OFFICE OF THE ATTORNEY GENERAL

Department of La,w

Fiscal Year 1992 Annual Report

Grant Woods Attorney General Grant Woods Attorney General

Robert B. Carey First Assistant Attorney General

Civil Division Crimin al Divi sion J M. Howard Michael C. Cudahy Chi ef Counsel Chief Counsel

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

Transmittal Letter

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

October 15, 1992

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 Arizona Attorney General, as required by ARS § 41-194.B.

These are difficult financial times for Arizona Government, and I appreciate the support offered by your office and members of the Arizona Legislature to ensure thoughtful funding decisions regarding the Law Department's budget. · 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.

During the past fiscal year, this administration continued to focus on increased civil rights protection for the citizens of our state and continued aggressive education and protection of consumers. The Arizona Legislature's passage of the equivalent legislation to the federal Americans With Disabilities Act, following the previous session's passage of the federally equivalent Fair Housing Act, has proven Arizona to be a leader in enacting in1portant civil rights protections for its citizens.

On behalf of the employees of the Attorney General's Office, I am pleased to submit this report outlining our tremendous accomplishments during the past fiscal year. As in past years, our future dedication will be to continue to provide quality services and counsel to the citizens and governn1ental entities of the State of Arizona.

Sincerely,

Grant Woods Attorney General Overview

The Arizona Attorney General is the lawyer for the the work load of the Criminal Appeals Section State and the protector of its citizens. As the increased from approximately 1,850 cases to nearly advocate for Arizonans, the Office has become 3,000 cases, the Office had no money with which proactive and will remam so during this to provide additional attorneys or staff. Because of adm ini stration. extraordinary effort on the part of the attorneys of this section, the section remains successful in During the past year the Office has aggressively protecting Arizona society. We question how long in vestigated frauds on Arizona consumers. For we can impose upon the loyalty and dedication of exampl e, the Office has vigorously pursued cases o_ur lawyers and staff. against companies such as World Rental Car Sales, Life Alert, and Scottsdale Meats. The Office prosecuted an elder abuse case this year in which the defendant was sentenced to one of the To educate and guide potential advertisers, the longest terms of any elder abuse offender in the Office has published the guidelines it uses to United States - 2 1 years. Although there is still determine when advertising is fraudulent or much to be done in this area, the Office hopes that misleading to consumers. The Office has planned the case will send a strong message. a series of public service announcements to educate consumers and help them protect their rights. In The Office has been at the forefront in expanding this way, the Office attempts to protect consumers Arizona and U.S . relations with Mexico. This year, from th e effects of undue sales pressure or the Office hosted the Conference of Southwest fraudulent or misleading ·statements, and to stop Border Attorneys General, which included fraud before it occurs. Attorneys General from many Mexican states. Through cooperation with Mexico, the Office has The Attorney General's Office also aggressively been able to prosecute the Willoughby murder case pursues civil rights violations. Although somewhat and, with the help of Mexican authorities, is hampered by inadequate funding, the Office has vigorously investigating the Zubia family execution nonetheless led the fi ght for fair-housing legislation case. and a "h ate crimes" statistics law. We are proud to announce that Arizona was the first in the nation to During the coming year, the Office wi ll continue to pass a State A mericans With Disabilities Act and provide vigorous prosecution to protect the public the third to meet federal housing standards. Our and quality service to the agencies, boards, and goal is to have Arizona lead the nation in the state officers it represents. To protect our children, protection of civil rights. the Office will focus on the enforcement of child support obligations and will continue to work with To provide a livable environment for ourselves and schools to establish "Drug Free School Zones" - a for future generations, the Office has reorganized program initiated by this Office that has proved and reinvigorated the Environmental Enforcement successful in reducing crime in and around public Unit. That unit was critical in helping to have schools. more stringent environmental laws - such as the Clean Air Act - passed by the legislature. The unit Because of lean economic times, the salaries of the is also pursuing claims against several companies lawyers and support staff in the Attorney General's responsible for despoiling the Arizona environment. Office now lag behind those for other public sector employees. The Office continues to attract On the criminal side, the Attorney General 's qualified new attorneys almost solely because the Office has sought to enforce the death penalty. We private firms in the state are not hiring. We fear are proud to report that the Criminal Appeals that, should the economy begin to recover, we will Section was successful in every·case argued before lose many of our employees to the private sector. the U.S. Supreme Court this past year. Although Indeed, in some areas we have already begun to Overview

