bankruptcy matters involving state lessees have requirements, environmental indemnities and similar been pending at any given time during the year. matters. Leases that are assumed by the debtor's estate must be enforced through the bankruptcy court. With the listing of the Mexican spotted owl as a threatened or endangered species, the Land Rules Department required assistance with respect to its timber sales in northern Arizona. The Department, Section attorneys assisted in the drafting and review assisted by the section, is now working with the of numerous state agency rules packages during this Forest Service and federal Fish and Wildlife agencies fiscal year. For Game and Fish, several rules were to ensure compliance with the Endangered Species certified, but the most significant were the watercraft Act. rules. These rules changed and updated the requirements for registration and operation of all The Game and Fish D.epartment is particularly watercraft in Arizona and will have a significant involved in the protection of endangered species impact on the large boating public. within Arizona. As noted above, the section has . assisted Game and Fish in several acquisitions of The Land Department 1s in the process of completely properties containing critical habitat. In addition, revising its rules. This year, section attorneys drafted Game and Fish is the state consulting agency for the a new set of hearing rules for the Department and Endangered Species Act. assisted in the drafting of a new broker commission rule, off-road vehicle rules, and commercial holding Arizona Navigable Streambed Adjudication lease rules. Commission

Extensive rulemaking was undertaken by the Legislation enacted during FY 1993 created the Department of Agriculture this year with the Arizona Navigable Streambed Adjudication assistance of the Land and Natural Resources Section. Commission. The legislation requires the Land In addition to new administrative hearing rules, Department to gather and present evidence to the Agriculture is promulgating new rules in the areas of Commission regarding navigability of Arizona aquaculture, native plants, apiary, citrus, fruit and streams and rivers and the resulting state public trust vegetable standardization, cotton research, orgamc interests in such lands. The section provides the legal fanning, imported red fire ant, and others. assistance to the Department in the gathering and presentation of that evidence. In a related Environment and Endangered Species development, the section has found itself defending more and more eminent domain lawsuits on the behalf As the manager of 9. 7 million acres of state trust land of the state as condemning agencies now name the in Arizona, the Land Department requires· constant state if riverbed lands are involved. assistance in environmental matters. This year, the CIVIL DMSION PAGE 34

LICENSING AND ENFORCEMENT SECTION Accountancy Board

The Licensing and Enforcement Section was staffed In the past year the Accountancy Board's need for in FY 1993 by a chief counsel, twelve staff legal services has grown dramatically. The Board attorneys, two paralegals and six legal secretaries. received 301 complaints regarding issues ranging Section Attorneys provided legal services to state from major audit failures to tax preparation errors to officers and agencies which license and regulate a non-compliance with continuing education variety of professions and occupations. During FY requirements. . Section attorneys represented the 1993 the section was given the task of providing Board in a substantial number of the over 120 legal services to four additional regulatory agencies hearings conducted by the Board and assisted the bringing the total to 30. Board in reaching consent agreements resulting in six revocations, 204 license suspensions and fines This section provided legal services to the following totalling $279,596.00. regulatory bodies: Accountancy Board, Barber Board, Behavioral Health Examiners Board, One of the major cases prosecuted by section Chiropractic Examiners Board, Cosmetology Board, attorneys was against Andrew Ligget, Chief Financial Dental Examiners Board, Homeopathic Medical Officer for American Continental Corporation Examiners Board, Joint Board of Physicians resulting in a 5 year suspension. Section attorneys Assistants, Law Enforcement Officers Advisory also prosecuted the hearing against Richard Denen for Council, Department of Liquor Licenses and filing misleading audits for governmental entities Control, Board o( Medical Examiners, Medical resulting in revocation of Denen's C.P.A. certificate. Radiologic Technology Board, Naturopathic Physicians Examiners Board, Nursing Board, Nursing Behavioral Health Examiners Board Care Institution Administrators Board, Occupational Therapy Board, Dispensing Opticians Board, The section continues to provide considerable legal Optometry Board, Osteopathic Physician Examiners services to the Behavioral Health Examiner Board. Board, Pharmacy Board, Physical Therapy Board, The Board was established effective July 1, 1989. Podiatry Board, Private Post Secondary Education The Board and its four credentialing committees are Board, Psychologists Examiners Board, Racing responsible for the certification of individuals Department, Registrar of Contractors, Respiratory engaging in practices of counseling, marital and Care Examiners Board, Structural Pest Control family therapy. social work, and substance abuse Commission, Technical Registration Board and counseling. Since each of the four credentialing Veterinary· Medical Examiners Board. committees has statutory duties separate and apart from the Board for developing the application The legal services provided by this section include: process, reviewing applications, investigating advising and counseling; writing legal opinions; disciplinary complaints and conducting administrative initiating and defending lawsuits and appeals; hearings, providing legal services to the Behavioral administrative hearings and ot~er contested matters; Health Examiners Board is tantamount to providing drafting and reviewing contracts, bonds and other legal services to five agencies. miscellaneous legal documents and reviewing for certification all · rules promulgated by the client Section attorneys provided legal advice in a num6er agencies. In order to maximize the productivity of of areas including the Open Meeting Law and the available attorneys, the section uses volunteer legal disciplinary hearing processes. Because this Board is assistant interns, joint investigative efforts with other relatively new, a great deal of time in training the law enforcement agencies and a computer assisted staff and the members about public records law. litigation support system. Section attorneys wrote an extensiye memorandum on public records issues that face the Board. CIVIL DMSION PAGE 35

Section attorneys defended the Board in an injunctive revocation of 5 of the 8 chiropractor's licenses, the action brought by a local newspaper for access to the three owners of the clinics are currently in hearing. investigatory files of an applicant for counseling To date, section attorneys have spent over 28 hearing credentialing who was director of Phoenix Memorial days in the Dr. 's Choice Weight Loss matter. Hospital's sexual offender treatment program. The newspaper wanted access to the Board's files and In connection with the Dr. 's Choice Weight Loss executive sessions. A Superior Court judge ruled that case, section attorneys successfully defended at the the files were confidential but that the credentialing Superior Court level the 5 previous revocations committee could not go into executive session to handed down by the Board. Three of the 5 have discuss them. As a result, section attorneys have appealed their decisions to the Court. of Appeals spent a great deal of time with the committee which has created more work for section attorneys complying with the court order. Further, the and staff assigned to that Board. investigation of the applicant has raised complex and new legal issues for this Board. The Board has begun hearings in the cases of those chiropractors who were involved in the AZSCAM Board of Chiropractic Examiners sting. Two doctors have admitted permitting their names to be used on campaign contributions they did While FY 1993 saw a decrease in the number of not make. The Board has determined through our consumer complaints filed before the Board, the prosecution of one of those cases that such conduct number of formal investigations and hearings opened constitutes unprofessional conduct. Also during FY during the year increased by 33 %. However, due to 1993, the Board continued to act on complaints the demands of the Dr. 's Choice Weight Loss regarding chiropractic advertising many of which hearings (described below) only half as many other carried over from the previous fiscal years. administrative hearings were concluded during the current year. Section attorneys were again active during this year in providing the Board and .its staff with legal advice By far, the Dr. 's Choice Weight Loss hearings on an almost daily basis. Additionally, section literally consumed almost all of the Board's attention attorneys successfully assisted the Board in the during this year. As reported last year, the case certification of two separate administrative rules originally involved 8 chiropractors who advertised submissions. extensively for the weight loss program but when the patients arrived at the clinic, they were "converted" Board of Cosmetology to chiropractic patients to enable the chiropractors to obtain reimbursement from insurance companies. The Arizona State Board of Cosmetology has The weight loss program proved to be a farce with jurisdiction over approximately 30,000 licenses little or no pre-diet physical examination or including licenses to practice cosmetology as well as monitoring being performed on the patients. the operate schools and salons. Consequently, this is Excessive and unnecessary x-rays were also taken so an extremely busy Board. Section attorneys attended as to further deceive the third party payers. To make the nine all day meetings held by the Board in FY matters worse, the owners of the clinics began an 1993. Approximately 50 informal interviews were effort to collect account balances from former patients conducted at these meetings. who were told at the time of treatment that the clinic would accept as payment in full whatever the patient's Three hundred sixty three (363) complaints were insurer would pay. This turned out not to be true filed with Board, 68 of which were resolved by which necessitated the amending of the complaint to consent agreements. Section attorneys prosecuted two include 75 additional counts regarding these billing administrative hearings in FY 1993. As a result of practices. Although last fiscal year saw the the informal interviews, consent agreements and CIVIL DMSION PAGE 36

Board orders, in FY 1993 the Arizona State allowed to make three payments and as of this date, Board of Cosmetology placed two licenses on had made its . first payment to the Board of suspension, placed 51 licensees on probation, ordered Cosmetology. The consent agreement also ordered numerous licenses to pay civil penalties in the total the school to be placed on probation for one year and amount of $30,200 and placed 271 letters of concern set out very specific requirements for restitution. in licensees' files. The Board also ordered This restitution will either be monetary or the school restitution in several cases. will attempt to actually assist these students in obtaining their minimum education requirements Section attorneys assisted Board staff in promulgating within 60 days of the effective date of the order. To an ·Infection Control Program. The Board has offered date, the school has shown good faith in fulfilling this seminars to the industry across the State of Arizona requirement. in its Infection Control Program. The desire of the Board is to now put this program into administrative In FY 1993, an Equal Employment Opportunity rules for the Board to implement. Commission (EEOC) claim was brought against the Board of Cosmetology by an applicant who had failed Section attorneys handled several very interesting the practical exam on four different occasions. cases in FY 1993 for the Board. . The Aesthetics Section attorneys prepared the Statement of Position Unlimited case involved a cosmetology school that in response to this claim and assisted the Board in heavily recruited Hispanic non-English speaking complying with the Commission's request for various students. Most if not all of these students were records and documents. As of this date, no response unable to obtain their licenses upon completion of the had been received by the EEOC. program and found themselves owing a great deal of money from student loans even though they had no Because this Board licenses over 30,000 people knowledge that it was loans and not grants that they and/or establishments, Section attorneys are contacted were signing up for. The two owners of the school almost on a daily basis for general legal advice. as well as one instructor were prosecuted in this Presently, two days have been set aside in August, matter. All three of these individuals were placed on 1993 to prosecute approximately 20 Cosmetology one-year probation each for a total of three years. formal hearings. One-third of these cases are The main owner was ordered to pay a fine of $2,000 disciplinary matters and the remaining two-thirds of while the other owner as well as the instructor and the cases are noncompliance cases. Section attorneys main recruiter were ordered to pay civil penalties of have spent a great deal of time in FY 1993 preparing $1,000 each. All three individuals were ordered not these cases as well as preparing the investigators to to solicit, recruit or seek to be involved in the testify in these matters. recruitment of students for any licensed cosmetology school in the State of Arizona for a period of three Board of Dental Examiners years. In addition, all three individuals were ordered ' not to own any school licensed by the Arizona State FY 1993 brought a new era to the legal work that this Board of Cosmetology for a period of three years. office provides for the Dental Board. Approximately

450 complaints. were processed .by the Board, most of In FY 1993 section attorneys also settled the Lamson then;i were cases from previous years. The Board Academy of Hair Design case. This was a made a concerted effort to catch-up on the complaints cosmetology school which prior to closing had and thus, the number of disciplinary actions increased allowed students to enroll without having a proper from previous years. As a result, judicial review educational requirements. A consent agreement was actions in Superior Court increased dramatically. negotiated by the Section attorneys in which the Section attorneys also successfully defended a school was found guilty of 42 violations and ordered Superior Court injunctive action filed by one dentist to pay a total fine of $10,750. The school was in an attempt to stop the administrative hearing CIVIL DMSION P AGE 37

procedure. FY 1993 saw the beginning of some substantial changes for the Arizona Law Enforcement Officer Section attorneys represented the state at two major Advisory Council. In August 1992, the Council formal hearings held by the Dental Board. One of entered into a contract with this office for the fully the hearings lasted four days and involved allegatio~s dedicated services of a half-time attorney. In October of dental malpractice and local anesthetic overdose 1992, one-third of the Council's staff retired to take which contributed to the d~ath of a young, medically- . advantage of incentives offered by the legislature. compromised Hispanic child in Southern Arizona who At about the same time, the Council selected a new had 9 teeth pulled in one sitting at a non-dental office Executive Director. site with portable equipment. The hearing consisted of testimony from 12 witnesses, including six experts. The shortage of staff and a new perspective led the The Board revoked the dentist's license. · Council to delete the four field representative positions. Field representatives had previously kept Another major formal hearing was against a dentist in close contact with the various law enforcement who repeatedly failed to respond to the Board's agencies throughout the state and assisted them in subpoenas for his records and comply with other obtaining training and in complying with Council Board orders, and who attempted to hide from Board rules. The Council had filled some of the gap left by regulation by setting up a series of corporate veils to the staff shortage through direct training of law insulate himself from economic responsibility to his enforcement agency heads. Section attorneys helped patients imposed by Board awards of restitution. The prepare and present the executive training. Board suspended that dentist's license for one year and took other action. That case is being appealed to Despite the shortage of staff, the Council kept very Superior Court. busy with certification matters. Partially due to the well publicized sex scandal out of Mesa Police In addition to these cases, the Board suspended two Department, the Council dealt with an unusually large dentists for substance abuse problems, suspended one number· of sexual misconduct cases this year. The dentist who was administering sedation without a allegations ranged from sex in a private home during permit and suspended another who had, sexually the lunch hour to felonious sexual conduct and child abused teenage patients and is awaiting criminal trial. molesting. In FY 1993 section attorneys prosecute These Board actions requited significant advice and cases before the Council resulting in 27 revocations, advocacy from section attorneys. 7 suspensions, 3 certification denials and 1 certification restriction. Section attorneys also provided daily advice and actual training to Board staff and investigators. The Council's dedicated Assistant Attorney General Board rules were not addressed this year because the was active during FY 1993 providing the Council priority was to handle the . complaint backlog. with legal advice on a daily basis. Among the more However, a significant amount of time was spent urgent and complicated issues requiring advice is how helping the staff to draft rules which will be a major does the Americans with Disabilities Act (ADA) area of the Board's efforts next fiscal year. Finally, affect the Council's medical and physical fitness the Board's legal needs have increased so significantly standards. The current rules present several in the past year that the Board entered into a contract compliance problems to a law enforcement employer. with this Office to fund a full-time Assistant Attorney In addition to legal advice on the subject, this Section General for fiscal year 1994. suggested and reviewed potential lawful ways of correcting the problems encouraging compliance with Arizona Law Enforcement Officer Advisory the ADA. Council Department of Liquor Licenses and Control CIVIL DIVISION PAGE 38

The Department of Liquor Licenses and Control is three cases where interim summary suspensions were one of the Section's most active agencies. In FY entered. As a result of the formal hearing process the 1993 there were approximately 230 administrative Board revoked tw_o licenses and accepted four citations issued by the Department, out of which the cancellations of a license with cause (the equivalent of Department collected $106,750 in administrative a stipulated revocation.) The remaining matters have fines. From these cases 14 licenses were revoked and been carried over into the next fiscal year and are license suspensions totalling 15 days. awaiting formal Board action.

Once again the Department's primary emphasis dealt Al~o, during these meetings, the Board conducted with the sell of alcohol to minors and intoxicated over 300 interviews which resulted in the issuance of persons. However,· section attorneys were also 22 decrees of censure, orders of probation or fines instrumental in resolving several years of and 22 stipulated orders (which are often agreed to in litigation/administrative citations involving the topless lieu of disciplinary action.) Section attorneys were nightclubs which resulted in the licensee agreeing to actively involved in all interviews and the preparation divest itself from the license and to pay $20,000 in of documents resulting therefrom. civil penalties. In addition, section attorneys were active in In addition to administrative disciplinary matters, recommending changes to the Board's statutes, which section attorneys represented the Department on more were passed by the Legislature. They also assisted in than 65 applications for licenses and license transfers , editing major changes in the statutes for the Joint before the Arizona State Liquor Board. Board of the regulating of Physicians Assistants. Drafting services were also provided for the Board's During this past fiscal year the Department of Liquor adoption of rules concerning the dispensing of Licenses and Control was provided with legal advice prescription medications. involving the interpretation of its statutes and rules in the licensing and enforcement areas. Section Among the other routine activities performed by attorneys representation of the Department is Section attorneys were the handling of subpoena complicated by the fact that the Department js requests, assistance in the development of a policy for actually comprised of two separate and distinct­ medical doctors who acquire HIV, and attendance of entities, the actual administrative offices headed by a the Federation of State Medical Board conference Director and the Liquor Board comprised of seven where a section attorney made a presentation to the appointed members. Section attorneys were involved attorneys' meeting. in providing legal advice to both entities except in conflict situations where the Solicitor General's One major case prosecuted by section attorneys Section provided legal advice. involved H. Ralph Linden, M.D. This prosecution resulted in a revocation of the doctor's license to Board of Medical Examiners practice medicine, and was significant because it was the first case in Arizona, and apparently the first of The Board of Medical Examiners kept its two its kind in the country, where a failure of the Special assigned Assistant Attorneys General very busy Purpose Examination (an FSMB administered during FY 1992-93. The Board met for a total of 22 competency examination) was used at a formal days during which they handled over 1,150 separate hearing as a basis to permanently revoke a doctor's matters, including complaints, malpractice actions and license. interviews. Section attorneys attended all Board meetings. Section attorneys represented the Board this past fiscal year in Superior Court litigation involving Ten cases were ordered to a formal hearing, including Doctor Baruch D. Rosen, M.D. (CIV 90-1833). The CIVIL DMSION PAGE 39

Board's administrative complaint against Doctor prosecute a significant number of administrative cases Rosen alleged numerous charges, including his before the Board involving a wide range of association with the unlicensed practice of medicine, unprofessional conduct despite a decrease in the total false and fraudulent statements , mislabeling of number of complaints received by the Board. controlling substances, and conduct harmful to Complaints decreased from 659 to 595, as did the patients. The administrative hearing w,as conducted number of requests for hearings or consent over 20 days and resulted in very strong Findings of agreements from 253 to 236. _ Section attorneys Facts and Conclusion of law from the hearing officer continued to maintain a very close working who described Doctor Rosen's conduct as relationship with the Board's nurse consultants in "egregious", "unconscionable", and "either grossly investigating, developing and preparing cases for negligent or criminal. " After the Board unanimously prosecution as well as negotiating, and facilitating the voted to revoke the physician's license, Doctor consent agreement process. In ail, 36 hearings were Rosen brought an action for damages in Superior conducted in FY 1993, a 25 % increase over the Court against the Board, its Executive Director and previous year. Section attorneys worked with the nine Board members and also requested judicial Board in revoking 34 licenses, suspending 12 review of the license revocation. The claim for licenses, placing 60 licenses on probation, issuing 42 damages was dismissed and the Superior Court decrees of censure, issuing 67 letters of concern and affinned the Board's Findings of Fact, Conclusion of imposing 19 civil penalties. Law and Order of Revocation. Plaintiff filed a Motion for New Trial which is now pending. A significant amount of time and effort was devoted by section attorneys in coordinating the investigation Another major case prosecuted by section attorneys into the professional misconduct of a former Arizona involved Doctor Edward Gertz (CIV 91-1296). The · State Board of Nursing member removed for cause Complaint against Doctor Gertz alleged that he from the Board by Governor Symington. The sexually molested two young male patients. The licensee in that case had been convicted of four doctor was summarily suspended pending a felonies related to his involvement in illegal drug formal ·hearing before a hearing officer. The studies performed on elderly patients in Pima County administrative hearing was conducted over 24 days nursing homes. Additionally, there was significant and resulted in Findings of Fact and Conclusions of evidence that this male Nurse Practitioner exceeded Law from the hearing officer which concluded in his prescribing and dispensing authority relative to extensive · detail that the physician had in fact controlled substances on a number of occasions. molested the patients. After the Board revoked the Further, this particular Nurse Practitioner was doctor's license to practice medicine, Doctor Gertz notorious for the sexual abuse, assault and harassment and his wife brought an action for damages in the of his subordinate female employees. After lengthy Superior Court against the first patient's father, the investigation and preparation for the administrative Board, its Executive Director, and seven members of hearing, this Nurse Practitioner agreed to settle the the Board and .also requested judicial review of the matter for a two year suspension followed by three license revocation. The claims for damages were years probation. He also lost his DEA prescribing subsequently dismissed and following an appeal in authorization and his Medicare privileges as a· result Superior Court the Board's Findings of Fact, of the felony conviction. Conclusions of Law and Order of Revocation were affirmed . .This case is currently pending before the Another major case prosecuted by section attorneys Arizona Court of Appeals. during FY 1993 involved a male Nurse Practitioner who performed breast examinations on female job Arizona State Board of Nursing applicants during pre-employment physical examinations contrary to institutional policy. After a During FY 1993, section attorneys continued to lengthy administrative hearing, the licensee was CIVIL DMSION PAGE 40 placed on an extended period of supervised probation surgery of the breast for female patients and with a specific requirement that he successfully inadequate records. Ultimately the Board entered into complete a legal ethics course. a stipulated order (prepared and negotiated by Section attorneys) with Dr. Williams providing for the Despite the implementation last year of the permanent restriction on his ability to perform any Chemically Addicted Nurse Diversion Option surgeries related to the breast and to censure him for (CANDO) program, chemical dependency continues unprofessional conduct. Additionally, a formal to be an ongoing problem in the nursing profession. complaint and hearing was initiated against Dr. The Board continues to be very aggressive in its Williams on another complaint. However, that case efforts to discipline nurses who are not in compliance has not proceeded to a formal administrative hearing with the terms of probation imposed in previous because Dr. Williams filed a special. action in the disciplinary action particularly those failing to satisfy Maricopa County Superior Court seeking judicial alcohol or drug treatment requirements. Section review of the authority of the Board to proceed with attorneys have successfully revoked a number of these this case against him. This litigation is still pending licenses in light of the obvious threat to the health and in the Arizona Court of Appeals. · safety of the public. The Board also issued a formal complaint against Dr. Practice related complaints regarding charting, Roger D. Scott based primarily upon allegations that medication and treatment errors were again prevalent he provided prescription-only medications (DEA during FY 1993. One particularly egregious case schedule ill and IV) to his wife and other individuals involved a Licensed Practical Nurse who was without appropriate medical justification and/or for employed (through fraud and deception) at recreation use only. The Board was also presented approximately 13 facilities over an 18 month period, with expert psychological and psychiatric testimony each period of employment resulting in termination establishing that Dr. Scott suffers from a significant due to incompetence. Fortunately, there were no personality disorder which impairs his ability to significant adverse complications in the patient practice as a physician. Section attorneys prosecuted populations. a 5 and 1/2 day hearing before the Board's designated hearing officer who recommended that Dr. Scott be In addition to providing legal advice to the Board and suspended for at least six months, be ordered to staff, section attorneys also regularly provides participate in intensive psychotherapy and that his assistance at meetings of the Board's committees as ability to prescribe prescription medications be well. · limited. Section attorneys have argued that more severe sanctions are warranted. The Board's Bol,lrd of Osteopathic Physicians Examiners consideration of this matter is still pending.

FY 1993 saw a 90 % increase in the number of active Board of Pharmacy cases prosecuted by section attorneys for the Board. Section attorneys attended 9 full-day meetings held by In FY 1993, section attorneys worked on 12 cases the Board as well as a number of telephone from the Board of Pharmacy. Nine of these cases conference call meetings held during the course of the resulted in Consent Agreements and three of these year. cases resulted in formal hearings before the Board. A substantial number of these cases involved record A substantial amount of the legal services provided to infractions which were found by the Pharmacy the Board focused Harvey E. Williams, D.O. and investigators following formal audits. Of the 1.2 cases Roger D. Scott, D.O. The Board received numerous that were received by the Attorney General's office complaints against Dr. Williams concerning from the Board of Pharmacy, two resulted in allegations of incompetent performance of plastic revocation of licenses, six resulted in suspensions of CIVIL DMSION PAGE 41

licenses, eight orders of probation were imposed and in the investigation of and complaints against three civil penalties were imposed. psychologists involving issues of misrepresentation of professional services and insurance fraud. Section Section attorneys also provided a great deal of legal attorneys will prosecute a case against a psychologist services to the Board of Pharmacy by answering for having performed an "exorcism rite" with a child general legal questions. The Board of Pharmacy held referred to him by DES for psychological evaluation six two-day meetings at which section attorneys were while the child was a ward of the state. available to provide legal advice. Section attorneys also continued to prosecute pharmacists before the Section attorneys devote a substantial amount of time Board who have illegally diverted controlled with the Board due to the sensitive nature of the cases substances to support their drug abuse addictions as described including cases involving allegations of insurance fraud which are complex and will require In addition, section attorneys provided legal advice to a substantial legal services. In addition, section the Board regarding a pending petition to declare low attorneys anticipate substantial legal services will be tar and nicotine cigarettes to be drugs. This is a devoted to the Board's increasing use of "informal very complex issue involving federal preemption with interview II hearings and a major revision of the far reaching implications for the advertisement, Board's rules which will be. submitted to this office distribution and sale of product line representing a for certification before the end of 1993. substantial segment of the tobacco industry. Private Postsecondary Board Board of Psychologist Examiners Section attorneys attended all of the monthly meetings Section attorneys provided legal services to the Board of the Private Postsecondary Board in FY 1993 and in 48 cases in FY 1993 and provided legal advice at provided legal advice on various matters. The the Board's· meetings conducted over 9 1/2 days majority of work that this Board does during its during the year. monthly meetings is to review applications submitted by schools wishing to receive their licenses. In FY In a major case before the Board, section attorneys 1993, 185 applications were received by the Board. negotiated a stipulated order with Marguerite Holmes, Because the Board must find that there is 11 Ph. D. for revocation of license due to Holmes "management and financial capability , section having become sexually and emotionally involved attorneys advised Board staff on investigative with two of her female clients during the course of procedures for these matters. One of the more treatment. important cases which the Board of Private Postsecondary Education was involved in during FY During the past fiscal year this Board required a 1993 was the Southwestern Sonoran School of Law substantial amount of legal advice in the form of ("Sonoran"). The Board had been involved in informal legal opinions on a variety of subjects litigation in FY 1992 with this school which refused relevant to its statutory duties of licensing and to be licensed. A Superior Court order was issued regulation of the profession. The former Board's stating that Sonoran would need to be licensed after executive director's handling of administrative matters it had operated for a period of nine months according became a serious problem and ultimately resulted in to the Board's statutes and rules. Once the nine the Board voting to the dismissal of it's former months expired in FY 1993, . the school was again executive director, Barbara Gast. These circumstances fighting licensure. Section attorneys assisted the staff required providing the Board special legal advice in in drafting a Cease and Desist Order ordering the area of personnel administrative procedures. Sonoran to close, however, the school closed before it became necessary to issue such an order. In FY 1993 section attorneys will assist the Board CIVIL DMSION PAGE 42

The Board called upon section attorneys to frequently the case is currently pending the Arizona Court of give infonnal legal opinions as to the authority and/or Appeals. jurisdiction of the Board. One such request was made by the Board asking section attorneys to advise Finally, section attorneys handled numerous requests the Board as to the constitutionality of the exemption for advice regarding miscellaneous legal issues, in their statutes for religious schools. Section including contract exculpatory clauses, public records attorneys researched the issue and concluded that the law, open meeting law, and various interpretations of exemption was unconstitutional for the reason that it the racing statutes regarding the legality of permittee required all degrees from the religious schools to be operations. used "solely for religious purposes". The Board had denied the exemption to North American University Registrar of Contractors which sued the Board for First Amendment violations. Based upon the Section attorneys' During FY 1993 the section attorneys handled 20 research and infonnal legal opinion, the Board Contractors Recovery Fund cases; 43 disciplinary rescinded t~eir earlier denial of the exemption. cases; 24 judicial review actions in Superior Court Consequently, section attorneys were able to and 23 license deaial cases. · In addition, the negotiate a Stipulation to Dismiss this action with Registrar's Hearing Division requested legal services each party bearing their own attorney's fees saving in drafting 37 new citation and complaints. substantial legal resources which would have been used in litigating this issue. A substantial number of cases that section attorneys prosecuted before the Registrar of Contractors Racing Commission/Department involved license denials due to past felony convictions of the applicants or cases where applicants had been Racing Commission and Department was represented involved with previous licenses which had been by section attorneys in twelve administrative hearings, revoked. Section attorneys also prosecute disciplinary three appeals before the Commission, and two actions against licensees who had been convicted of Superior Court actions. The administrative cases felonies, and against licensees whose officers were on resulted in seven suspensions of licenses, two other licenses that were disciplined. Section attorneys disqualifications of horses and one denial of a license. also brought disciplinary actions against licensees who had knowingly contracted beyond the scope of their In addition to representing . the Department in licenses and or assisted another person who was not administrative cases, section attorneys also attended licensed to evade the Registrar's rules and and advised the Commission at twelve monthly regulations. meetings. One of these required extraordinary preparation because the primary agenda item was an Often section attorneys find this agency's cases infonnal advice letter from our office regarding particularly satisfying in assisting homeowners whether teletracked dog or horse races were entitled victimized by unscrupulous contractors. For instance, to a statutory preference over live races. in Roe v. Home Craftsman, section attorneys worked closely with four elderly victims who had purchased Section attorneys are representing the Department in fraudulent, inefficient devices which were represented a major case American Greyhound Racing v. Yavapai to be energy savers. These victims testified at the County Fairgrounds. This action was brought by administrative hearings resulting in the revocation of members of the dog racing industry · against the the contractors' license and were able to obtain members of the horse racing industry and the State to money from the Contractor's Recovery Fund to - declare certain teletrack wa'gering rules illegal. recover their losses. Section attorneys successfully defended the validity of these rules in Maricopa County Superior Court but Section attorneys and legal assistants spent a CIVIL DMSION PAGE 43

considerable amount of time reviewing files received interpretation of the statutes and the new rules from th~ Registrar's office for the preparation of implemented during the past year. complaints. Section attorneys also provided legal services to the Registrar of Contractors in opposing INSURANCE DEFENSE SECTION improper or questionable claims against the Contractors' Recovery Fund. The majority of these The Insurance Defense Section represents the cases are in administrative hearings, however, several departments, agencies, boards, commissions, officers, of these Recovery Fund oppositions are in Superior employees and agents of the State of Arizona in Court lawsuits. Section attorneys' defense in these lawsuits alleging state liability for personal injuries, actions have prevented excessive payments from the property damage and constitutional law violations. Recovery Fund totaling more than $30,000. This section defends the state against the standard allegation of negligence and also defends the state In addition to case work and providing legal advice to against civil rights allegations brought by prisoners as the Registrar of .Contractors, section attorneys have well as wrongful discharge lawsuits from state worked with the Registrar to draft, promulgate and employment and employment discrimination actions. certify rules as well as advising the agency on contract issues and administrative operations. Pursuant to A.RS. § 41-621.L, Attorney General Grant Woods, with funds provided by the Risk Structural Pest Control Commission Management Division of the Department of Administration, must provide for the defense of these In FY 1993 section attorneys represented the lawsuits either through his office or by appointment Commission in 56 administrative disciplinary actions. of outside legal counsel. During the past year we Section attorneys were also actively involved in have continued our practice of defending most responding to petitions for rehearing before the lawsuits through the Office of the Attorney General. Commission. The efforts of section attorneys led to Approximately ninety percent of all lawsuits filed the revocation of three licenses, the suspension of against the state were defended by the Insurance three licenses, the issuance of numerous Defense Section attorneys while ten -percent of those administrative warnings and the imposition of lawsuits were assigned to outside legal counsel. approximately $40,000 in civil penalties. These Virtually one hundred percent of all of the civil rights figures do not include the many complaints resolved actions brought by prlsoners,are defended in-house by by settlement conferences where section attorneys this Section. assisted in agreement which remedied the damage to the homeowners property. Records of Cases Dismissed On Motion Or Settlement Many of the Commission's regulations center on pre­ construction subterranean termite treatments, and The twenty-nine lawyers in this section handled over wood infestation reports which indicate whether a nineteen hundred lawsuits during the last fiscal year home is infested with termites. The Commission which is an increase of approximately two hundred investigators have kept a close eye on these areas in lawsuits compared to the prior fiscal year. This order to prevent fraudulent or incomplete reports or increase was absorbed by the section without an treatments. Other major areas of concern involve increase in attorney staff. misuse of registered pesticides, failure to maintain records, uncertified or unregistered applicators and Approximately eight hundred of these lawsuits were unlicensed activity. Section attorneys continued to be resolved either through settlement, dismissal, tender heavily involved in the enforcement of these or trial and the remaining cases are actively being provisions and in providing legal advice to the defended. Of the cases that have been resolved, four Commission and its administrative staff involving hundred and one were dismissed by motion to dismiss CIVIL DMSION PAGE 44

and one hundred sixty-seven were dismissed through The record of this section establishes that the quality motions for summary judgment. One hundred ten of the product provided by in-house counsel equals or were settled on terms favorable to the state and exceeds the results provided by outside counsel and twenty-three cases were tendered to insurance carriers therefore it is the continuing goal of this section to for contractors of the state so that the state did not defend as many cases as possible in-house without have to pay for either the legal defense or the sacrificing the quality of defense. settlement or judgment in these cases. Conclusion Trial Record Over forty percent of the lawsuits handled by the The attorneys in this section have continu.ed to take attorneys in this section last fiscal year were resolved appropriate cases to trial. In addition to thirteen on terms favorable to the state. In addition to these bench trials and arbitrations, the attorneys in this lawsuits the attorneys also monitored over one Section completed twenty trials where the state's thousand claims file against the s{4te. They also exposure was significant. Twelve of these cases assisted . in the responses to approximate! y three resulted in defense verdicts or directed verdicts for hundred charges of discrimination filed against the the state. In these twenty cases the lowest demands various state agencies. This service was provided on made by plaintiffs prior to trial totaled $11 million a cost effective basis without sacrificing quality. and the total amount requested by plaintiffs at trial Thus, the attorneys in this section are ably handling exceeded $19 million. Of that amount the state was all areas of insurance ·defense for the State of required to pay $886,000. See attached chart on trial Arizona. results. Statistics Cost of Defense The statistical report on the following page The hourly rate for the services provided by the demonstrates trial activity of the Insurance Defense attorneys and legal assistants of the Insurance Section. Defense Section for the past fiscal year was less than $54 an hour. This figure was obtained by dividing the total budget of the Insurance Defense Section for the past fiscal year ($4, 1000,000) by the total hours billed for the defense of lawsuits, charges of discrimination and claims (76,132 hours).· Outside counsels' average hourly rate billed to the state for services provided by lawyers and legal assistants in . the defense of lawsuits for the past fiscal year was approximately $85 ah hour. Thus, outside counsels' average hourly rate is more than one-third higher than in-house hourly rate. CIVIL DMSION PAGE 45

TRIALS CONDUCTED BY THE INSURANCE DEFENSE SECTION FISCAL YEAR 1993

Type of Case (Agency) Last Demand Amt/ Amt Paid Trial Results Amt Requested At Trial By State

Car Accident (UOA) $250, 000/$700, 000 $170,000 $200,000 verdict (State 85 %; - Pl. 15%) Personal Injury (SCT) $810,000/Not Specified None Directed Verdict Property (ATG) $140,000/$300,000 None State (Directed Verdict) Wrongful Death (DPS) $2,000,000/$2,000,000 None Defense Verdict Inmate Med-Malpractice; $1,000,000/ Not $512,500 Med. Mal. - $375,00 verdict, Assault Battery (DOC) Specified $112,500 against State (State 30%; Pl. 70% ). Assault - $500,000 verdict (Verdict compromised for $512,500) Pesticide Poisoning $1,000,000/$1,000,000 None Defense Verdict (AGR, EMD) Inmate Excessive Force $55,000 + Costs/ $10,000 $10,000 Verdict (DOC) $600,000 Highway Design $4,500,000/$8,000,000_ None Defense Verdict Maintenance (ADOT) Inmate Car Accident $150,000/$485,000 $90,000 $150,000 Verdict (State 60%; (DOC) Pl. 40%) Inmate Asslt Batt (DOC) $50,000/$100,000 None Defense Verdict Inmate Cruel & Unusual None/$5,000 comp; $251.00 $1.00 compensatory; $250 Punishment (DOC) $10,000 pun punitive Roadway Signing $350,000/$2,000,000+ None Defense Verdict (ADOT) Inmate PI (DOC) ~iability Only Separate Plaintiff Verdict (State 50 %; Damages Trial Pl. 50%) in Sept. 1993 Inmate Medical $100,000/$100,000 None Defense Verdict Indifference (DOC) CIVIL DIVISION PAGE 46

Inmate Destroyed $3,000/$3,000 None Defense Verdict Property (DOC) Medical Malpract. (UOA) $300,000/$1,500,000 $100,000 $100,000 Verdict (Liability Admitted) Inmate Civil Rts (DOC) None/$10,000 None Defense Verdict Inmate Civil Rts (DOC) None/$20,000 None Defense Verdict Car/Bicycle (UOA) $1, 930/$200, 000 $3,500 $7,000 Verdict (Pl. 60 %; State 40%) Employment (DOC) None/$40,000 atty fees; None Case Dismissed by Court on $15,000 back pay Appeal 20 Cases $10, 709,930/ $886,251 $19,798,000

SOLICITOR GENERAL AND OPINIONS Pollution Control Hearing Board, Board of Appraisal, SECTION Department of Building and Fire Safety, Board of Chiropractic Examiners, Board of Dental Examiners, The Solicitor General and Opinions Section is Board of Dispensing Opticians, Department of responsible for managing and supervising civil Economic Security, Board of Education, Department appeals in the Attorney General's office. In FY of Environmental Quality, Board of Funeral Directors 1992-93, the section reviewed or supervised 159 and Embalmers, Game and Fish Department, Office appeal briefs and special actions, helped write five of Governor, Land Department, Land Department petitions for review or responses to petitions for Board of Appeals, Law Enforcement Officers' review, and judged fourteen moot courts. Advisory Council, Department of Liquor Licenses Additionally the Section handled four cases and and Control, Board of Medical Administrators appeals in-house. · · Examiners, Optometry Board, Board of Osteopathic Examiners, Board of Pharmacy, Physical Therapy The Solicitor General and Opinions Section is also Examiners Board, Physicians Assistants Examiners responsible for reviewing all Attorney General ··s Board, Board of Podiatry Examiners, Board of Opinions. The section reviewed fifty-three requests Psychologists Examiners, Department and for Attorney General Opinions, and wrote or Commission of Racing, Board of Regents, Structural reviewed five formal Attorney General Opinions in Pest Control Commission, Board of · Technical FY 1993. The section also reviewed thirty-five Registration, Veterinary Medical Examining Board, amicus requests and has joined the state in seventeen and Water Quality Appeals Board. During the past of the briefs reviewed. fiscal year, the Section provided advice to agencies in at least ninety-eight cases, and attended many agency In addition to its appellate and opinions functions, the hearings. Solicitor General Section gives independent advice to state agencies and boards that hear administrative The section assisted the Attorney General in twenty­ cases in which other attorneys general are advocates. five research projects including the Martin Luther Those agencies and boards include the following: King Holiday issue, Indian gaming, hate crimes, gun Accountancy Board, Department of Agriculture, Air control, and the Evan Mecham litigation. CIVIL DMSION P AGE 47

In addition, section attorneys edited and revised the The Tax Section staff of 16 attorneys, five paralegals, Arizona Agency Handbook for distribution throughout one office administrator, eight legal secretaries, two the state, provided assistance in attorney fee collectors, two clerk-typists and one collection litigation, reviewed the Attorney Generals' Ethics administrative assistant is organized into five Manual, reviewed the Sexual Harassment Policy of functional units: Sales. and Use Tax, Income Tax, the Attorney General's Office, and produced and Property Tax, Motor Carrier and Fuel Tax, and participated in an Appellate Advocacy CLE Writing Collections. The attorneys, paralegals and legal Seminar and the Medical Directive CLE. The section secretaries are assigned primary responsibilities has participated in several other committees, within these units as well as secondary duties in both including Retreat Committees, Civil Justice Reform their own units, as needed. Act Committee,· RAJI Committee, Southwest Border Conference Committee, Opinion Review and Intake Within these units, a wide variety of subject areas Committees, Private Property Rights Protection exist, including, for example, ad valorem property Committee, and CLE Committee. taxes (real and personal property), income taxes (individual and corporate), transaction privilege TAX SECTION (sales) taxes, use taxes, luxury taxes, motor carrier (vehicle weight-mile) taxes, use fuel taxes, luxury The responsibilities of the Tax Section of the taxes, insurance premium taxes, garnishments, Attorney General's Office are to represent various bankruptcies, bingo games and miscellaneous matters state agencies concerning their authority and duty to too numerous to mention. impose a wide variety of state taxes. The primary agency represented by the Tax Section is the Arizona The Tax Section's representation of the Department Department of Revenue. Other agencies and of Transportation intensified during the year as the commissions for which the Section provides agency implemented new civil law initiatives to representation and advice include the Arizona combat tax evasion. Both agency and Tax Section Department of Transportation, the Arizona personnel attended training sponsored by the Federal Department of Insurance, The Property Tax Highway Administration to prevent gas tax evasion. Oversight Commission, the Economic Estimates With intensive legal guidance from Tax Section Commission and the Municipal Tax Code personnel, the agency utilized its administrative Commission. The Tax Section is also responsible for jeopardy assessment and seizure powers for the first collecting debts owed to the State through the CERF time in many years in order to move quickly to (Collection Enforcement Revolving Fund) program. prevent further losses of tax revenues from taxpayer who are not reporting and paying taxes on illegal The foregoing agencies and commissions receive legal blending. The actions caused an immediate cessation assistance across a wide spectrum of areas, including of the improper activity and efforts are continuing to day-to-day legal advice, representation before be pursued to obtain payment of the taxes owed. Tax administrative and judicial tribunals, rule Section personnel have been an integral part of the certification, participation in the development of long­ ADOT team which is forging a new spirit of term goals regarding legislation and other matters cooperation with the neighboring states to share relating to taxation. In addition, Tax Section information, engage in joint audits and take attorneys are called upon to draft Attorney General coordinated action against multi-state tax evaders. Opinions involving questions of tax law and questions The efforts have prevented taxpayers from playing relating to expenditure and levy limitations. Also, the one state against another, and have resulted in faster, section responds to a significant number of constituent more accurate assessments. The programs reduce the letters and telephone calls that pose a wide variety of total time taxpayers must devote to an audit, while tax questions and concerns. allowing the states to obtain more thorough assessments. CIVIL D MSION PAGE 48

The Section also advises the Property Tax Oversight Savings to the state for substantive taxes are Commission, the Economic Estimates Commission generated by two categories of cases, refund cases and the Municipal Tax Code Commission on a wide and audit assessment cases. In refund cases, the variety of legal matters including questions involving taxpayer or claimant requests a refund or recovery of primary property tax levies, expenditure limitations monies that were previously paid to the state. Any and amendments to the Model City Tax Code. The amount by which the claim is diminished is reported Tax Section was requested to assume the as savings to the state. Audit assessment cases representation of these commissions because the involve the validity of tax assessments issued by Director of the Department of Revenue serves as the taxing agencies. Savings to the state are reported to chairman of each commission. the extent the validity of an assessment is upheld. A summary of the savings generated by the Tax Section One of the indicators of the performance of Tax for FY 1993 is as follows: Section personnel lies in an examination of the monetary savings secured during the fiscal year.

Tax Section Recapitulation of Savings to the State Fiscal Year 1993

TYPE OF TAX AMOUNTIN AMOUNT TOTALS (Substantive Cases) ISSUE SAVED Income Tax $47,081,019 $13 ,168,790 Motor Vehicle Tax $2,959,772 . $2,293,907 Sales Tax $3,477,990 $3,049,061 Miscellaneous Taxes $223,208 $223,208 TOTAL $53,742,079 $18,734,966 $18,734,966 COLLECTIONS (CERF) $1,244,621 TOTAL RECOVERIES (FY 1993) $19,979,586 TOT AL RECOVERIES (FY 1992) $17,172,098

The total savings and recoveries for FY 1991 -92 of effort by existing Tax Section personnel, compares favorably with prior years; the total amount especially in view of the fact that the Section operated represents and increase of more than 15 % from the with no personnel increases from the prior .fiscal previous fiscal year (which had been a banner year). year. A detailed itemization of the recoveries and - The recoveries and savings amount generated by the savings, on a case-by-case basis, is available from the Tax Section represent an extraordinary rededication Section. CIVIL DMSION PAGE 49

Moreover, wholly apart from the monetary gains Gila River Indian Community v. State of Arizona secured, substantial services are rendered by Tax TAX 90-0402/T AX 91-0009. The issue in this case Section personnel through assistance to agency concerns the taxability of various ' non-Indian personnel in the drafting of proposed legislation and operations conducted in the vicinity of the Firebird rules, attending meetings and informal conferences, International Raceway within the exterior boundaries and giving day-to-day legal advice. Thus, general of the Gila River Indian Community. The question monetary recoveries cannot alone adequately measure is whether the State of Arizona has jurisdiction to the benefits derived from ·these services. impose the State transaction privilege ("sales") tax upon the non-Indian operators of facilities such as Additionally, a significant development concerns the Compton Terrace and related operations. The matter continued operation and expansion of the collections is presently pending in U.S. District Court for the function of the Tax Section. As seen from the District of Arizona. foregoing monetary recoveries, the. Collections Unit had another impressive year by almost equalling last Ball Ball and Brosamer v. Arizona Department of · year's collections record. This was accomplished Revenue TAX 91-0158. The issue in this case is despite the fact that the Collections Unit was working whether the Department has discriminated in the with essentially one collector (instead of the normal privilege taxation of contracting, thereby violating the two collectors) since February to the end of the fiscal taxpayer's equal protection rights and entitling it to a year. Clearly, this demonstrates the growing refund of almost $1 million in privilege taxes paid. efficiency of the Collections unit and the wisdom of An alternative issue is whether the taxpayer is entitled expanding the collection efforts of the State of to the refund in any case because the receipts it paid Arizona as opposed to '_'farming out" such collections the tax on are exempt from tax. The case is before to private entities. the Arizona Court of Appeals on the Department's appeal from an adverse decision by the Tax Court. Some of the major cases now being handled by the Tax Section include the following: Cyprus Sierrita v. Arizona Department of Revenue TAX 92-0843. The issue in this case is whether Sales Tax chemicals that a mining company purchases to use in extracting metals from ore are exempt from use tax Atchison, Topeka & Santa Fe Railway Company v. machinery or equipment. This matter is before the State of Arizona TAX 91-2605. The Atchis_on, Tax Court on the Department's appeal from an Topeka & Santa Fe Railway along with the Southern adverse decision of the Board of Tax Appeals. This Pacific Transportation Company have filed a lawsuit is a very significant case and tpe ultimate decision in the United States District Court for Arizona could have a multi-million dollar effect on similar alleging that the State of Arizona transaction privilege issues. and use tax statut~s discriminate against the railroads in violation of federal law. Prior to the filing of the Property Tax District Court action, the Railroads filed refund claims with the Arizona Department of Revenue for Hayden Partners (AM Community Developers v. transaction privilege and use taxes paid since 1986. Maricopa County) TAX 88-1375. Approximately The Railroads seek an injunction against the state 150 actions have been filed to reclassify property against any further transaction privilege or use tax from Class 4 to Class 5 involving approximately collections and a refund of all amounts that have been 90,000 parcels of property throughout the State. If paid since 1986. The total possible exposure to the successful, this would change the assessment ratios state is $20,000,000.00 in refunds with a loss of from 16 % to 10 % for purposes of taxation. All cases $2,000,000.00 per year in future anticipated have been consolidated and involve issues of the transaction privilege and use taxes. constitutionality of A.RS. § 42-162(B) and § 11- CIVIL DMSION PAGE 50

506 as amended by Senate Bill 1370 (having a 5-year statute in Maricopa County v. State ofArizona, TAX retroactive application). The Court ruled that Senate 93-0557. Bill 1370 was unconstitutionally retroactive for all years prior to 1991 in that it impaired taxpayers' Income Tax vested rights. However, the Court denied all A.RS. § 11-506 and 42-204 (discrimination) claims and Bohn v. Waddell TAX 89-0211. The issue in this ruled for the government for year 1991. All case is whether or not the State of Arizona is liable to counties, with the exception of Maricopa County, refund approximately $200 million in purportedly have settled with the taxpayers. Negotiations between illegally collected Arizona income tax to Arizona Maricopa County and the taxpayers are ongoing. residents who are federal retirees. The Arizona Tax Court held that refunds would have to be given in an Waddell v. 38th Street Partnership v. Maricopa amount that, if affirmed on appeal, would only be County and Department of Revenue TAX 90-1093. between $5,000,000 and $6,000,000. Plaintiffs and An action filed by the Department of Revenue against the State Defendants appealed and cross-appealed, approximately 500 taxpayers whose property had been respectively. The Court of Appeals held the Tax appealed administratively and whose classification had Court lacked jurisciiction to award any refunds been changed from vacant land to residential land. because the Plaintiffs failed to exhaust administrative This is the companion case to Hayden Partners remedies. The Arizona and U.S. Supreme Courts above. The Tax Court ruled in favor of the state that have refused to review the decision. Plaintiffs' Senate Bill 1370 was valid and retroactive to January Petition for Rehearing is pending before the U.S. 1, 1991 and applicable to all defendants. Written Supreme Court. decision for the government has been published. Those without a foundation will be classified as class Estate ofLadewig v. Waddell TAX 91-0455. This four, vacant land. Judgments are being prepared with case involves an attach on the constitutionality of the appendices listing the parcels involved (approximately Arizona income tax deduction for dividends received 50 pages). from corporations doing more than 50 % of their business in Arizona. The claims include commerce APS, et al. v. Department of Revenue, et al. TAX clause and equal protection violations, as well as 42 88-0017. _ The Plaintiffs have challenged the U.S. C. · § 19 83 action against the Director and constitutionality of A.RS. § 15-992 which imposes Deputy Director of the Department of Revenue. The an additional qualifying tax rate for education. The Court has ruled in favor of the state on all substantive case involves claims for refunds of approximately grounds, but the case is pending on r~consideration $150,000,000. A decision was entered granting the based on the Bohn decision. Motion for Summary Judgment in favor of the state upholding the constitutionality of the statute. A State v. Talley Industries, Inc. and Subsidiaries TAX proposed Judgment has been lodged with the Court. 88-0575/TAX 91-0299. The Department disallowed The case will most likely be appealed. the Talley group's method of combined reporting to Arizona for income tax purposes and required each Scottsdale Princess Partnership v. Maricopa County corporation · doing business in Arizona to file a and Department of Revenue TAX 91-0916. The separate return. The Tax Court held that Talley and Judge has ruled that A.R.S. § 42-68 is subsidiaries were a unitary business which could unconstitutional. This ruling has still not be reduced lawfully be required to file a combined report. The to judgment. In response to this ruling, the state has filed an appeal on the grounds that Talley's Legislature enacted Senate Bill 1153, completely method of separate reporting in other states shows changing possessory interest tax scheme.· Maricopa that the nature of the Talley group's operations pennit County has filed a declaratory judgment action against separate reporting and a combined report would not the state challenging certain portions of this new accurately reflect income earned in Arizona. This CIVIL DMSION PAGE 51

case has been briefed and awaits oral argument. The following table demonstrates the collection recoveries for each ~gency represented. Gas Tax AGENCY AMOUNT COLLECTED Chevron U.S.A., Inc. v. ADOT TAX 92-0195/1806. Chevron sued to cancel a penalty assessment of Arizona Game & Fish $8,452.27 approximately $750,000 for failure to report the Arizona State Retirement System $17,798.89 increased gasoline created by blending MTBE into Board of Medical Student Loans $7,013.19 gasoline blend stock. The company also sought a Coliseum, Veteran's Memorial $499.89 refund of approximately $1. 8 million for taxes paid Corporation Commission $12,240.00 on the MTBE. If successful, the suit would have Department of Administration resulted in other taxpayers seeking refunds involving Risk Management - General $33,674.53 millions of dollars. The suit was resolved Risk Management - Workers Comp. $5,664.55 successfully for the state when a Tax Section attorney Department of Agriculture $100,000.00 was able to convince Chevron to pay the penalties, Department of Corrections drop its claim for a refund and dismiss its case. Arizona Correctior1al Industries $761.00 Dept. of Youth Treatment & Rehab. $26,085.54 Nicholson Family Enterprises TAX 93-0638. An Department of Economic Security $560.67 assessment exceeding $550,000 was made by ADOT Department of Education $454.64 against several family members who failed to report Department of Environmental Quality $1,899.00 and pay gasoline and use fuel tax liabilities from a Department of Health Services number of enterprises. The Department used its Arizona State Hospital $2,291.92 jeopardy assessment and seizure powers to terminate_ Southern AZ Mental Health Center $1,724.41 the activities and tie up assets. Tax Section attorneys Family Health Services Division $9,877.66 are now defending lawsuits in Bankruptcy and state Dept. of Liquor Licenses & Control $8,761.57 courts involving issues of ownership of property and Department of Revenue $594,532.52 sorting out the various tax assessments against Department of Transportation individual family members and their business Motor Vehicle Division $63,377.60 enterprises. Highway Division $123,160.42 Department of Weights & Measures $17,653.42 Bankruptcy Lottery Commission $3,894.41 Northern Arizona University $70,396.63 In Re Arizona Safety Center, Inc. TAX 93-01288. Registrar of Contractors $74,792.07 This is a Chapter 11 bankruptcy filed by Arizona Safety Center dba Sears Arizona School of Driving. Structural Pest Control Commission $11,383.68 The Attorney General's Office represent the Arizona Other Agencies $47,670.93 Supreme Court and several Arizona municipal and justice courts in this matter. Arizona Safety Center TOTAL COLLECTED $1,244,621.46 owes the courts approximately $250,000.00. This amount represents fees Arizona · Safety Center collected on behalf of the courts for defensive driving TRANSPORTATION SECTION classes. Presently the courts are opposing the proposed sale of the Debtor on the ground that The Transportation Section provides legal services to $35,000 is a "commercially unreasonable" price for the Arizona Depart_ment of Transportation (ADOT) the business, which has been quite successful. and the Arizona Department of_Public Safety (DPS).

Collections With . the exception of •motor vehicle tax matters, CIVIL DMSION PAGE 52

which are assigned to the Attorney General's Tax witnesses must be exchanged prior to the start of Section, and procurement matters which are assigned trial. Objections on whether or not those anticipated to the Civil Division's Procurement Law Unit, all opinions were properly disclosed would be made and legal services required by ADOT' s five organizational argument on those objections would be held prior to divisions (Highways, Transportation Planning, Motor selection of the jury. In addition, there are numerous Vehicle, Administrative Services and Aeronautics) are pretrial evidentiary 4earings that are required to provided by the Transportation_Section. All legal determine whether or not certain witnesses will be services required by DPS are furnished by attorneys allowed either to testify at all or to give certain in this section except for matters relating to its testimony. There have been approximately 95 criminal law enforcement activity and personnel motions filed and argued. There are over 200 matters which are assigned to other section of the depositions taken to date, with over 14,000 pages of Attorney General's Office. testimony. It is hoped that a jury will be called sometime in the fall of 1993. The attorneys in the section provide as much as 95 % of all the legal services required by ADOT and DPS, In State v. Schein, an eminent domain case tried in two of the state's largest agencies, and in addition, Pinal County, there was an approximate $500,000 provide assistance when called upon to other state difference between the state's value and the property agencies relating to the acquisition of lands for owner's value,. The jury awarded $10,000 over the construction or alteration of public works. state's appraised value.

Legal services provided by this section range in The section was also very successful in a Coconino variety from the litigation of complex construction County case, State v. M & S Investments. The contract claims, personal injury, wrongful death and property owners were seeking $163,739 and the state property damage claims, civil rights complaints and valued the property at $48,250. The jury award was eminent domain actions, to the less -complex, though $63,074 with no severance damages. more voluminous motor vehicle license revocations and/or suspensions ahd personnel appeals. In The constitutionality of A. R. S. § 28- l 862(B) is addition to litigation cases, section attorneys provide presently on appeal before the Supreme Court in the a considerable amount of administrative services for case of State v. McGowen. The trial court had ruled their assigned agencies. These services include that a portion of State Route 288, the highway to contract negotiation, rule drafting and certification, Young, Arizona, had not been properly established. opinion writing and daily oral advice on various This ruling was despite the fact that the highway had agency matters. been first constructed as a county road in the early 1920's, had been taken into the state system sometime Eminent Domain Litigation in the 1950's, and had been continuously used for over 70 years as a public highway. Funding for right of way acquisition and/or · construction of the urban freeway system otherwise The section closed 50 eminent domain cases this past known as the MAG system is still very limited year. because of the downturn in the economy and the fact that the revenues have not kept up with the demand. Legal Services for Motor Vehicle Division

State v. Title USA, which was mentioned in last The Motor Vehicle Division continues to exercise the year's report, still has not proceeded to trial. After heaviest demand for legal services of all the ADOT unprecedented lengthy arguments on motions in divisions. The number of telephone calls requesting limine, the court ordered that disclosure statements legal advice on a day to day basis continues to for all testimony that was anticipated from all expert . increase. During the course of the year, 145 MVD CIVIL DMSION PAGE 53

cases were closed. were being applied by the DPS in an unconstitutionally discriminatory fashion. In Lucero In Evitts v. ADOT, a memorandum decision, the v. Arizona Depanment of Public Safety, the issue of Appeals Court determined that where a licensee access to confidential informant data via an Arizona refuses to take a breath test but later recants, the test public records request is pending. The public records need not be offered_again if the recant was simply request came after a denial of access to the same "gamesmanship, " and was not in good faith. information by a court in a criminal case. A special action was filed in the Superior Court; DPS was Environmental Litigation successful and the appeal is pending.

Environmental concerns continue to increase in their Additional activities for the DPS included a complete importance. Not only in the acquisition of right of - rewriting of A.RS. § 41-1750, the criminal history way, but in the conduct of the construction of the records statute. Presently under way is a rewrite of highways and their maintenance. ADOT is still in the statutes governing regulation of security guard danger of losing federal funding in Maricopa County companies. if federal standards are not met under the new federal implementation plan prescribed by EPA. There were Legal Services for Aeronautics Division instances of violations of the acceptable limits for air quality. If sanctions are imposed, certain federally The section provides . day-to-day advice to the funded projects will not be allowed to proceed. Aeronautics Division for such things as approval on grants of aid to local airports and advice relating to The case mentioned in last year's annual report, State the management and operation of the Grand Canyon v. Gabrielli, is finally closed after several adverse Airport, the only state-owned airport. rulings which would have resulted in appeal had the matter proceeded to trial. One ruling was the state's The case of State v. Hatch, mentioned in last year's valuation could not consider the contamination of the report, is still pending before the Supreme Court. property. All claims are resolved and all lawsuits are dismissed. The state agreed to pay $2,125,000 A complex solicitation for proposals for construction for the subject property which included interest for and operation of heliports on the Grand Canyon three years. Because of adispute over the parcel size Airport was drafted by section attorneys. The issue resulting from a vague historical legal description, the of these heliports has become quite controversial and original approved appraisal was increased by about it is not yet determined whether the heliports will be $150,000. As a result of the settlement negotiations, built. however, ADOT was able to recover over $232,500 interest from the funds that had been deposited in an Construction Contract Claims interest-bearing account, and also recovered $680,000 from the Olin-Matheson Company for cleanup costs. Construction claims continue to require a significant The settlement required that ADOT assume amount of time. Most _of the litigation and arbitration responsibility for future cleanup of known conditions. in this area have been handled by section attorneys. However, unknown conditions such as contamination There were several cases which had been sent to of the groundwater are not subject to the agreement. outside legal counsel as they would have overburdened the .resources of the section, but they Legal Services for Department of Public Safety have for the most part been completed.

The state's motion in the case of New Alliance v. Litigation State, was granted. New Alliance had alleged that the state's forfeiture statutes were unconstitutional and Edward Kraemer & Sons, Inc. v. State, was CIVIL DIVISION PAGE 54

mentioned in last year's report. Settlement was made Hacienda Landscape, Inc. defaulted on a job. There based upon the arbitrator's decision. The claim was is presently a dispute between the bonding company for $3 million; the arbitrator's decision was for about for Hacienda and ADOT. We are currently $1.5 million, which was paid. negotiating with the bonding company to take ownership of the job and finish construction. The Pavarini Construction, Inc. v. State, as noted last original agreement was for $1.2 million, but it may year was set for arbitration. Arbitration on liability cost more to complete because· the original contractor was completed. It was determined that Pavarini was did not properly perform some of the work. at fault and their claims for extra compensation were dismissed. A claim arising on the Avia ti on Corridor in Tucson is in progress. Maya Construction Company walked Claims off the job and a dispute has arisen between the bonding company and ADOT as to how much The section continues to encourage ADOT to involve responsibility the bonding company bears for its attorneys early in the claims process in order to completion of the job. There is approximately $1 mitigate or eliminate problems before they occur. million involved in tiris claim.

One of the claims mentioned last year is Tanner · A claim that was successfully handled by section Companies. The state continues to negotiate with attorneys involved the $100,000 claim of C. S. Tanner and the design consultant to determine McCrossan. ADOT required the contractor to percentages of fault for the defects in the bridge at remove some asphaltic concrete, resulting in the the interchange of I-10 and the Maricopa Freeway claim. The arbitrator ruled that ADOT properly near Sky Harbor Airport. No lawsuit has been filed required the removal, but because of a delay in to date against either Tanner or the design consultant. deciding the material should be removed awarded McCrossan $18,000 for the extra costs actually Another claim mentioned last year, Cannon incurred. Structures, Inc., was resolved for zero dollars. It was determined that the claims presented by Cannon Arbitrations against ADOT and the claims by ADOT against Cannon cancelled each other. A.RS. ·§ 12-1518 provides that all construction , claims of less than $100,000 are to be decided by A new claim by Wildish Southwest Contracting Co., arbitration rather than litigation. Section attorneys has been presented for approximately $3.5 million. handled 12 arbitrations in the past year. The claim is that the number of days prescribed in the contract in which the job was to be completed was not sufficient, thus accelerating the work and adding to the costs of Wildish. This arises out of work that was completed on 1-10 at the Broadway curve. (1 I ARIZONA DEPARTMENT OF LAW Office of the Attorney General Criminal Division I Grant Woods Attorney General

I Chief Coumel Michad C. Cudahy I I I I I I I I Criminal Appeals Criminal Trials Section Dru,: Enforttment Environmental Or,:anized Crime & Special lnvestigatiom Tucson Criminal Section Section Section Enforttment Section Fraud Section Section John E. Davis Paul J. McMurdie Gary A. Husk Patrick J. Cwiningham ShCIT)' K. Stephens Lee L. Rappleyea ChiefCo\D\Sel ChiefCoW\SCI Chief COWlSCI Chief of Co\D\Sel Chief Counsel Chief Investigator

~ Drui:: lucketeerini:: ~ Civil Enforcement H AHCCCS Fraud Control I

-I Financial Remedies -I Criminal Enforttment L..j Victim \Vitne" Proi::ram I

~ ~ r ~ ~ CRIMINAL DMSION PAGE 56

The Criminal Division of the Attorney General's criminal investigations, which generally are not Office is divided into seven section: Criminal described in this public report because of ethical and Appeals; Drug Enforcement; Environmental legal confidentiality provisions. Many of these Enforcement; Organized Crime and Fraud; Special investigations do not result in the filing of criminal Investigations; Criminal Trials and Tucson Criminal. charges. . All investigative matters and charges The specific responsibilities of each section are contained in this annual report involve accusations described below. In addition, the division is only. Suspects/defendants are presumed innocent supported by Special Investigation Section agents, until proven guilty. most of whom are peace officers, and the Victim Witness Program, which acts as a liaison with the CRIMINAL APPEALS SECTION victims of crimes prosecuted by the· Attorney General's Office. · The Criminal Appeals Section represents the. State of Arizona in all of the criminal appeals filed by All Criminal Division attorneys cooperate with the convicted felons. It also represents the state in all attorneys assigned to the Consumer Protection Section federal court proceedings arising out of state court of the Civil Division, the special agents of the convictions where tht defendant is incarcerated by the Attorney General's Special Investigations Section, as Department of Corrections. In addition, it provides , well as agents of the Department of Public Safety, trial and research assistance to the county attorneys Federal Bureau of Investigation, the Drug upon their request. Enforcement Administration, the U.S. Customs Service, Phoenix Police Department, and many other In addition to the appellate matters, the Criminal federal, state and local law enforcement agencies. Appeals Section handles all petitions for post­ conviction relief filed in death penalty cases. This Many of the complex and sophisticated cases enables the office to explore thoroughly the relevant investigated and prosecuted by the Criminal Division issues at the trial court level and to make a complete cannot be handled by local prosecution agencies, record for subsequent review in state and federal since they must concentrate their resources primarily courts. By using a group of attorneys knowledgeable on the overwhelming number of II street crimes. 11 If about Arizona and United States Supreme Court death the Attorney General's Office did not investigate and penalty decisions, the office has taken a consistent prosecute these cases, the perpetrators of many approach in presenting the applicable law to the seriou_s crimes would go unpunished. The division's reviewing courts, subject only to a case-by-case policy is to fully implement and use the enforcement analysis based on the different facts of each crime. and remedial potential of the Arizona Racketeering This has resulted in a more expeditious appellate Act, including the civil remedies contained in those review process than if each county attorney retained statutes. The division also serves as legal advisor to responsibility for the case. This approach has the state grand jury and prosecutes all indictments it resulted in Arizona's first executions in 29 years. returns. As noted below, Criminal Division The section fully expects the number of executions to employees have also been involved in a variety of increase in the very near future. community educational programs whose purposes are notifying the public about crime prevention and With approximately 110 inmates now on death row, detection. · Criminal Division employees are also the death penalty cases continue to generate involved in drafting legislation. considerable legal work as the defense attorneys come up with new and different challenges to the capital Some of the significant publicly filed court cases punishment system. The Arizona superior courts handled by the Criminal Division in FY 1993 are have been increasingly liberal in allowing inmates to described below. · .A substantial portion of the file successive petitions for post-conviction relief division's resources were also devoted to pending resulting in many cases litigating issues and CRIMINAL DMSION PAGE 57

relitigating issues already decided. Although we where he worked, and then went to the owners' house ultimately prevail in almost all of these cases, the and killed the husband and the wife. Clark stole their result is that we expend many hours of time opposing jewelry, credit card, money, and car. He later these petitions. gloated about the murders and retained one of the bullets that had passed through the head of one of the Several other events have led to a· dramatic increase victims as a souvenir. Clark was executed by lethal in the workload of this section. As a result of an injection'just after midnight, Apri1 14, 1993. increasing prosecution emphasis and punishment for crimes against children and narcotics violations, an Execution of John George Brewer increased number of defendants are gong to trial rather than pleading guilty. The effect is to increase In the early morning hours of November 11, 1987, the number of appeals this office must handle. This Brewer began to beat and strangle his pregnant is dramatically reflected in the attached statistical girlfriend when she told him she was leaving to help analysis. him learn to live on his own. After a lengthy struggle, Brewer finally killed her by strangling her From 1985 through 1990, this section handled with a tie. After taking a shower Brewer had sexual approximately 1,650 cases per year. In 1_991, we intercourse with the corpse. Brewer did not contest received nearly 3,000 cases. In 1992, we received the death sentence and represented himself against his 2,127 cases, in spite of the legislature's abolition of mother's efforts to fight the death sentence. On appeals from plea agreements effective September 30, March 3, 1993, Brewer became the first Arizona 1992. This enormous increase in appellate cases prisoner to be executed by lethal injection. In a required both the Maricopa and Pima County Public written opinion dissenting from the 9th Circuit's Defender's Offices to seek relief in reducing their failure to grant en bane review, Judge Reinhardt, case load or adding additional attorneys. Maricopa joined by Judge Pregerson, lamented that, in capital County increased their public defender appellate cases, the judiciary had II sorely failed" by not giving section by five attorneys. Division Two of the Court adequate consideration to the cases. [1993 WL of Appeals ordered the Pima County Public Defender 21930, 14 (9th Cir.)] not to accept additional cases until their backlog was reduced. The net effect of this action was to Richmond v. Lewis, 113 S. Ct. 528 (December 1, substantially increase the workload of the criminal 1993). appeal's section. On October 13, 1992, this matter was argued to the A statistical analysis reflecting the section's workload U.S. Supreme Court. Richmond had been sentenced for the 1992-93 year is as follows: to death for the murder of a man who had been lured to the outskirts of Tucson by Richmond's two women Responsive Briefs Files 1,017 accomplices. In a 4-1 opinion, the Arizona Supreme Responses Filed 2,672 Court had upheld Richmond's death sentence; Oral Arguments 49 however, twp justices wrote a concurring opinion that New Files Opened 2,041 differed in its analysis from the lead opinion, rejecting one of the aggravating factors, but still Some sample cases handled by the Criminal Appeals finding the death penalty to be appropriate. The U.S. Section are provided below. Supreme Court, in a 7-2 opinion, found that even though the two justices in the lead opinion may have Execution of James Dean Clark properly reweighed the aggravating and mitigating factors, the two justices in the concurring opinion had In the early morning hours of December 4, 1977, not explicitly reweighed . the aggravating and Clark killed two other wranglers at the dude ranch mitigating factors or made a harmless error analysis. CRIMINAL DMSION PAGE 58

Thus, the Court could not find that a majority of the Death Case - State v. Salazar, Ariz., 844 P. 2d 566 I Arizona Supreme Court had properly reweighed the (1992) factors . The Arizona Supreme Court is currently considering whether it should resentence Richmond or _Salazar and his companion pried the metal security remand to the superior court for resentencing. bars off a window, entered the home, and beat and strangled an 89-year-old woman to death. The Carriger v. Lewis, 971 F.2d 329 (9th Cir. 1993) Arizona Supreme Court affirmed the conviction and sentence and made two particularly significant On March 13, 1978, Carriger entered a Phoenix holdings: (1) that Strickumd v. Washington sets the jewelry store and forced the proprietor into a only standard for judging the competency of defense backroom, where he tied his hands and beat him with counsel, so the NLADA (National Legal Aid and an iron skillet and a ring sizer. Carriger finished him Defender Association) standards for death penalty off by strangling the victim with his own tie. The counsel are irrelevant; and (2) that the Arizona case was argued to the en bane Ninth Circuit on April Supreme Court will no longer conduct proportionality 30, 1992. The court vacated its panel's prior reviews is death penalty cases. decision and affirmed the district court's denial of the writ, holding that the trial court did not deny Carriger Death Case - State v. Schackart, (Arizona Supreme due process by not giving a lesser included offense on Court, July 22, 1993) second-degree murder when the evidence did not support second-degree murder. · The defendant claimed that while talking with the victim in a hotel room,· he began confusing the victim The Arizona Supreme Court has issued a warrant of with his ex-wife, so he pulled out a gun and forced execution for Carriger on December 1, 1993. her to have sex with him. When the victim was Because Carriger has been through both the state and apparently sleeping, Schackart hit her with the gun federal systems one time, there is a legitimate chance butt, and when she began screamin_g, he strangled her that the execution will occur on that date. to death and stuffed a large sock in her mouth. Although the Arizona Supreme Court upheld the State v. Youngblood, Ariz., 844 P.2d 1152 (1993) conviction, it found that the transcript of the sentencing hearing was so inadequate that a new The Arizona Supreme Court, in a 3-2 opinion sentencing hearing is required. i (Justices Feldman and Zlaket dissenting), finally decided the issue of whether, absent bad faith on the State v. Anderson, Ariz., 850 P.2d 669 (1993) part of the state, failure to preserve evidence that might be exculpatory constitutes a denial of due The court of appeals reversed for fundamental error process under Article 2, Section 4 of the Arizona on the basis that there was no factual basis for Constitution, holding. that it does not. The U.S. questions the prosecutor asked on cross-examination. Supreme Court had already agreed with the State's The Arizona Supreme Court found that the appellate position, but on federal due process grounds. On court record was insufficient to determine whether the remand, Division Two of the Arizona Court of State had sufficient evidence to ask the questions, and Appeals found that a different result obtained under held that the court of appeals had erred by reversing the Arizona Constitution. Division One had come to on that basis. the contrary result in State v. Herrera-Rodriguez, 164 Ariz. 49, 790 P.2d 747 (Ct. App. 1989). The State v. Huerta, 142 Ariz. Adv. Rep. 3 (June 24, Arizona Supreme Court did not expressly say that the 1993) federal and Arizona due process clauses are coterminous, but did say that the "touchstone" under A prospective juror said that he could not be impartial both is fundamental fairness. because the two charges of child molestation had been CRIMINAL DIVISION P AGE 59 alleged by two different victims. The trial court State v. Johnson, Ariz., 842 P.2d 1134 (1992) refused the defendant's motion to strike. The issue was whether the defendant was denied a fair trial The Arizona Supreme Court finally had it with Judge when there was no showing that any of the jurors Riddel not reading the reasonable doubt instruction at who actually participated in the trial was prejudiced. the close of the case. · In this case, that error was The Arizona Supreme Court found that the trial court combined with an erroneous instruction. The dissent abused its discretion by not excusing the juror for argued that the evidence was overwhelming, that the cause and that the prejudice on having one less defendant had a fair trial, and that it was unfair to the peremptory strike than the prosecution is enough to victims to drag. them back into court to try to ensure mandate reversal. Both of the dissenting opinions the trial judge's compliance with the law. Later, the stressed that the defendant had a fair trial. Justice Court ordered that Judge Riddel not be assigned any Corcorran' s dissent warned prosecutors to held trial more criminal cases. courts avoid error.

CRIMINAL APPEALS SECTION STATISTICAL ANALYSIS REPORT (Period: July 1, 1992 to June 30, 1993)

A. BRIEFS RECEIVED

DATE Superior Ct. of Appeals District Court Ninth Circuit United States TOTAL Court Supreme Ct. Supreme Ct . Jul 92 0 170 9 0 2 181 Aue 92 0 122 4 0 5 131 Sen 92 0 177 2 1 5 203 Oct 92 0 161 4 0 2 167 Nov 92 0 133 13 1 2 149 Dec 92 0 162 7 0 1 170 Jan 93 0 99 11 0 3 113 Feb 93 0 118 3 0 2 123 M~r 93 0 119 11 0 2 132 Aor 93 0 70 5 1 0 76 Mav Q1 0 90 7 0 0 97 Jun 93 0 91 7 0 1 99 TOTAT 0 1 512 101 1 ')" 1 641 CRIMINAL DMSION P AGE 60

B. RESPONSIVE BRIEFS FILED

DATE Superior Ct. of Appeals District Court Ninth Circuit United States TOTAL Court Supreme Ct. Supreme Ct.

Jul Q? 0 101 'i 1 0 107 Aue: 92 0 71 7 7 2 87 SP.n 92 0 :n 2 4 0 93 Oct 92 0 62 5 5 3 75 Nov Q? 0 79 7 4 0 90 ·- Dec 92 0 77 2 0 1 80 fan 93 0 h? 4 4 1 71 Feb 93 0 87 5 4 2 98 M~r Q1 0 79 7 1 0 'x7 Anr 93 0 82 11 1 1 95 Mw93 0 4'x 7 'i 1 61 Jun 93 0 53 15 5 0 73 TOTAi 0 RRR 77 41 11 1 017

C. OTHER RESPONSES FILED

~ DATE Superior Ct. of Appeals District Court Ninth Circuit United States TOTAL . Court Supreme Ct. Supreme Ct. Jul 92 7 269 25 3 0 304 Aue: 92 8 249 21 4 1 283 Seo 92 5 195 25 4 4 233 Oct 92 8 209 21 6 2 246 Nov 92 10 202 19 7 0 238 Df:".c 92 7 180 14 15 0 216 Jan 93 31 192 22 2 0 247 Feb 93 6 189 16 2 0 213 Mar 93 8 147 29 3 1 188 ' Anr93 2 145 22 4 1 174 Mav 93 7 118 15 3 0 143 .Tun 93 6 154 24 3 0 187 TOTAi 1()" 214Q 7.'i1 'i6 Q ?. 67?. -

- - CRIMINAL DIVISION PAGE 61

D. ORAL ARGU1\1ENTS .

DATE Superior Ct. of Appeals District Court Ninth Circuit United States TOTAL Court Supreme Ct. Supreme Ct.

J11l Q? 0 1 0 () () 1 Amr 92 0 0 0 0 0 0 Sen 92 0 1 0 0 0 1 Oct 92 1 3 0 1 1 6 Nov 92 0 4 1 () () 5 Dec 92 1 4 0 1 0 6 .fan en 0 4 0 0 () 4 Feb 93 2 2 0 1 0 5

M~r Q1 1 ~ . () () () 6 Aor93 1 3 0 1 0 5 M::iv 91 1 5 0 0 () 6 Jun 93 ' 0 2 0 0 0 2 TOTAT 7 'V, 1 i:::I. 1 49

E. NEW FILES OPENED

• DATE Superior Ct. of Appeals District Court Ninth Circuit United States TOTAL Court Supreme Ct. Supreme Ct. Jul 92 . 181 0 0 0 0 181 Aue: 92 184 0 0 0 0 184 Seo 92 186 0 0 0 0 186 Oct 92 156 0 0 0 0 156 Nov 92 156 0 0 0 0 156 Dec 92 197 0 0 0 0 197 Jan 93 147 0 0 0 0 147 Feb 93 128 0 0 0 0 128 Mar 93 232 0 0 0 0 232 Anr93 1/,4\ 0 0 0 0 165 Mav 93 149 0 0 0 0 149 Jun 93 16() 0 0 0 0 160 TOTAT 2 n i:::11 0 0 () () ? ()41 CRIMINAL DMSION PAGE 62

F. SERVICE MEASUREMENTS

Service Measurements Actual Actual Actual Estimated Estimated Estimated FY 1991 FY 1992 FY 1993 FY 1994 FY 1995 FY 1996 Appellate Files Received* 2,374** 2,556** 2,041 *** 2,271 **** 2,601 **** 2,831 **** (no FTE additions since FY 1989)

* The Criminal Appeals Section represents the State of Arizona in all criminal appeals filed by defendants with felony convictions. Included in these appeals are the ·litigious capital cases. The section also represents the state in all federal court proceedings arising out of state court convictions wherein the defendant is incarcerated with the Arizona Department of Corrections. In addition, it provides trial and research assistance to the trial sections of the Attorney General's Office and county attorneys upon their request.

** Actual figures are kept on a calendar year basis.

*** Decrease from FY 1992 resulted from legislation that eliminated appeals from plea agreements.

**** Estimates are based on 5-year totals indicating an average increase of 230 cases per year.

DRUG ENFORCEMENT SECTION General's Office has succeeded in holding criminals accountable for their conduct, removing any financial The Drug Enforcement Section is committed .to the incentive from narcotics traffickers and reducing the successful investigation and prosecution of narcotics general demand for illegal substances. offenses, money laundering offenses and illegal enterprises within the State of Arizona. In an effort Drug Racketeering Unit to achieve this goal, the section has established a three prong approach to the problems related to The Drug Racketeering Unit is responsible for the substance abuse. First, the' Drug Racketeering Unit criminal prosecution of narcotics traffickers, is responsible for the criminal prosecution of individuals engaged in money laundering and their narcotics offenses. Second, .the Financial Remedies criminal syndicates. Generally, the cases submitted Unit is responsible for identifying and pursuing, for prosecution fall into three categories. _First, the through civil forfeitures, all assets either acquired more complex conspiracy cases involving multiple with drug proceeds or utilized int the course of illegal counties and multiple defendants. Second, cases in drug activities. Third, and p~rhaps the most which a particular County Attorney may have a innovative component of this approach, the section conflict of interest which would preclude the has taken a proactive role in drug/gang education and investigation or prosecution of such cases. The final prevention throughout the state. Through this category would be those cases which may be initiated coordinated effort that combines aggressive law by the investigative branch of the Attorney General's enforcement with community education, the Attorney Office which usually involves an investigator working CRIMINAL DIVISION PAGE 63

in conjunction with a federal or state narcotics task received substantial sentences. force. State v. Aldabb4gh and Abuhamdieh This unit is widely recognized throughout the Southwest for its expertise in the area of electronic This case involved an investigation into various surveillance and financial search warrants. Attorneys enteiprises that were engaged in fraudulent schemes. in this unit are available 24 · hours per day to assist The investigation included the execution of more than law enforcement agencies and are frequently called 40 search warrants in 3 states and resulted in the upon . to take a proactive role in criminal indictment of multiple defendants for various felony investigations by advising law enforcement officers. offenses. This matter is currently set for trial in mid- Within the office, the drug prosecutors tend to be the 1994. most active litigators given their caseloads and the serious nature of the offenses. State v. Ketchner, et. al

The following is a sample of some of the cases which This case involved a major cocaine distribution the unit has successfully prosecuted throughout the operation in Mohave County which the Mohave last fiscal year: County Attorney requested be handled by the . Attorney General. Criminal charges included Dirty Dozen Motorcycle Club conspiracy to sell cocaine, sell of cocaine and illegally conducting an enteiprise. All defendants This was an in-depth investigation into the illegal were convicted with the primary defendant receiving activities of the Dirty Dozen Motorcycle Club within a 10 year sentence. the State of Arizona. This investigation was initiated by the Arizona Department of Public Safety with the State v. Ramos-Chavez, et. al cooperation of various local ·and federal agencies. Approximately 80 search warrants were executed in This case involved a significant cocaine/heroin September, 1992 on various locations throughout the distribution ring operating between California and state. Based on the fruits of this investigation, 180 Arizona. Approximately 13 defendants were indicted felony counts have been filed against approximately in this case and all individuals who were apprehended 40 individuals on a variety of criminal charges. A have been convicted. · Several defendants remain 1994 trial date is anticipated. fugitives at this time.

State v. Francisco Garcia State v. Singleton, et. al

This was a series of cases involving approximately 35 This case involved an extensive methamphetamine defendants who were associated with a local street operation which functioned throughout the Southwest. gang that was engaged in the distribution of narcotics Various search warrants were executed in multiple · and the sale of stolen vehicles. The case has been jurisdiction and assents were seized for civil resolved except as to those defendants who remain forfeiture. A total of 6 defendants were indicted by fugitives. the state grand jury and are awaiting trial in this matter. State v. Alberico Pietrocarlo State v. Lustig and Gonzalez This case involved one of the more notorious drug traffickers in the State of Arizona who had an This case involved a drug trafficker who was extensive history in narcotics offenses. All laundering his profits with the assistance of a real · defendants in this case entered pleas of guilty and estate agent. Approximately $600,000 had been CRIMINAL DIVISION PAGE 64

laundered over a 15 month period. The drug trafficking and on the reduction of the profits made trafficker entered a plea of guilty to multiple counts possible by drug dealing. and agreed to testify against the real estate agent. Following a 4 week jury trial, the real estate agent Services provided by the project include location and was convicted of multiple counts of money financial ana1ysis of assets, computerized asset and laundering. evidence tracking, property management, statewide currency transaction and movement analysis, financial Financial Remedies Unit investigation, litigation of selected cases, and filing of amicus briefs . in civil racketeering appeals. The Financial Remedies Unit supports the use of civil Supporting County Attorney litigation has been a economic remedies to reduce the profit incentive of major part of Forfeiture Support Project cases. The drug dealing and to disrupt drug networks. It project has cooperated regularly in major civil provides legal, investigative, property management litigation with County Attorneys on a statewide basis. and appellate support to financial remedies prosecutors statewide, and pursues selected cases High Intensity Drug Trafficking Area (HIDTA) focused on money launderers and other facilitators of Targeting and Prosecution drug trafficking enterprises. lllDTA is a federal program which provides funding The unit is nationally recognized for leadership in for drug enforcement on the Southwest Border, which money laundering, forfeiture and civil racketeering. has been designated as a High Intensity Drug Its members are frequently callee! upon for assistance Trafficking Area. in setting up similar efforts, establishing effective legislation, coordinating enforcement efforts, and lllDTA funding has enhanced' two abilities of the providing training materials. The unit serves as Financial Remedies Unit. First, the funding supports clearinghouse for the LECC Forfeiture Subcommittee, the unit's evolving efforts to obtain and use financial the Arizona Forfeiture Association (AFA), and the and transaction reporting data to guide statewide Western Financial Remedies Enforcement Association resource allocation, improve strategic (regional and (WFREA) and its WFREA Quarterly, cosponsors an categorical) targeting, enable tactical (case-specific) annual Southwest Border Money Laundering targeting and support all investigations. Second, Conference with the federal Financial Crimes lllDTA funds support major, long-term joint projects Enforcement Network (FinCEN), and provides or with the U.S. Customs Service and other state, local supports numerous training seminars. and federal agencies designed to focus civil and criminal remedies on the drug industry along the The efforts of the Financial Remedies Unit have state's southern border. attracted three major sources of funding support, each of which reflects a major program are within the unit. Narcotics Facilitators Project·

Forfeiture Suiwort Project The Narcotics Facilitators Projects provide federal funds to money laundering investigations through a The core functions of the Financial Remedies Unit are Control Board designed to provide coordination support services funded by a grant from the Arizona among the U.S. Customs Service, U.S. Drug Criminal Justice Commission (ACJC). The goal of Enforcement (DEA), Arizona Department of Public these support services is to enhance the power of Safety, Arizona State Banking Department (which has local investigative and prosecutive agencies to use regulatory jurisdiction over all money transmitters, civil economic . remedies to attack the illegal drug including non-bank financial institutions), and the industry. These strategies focus on the removal of Arizona Attorney General's Office. The Control property needed to conduct the daily business of drug Board, chaired by the Attorney General's CRil\flNAL DIVISION PAGE 65 representative, evaluates potential cases, funds those State v. Singleton · with the most potential for disruption of the statewide financial network supporting drug trafficking, and A methamphetamine production enterprise that had oversees case development through conclusion by produced hundreds of pounds of methamphetamine civil and criminal prosecution. The Control Board for Arizona consumption was sued in a DPS/Prescott assures state-federal coordination and best use of Area Narcotics Task Force case. Seizure and regulatory, civil and criminal remedies in each case. searches were made simultaneously in Arizona, Colorado and Texas in cooperation with The following is a sample of some of the cases which state and local officials in all three states. Asset the Financial Remedies Unit has prosecuted: forfeiture and sharing of assets made efforts in Texas and Colorado possible that would otherwise have been State v. Figueroa-Soto, et. al unaffordable by the rural agencies involved. Property · as far away as Oregon and California was seized as In cooperation with state criminal prosecution by the part of this investigation. Attorney General's Tucson Criminal Division and federal forfeiture prosecution of a portion of the case, State v. Nelson. Ra~keteering seizure statutes were the state filed a civil racketeering action seeking essential in the emergency seizure of $2 million in forfeitures and other civil remedies in connection with state treasury assents in the process of being an enterprise it alleged had imported over 128 tons of embezzled by a ·state employee. Dollar-for-dollar marijuana in an eight month period through Tucson, restitution was made to the state treasury, a result that Mesa and Tempe. Judgments have so fare been would not have been possible without seizures for obtained against members of two of the three sub­ forfeiture. groups involved. This organization, the largest known marijuana enterprise in Arizona history, has State v. Aldabbagh, et. al. Civil remedies have been been completely dismantled. instituted against an enterprise alleged to be involved in various fraudulent and criminal activities. State v. Somoza, et. al Drug/Gang Prevention Program The state alleged an ongoing importation conspiracy that included massive bribes to Mexican officials who The Arizona Attorney General's Office has taken an had seized 20 tones of the group's marijuana in a active role in the area of drug/ gang prevention single arrest. Judgments have been obtained against programs by awarding a series of grants from its state key members of the enterprise, a portion of which is RICO funds pursuant to ARS § 13-2314.01. The enforceable by virtue of seizures for forfeiture. The chart on the following page lists recipients of the judgments have been turned over to Mexican 1992-1993 awards that provided alternatives to gang Embassy officials in a diplomatic effort to enhance activities and substance abuse. international cooperation in the struggle against drugs and the corruption that drug money engenders. CRIMINAL DMSION PAGE 66

DRUG/GANG PREVENTION PROGRAM

RICO GRANT RECIPIENTS

Wakefield School (Tucson, AZ) $10,000 Maricopa County Board of Supervisors (Phoenix, AZ) $25,000 Maryvale High School (Phoenix, AZ) $10,000 Carl Hayden Community High School (Phoenix, AZ) $10,000 Florence Unified School District (Florence, AZ) $5,000 Maricopa· County Sheriff (Mothers Against Drugs, Phoenix, AZ) $5,000 Arizona State University (Paul Rodriguez Drug/Gang Prevention Program, Phoenix, AZ) $10,000 Yuma Police Department (Yuma, AZ) $5 ,000 Glendale Police Department (Glendale, AZ) $5,000 Tucson Police Department (Tucson, AZ) $5,500

TOTAL AWARDS $90,500

ENVIRONMENTAL ENFORCEMENT SECTION their tributaries. In this connection, WRAT represents primarily the State Land Department, This Section's represents the State of Arizona and which has filed some 8,000 claims on over 9.6 advises all state agencies on civil and criminal million acres of trust land, the Game & Fish environmental enforcement matters. The Section's Commission, which has filed 150 claims in 10 princ;ipal client is the Arizona Department of adjudication areas, and the State Parks Board with Environmental Quality, to which it supplies all legal claims for recreation and historic parks. WRAT also services, consisting of day-to-day legal advice, rule represents several other state agencies, including the development and representation in all civil, criminal, Board of Regents, Community College Board, administrative and judicial matters. The Section also National Guard, Department of Transportation, and enforces criminal environmental laws of the State, the Department of Corrections in this litigation. and, where appropriate, together with the federal government, prosecutes federal violators. The Working with this Section is the Western States Section is also charged with the responsibility of Hazardous Waste Project. This project was civilly prosecuting, on behalf of the Department of established pursuant to a grant awarded to the Agriculture, violations of the state pesticide laws. Arizona Attorney General's Office by the United The Section also has assumed the representation of States Environmental Protection Agency in 1987 and the Oil and Gas Conservation Commission. consists of fourteen members: Arizona, New Mexico, California, Utah, Colorado, Nevada, Idaho, . In addition, the Section develops environmental Oregon, Washington, Alaska, Hawaii, Alberta, legislation for this office, and where called upon, the British Columbia and the Defense Criminal Arizona Department of Environmental Quality and the Investigative Service. The project exists in order to Legislature. coordinate liazardous waste management and general environmental enforcement throughout the western Finally, the Section, through the w·ater Rights United States and Canada, and to provide information Adjudication Team (WRAT), represents the State as and training to state personnel 1nvolved in the a claimant under the Gila and Little Colorado General enforcement of the laws dealing with hazardous Stream Adjudications, special civil cases dealing with waste, air pollution, water pollution and solid waste, the adjudication of water claims on those streams and including both lawyers and non-lawyers such as CRIMINAL DMSION PAGE 67

investigators and technical staff. . pipe at the Ray Mine without following asbestos standards. The company also demolished a cooling Civil Environmental Enforcement Unit tower at the Hayden Smelter without appropriate precautions. Among the significant matters handled by the Civil Environmental Enforcement Unit during the past year State v. Gard, et al. are the following. A lawsuit was filed for abandonment of In re Circle K Corporation approximately 500,000 gallons of used oil in a residential area southwest of Phoenix. The court Arizona, 28 other states and the federal government imposed a preliminary injunction requiring clean up pursued claims against Circle K in bankruptcy court of the site. This has not been done and Gard has relating to contamination at closed gasoline stores it been held in civil contempt but no sanction has been formerly leased. A settlement agreement was filed imposed as yet. A tentative settlement has been and approved, wherein Circle K agreed to pay $30 reached with the landowner. Trial is anticipated in million of which Arizona received $1.66 million for late 1993 or early 1994. reimbursement of privately run cleanups, funding of state lead cleanups and possible replenishment of the ADEO Compliance Order Training State Assurance Fund. · The unit provided training and specific guidance for State of Arizona and City of Phoenix v. Motorola; various programs administered by ADEQ. This Inc., et al. included the development of standard forms of administrative orders and conducting training in the A Consent Agreement was in filed in U.S. District use of these forms and the drafting of administrative Court which Allied Signal Corporation, Digital orders based upon these forms. Equipment Corporation and the State of Arizona paid $8.2 million in settlement of all cost recovery and CAWCD v. EPA contribution claims, with the funds earmarked solely for the 19th Avenue Landfill remediation. This The Central Arizona Water Conservation District litigation has now been successfully concluded, with (CAP) petitioned the U.S. Court of Appeals for the settlements totaling $29 million. 9th Circuit to overturn the EPA' s regulation of sulfur dioxide emissions from SRP's Navajo generating State v. Mobil Oil Corporation station in Page. The State of Arizona entered the lawsuit as amicus curiae and submitted a brief in This was the first civil environmental penalty trial in support of EPA's position. The EPA rule was upheld Arizona. The court ruled that Mobil had violated the by the Court. The CAP has filed a petition for law by delaying recovery of over 2,000 gallons of certiorari in the United State Supreme Court and the gasoline which had leaked from underground tanks at State is filing an amicus brief opposing the petition. a gasoline station site in Yuma. The court imposed A decision will be made the Court later this year. $622,000 in civil penalties and awarded ADEQ its court costs. Mobil has paid the penalties and costs. State v. Shelby Wastewater

State v. Asarco, Inc. Numerous discharges from improperly maintained wastewater treatment ponds at the Shelby Wastewater This is suit seeking civil penalties for violations of facility in Sedona, into Oak Creek, resulted in a civil asbestos work practice standards consisting of the complaint which followed numerous warnings, renovation of over three miles of asbestos coricrete including a compliance order. A global settlement CRIMINAL DIVISION PAGE 68

was reached between EPA, ADEQ and Shelby which This case involves parallel civil and criminal provided for a compliance schedule for remediating proceedings. The initial civil Complaint alleged the percolation ponds and payment of a $100,000 various violations of Sunbelt's air quality installation civil penalty, $40,000 of which was payable to permit, including failure to maintain the required ADEQ. ADEQ collected a total of $41,232.87, thermocouple monitoring system and failure to certify including interest. the continuous emissions monitoring system for hydrogen sulfide. Further investigations led to State v. Quality Printed Circuits allegations that the facility has also violated hazardous waste management and water quality related Following a fire in August, 1992, which resulted in requirements. The parties are negotiating a Consent. a plume of allegedly toxic smoke permeating the Judgment and have reached· agreement on many adjacent neighborhood, a compliance order was issued issues. If executed, the civil Consent Judgment is to Quality Printed Circuits requiring it to conduct a expected to result in the largest negotiated civil thorough assessment of any toxic materials that may penalty yet collected on behalf of ADEQ. have been released and of any health risks associated with the release. State v. Sheldon Swc,,in, et al.

State v. ESCO, et al. ADEQ had issued a Cease and Desist order requiring Sheldon Swain and property owner James Stewart to A civil action was filed in U.S. District Court against remove hundreds of thousands of tires stored on a 29 . individual and corporate defendants alleging parcel of property at South 22nd A venue and Pima liability under superfund (CERCLA and WQARF) for Street in Phoenix. A fue in October 1992 had the cleanup of a site located at 5200 South Braniff consumed many of the tires, leaving both burned and Road in Pima County, Ariz.ona. ESCO was a solvent unburned wastes on the property, along with possible recycling business that operated in the Tucson area soil contamination due to release of hazardous during the 1980's before it was closed by the EPA. substances during the fue. An administrative hearing A tentative settlement agreement has been reached resulted in confumation of the Cease and Desist with some of the defendants calling for Order. Upon failure of the defendants to comply, a reimbursement of ADEQ of over $340,000 in past civil Complaint seeking injunctive relief and civil costs and to evaluate the site with a view towards penalties was filed against Swain, Stewart, and eventual cleanup. The litigation is proceeding against additional parties determined to have ownership the non-settling defendants. interests in the property.

State of Arizona and Pima County v. Arizona State of Arizona v. United Industrial Corp. Portland Cement A civil complaint was filed under CERCLA against A civil complaint was filed by both the ADEQ and this New York-based corporation which owned and Pima County alleging that Arizona Portland Cement's operated an industrial site on West Osborn Road Tucson facility had burned hazardous waste in during the 1950's and early 1960's. The suit seeks to violation of law. In the consent judgment executed recover all of the State's past costs incurred in by the three parties, Arizona Portland Cement agreed dealing with the TCE contamination at the site and to to remediate the county-level violations observed in obtain a determination that United be required to fully the inspection, pay a civil penalty of $367,840.00 and remediate the site of the TCE contamination which implement a pre-acquisition testing program to has polluted the groundwater in that part of West prevent future violations. Central Phoenix. To date, the state has incurred costs of approximately $1,000,000. It is estimated State v. Sunbelt Re.fining Co., et al. that the full cost of remediating the TCE CRIMINAL DMSION PAGE 69

contamination at this site will be approximately case which may lead to major changes in the way $25,000,000. water rights are managed in Arizona.

State v. F&B Mfg. Inc. Water management is serious public issue confronting all the arid western states. In November, the F&B is one of the responsible parties in the West Attorney General in connection with the Department Central Phoenix Study Area, although its plume of of Water Resources, sponsored a conference attended contamination may not contribute to the main plume by state attorneys and public water administrators of contamination in the study area. An agreement from eleven states involved in General Stream was negotiated wherein F&B would pay ADEQ _its Adjudications of appropriate surface and past costs and future oversight costs, and would groundwater. It is hoped that this conference will conduct a remedial investigation/feasibility study at become an annual one where state water officials can the F&B site. A complaint has b~n filed and share information and seek ways to improve the approved in U.S. District Court to lodge this necessary but costly and complicated adjudication agreement. ADEQ has received $68,000 from F&B process. and has billed an additional $168,000. Criminal Environmental Enforcement Unit State v. Nucor The Criminal Environmental Enforcement Unit Nucor is a responsible party in the West Central investigates and prosecutes cases involving criminal Phoenix Study Area. ADEQ has negotiated a violations of the state's environmental laws. In settlement with Nucor wherein Nucor will pay ADEQ addition, the unit provides investigative assistance to $1.275 million as full settlement of Nucor's liability the Arizona Department of Environmental Quality. at the site. The U.S. District Court has approved the It performs background investigations on businesses Nucor settlement. and persons seeking permits from the state to operate businesses involved in the treatment, storage, or Water Rights Adjudication Team disposal of hazardous waste. The unit also investigates allegations of organized crime Significant progress occurred during the past year in involvement in the hazardous waste industry. the Arizona's two general stream adjudications when the court appointed special master to set up The primary purpose of this unit is to prosecute cases representative cases involving state water rights. and seek substantial penalties, including possible Rulings in these targeted cases should establish legal incarceration in certain cases, to: (1) afford an principles for confinning stockponds, springs, and adequate deterrence against other potential misconduct small wells without the need for an individual hearing and environmental abuse; (2) remove the competitive on each claim. Over 90% of the state's claims may advantage and economic incentive realized when a be summarily confirmed through this process, thereby defendant disregards requirements of the achieving a great saving of court time and · legal environmental statutes; and (3) seek a just punishment expense. Trial proceedings in the targeted cases will for offenders. be conducted during the fall and winter. The unit had previously established three Also, in the Gila Adjudication, the Supreme Court of environmental crimes task forces in central, southern Arizona selected the Attorney General as one of six and northwest Arizona to provide assistance to and parties to argue an Interlocutory Appeal involving a coordination among state, county and local challenge to the fundamental law of the state governments in environmental enforcement. The regarding relative rights of surface and groundwater newest task force is the environmental crimes task users. Over 30 parties filed briefs in this historic force of the State/Federal Law Enforcement CRIMINAL DMSION PAGE 70

Coordinating Committee (LECC). Office, the State discovered that the company, Micom, had stored over forty-two drums containing The unit conducts periodic training sessions for the hazardous waste in excess of the permitted ninety-day Department of Environmental Quality and with local period. The company had previously signed a governmental agencies involved in environmental Consent Order with ADEQ agreeing to comply with enforcement to familiarize personnel in these agencies all applicable statutes and laws regarding the storage with the criminal enforcement provisions of both state of hazardous waste after prior violations had been and federal environmental law. The unit has also noted. The company was fined $10,000.00 and sponsored the attendance of the Department of ordered to pay $8,155.00 in restitution to the Arizona Environmental Quality and Arizona Game and Fish Department of Environmental Quality. In addition, Department personnel and police officers from the company was placed on probation for three years Phoenix, Bullhead City, Tucson, Tempe and the and ordered to place an ad in a newspaper Department of Public Safety at the Federal Law demonstrating the need for companies to comply with Enforcement Training Center's program on environmental laws. environmental crime. State v. Swain Members of the unit also appear before private organizations at seminars to epucate the private sector On October 20, 1992, a four-alarm tire fue occurred about their responsibilities and liabilities under the .at 22nd Avenue and Pima Street in Phoenix. This state's environmental laws. office opened an investigation in an effort to determine whether any criminal violations had Among the significant matters handled by the occurred. As a result of our investigation and Criminal Environmental Enforcement Unit during the referral to the Phoenix City Prosecutor's Office, the past year are the following. · persons responsible were convicted of numerous violations of the city's fue code. The defendant, State v. Marina Operations Corp. Swain, was ordered to spend six months in jail and pay restitution in the amount of $429,000.46. On May 12, 1993, a Del Webb subsidiary and ARA Leisure Services paid a record $1,325,000 to settle State V. Shumway charges the companies created an "underwater landfill" by throwing hundreds of batteries and tons On July 23, 1992, Todd Ross Shumway was indicted of debris into Lake Powell in connection with their by the State Grand Jury for criminal littering and houseboat rental operations. The dumping took place po11uting. Shumway had disposed of construction from 1980 to 1990 at Wahweap Marina near Page in debris illegally on private property on January 7, Coconino County and at four .other marinas. The 1992. The property belonged to Farnsworth investigation revealed that marina boat rental Development · Company. The defendant was employees routinely discarded lead acid batteries, sentenced to 1.5 years in jail on December 9, 1992. toilets, propellers and engine parts into Lake Powell from 1980 to 1990. State v. Denny Edlin

State v. Micom Circuits West On July 16, 1993, the defendant Denny Edlin was sentenced to twelve months in the Pima County Jail In March of 1993, a Tempe electroplating company for the illegal disposal of hazardous waste. Edlin had called Micom Circuits West and its president and previously abandoned approximately sixty drums and owner were indicted for the knowing illegal storage containers of hazardous chemicals in a storage locker of hazardous waste, a class 5 felony. As a result of located at Multi-garage Units at 3330 East Michigan a search warrant executed by the Attorney General's in Tucson. The abandoned chemicals included CRIMINAL DIVISION PAGE 71

potassium cyanide, sulfuric acid, methyl ethyl ketone conspiracy statutes. The Section has also resolved and sodium cyanide. In addition to the jail sentence, some matters by using the civil remedies set forth in Edlin was ordered to reimburse the property owner the RICO statutes and has . additionally handled for his costs in removing the chemicals from the forfeitures in connection with the cases prosecuted by storage unit and for back rent of the facility. It is the Section. The Section attorneys have also estimated that proper disposal of the chemicals will prosecuted cases forwarded to the office because cost about $30,000. In addition, Edlin was ordered another prosecuting agency had a conflict-of-interest. to reimburse the Arizona Department of During fiscal year 1992 - 1993 the Organized Crime Environmental Quality for their costs in the amount and Fraud Section was involved in hundreds of of $2,637.00 and must also complete 200 hours of investigations and numerous significant prosecutions. community service upon his release. To facilitate the investigatory and prosecutorial process, the attorneys assigned to the Organized State v. Frank Moore Crime and Fraud Section administer and work closely with the Arizona State Grand Jury. The following On _April 19, 1993, the defendant Frank Moore was cases, categorized by subject matter, are examples of charged with bribery, a class 4 felony. According to matters the Section attorneys handled this past year. information uncovered by the Arizona Attorney General's Office, the defendant solicited money from Securities And Real Estate Fraud an undercover inspector to certify that a truck did not have a catalytic converter as required by state The Organized Crime and Fraud Section prosecutes emissions laws. Trial is pending. cases generated by the personnel of the Securities Divis1.on of the Arizona Corporation Commission. State v. Arnold Eugene Harraway, dba Harraway The Securities Division provides the investigative and Metals accounting resources, and, in some instances, legal expertise in the form of staff attorneys who assist in On January 22, 1993, the defendant Arnold Eugene the criminal case prosecution. These cases are Harraway was charged with two counts of knowing generally very complicated and require a substantial illegal disposal of hazardous waste, a class 5 felony. time commitment by the assigned Section attorney. According to the investigation conducted by the The Section also prosecutes cases referred by the Real Attorney General's Office, the defendant had illegally Estate Department. These cases often involve disposed of ash containing toxic amounts of lead violations of the securities laws. resulting from the burning of insulation from copper wire near the Waterman's Wash which is a tributary United States v. Charles H. Keating III, et al. of the Gila River. Trial is pending. Charles Keating was sentenced in July 1993 to 12.5 ORGANIZED CRI1\1E AND FRAUD SECTION years in federal prison following fraud related convictions in United States District Court in the The Organized Crime ahd Fraud Section investigates Central District of California (Los Angeles). Nine and prosecutes white-collar and organized criminal other defendants have been convicted as a result of activity including, but not limited to, securities fraud, the investigation, which included limited participation computer fraud, AHCCCS (Arizona Health Care Cost of an Attorney General's Office prosecutor as a Containment System) fraud, telemarketing fraud, special assistant United States Attorney during the charity fraud, tax fraud, public corruption, insurance investigation and a three year full-time assignment of fraud, banking fraud, home improvement fraud, real an Attorney General's Office special agent. estates fraud, employee embezzlements, and other Forfeiture and other related remedies have been types of financial crimes that fall within the purview ordered. of the fraudulent schemes, theft, racketeering, and CRIMINAL .DMSION PAGE 72

State of Arizona v. John Lawrence Pomerenke abuse/neglect affecting the Arizona Health Care Cost Containment System (AHCCCS). The AHCCCS Pomerenke perpetrated a complicated Ponzi scheme, Fraud Control Unit has one Assistant Attorney bilking 200 investors out of in excess .of $5.2 million. General/Director and two Assistant Attorneys General He received a ten year prison term on one count and assigned at the current time. a consecutive 7 year intensive probation term on the second count. To date the State has recovered over During the past twelve months, the AHCCCS Fraud $100,000 cash for the victims, a substantial portion of Control Unit has obtained 13 indictments; eight which was recovered in a civil racketeering consent persons have been convicted of criminal conduct judgment entered against Pomerenke's defense related to the AHCCCS Program, and the Unit is attorney who took victim monies for his legal fee. responsible for the imposition of $80,000. in state civil penalties. Additionally, . the Unit has obtained State of Arizona v. James Clair Dunlap $20,180 in ordered overpayment recoveries from AHCCCS providers who have obtained money to Stockbroker James Clair Dunlap has been indicted which they were not entitled. Currently, the. and is awaiting trial on 63 theft and fraud charges AHCCCS Fraud C0ntrol Unit has 62 open cases. relating to his alleged diversion of approximately Approximately 50 percent of the case-load is patient $900,000 from dozens of Arizona victims, many of abuse or neglect; the remainder involves allegations whom were elderly. It is alleged that Dunlap did not of fraudulent activity involve a wide variety of use the victim/investor money to make the requested AHCCCS providers ranging from doctors and nursing investments, but instead used the money for his homes to pharm~cies, transportation providers, and personal benefit and overhead operating expenses. durable medical equipment companies. The following After failing to appear for trial on May 13, 1993 is a short summary of some of the cases the Dunlap was eventually arrested and remains in jail AHCCCS Fraud Control Unit has prosecuted during awaiting trial scheduled to commence in Maricopa the past 12 months. County Superior Court on September 27, 1993. Jasldewicz, Richard State of Arizona v. Knoell, et al. Jaskiewicz, an employee of Pima ~ounty Long Term Two Knoell Brothers and John Woodall were indicted Care Systems, was involved in a conflict-of-interest for fraudulent schemes perpetrated in connection with situation when he used his position to obtain money obtaining $330,000 from 12 investors in a real estate from Marion Labs to conduct a study of a non-FDA scam. approved experimental drug on elderly ALTCS patients. Jaskiewicz failed to disclose (affinnatively State of Arizona v. Ronald Jacobsen concealing) the conflict-of-interest in connection with study of experimental drugs on ALTCS patients in Jacobsen was tried and convicted of theft, securities ALTCS contracted facilities. He was found guilty on violations, and illegally operating an enterprise. The 6 felony counts and sentenced to two years eight victims ranged in age from 66 years old to 90 probation. years old. Waltermann, Hugh The AHCCCS Fraud Control Unit Hugh Waltermann, a respiratory therapist/technician, The AHCCCS Fraud Control Unit is a 75 % federally recently pied guilty to 2 counts of Sexual Abuse, a funded group of attorneys, investigators, auditors, and class 5 felony, wherein he fondled the breasts of two administrative staff who engage in investigating and incapacitated minors in a nursing home. On 9-10-92 prosecuting medical provider fraud and patient he received a suspension of sentence and probation CRIMINAL DMSION PAGE 73

was granted for a period of 48 months. was given probation for 4 years.

Hirsch, Neil,· Berton Siegel; & Carol Killingsworth Arizona Department of Revenue Prosecutions

Owners of an AHCCCS contracted health plan, were Two attorneys in the Organized Crime and Fraud charged with conspiracy, fraud and theft of corporate Section work exclusively on criminal referrals funds. They were convicted and sentenced on generated by the Arizona Department of Revenue. A 7/31/92. brief sample of the cases prosecuted this year follows.

Ziff, Harvey Operation Tax Cheat

Ziff, an insurance agent, conspired to defraud HCPA Operation Tax Cheat is an ongoing prosecution of tax and the state by helping Drs. Neil Hirsch and Berton evaders who fail to file Arizona personal income tax Siegel file false documents with AHCCCS to conceal returns. Phase One of the operation focused on fraud and theft of HCPA monies. He pied guilty and Mohave County tax evaders; 27 people were indicted. was sentenced to 6 months probation, 5 years Phase Two focuses on another county. Indictments exclusion from medicare/medicaid, and suspension of are expected in the fall. his insurance license. State of Arizona v. Riggle Anderson, Dorothy A Scottsdale cement contractor was found guilty at On 2/20/93 the Arizona State Grand Jury returned an trial of under-reporting his income on his Arizona indictment on 15 counts involving two counts of fraud personal income tax returns. He under-reported his schemes against the AHCCCS Long Tenn Care income by $50,000 to $100,000 each year for four Program and Social Security Administration; three years. Sentencing is pending. counts of Filing Fraudulent Documents with the Court Probate Division; and 10 counts of Theft of Funds State of Arizona v. Snodgrass from her elderly incapacitated brother. She was indicted for fraud and theft of funds amounting to A Phoenix house mover who failed to file personal $65, 189. 46,. income tax returns for five years was indicted by the Arizona State Grand Jury. In one of the years, his Palmer, Linda income exceed $140,.000. Trial is pending.

The defendant, an unlicensed health care provider, State of Arizona v. George Haden left two elderly Alzheimer's patients unattended and laying in their excrement on June 4, 1993. The Haden, a successful insurance agent, has not filed County Grand Jury indicted the defendant, charging income tax returns for five years. He was indicted 2 counts of Abuse of a Vulnerable Adult, Class 2 on March 15, 1993 on five counts of failure to file felonies, and 1 count of Unlawful Imprisonment, a Arizona personal income tax returns. Class 6 felony. State of Arizona v. Melvin Henson Jackson, Nelcy Beatrice Henson has filed at least 20 fictitious Arizona 140 Jackson worked as a nursing aide at a nursing home Property Tax Credit tax forms under various aliases wherein the defendants forged checks of elderly and and has received refund warrants from ADOR for mentally incapacitated patients. She was indicted, approximately $362.00 per f<,tlse return. On May 1.1, pied quietly and finally sentenced for forgery. She 1993 the State Grand Jury indicted Henson on 15 CRIMINAL DMSION PAGE 74

counts of fraudulent schemes and artifices. A warrant part of the plea agreement, Lester deposited $30,000 was served on Henson while he was serving time in with the Clerk of the Court as a partial prepayment of the county jail on other charges. his restitution obligation immediately prior to sentencing. Insurance Fraud State of Arizona v. Lilburn Steele, Stella Steele The Organized Crime and Fraud Section prosecutes insurance fraud matters referred by the Arizona On March 17, 1993 Lilburn Steele and his wife, Department of Insurance, the Insurance Crime Stella Steele, were indicted on a total of two counts Prevention Institute, various insurance companies of fraudulent schemes, 10 counts of theft, two counts throughout the country·, and law enforcement agencies of attempted theft and 12 counts of fraudulent around the state. The cases range in complexity from insurance claims. The state is alleging that 10 matters as simple as individuals staging accidents to victims lost a total of $131,309 to the Steele's collect on disability policies to sophisticated arson fraudulent insurance filings. rings that stage fires to collect the insurance proceeds. Public Corruption State of Arizona v. Charles Blewer The Organized Crime and Fraud Section investigates The Arizona State Grand Jury charged the defendant and prosecutes matters involving criminal conduct with arson, theft and fraudulent insurance claim for a committed by state, county and local employees and fire at his variety store business located in Casa public officials. The most significant prosecutions Grande. Defendant submitted a proof of loss to his conducted this year are summarized below. insurance company which exceeded $800,000. State of Arizona v. James Hartgraves State of Arizona v. Malone, et al. Former Deputy Superintendent of the Arizona Defendants were involved in a scheme of selling false Department of Education was sentenced on January 6, automobile title documents and fake proof of 1993 to eight years in prison based on convictions for insurance cards. Many of the title documents Ftaudulent Schemes, Bribery, and Money fraudulently cleared title to encumbered vehicles (i.e. Laundering. Hartgraves defrauded the taxpayers of cleared liens so stolen vehicles could be sold). nearly $1,000,000 through his authorization of payments of phony book orders and a consulting State of Arizona v. Simmons contract. A trebled restitution/racketeering judgment was entered against Hartgraves for $2,900,000. The State Grand Jury charged the defendant with Hartgraves' home, automobile and retirement benefits numerous counts of fraud, theft and fraudulent were also forfeited to the State. insurance claims for a scheme which involved submitting numerous claims to insurance companies Eloy Voter Fraud under various aliases. The scheme lasted 4-5 years and involved losses in excess of $100,000. The Arizona State Grand Jury charged nine defendants with fraud, forgery, illegal registration and State of Arizona vs. Wi.llie Donald Lester illegal voting in connection with attempts to manipulate the Eloy City elections. The charges On December 14, 1992 Willie Donald Lester pied allege misconduct by the Pinal County Sheriff, his guilty to one count of theft and one count of family and friends. The case is set for trial in attempted fraudulent insurance claims. Four victims October, 1993. lost $37,604.86 to Lester's fraudulent filings. As .. CRIMINAL DMSION PAGE 75

State of Arizona v. Wayne James Nelson stolen property. A representative sample of these cases follows. Arizona State Treasurer's Office Administrative Services Manager/Security Officer Wayne James Operation Bootleg Nelson was sentenced on May 28, 1993 to five years in prison after pleading guilty to 10 felonies in Over 50,000 counterfeit items (including tee-shirts, connection with his attempt to steal through computer hats, purses, shorts and watches) were seized during fraud $1,800,000 from public money under his the execution of search warrants served on a dozen control. Nelson engaged in a scheme to have State of Phoenix merchants. As a result of the search Arizona warrants issued to a bogus vendor, Advanced warrants and the subsequent investigation, six Consulting, which he secretly established and individuals pied guilty to crimes involving possession controlled, eventually intending (according to seized of stolen property. hand-written notes) to flee the United States with the stolen money. Nelson was able to deposit warrants State of Arizona v. Terry Fish totaling $729,774.86 before an alert Citibank Arizona employee contacted the Treasurer's Office. Attorney Fish, an advertising/printing subcontractor with General's Office special agents immediateI y arrested Safeway Stores, Inc., was indicted by the Arizona Nelson, served nighttime search warrants on three State Grand Jury for fraud and theft arising · from locations and seizure warrants on various local banks. alleg;itions that he double-billed Safeway in excess of All of ·the funds were recovered and there was $1 . 3 million for goods and services. Trial is ultimately no loss to the taxpayers. scheduled for October, 1993.

State of Arizona v. Melvin Hannah State of Arizona v. Thoma~ Petrola

The governor's affirmative action officer solicited Petrola, an accountant, embezzled $789,000 from his funds from Arizona Public Service to be used for client, a college student and youngest daughter of promotional items in connection with a proposition L.S. Shoen, the founder of U-Haul. He was supporting passage of a paid state holiday honoring sentenced to 7.5 years in prison, followed by five Martin Luther King. He pocketed the funds for his years intensive probation. personal use. Hannah pied guilty and was placed on probation with a brief jail term. State of Arizona v. John Edgmon and Wayne Kindig

State of Arizona v. Danny Bryant Defendants John Edgmon and Wayne Kindig were each sentenced to five years' in prison after pleading Chairman of the Yuma County Board of Supervisors guilty in a scheme involving the theft of $250,000 pied guilty to crimes involving his operation of a from an elderly Maricopa County widow. Edgmon mobile home business in Yuma County. He was and Kindig became friendly with the victim while she placed on probation and ordered to · perform was grieving from the deaths of her father and community service. husband, working around her home and bringing her gifts when she was emotionally vulnerable. Edgmon Miscellaneous Financial Crimes and Kindig used a variety of lies to obtain II loans 11 from the widow. The money was actually used for In addition to the cases already mentioned, the narcotics purchases and other personal expenses. The Section attorneys prosecuted and investigated cases widow has lost her entire life savings and is now involving computer fraud, exploitation of the elderly, supported by relatives. home improvement frauds, telemarketing fraud, 11 11 investment schemes, . chop shops , and trafficking in CRIMINAL DMSION PAGE 76

State of Arizona v. Ronald Eugene Poundstone State of Arizona v. Kenneth Wayne Anzinger

Ronald Poundstone was sentenced on April 1, 1993 to On August 26, 1992, Kenneth ·wayne Anzinger was 15. 75 years in prison following a jury verdict of sentenced to concurrent terms of 7 .5 years guilty on Fraudulent Schemes and Theft charges imprisonment on two counts of theft in connection relating to his embezzlement of $235,000 from the with a fraudulent jail bail bonding scheme. Anzinger Tempe design finn Habitat, Inc., where Poundstone was also ordered to pay restitution totalling $11, 700 was employed as the controller. Poundstone to the two victims of his scheme. manipulated the computer system to perpetrate and conceal his scheme. Ronald Poundstone had nine State of Arizona v. John Savoy prior felony convictions. John Savoy, Max Dunlap's attorney, was tried and State of Arizona v. Sherman Shelton convicted of perjury before the Arizona State Grand Jury investigating the Don Bolles homicide. Shelton, the operator of a collection agency was convicted by jury of stealing over $70,000 from State of Arizona 'V. Robert Martin Zucker clients. He was sent to prison for 3. 75 years to be followed by a 5 year probation term. On January 6, 1993 Robert Martin Zucker was sentenced to three years probation · on one count of State of Arizona v. Lincoln Auto and Quint theft in connection with his operation of a computer service business. Six medical offices lost $17,288.57 Quint was indicted for fraudulent schemes and to Zucker' s scheme. Pursuant to the plea agreement, Lincoln Auto was indicted for facilitating Quint's Zucker made full restitution to the victims fraudulent schemes. Charges stem from allegations immediately subsequent to sentencing. that Quint sold vehicles that had been involved in roll-over accidents to unknowing Arizona buyers. State of Arizona v. Terence Reale Quint used Lincoln's help to avoid acquiring the required salvage titles. Reale masterminded a scheme to sell stolen cars bearing vehicle identification numbers of wrecked State of Arizona v. Don Wayne Berry cars. ij:e was convicted by jury of conspiracy-, conducting an illegal enterprise, fraudulent schemes Berry pied guilty, in 1987, to stealing over $150,000 and artifices, and trafficking in stolen property. from a local business where he was employed. Berry had been a fugitive for nearly six years until he was Victims' Rights/Victim Witness Program caught and returned to Phoenix. He was sentenced to five years in prison. The Victims' Rights/Victim Witness · Program is a service-oriented, comprehensive assistance program State of Arizona v. Aust, et al. established.for the purpose of promoting the interests of crime victims and witnesses within the criminal The Arizona State Grand Jury indicted the defendants justice system. The Program works to ensure that for 17 counts of fraud and forgery for their conduct victims of crime are treated with fairness, respect and with E-Z Auto Title. Through the title company, the dignity and are free from intimidation, harassment or defendants were forging documents to clear titles to abuse through the support of the Program, and stolen cars. They were also submitting false through the assistance and protection of the Attorney insurance cards, · emissions tests, and vehicle General while victims or witnesses are involved in the inspections to obtain titles to hundreds of vehicles. judicial process. The Victims' Rights/Victim Witness Program is staffed by a director, two program CRIMINAL DMSION PAGE 77

coordinators, an assistance clerk, and 20 - 25 trained three per month to fifty . volunteer advocates. Significant activities, accomplishments, and In fiscal year 1992 - 1993; the Program provided contributions for the past year include: over 28,000 services to 6,817 victims and 109 witnesses, including: * Recruitment, training, placement and supervision of 25 new program advocates; 5,446 total hours of * Accompaniment to attorney interviews and court volunteer service provided to victims and proceedings; witnesses. * Pre-trial, post-conviction and appellate notification * Specialized assistance · to victims in two death services; penalty cases resulting in execution; daily/hourly * Claims' assistance services, including personal contact with victim(s), media intervention, compensation and restitution; counseling and (de)briefing referrals, were some of * Thorough and fonnal referral to community the services provided. resources for specific needs assistance; * Implementation of revised procedures to ensure * Advocacy in dealing with other agencies, including Office's ongoing compliance with internally­ employer intervention; adopted policy relating to victims' rights laws. * Guidance in the completion and submission of * Increased funding, and two-year commitment to Victim Impact Statements; fund, from the Victims of Crime Act federal .grant * Follow-up counseling and guidance; and, program; will provide for expansion of direct * Criminal justice system education/infonnation, victim witness services to Tucson/southern with emphasis on the appellate process. Arizona. * Co-sponsorship of annual Arizonan 's Together-for The Victims' Rights/Victim Witness Program is the Victims', for Justice conference, and candlelight designated responsible party for purposes of vigil during victims' rights week; recognition of notifications in all criminal prosecutions handled by eight individuals and organizations through the Office, and exists as the only criminal justice, Attorney General Distinguished Service Award governmental service provider for the victims in all program. cases appealed to the state and federal courts. Last * Revision and distribution of over 200,000 crime­ year, the Victims' Rights/Victim Witness Program victim pamphlets to 83 law enforcement agencies opened 1,239 new cases, of which 93 % involved charged with victim-related obligations under the victims whose cases are on direct or death penalty law; appeal. Ninety percent (90 %) of all services * Development and administration of the Victims ' provided to ~ictims in the last fiscal year were Rights Implementation Assistance Program services mandated by A.RS. Title 13, Chapter 40 -­ pursuant to A.RS. § 41 -191.06(B); nearly one­ Crime Victims' Rights,· of which, 71 % were pre-trial, million dollars was awarded to 55 agencies to post conviction and appellate notifications pursuant to offset costs of implementing various provisions of A.RS.§ 13-4408 and§ 13-4411. Crime Victims' Rights legislation. * Served as a resource and contact to state, county Over the past year -- and as a direct result of the and municipal law enforcement, custodial, Attorney General Office's role as a coordinator on prosecutorial, correction and mental health behalf of entities charged with implementing victims' treatment agencies, and courts, having duties rights legislation -- the Program has handled a established and defined · by Crime Victims' Rights phenomenal increase in calls for assistance from laws; mediated victims' rights violation complaints victims in cases other than those coming under the involving agencies and victims. jurisdiction of the Office; 11 cold calls 11 received from * Active participation with federal state and local victims in 1992 - 1993 increased from an average of victim service networks. CRIMINAL DMSION PAGE 78

SPECIAL INVESTIGATIONS SECTION Mafia for a gangland slaying of another member at the Arizona State Prison. The State is aggressively The Special Investigations Section is a section within seeking the death penalty for all six defendants. the Criminal Division of the Attorney General's Office that provides investigative support for the State v. Salazar, Quintana & Moffatt attorney sections of the office. The section has 65 employees, 58 of whom are investigators, analysts or On March 25, 1992, the three defendants went to the auditors. The section is divided into nine units: home of Michael Vigil in Holbrook. They began Consumer Protection, Tucson, Major Fraud, Special drinking beer and playing drinking games. Others Projects, Organized Crime, Environmental Crimes, joined the party. Michael Vigil eventually became Financial Remedies, AHCCCS, and Administrative agitated and started a fight with Quintana. This fight Staff. proceeded into the yard. Salazar became upset with Vigil for wrestling with his cousin, Quintana. He The Special Investigations Section provides expertise went to Moffatt's car and obtained a .22 pistol. He in the specialized areas of prosecution upon which the went to the location where Quintana had Vigil pinned Attorney General's Office focuses. This expertise is to the ground. He placed the gun to Vigil's head and generally not available at other law enforcement made some derogatory comments. Vigil began agencies. Many of the cases described in other approaching Salazar once he was let up by Quintana. portions of the Criminal Division report were Salazar opened fire on the unarmed Vigil striking him investigated by the.Special Investigations Section. in the chest, arm and twice in the back. The three defendants then fled. They were captured just south CRIMINAL TRIALS SECTION of Payson the following morning. A search of their car revealed marijuana. Following a 2-week trial in The attorneys assigned to the Criminal Trials Section Holbrook, Leo Salazar was convicted of Second have the responsibility of providing assistance to the Degree Murder and drug offenses. Quintana was various County Attorneys in the handling of matters convicted of the drug offenses. Moffatt testified for referred to the Attorney General's Office because of the State and received probation as a result of his a conflict of interest or for other policy reasons, cooperation. Quintana also received probation and including complex homicide cases which require a Salazar received 15 flat years. substantial allocation of resources. State v. Richard Smock The following cases illustrate some of the contributions this section has made. During 1985 the defendant, a Canadian citizen, molested a 12 year-old girl in a Glendale apartment State v. James Robison and Max Dunlap complex. During the questioning of the victim, the police learned that the defendant had some unusual On June 2, 1976, newspaper reporter Don Bolles was markings on his penis. Upon arresting the defendant, fatally wounded in a bombing of his automobile. The a search was performed and the markings were noted murderers were subsequently convicted, but in 1980 and photographed. The defendant bonded out and their convictions were overturned. New evidence fled to Canada. As a result of the television program surfaced and they were again charged. Dunlap has "America's Most Wanted" he was located in Canada. been convicted and is scheduled to be sentenced. Unfortunately for Mr. Smock he was not the person Robison is set for trial. the show was depicting. It was another molester by the name of Richard Smock. However, others made State v. Matus, et al. the erroneous assumption and turned him in. After 3 torturous years of attempting extradition, the The prosecution of six members of the Mexican defendant was returned to Arizona. Following a trial, CRIMINAL DMSION PAGE 79

he was convicted of all counts and sentenced to 7 flat several weeks later. Ignacio is a juvenile and Hector years. This is equal to a death sentence as he is is an adult. Hector is being charged with two counts AIDS positive and is expected to live approximately of First Degree Murder in adult court, while Ignacio 6 months. is being charged with Aggravated Assault as a result of the first shooting, two counts of First Degree State v. Kenneth Zarska Murder as a result of the second shooting, and Attempted Escape and Aggravated Assault as a result On December 23, 1987, Richard Graybill, his 20 of an incident where he attempted to escape juvenile year-old . daughter, and her 15 year-old boyfriend court and assaulted a Deputy County Attorney. It is were executed at the Graybill home. They were each anticipated that no plea bargains will be offered. shot numerous times. The Maricopa County Attorney's Office indicted three individuals. Two Foreign Prosecution Unit pled guilty to the triple homicides and received consecutive life sentences. The third, Kenneth This section has also formed the Foreign Prosecution Graybill, refused to plead , and was tried. He was Unit (FPU) which is responsible for the prosecution convicted and sentenced to three life sentences. A of foreign nationals who commit major felonies in new trial was granted due to a finding of ineffective Arizona and flee to Mexico. Mexico does not assistance of counsel and the case was transferred to extradite its citizens and in the past nothing was or our office because of a conflict of interest within the could be done to thwart this mounting problem. County Attomei s Office. The problems with the Now, by working closely with Mexican prosecutors case, other than the obvious passage of time and officials, we will bring to justice those who hope problems, involve the recantation of the cooperating to avoid prosecution' by their flight. witness. He now claims to have lied at the first trial and refuses to testify. Trial is currently set in Pending presently are two major cases. One mid-October and consideration is being given to involving the brutal murder of a six-year old girl with withdrawing from the plea agreement against the an AK-47 auto rifle during an attempted hit on a rival co-defendant and retrying him and asking for the faction of two warring drug cartels in Nogales, death penalty. .,. . Arizona. The.other a double homicide in Douglas, Arizona. The prosecution of both cases has been State v. Ignacio and Hector Valencia fully prepared by the FPU and presented to the proper Mexican authorities. The FPU continues to During February, 1993, Sammy Baldonado was shot work close1y with Mexican prosecutors and expects in the chest by an opposing gang member by the that arrests and prosecutions are imminent. name of Ignacio Valencia. Valencia escaped and Baldonado, although in critical condition, survived. Drug and Gang Prevention Efforts Valencia eventually spoke with Baldonado and asked him to not press charges. He refused. Shortly This section has also been responsible for the thereafter Valencia and his cousin Hector went to implementation of various drug and gang prevention Baldonado's home. They knocked on the door and programs as follows. when Sammy's step-father answered, they asked for Sammy. Sammy came to the door and both the Drug-Free School Zones step-father and Sammy were gunned down. The defendants fled . . The step-father was dead at the In this area, we have continued to pursue full scene as a result of a gunshot wound to the back of compliance with the implementation process in local his head while Sammy lingered for approximately 2 communities. We have had several high publicity 1/2 weeks before dying. Ignacio Valencia was "kick-offs. " The major piece of work involved captured the same evening and Hector was captured drafting an implementation manual for state-wide use CRIMINAL DMSION PAGE 80

by law enforcement and schools. The Tucson office also assisted in several federal prosecutions. Three of the unit's prosecutors are Gang Advisory Team designated as Special Assistant U.S. Attorneys.

As a member of this state-level group (which is a State v. Sandoval et al. sub-committee of the Arizona Drug & Gang Policy Council) we have developed a technical assistance An indictment was obtained charging seven tearri. This group has traveled around the State with defendants with attempted money laundering, theft, the purpose of assisting local communities with their marijuana trafficking and possession of LSD for sale. gang prevention, intervention and treatment The Department of Game & Fish was assisted by the programs. The State Team also held a state-wide Tucson office in an investigation of illegal guided training conference at which we provided training to hunting of endangered species for fees of $10,000 or local gang prevention groups. more: Felony indictments were obtained in this case against Timm Haas, John Klump, Don Bishop and Drug & Gang Prevention Unit Dan Lawing, giving the Department of Game & Fish an ability to deal with this poaching for profit activity Our Office this year dedicated over $100,000 of our in an effective manner. The Tucson office tried four R.I.C.O. funds to the drug/gang prevention effort. In narcotics conspiracy cases and obtained jury an effort to better coordinate our efforts, we are in convictions in all four. The office also convicted at the process of creating a Unit within the Drug trial one man the Tucson Police Department rated as Enforcement Section. one of its ten most dangerous street gangsters. The · defendant, George Flores, received an aggravated TUCSON CRil\fiNAL SECTION sentence of 7.25 years, followed by a period of five years intensive probation. The Criminal Section in Tucson prosecutes narcotics, county conflicts and assists, and fraud, corruption and racketeering cases throughout Southern Arizona.

The primary emphasis in narcotics is conspiracy prosecutions involving smuggling operations and money laundering. These prosecutions are brought to the section by the Drug Enforcement Administration, Arizona Department of Public Safety, the Pima County Sheriff's Office, and the Tucson Police Department.

This year the Tucson office convicted 56 defendants by trial or plea. Major assistance was provided to Santa Cruz county and Pinal County with the prosecution of numerous cases. Significant assistance was provided to the Tucson Police Department in the prosecution of racketeering cases, the Pima County Sheriff's Office in the prosecution of narcotics cases, and to the Department of Public Safety in fraud prosecutions. i rJJ ARIZONA DEPARTMENT OF LAW Office of the Attorney General Human Services Division Itr-1 rJ.) ~ Grant Woods Att9J11ey General

~

Chief Counsel i Cecil B. Patterson, Jr.

Community Relations Section Civil Rights Section Economic Security Section Phillip A Austin David Bartlett Kirk A Burtch Chief Counsel Chief Counsel Chief Counsel

Elder Affairs Fair Housing Enforcements

Mediation Employment Discrimination Child Support Enforcement

Education and Outreach Public Accommodations Protective Services

Disabilities

Voting Rights i oe ~ HUMAN SERVICES DMSION PAGE 82

CIVIL RIGHTS SECTION expediting the processing of complaints wbile enhancing quality control. Centralized telephonic The Civil Rights Section is responsible for intake will be maintained through FY 1994 in enforcement of the Arizona Civil Rights Act (ACRA), housing. Title 41, Chapter 9, Articles 1-8. This includes the areas of discrimination in employment, fair housing, The section continued to present seminars statewide public accommodations and voting rights. Offices in the areas of employment, fair housing and were maintained throughout the year in Tucson, disabilities. All three areas have been in great Phoenix and Flagstaff. demand due to enforcement efforts.

The section's principal activities consisted of The Civil Rights Section also continued to provide investigating charges of discrimination · in assistance in the legislative process. These efforts employment, housing and public accommodations. included reviewing and initiating legislation in housing, employment and education. Legislative Five civil actions were filed in the Superior Court of amendments to the ACRA were proposed by the Arizona. These prosecutions were required because Attorney General but were not successful. the underlying housing investigations resulted in a cause finding and conciliation efforts proved The Civil Rights Section continued to provide staff unsuccessful. In addition, two lawsuits were filed in support throughout . the · year for the activities employment sexual harassment cases after the conducted by the Civil Rights Advisory Board underlying administrative· investigation uncovered (ACRAB) . Activities of the Board during the year serious violations of state and federal law. included hosting and Martin Luther King, Jr. luncheon in Tucson and developing the Arizonans The section made substantial progress in reducing the With Disabilities Act rule making process. backlog in employment cases awaiting administrative investigation as a result of growth in staffing, Staffing during the fiscal year reached thirty-three and reorganization and training efforts. The section's one half positions. This included one chief counsel, administrative employment docket was reduced by a five attorneys, eighteen investigators and nine and one total of 229 cases statewide. The greatest reduction half clerical positions. Staff growth was essential to was in Title VIl cases, with Tucson realizing the progress made by the section in providing timely and greatest reduction. Charge resolutions in employment quality investigations in employment and fair housing. were less than the number achieved in FY 1992, due to low staffing levels. This barrier w·as overcome in Funding for the Civil Rights Section was provided by January 1993 with the addition of five new both state and federal monies. The Equal investigators. Opportunity Commission and the Department of Housing and Urban Developments were the Section's In housing, complaints of discrimination reached a sources of federal funding. new high of 244 statewide. Staff allocations in housing were increa.sed to two attorneys, seven Major accomplishments for the section include: investigators and two legal secretaries in January 1993. Resolutions and benefits in housing will 1. Reduction of employment docket by 229. increase dramatically in FY 1994 as investigations are closed and settlements increase. 2. Addition of two attorneys, two legal secretaries, eleven EOS's and two clerk An intake unit was created in Tucson to process all typists. inquiries received statewide in the area of housing. This effort has proven very successful and resulted in HUMAN SERVICES DMSION PAGE 83

3. Creation of an intake unit in Tucson for A summary of the Civil Rights Section's annual housing statewide. performance with respect to investigative activities in provided on the following tables:

CIVIL RIGHTS SECTION ANNUAL PERFORMANCE SURVEY (Period: July 1, 1992 to June 30, 1993)

A. PENDING INVENTORY

CATEGORY TUCSON PHOENIX/FLAGSTAFF COMBINED TOTALS June 92 June 93 Change June 92 June 93 Change June 92 June 93 Change Title VII 432 · 329 -103 215 153 -62 647 482 -165 Age 26 15 -11 28 19 -9 54 34 -20 Handicap 95 84 -11 100 67 -33 195 151 -44 SUBTOTAL 553 428 -125 343 239 -104 896 667 -229 Pub Aecom 2 4 +2 6 11 +5 8 15 +7 Housing 36 100 +64 17 117 +100 53 217 +164 . TOTAL 591 532 -59 366 367 +1 957 899 -59

; HUMAN SERVICES DMSION PAGE 84

B. CHARGES FILED

CATEGORY TUCSON PHOENIX/FLAGSTAFF COMBINED TOTALS June 92 June 93 Change June 92 June 93 Change June 92 June 93 Change Title VII 299 96 -203 219 96 -123 518 192 -326 Age 65 20 -45 43 23 -20 108 43 -20 Handicap 47 15 -32 80 23 -57 127 38 -89 SUBTOTAL 411 191 -220 342 142 -200 753 273 -480 Pub Aecom 5 3 '-2 6 14 +8 11 17 +6 Housing 49 88 +39 19 156 +137 68 244 +176 TOTAL 465 222 -243 367 312 -55 832 534 -298

C. CHARGE RESOLUTIONS

CATEGORY TUCSON PHOENIX/FLAGSTAFF COMBINED TOTALS June 92 June 93 Change June 92 June 93 Change June 92 June 93 Change Title VII 194 140 -54 262 138 -124 456 278 -1 78 Age 13 14 +1 54 22 -32 . 67 36 -31 Handicap 30 28 -2 53 60 +7 83 88 +5 SUBTOTAL 237 182 -55 369 220 -149 606 402 -204 Pub Aecom 2 1 -1 3 6 +3 ' 5 7 +2 Housing 7 32 +25 9 44 +35 16 76 +60 TOTAL 246 215 -31 381 270 -111 627 485 -142 HUMAN SERVICES DMSION P AGE 85

D. BENEFITS

CATEGORY TUCSON PHOENIX/FLAGSTAFF June 92 June 93 Change June 92 June 93 Change Title VII $300,079 $470,848 +$170,769 $462,555 $243,792 -$218,763 Age $3,807 $18,300 +$14,493 $282,374 $13 ,500 -$268,874 Handicap $49,897 $202,725 +$152,828 $106,044 $99,696 -$6,348 SUBTOTAL $353,783 $691,873 +$338,090 $850,973 $356,988 -$493,985 Pub Aecom -0- -0- -0- $42 $655 +$613 Housing $1,000 $1,900 +$900 $750 $22,274 -$21,524 TOTAL $354,783 $711,173 ' +$356,390 $851,765 $379,917 -$471,848

CATEGORY COMBINED TOTALS June 92 June 93 Change Title VII $762,634 $714,640 -$47,994 Age $286,181 $31,800 -$254,381 Handicap $155,941 $302,421 +$146,480 SUBTOTAL $1,204,756 $1,048,861 -$155,895 Pub Aecom $42 $655 +$613 Housing $1,750 $24,174 +$22,424 TOTAL $1,206,548 $1,073,690 -$132,858 HUMAN SERVICES DMSION PAGE 86

COMMUNITY RELATIONS SECTION Below are figures that summarize a very active and productive year for the Elder Affairs Program: The Community Relations Section was officially established within the Human Services Division on . Complaints Opened 499 July 1, 1991. The section is fulfilling its mission of Complaints Closed 373 educating the community and providing cost effective Information and Referral 3,500 techniques to resolve conflicts and promote harmony . Speeches/Referral 85 The section has three major programs: Elder affairs, Active Volunteers 11 Mediation and Alternative Dispute Resolution and Value of Volunteer Hours $43,924 Education and Outreach. Financial Recovery $181,219

Elder Affairs·Program Program Development

Dat~ for FY 1993 illustrate the short and long term The Elder Affairs Program added three new impact of the Elder Affairs Program. The year was components to its basic program this year. characterized by sharply increased volume and diversity. Changes in the client intake process Senior Consumer Advocacy - Trained ,volunteers are expedited service delivery to elder citizens wanting placed in senior centers and other sites to respond to only information or access to community resources. consumer complaints and requests for information and All elder affairs complaints are now logged into the referral sources. To date we have volunteers placed n_ame search component of the Complaint & in Sun City West, Scottsdale Senior Center, various Information Center data base. This enables all sites in ta Paz, Mohave and Yuma Counties through agency staff to identify instances where the Elder the Area Agency on Aging Legal Advocacy Program. Affairs Program has ongoing cases or information Additional sites are to be staffed in the coming year. which may prove helpful to them. The immediate impact is demonstrated by the amount of time staff Minority Outreach Program - The Elder Affairs . spent processing open cases and the large number of Program was funded by the American Bar referrals made internally and externally. Equally Association Commission on Legal Problems of the significant is the ratio of cases opened to cases Elderly to develop a program to address the lack of processed (closed/completed). culturally appropriate information on legal services, consumer issues, and crime prevention techniques. Volunteers played a significant part in the The implementation will begin in September 1993 in achievements of the Elder Affairs Program during FY La Paz, Mohave, Yuma and Santa Cruz counties. 1993 as 11 active volunteers contributed 3,099 hours, this translated into a monetary value of $43,924. The Elder Affairs and Mediation and ADR programs Many of these donated hours were given to other received funds from ESD/ Aging and Adult to train Attorney General Sections, AHCCCS Fraud, volunteer ombudsmen in communication skills and Consumer Fraud and Economic Security, to name· a mediation referral procedures. Three cases have been few. referred for mediation to date. Five regional training session were conducted with 130 volunteers The voluntary financial restitution during FY 1993 participating. totalled $181,219. This amount does not reflect restitution made to clients referred to our Mediation Training/Technical Assistance Unit, or monies recovered as part of successful litigation. This represents a nearly 23 % increase over Staff provided training and/ or technical assistance for FY 1992. many professional groups both in Arizona and nationally in this fiscal year. Training included such HUMAN SERVICES DMSION PAGE 87

topics as Elder Abuse, Consumer Fraud, At-Risk 1. Corliss Ford, St. Joseph's Care Center, Linda Factors in Elder Abuse and Care Giving. Technical Palmer; all cases of abuse/neglect. assistance was provided in areas such as legislative, recognition and prevention of elder abuse and Adult 2. A complicated case involving private fiduciary Review Board procedures. (not yet indicted).

Special Issues 3. Various companies in violation of the Consumer Fraud Act in such enterprises as living trusts, Several activities deserve special mention because of hearing aids, "custom" beds and chairs and their significant impact both from a service and security systems. educational point of view. All of the above-mentioned cases originated in the Statewide Elder Abuse Conference - Co-sponsored by Elder Affairs Program and the initial information the Area Agency on Aging and the Arizona Attorney reviews were conducted by staff and volunteers prior General's Office, attended by more than 500 to recommendation for formal investigation. professionals. Attorney General Grant Woods was one of the keynote speakers of the session and other Mediation and Alternative Dispute Resolution staff professionals made presentations. Elder Affairs Program staff were actively involved throughout both planning and implementation stages. The Mediation and Alternative Dispute Resolution Program implements a statewide dispute resolution Elder Affairs staff members were appointed to the program through its three offices, Phoenix, Tucson Governor's Task Force on Financial Fraud which has and Flagstaff, in the following areas: addressed concern regarding financial planners, living . trusts, automobile and home repair and telemarketing. Court Related Public awareness and legislative efforts are the main activities of this group. Maricopa County Justice Courts: Mediation of small claims, injunctions, truancy, harassment, and civil The Arizona Attorney General's Office and the suits for sixteen Justice Courts in Maricopa County. Maricopa County Bar Association co-sponsored an

Elder Law Conference for professionals in both law Maricopa and Pima County Juvenile I Court: and aging. This was the first time such an Mediation of dependency actions filed with Juvenile opportunity was offered in Arizona and was Court. enthusiastically received. Elder Affairs · staff were involved in all stages of planning and implementation. Municipal Courts: Mediation of minor criminal filings. The Elder Abuse Standing Committee was convened in December and has met on two other occasions. Bullhead City Justice Court: Mediation of small This group monitors internal and external complaint claims and harassment actions filed with the court. problem resolution and is identifying a process for cases requiring joint action among different divisions Pinal County: Mediation of truancy, small claims of the Attorney General's Office and client agencies. and civil actions.

The increased case load dealt with by unit staff and Prescott: Mediation of orders of protection, volunteers· is reflected in the diversity of those which injunctions against harassment, . special training for resulted in prosecution by one, or more, of the mediators, implemented domestic violence screening. various .Attorney General Divisions: HUMAN SERVICES DIVISION PAGE 88

Agency Referred Mediation resources.

Registrar of Contractors: Mediation of complaints by It is estimated that the mediation program helped over residents and businesses against contractor filed with 4,500 citizens resolve their disputes in a timely and ROC. cost effective manner in FY 1993.

Consumer Fraud: Mediation of complaints of fraud, Volunteer Program faulty service by consumers against merchants. . Approximately 100 additional volunteers were trained Civil Rights: Mediation of employment, housing and statewide during the year. In-service .training for public accommodations discrimination complaints. current volunteers was held in Phoenix, Tucson and Flagstaff. In addition to mediators, volunteers also Child Welfare: Mediation of disputes between Child staff the Advisory Board, provide clerical help in the Protective Services, families and others regarding office and participate as instructors during training. child welfare issues. In.terns have provided valuable assistance in the office on telephone mediation and have assisted in Tax Audit: Mediation of disputes between taxpayers developing statistical information. The Speakers and the Arizona Department of Revenue regarding tax Bureau, consisting of volunteers and staff, gave audits. presentations throughout the state to city and county groups, fraternal organization and legal groups. Elder Affairs: Mediation of financial and health care issues involving the elderly. The Yuma, Sierra Vista, and Bullhead City mediators, originally trained in Fair Housing Inmate: Mediation of disputes between inmates and mediation are now equipped to successfully mediate Department of Corrections or civil rights issues. other types of cases (community relations, consumer fraud, civil rights, Registrar of Contractors and child Structural Pest Control: Mediation of complaints by welfare). . Prescott mediators received additional residents and businesses against applicators filed with training to mediate custody, visitation and family Structural Pest Control Commission. issues.

Program Highlights Great efforts have been made to preserve the value of our volunteers. In-service training has offered _Statistical Report volunteers more insight into the mediation program and has greatly ~roadened the scop of the volunteer The Mediation Program scheduled its more than 300 program. Our volunteers have grown in number and volunteer mediators to resolve 1,904 mediation. although we have lost some volunteers from the Seventy percent of the mediation held resulted in earlier groups, we are left with an effective and successfully mediated agreements which resolved the productive team of dedicated mediators. matter. Trained mediators volunteered over 4,200 hours to mediate these cases which relieved the The volunteers maintain high visibility in the office participatory courts and agencies of this workload. and now travel with us to coordinated sites for Over $730,000 was obtained for disputes during this mediation, assist the office j.n the preparation of year. agreements and coordinate mediation with prospective clients. We find that their input is invaluable in the Additionally, the Community Relations staff assisted continued growth and development of the Mediation over 1,000 citizens by defining the dispute and Program and greatly appreciate their continued directing the citizens to the appropriate community support. HUMAN SERVICES DIVISION PAGE 89

Registrar Of Contractors (ROC) the cases to mediation. :Early screening of cases assists both Mediation and the Civil Rights Section in Meetings with ROC staff have ensured steady determining the probability of a successful mediation. statewide referrals from their agency to the A file routing system based on programmatic needs of Community Relations Program for mediation. A very both Civil Rights and Mediation has been developed. high percentage of cases referred from the ROC have settled successfully in mediation. In addition to Closures have increased significantly and as the flow Phoenix, Tµcson and Flagstaff mediators have been of cases from Civil Rights increases, these numbers trained and are successfully mediating cases in Lake will again reflect the increased closure rate. Havasu City. Staff Training Consumer Protection Enhancement of services requires staff training. The The Attorney General's Consumer Protection and staff has received training in computer applications, Antitrust Section was provided with a profile of our negotiations, multi-cultural diversity, fair housing, program to familiarize them with our referral system, advanced mediation and family issues. file routing system, the mediation process, and closure of cases. This sharing of information has School Mediation Program greatly enhanced the processing of cases to and from Complaint Intake Center in that they have a clearer The school mediation program conducts workshops understanding of the function of the program. for teachers and administrators and trains students in conflict resolution skills. The students serve as peer In Tucson, a task group of mediators, comprised of mediators, working in pairs to help other students volunteers from Sierra Vista and Tucson, was peacefully resolve conflicts in schools. organized in April 1992 to review and mediate cases referred from Consumer Protection. The volunteers Peer mediators, using communication skills and offered ten hours a week and devoted much of their problem solving techniques, provide a model for time to reviewing cases, contacting the parties and students to constructively resolve interpersonal facilitating the mediation. This arrangement allowed disputes. The program can significantly improve the more flexibility for the mediation staff to manage atmosphere in a school as students learn alternatives larger caseloads generated from Consumer Protection to improper behaviors such as fighting, abusive in addition to allowing more time to devote attention language and rumors. to programmatic needs. Meetings with Consumer Protection staff has helped to maintain consistent The Community Relations Section staff assists the referrals to the mediation program. school district in developing and implementing a tailor-made mediation program for its schools. Once Civil Rights, Fair Housing, and Employment the students have been trained they are recognized in Discrimination a graduation ceremony and given certified peer mediator certificates. The Mediation Program has maintained consistent communication with the Civil Rights Section. A Ombudsman Training referral system was designed to provide mediators with guidelines for more successful settlements. Staff Ombudsmen throughout the state were trained in is currently working together to identify cases which communication and conflict resolution so that they are not appropriate for mediation based on recurring may resolve daily disputes among administrators, circumstances such as monetary issues, willingness or families and ombudsmen in nursing facilities. In the unwillingness of parties to mediate prior to sending event the ombudsman cannot resolve the dispute, the HUMAN SERVICES DMSION PAGE 90

mediation program accepts referrals from the Aging Hearings were held and volunteer mediators trained and Adult Administration . Department. Several in Yuma, Prescott, Bullhead City, Sierra Vista and nursing home mediations have been successfully Globe. Mediators are resolving fair housing and completed. ., other referrals in these locales.

Tucson Air Guard Immigration Reform And Control Act aRCA)

The Tucson Air Guard requested mediation training In Spring 1991, the Community Relations Section in order to resolve grievance claims. Approximately entered into an interagency service agreement with 20 guard members were trained in a 32 hour course the state Single Point of Contact to do the following: teaching mediation, negotiation, conflict resolution, communication; and labor laws. "The attorney, utilizing the Arizona Civil Rights Advisory Board members and staff, will hold public Education and Outreach Programs meetings throughout the state to educate various groups regarding employer's responsibilities and anti­ The assignment of a staff member as Civil Rights discrimination provisions of the Immigration Reform Education and Outreach Coordinator has brought and Control Act (IRCA) of 1986. L~terature such as greater focus to the education and outreach programs brochures, fact sheets, newsletters and video tape offered by the Attorney General's Office. presentations will be used to disseminate information, The attorney shall also cooperate with and provide Fair Housing Incentive Program (FHIP) legal counsel regarding IRCA's anti-discrimination provisions to SPOC and Community Base The Community Relations Section implemented an Organization (CBO' s) who may receive contracts to educational and outreach program regarding fair provide such information to employees and housing issues pursuant to the Fair Housing Incentive applicants for employment within the state." Program (FHIP) grant. in that proposal, the section committed itself to the following objectives: Pursuant to that mandate, the Civil Rights Section began developing its employer education program on "The first prong of the program involved the July 1, 1991. assistance of the Arizona Civil Rights Advisory Board, who will hold public monthly meetings During FY 1993, presentations on employer throughout the state for the purpose of educating sanctions, verification procedures and non­ community groups, schools, religious institutions, discrimination were made to over 500 employers and adult education classes, neighborhood groups, civil almost 2,000 employees throughout the state. rights laws and housing discrimination. Surveys conducted by staff reveled that employment practices have been modified to comport with the "The second prong of this program involved training requirements of the !RCA. The program continues in and educating volunteers from communities and FY 1994. · housing industry throughout the state in dispute resolution techniques. These volunteers mediated not Hate Crimes - Education and Monitoring only charges but will provide general outreach assistance and education." In June 1993, the Community Relations Section initiated the Hate Crimes Education and Elimination Staff has been hired and trained regarding fair Program. The purpose of this program is to educate housing issues and the application of mediation law enforcement agencies, community groups and the training for the resolution of fair housing disputes. public regarding hate crimes activities and laws prohibiting such activity. This endeavor will also HUMAN SERVICES DMSION PAGE 91 monitor the prosecution of hate crimes by law • Establishment of paternity and establishment, enforcement agencies. modification and enforcement of child support orders; ECONOMIC SECURITY SECTION • Collection of overpayments in the unemployment The Economic Security section provides legal services and welfare programs, as well as other debts to the Arizona Department of Economic Security owed to DES; (DES), the second largest state agency. • Representation of DES in administrative hearings; DES administers more than 40 major programs funded by a combination of federal and state monies, • Prosecution of persons who fraudulently obtain and employs over 8,000 employees. Its annual unemployment and welfare benefits and budget for program distribution, contracting for employees who defraud DES; equipment, supplies, leases, services, staffing and administration exceeds $1 billion from state and • Representation of the state ih child abuse federal sources. proceedings whkh include temporary separation (dependencies) and permanent separation Legal services are provided to all programs (termination of parental rights) . of the abused or administered by the DES, with primary emphasis on: neglected child from the family, as well as adult and child protective services; child support training DES caseworkers; enforcement; unemployment benefits and contributions; contracts . and collections; criminal • Representation of DES in the administration of prosecution; food stamps and welfare; developmental long term care to the developmentally disabled, as disabilities, including long term care; and personnel well as advice and counsel to DES relative to its hearings and training of DES employees. obligations as an AHCCCS provider; and

Legal services provided by the Economic Security • Review of contracts. Section are quite varied. They include: Collection Unit • Federal administrative and District and Appellate Court litigation relating to various federal The Collection Unit of the section obtained 480 programs administered by DES; judgments for the Unemployment Insurance Program and in the welfare, food stamp, and overpayment are • Representation of the state in adult protective of DES totalling about $572,376. The activity of this services cases; unit resulted in a satisfaction of $441,551 in judgments. • General advice and counsel to DES; Criminal Prosecution Unit • Defense of appeals from DES administrative decisions; The section, through its Criminal Prosecution Unit, prosecutes cases involving the fraudulent acquisition ' • Enforcement of unemployment insurance tax of unemployment and welfare benefits as a deterrent collections; to such activity. In FY 1993, the unit filed 313 cases involving $758,463 in fraudulently obtained benefits, • Representation of DES in employee personnel a 37% increase over fast year. This effort resulted in appeals; 282 convictions. A total of $611,086 was either repaid prior to the conviction or ordered as restitution HUMAN SERVICES DMSION PAGE 92

by the courts. In addition, the courts ordered In FY 1993, the Protective Services Unit filed 948 $10,640 in fines, and 17,455 hours of community dependencies, attending in excess of 5,600 hearings, service. Also, 40 defendants have been sentenced to a 17 % increase over FY 1992, and 244 petitions for a total of 25 years, 9 months of incarceration. termination of parental rights. The unit also provides advice and representation for the Adult and Aging The Criminal Prosecution Unit, which 2 years ago programs, as well as the Family Assistance began prosecution of parents who failed to provide Administration of DES, whic]l administers the family support for their children, filed 4 additional cases this assistance programs such as food stamps, AFDC and year. general assistance.

Child Support Enforcement Unit The unit also opened an office in Cochise County to more effectively serve the population in Southern Through its Child Support Enforcement Unit (CSE), Arizona. the section establishes . paternity and support obligations, modifies and enforces these obligations Civil Unit for public assistance and nonpublic assistance recipients of support orders through reciprocal actions The Civil Unit of the section provides general advice · and recovers monies to reimburse the state for and representation for DES . This unit also AFDC. It also represents the state's interests in represented- the client agency at approximately 45 federal bankruptcy court. administrative and judicial proceedings and in the preparation and review of 512 contracts. They also During FY 1993, CSE represented the program at handled 80 personnel cases. 3,977 appearances in Superior Court. The amount of judgments obtained by the unit totalled over $9 The unit also successfully negotiated a settlement of million during this period for the state and for a $597,224 claim for the recoupment of $350,000. nonpublic assistance recipients who had requested This was the first time that DES had successfully assistance. In addition, the unit established paternity made and recouped a claim against a provider of DES for 301 children. Attorneys in the unit also reviewed services. and gave advice on a number of cases that were not litigated.

Protective Services Unit

The Protective Services Unit is primarily responsible for providing legal services 'to the social service programs within DES, including Adult and Child Protective Services. Legal actions are instituted to help children and adults who are being exploited, neglected or abused. VOLUNTEER AND INTERNSHIP PROGRAMS PAGE 93

In an outreach effort to better serve the people of the complaints received by Consumer Information & State of Arizona, the Attorney General has taken Complaints Section staff that do not involve major strides in the area of volunteer/internship fraudulent activity. Volunteers also answer and programs. We highlight the following research questions or inquiries from consumers. This accomplishments: program serves to effectively resolve consumer complaints. VOLUNTEER PROGRAMS Victim Witness Assistance Program Elder Affairs Volunteer Program Twenty to twenty-five volunteers in the Organized This volunteer program is administered through the Crime and Fraud Section of the Criminal Division Human Services Division, Civil Rights Section, provide victims with information regarding their Office of Elder Affairs. Volunteers support the rights, inform them of the case status, and help program staff by responding to the needs of elder ' victims participate in the justice system. On a daily (senior) citizens to resolve problems/issues regarding basis, they perform the following: abuse, neglect, fraud and exploitation of elder (senior) citizens. Identify and respond to the needs of victims involved in cases handled by the Attorney General's Office. Extern/Intern Volunteers Inform victims of their constitutional rights, keep Volunteers are accepted throughout the year and victims involved with the status of their cases and provide much-needed assistance in the areas of legal assist them in their participation throughout the justice research, drafting and writing. The Office in tum pro~ess .. provides hands-on experience and credit hours towards their law school studies. Reduce the inconveniences that victims may encounter when involved in the justice system in order to Mediation Program promote continued cooperation and a possible reduction in future victimizations. Administered through the Human Services Division, Community Relations Section, over 250 volunteers Promote justice and healing for the victim. throughout the State of Arizona (Phoenix, Tucson, Flagstaff, Sierra Vista, Prescott, Yuma, Lake Havasu Assist the Attorney General's Office in seeking City, Bullhead City) help resolve approximately 2,000 justice. referrals from the courts. Their purpose is to intervene as neutral third persons to help disputing INTERNSHIP PROGRAMS parties to reach an agreement through mediation or voluntary arbitration. Conflicts settled include Paralegal Internship Program Consumer Fraud, Registrar of Contractors, Child Protective Services or any other agency or area The paralegal internship program is administered by needing their intervention. the Attorney General's Office Law Library, to train and provide practical experience to paralegal students Telephone Conciliation Program from Phoenix College, American Institute and Sterling School, the three local-area · training Administered through the Consumer Protection & institutions recognized by the Arizona Bar Antitrust Section, Consumer Information & Association. Three to four interns are selected each Complaints Unit. Volunteers, working 40 hours per year and placed in various sections of the Office week, help mediate and/or conciliate consumer under the supervision and guidance of a qualified, on- VOLUNTEER AND INTERNSHIP PROGRAMS PAGE 94 staff paralegal. Their purpose is to gain experience schools, as well as out of state. Those selected serve and provide assistance in the areas of research, a three-month internship. During the three months, document handling, file preparation, and writing. experience is gained in the areas of legal research and For their assistance, they receive experience and writing, communication, experience in the courtroom credit hours towards their paralegal studies. and agency hearings. Interns are challenged to perform as if they are public attorneys' while Summer Internship Program maintaining ethical and professional standards.

Students may apply or are recruited from local law i~ ~ Attorney General's Office tr1 FY 1993 Expenditures by Funding Source {In Thousands) ~ ~ Other General lnteragency Direct Federal Other Non- DESCRIPTION Fund Agreements Funding Funds Appropriated Appropriated Total Illti) 11 Personal Services $1 2,804.9 $1,421.6 $8,331.6 $1,654.0 $37.7 $1,443.7 $25,693.5 Empl. Rel. Expenditures 2,284.7 246.3 1,830.0 405.3 7.3 508.4 $5,282.0

Professional and Outside 167.5 641 .9 17.2 15.2 336.2 $1,178.0 Travel In-State 209.0 10.4 57.1 36.6 2.2 $315.3 Travel Out-State 39.9 7.7 16.8 41.0 0.1 105.8 $211 .3 Other Oper. Expenditures 2,886.8 195.7 1,254.4 772.9 16.7 2,072.9 7,1 99.4 Capital Equipment 70.1 62.2 79.2 354.3 10.3 145.7 721.8

Subtotal 18,462.9 2,585.8 11 ,586.3 3,279.3 72.1 4,614.9 40,601.3

Disbursements to Others 975.2 3,439.0 4,414.2

Collection Enforcement 1,297.4 1,297.4 Centex Rodgers 238.5 238.5 State Grand Jury 150.0 150.0

TOTAL $ 18,851.4 $2,585.8 $11,586.3 $3,279.3 $2 344.7 $8 053.9 $46,701.4 11 >~ ~ trj \0 °' FuNDING AND EXPENDITURES PAGE 96

In FY 1993, total funding from all sources for the Interagency Agreements. The Attorney General's Attorney General's Office was $46,701,400 (see Office has three sections that are directly funded by attachment 1). As can be seen from Graph D the other state agencies from appropriated funds: (1) the state General Fund contributed 40.4 % of this amount, Economic Security Section, paid by the Department 24. 8 % was direct funded and monies from federal of Economic Security; (2) the Insurance Defense funds were 7.0%. Interagency Agreements (IGAs), Section, paid by the Risk Management Division of .the other non-appropriated, and other appropriated funds Department of Administration, and (3) the represented another 27. 8 %. Transportation Section, paid by the Department of Transportation. . Graph E illustrates the various expenditures. It shows that 76.3 % of all funds expended in FY 1993 Federal Funds were for salaries (Personal Services and Employee Related Expenditures). Note: For the purposes of Funds are received from several federal agencies. Graph E, disbursements to others and below the line The following is a consolidated list of funding items (Centex Rodgers and State Grand Jury) are not received in FY 1993: included as expenditures. Federal Agency Purpose General Fund Housing and Urban Fair Housing Actual expenditures from the state General Fund were Development Enforcement $18,851,400. Of this amount, $238,500 was for the Centex-Rodgers case and $150,000 was for the State Equal Employment Employment Grand Jury. As can be seen in Graph F, Personal Opportunity Commission Discrimination Services and Employee Related Expenditures represent 81. 7 % of total General Fund expenditures. Health & Human Svcs Medicaid Fraud Note: For the purposes of Graph F, below the line Prosecution items (Centex Rodgers and State Grand Jury) are not included as expenditures. Environmental Protection Hazardous Waste Agency Management Interagency Agreements Department of Justice Victim Witness Interagency Agreements (IGAs) are contracts between Support; Narcotics the Attorney General's Office and other state agencies Trafficking; Drug for legal services. In most instances, IGAs are Cartel Prosecution; entered into with state agencies that are not funded Money Laundering through the state General Fund, such as the Board of Medical Examiners. In FY 1993, IGAs represented In FY 1993, federal funds represented 7. 0 % of total only 5.6% of total funding. Of the $2,585,800 expenditures (see Graph D). · expended, 64.5 % was for Personal Services and Employee Related Expenditures. Other Appropriated Funds

Direct Funding In FY 1993, funding was generated from the Victim Rights Implementation Revolving Fund and the Direct funding refers to areas in the Attorney Collection Enforcement Revolving Fund. 93.1 % or General's Office that are paid for directly by other $975,400 of the $1,047,300 expended in the Victim state agencies. This means that no funds are Rights Implementation Revolving Fund was passed transferred between the agencies; as in the case of the thru to other entities throughout the state. In FuNDING AND EXPENDITURES PAGE 97 addition, 65.0% of the $1,297,400 expended in the 2. Court-Ordered Trust Funds Collection Enforcement Revolving Fund was disbursed to various state agencies. Total expenditures 3. Revolving Funds including disbursements to others and pass thru were $2,344,700. In FY 1993, 42.7% or $3,439,000 of these expenditures were distributions (disbursements and Other Non-Appropriated Funds pass thru) made to other entities.

Monies in this category reflect the following sources:

1. Pass-through from the Criminal Justice E hancement Fund to Arizona Prosecuting Attorneys' Advisory Council and to each county attorney's office . ..

Graph D

FY 93 Expenditures By Funding Source

(40.4%) General Fund

(5.6%) lnteragency Agreements Other Non-Appropriated (24.8%) (1 7.2%)

Direct (7.0%) (5.0%) Funding Other Appropriated Federal Funds FuNDING AND EXPENDITURES PAGE 98

Graph .E

FY 93 TOTAL FUNDS EXPENDITURES By Expenditure Type

(l .S %fapital Equipment (l .J %) Travel

(17.7 %) Other Operating Expenses (2.9%) Professional and Outside

Graph F

FY 93 General Fund Expenditures By Expenditure Type

Personal Services/ERE (81.7%)

Capital Equipment (0 .4 %)

Other Operating Expenditures (1 5.6%)

(0.9%) Professional and Outside OUTSIDE LEGAL COUNSEL: FISCAL YEAR 1994 PAGE 99

Occasionally the Office of the Attorney General has a need to employ the prof~ssional services of local law firms to represent the Attorney General. This need arises from a conflict of interest or_a lack of sufficient expertise in a specific area of law. Examples of the areas of law where the Attorney General may desire the assistance of outside legal counsel are malpractice, premises liability, roadway de­ sign/maintenance/ striping/signing or traffic control devices, banking regulation, construction law and claims, Indian law, real estate regulation, representation of licensing agencies, trademark and copyright law or other civil matters in which the state is a party.

The attorneys listed below are contracted to act as outside counsel to the Attorney General during FY 1994:

Bruce D. Alper, P.C. Phoenix Judis R. Andrews Phoenix Jeffrey F. Arbetman Phoenix Aspey, Watkins & Diesel Flagstaff Arthur C. Atonna, Ltd. Phoenix Ayers & Brown, P.C. Phoenix Baskerville Law Offices Mesa Bell & Associates Phoenix Bess & Dysart, P.C. Phoenix Boyle, Pecharich, Cline & Whittington Phoenix Broening, Oberg & Woods · -Phoenix Burch & c:;racchiolo, P.A. Phoenix Campana, Vieh & Strohm Scottsdale Bryan Cave Phoenix Dan Cavett Tucson , Chandler, Tullar, Udall & Redhair Tucson Cohen McGovern Shorall & Stevens Phoenix Corey and Farrell, P. C. Tucson Cruse, Firetag & Bock Phoenix DeConcini, McDonald, Brammer, Yetwin & Lacy, P.C. Tucson Dioguardi, Poli & Ball, Ltd. Phoenix Joseph C. Dolan Phoenix Doyle & Appel Phoenix Duffield, Miller, Young, Adamson & Alfred, P.C. Tucson Ernest Brown & Co. Tempe Joseph L. Esposito Tucson Faith, Ledyard, Dagilis & Nickel Avondale M. Jay Felix Tucson Kenneth Q. Flickinger, Jr. Phoenix Folk & Associates Phoenix Gallagher & Kennedy Phoenix Gaona & Haynes Phoenix Glover & Van Cott, P.A. Phoenix Graham & Associates, Ltd. Phoenix Green & Baker Scottsdale Gust Rosenfeld Phoenix Guttilla & Murphy, P. C. Phoenix OUTSIDE LEGAL COUNSEL: FISCAL YEAR 1994 PAGE 100

David T. Hardy Tucson Paul S. Harter Phoenix Hazlett & Wilkes Tucson Hecker & Phillips & Zeeb Tucson Holloway, Odegard & Sweeney, P.C. Phoenix Jaburg & Wilk, P. C. Phoenix Jackson, White & Gardner, P. C. Mesa Jennings, Kepner & Haug Phoenix Jennings, Strouss & Salmon Phoenix Johnson & Whiteman Scottsdale Jones, Skelton & Hochuli Phoenix Junker & Dougherty, P.C. Phoenix Kern and Wooley Mesa Kimble, Gothreau & Nelson Tucson , Ronald A. Lebowitz Phoenix Lieberman, Dodge & Sendrow, Ltd. Phoenix Ralph E. Mahowald Phoenix Mangum, Wall, Stoops & Warden Flagstaff Benson T. Maple Phoenix Mariscal, Weeks, McIntyre & Friedlander, P.A. Phoenix Martin, Hart & Fullerton Mesa Mesch, Clark & Rothchild, P.C. Tucson Mitten, Goodwin & Raup Phoenix Munger and Munger Tucson Murphy, Goering, Roberts & Berkman, P.C. Tucson Ortega & Moreno & Talamante, P.C. Phoenix Quarles & Brady Phoenix Renaud, Cook, Videan, Geiger & Drury, P.A. Phoenix Ridenour, Swenson, Cleere & Evans Phoenix Rivera, Scales & Kizer Phoenix Roberts, Ellsworth & Rowley Mesa Rogers and Whalen Phoe.nix David S. Rosenthal Phoenix Rusing & Lopez, P.L.L.C. Tucson D. Jay Ryan Phoenix Ryley, Carlock & Applewhite Phoenix I John N. Savage Chandler David W. Scanlon Litchfield Park Scult, Lazarus, French, Zwillinger & Smock Phoenix I Kenneth W. Seidberg Phoenix Shimmel, Hill, Bishop & Gruender, P.C. Phoenix Slutes, Sakrison, Even, Grant & Pelander, P.C. Tucson Snell & Wilmer Tucson Sterns and Tennen Phoenix Struckmeyer & Wilson Phoenix Surrano & Massey Phoenix Thomas, Burke & Phillips Phoenix OUTSIDE LEGAL COUNSEL: FISCAL YEAR 1994 PAGE 101

Tryon, Heller & Rayes, P.C. Phoenix Udall, Shumway, Blackhurst, Allen & Lyons, P.C. Mesa Warner, Angle, Roper & Hallam, P.C. Phoenix Waterfall, F.conomidis, Caldwell, Hanshaw & Villamana, P.C. Tucson Michael J. Watton Phoenix Weyl, Guyer, MacBan & Olson, P.A. Phoenix Wilenchik, Bartness & Zuckerman Phoenix Robert E. Wisniewski Phoenix John E. Wolfinger Phoenix TELEPHONE DIRECTORY PAGE 102

ADMINISTRATION DIVISION (ADM)

Attorney General Grant Woods 542-4266 First Assistant Attorney General Rob Carey 542-4266 Chief of Administration Tom Augherton 542-4266 Director of Communications Steve Tseffos 542-4266 Elections & Opinions Rob Carey 542-4266 Intergovernmental Affairs John MacDonald 542-4266

MANAGEMENT SERVICES

Administrative Services Section Jim Sawyer 542-4374 Financial Services Section Paul Akers 542-4374 Information Services Section Doug Caddell 542-4374 Library/ Research Services Section Lucy Trujillo 542-4374 Personnel Services Section Harold Evans 542-4374

CIVIL DIVISION (CIV)

Division Chief Counsel Leslie Hall 542-1401 Civil Administrative Law Section Tom McClory 542-1610 Consumer Protection & Antitrust Section Sydney Davis 542-3702 Insurance Defense Section Tom Prose 542-4951 Land & Natural Resources Section Diane Heinton 542-1401 Licensing & Enforcement Section Monty Lee 542-1610 Solicitor General & Opinions Section Rebecca Berch 542-3333 Tax Section Gale Garriott · 542-1719 Transportation Section Richard Alleman 542-1680

CR11\11NAL DIVISION (CRM)

Division Chief Counsel Mike Cudahy 542-3881 Criminal Appeals Section Paul McMurdie 542-4686 Criminal Trials Section 542-3881 I Drug Enforcement Section Gary Husk . 542-4853 Environmental Enforcement Section Patrick Cunningham 542-3881 Organized Crime & Fraud Section Sherry Stephens 542-3881 Special Investigations Section Lee Rappleyea 542-4853 TELEPHONE DIRECTORY PAGE 103

HUMAN SERVICES DIVISION {HSD)

Division Chief Counsel Cecil Patterson 542-1401 Civil Rights Section David Bartlett 542-5263 Community Relations Section Phillip Austin 542-2124 Mediation 542-4192 Elderly Affairs 542-2124 Economic Security Section Kirk Burtch 542-1645 Child Support 542-1473 Child Welfare 542-1645 Enforcement 542-1645

PHOENIX OFFICES TUCSON OFFICES

Law Building Main Office 1275 West Washington Street 402 West Congress, Suite #315 Phoenix, Arizona 85007 Tucson, Arizona 85702-1367

Capital Center Building Information 628-6504 15 South 15th Avenue · Civil Rights 628-6500 Phoenix, Arizona 85007 Criminal 628-6504 Economic Security 628-6574 General Information 542-5025 Special Investigations 628-6504 Consumer Fraud Complaint 542-5763 Victim's Rights/Witness Assistance 628-6454 (Toll-free within Arizona) 800-352-8431 Insurance Defense 177 North Church Street, Suite #1105 Tucson, Arizona 85701 628-6044

FLAGSTAFF OFFICE KINGMAN OFFICE

Economic Security Economic Security/Child Support Enforcement 2323 North Walgreen's Street, Suite #100 2611 Kingman Avenue Flagstaff, Arizona 86004 Kingman, Arizona 86401 527-0924/526-8029 753-4411

YUMA OFFICE SIERRA VISTA OFFICE

Child Support Enforcement Child Support Enforcement Special Investigations Haymore Adobe Plaza, Suite #L-13 1595 South First Avenue East Fry Boulevard Yuma, Arizona 85364 Sierra Vista, Arizona 85635 459-6523 Child Support Enforcement 343-0940 Special Investigations 344-6959 • . I

I I I . I

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Office of the Attoniey Oeneral 1275 W. Washington Phoenix, AZ 85007 (602) 542-~025 , ' I

Publishe9 by the Manageme,nt Services Division

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