see this happen. rev1s10n of the statutory duties of the Attorney General, the legislature should assure funds with During the past year, the Office has instituted many which to carry out those duties. measures to help make the Attorney General's Office more self-supporting. These measures The lawyers and staff of the Arizona Attorney alone, however, will not suffice to keep the salaries General's Office proudly serve their State. The competitive and the morale high The Office looks Office has had an outstanding year. Through the to the legislature for the support to ensure vigorous continued dedication of the employees of the and able legal representation for the State. When Attorney General's Office, we lo ok forward to the legislature imposes new duties upon the Office, another one next year. such as those imposed in the private property protection act, the lobbyists registration act, and the 0 ~

0) :l ARIZONA DEPARTMENT OF LAW -N Office of the Attorney General ,..0) -0 J. Grant Woods :l Attorney General 0)

I ("') I I I I I First Assistant Management Services Civil Division Criminal Division Human Services Division ::r Attorney General Thomas G . Augherton J. M . Howard Michael C. C udahy Cecil B. Patterson, Jr. 0) Robert B. Carey Chief of Administration Chief Counsel Chief Counsel Chief Counsel ,..~

Administrative Services Civil Administrative Law Section Criminal Appeals Section Civil Rights Section Communications Section Fred W. Storie, III Paul J. McMurdie Richard M. Martinez - Steven A. Tseffos - - Jim E. Sawyer - Chief Counsel Chief Counsel - Chief Counsel

Elections and Opinions Financial Services Consumer Protection & Antitrust Sec. Criminal Trials Section Community Relations Section - Lisa T. Hauser Section H. Leslie Hall - Steven C. Mitchell Phillip A. Austin - Paul A. Akers - Chief Counsel Chief Counsel - Chief Counsel

Intergovernmental Information Services Land & Natural Resources Section Drug Enforcement Section Economic Security Section - Alfairs - Section Diane D. Hienton - Gary A. Husk Kin A. Burtch G. Michael Williams Douglas D. Caddell - Chief Counsel Chief Counsel - Chief Counsel

Library/Research Insurance Defense Section Special Investigations Section - Legislative AtTairs - Services Section Thomas P. Prose - Lee L. Rappleyea Lucy A. Trujillo - Chief Counsel Chief Investigator

Personnel Services Licensing & Enforcement Section Environmental Enforcement Section - Regional Offices - Section Montgomery Lee .... Palrick J. Cunningham Harold L. Evans - Chief Counsel Chief Counsel

Solicitor General & Opinions Section Organized Crime & Fr aud Section Rebecca W. Berch .... Sherry K. Stephens - Chief Counsel Chief Counsel

Tax Section Tucson Criminal Section - Gale L. Garrion - JohnE. Davis Chief Counsel Chief Counsel

Transportation Section - Richard S. Allemann Chief Counsel Table of Contents

OFFICE OF THE ATTORNEY GENERAL

Department of Law

Fiscal Year 1992 Annual Report

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

Ro le of the Attorney General ...... Page 4

Chronology of Attorneys General ...... Page 5

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

Administration Division ...... Page 9

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

Civil Division ...... Page 15

Criminal Division ...... Page 53

Human Services Division ...... · ...... Page 74

Volunteer and Internship Programs · ...... Page 84

Funding and Expenditures Page 86

Outside Legal Counsel Page 90

Telephone Directory Page 92 Arizona Rules of Professional Conduct: A Lawyer's Responsibilities

A lawyer is a representative of clients, an officer of the law beyond its use for cli ents, employ that the legal system and a public citizen having special knowledge in reform of the law and work to responsibility for the quality of justice. strengthen legal education.

As a representative of clients, a lawyer performs A lawyer should be mindful of deficiencies in the various functions. As advisor, a lawyer provides a administration of justice and of the fact that the client with an informed understanding of the poor, and sometimes . persons who are not poor, client's legal rights and obligations and explains cannot afford adequate legal assistance, and should their practical implications. As advocate, a lawyer therefore devote professional time and civi c zealously asserts the client's position under the influence in their behalf. A lawyer should aid the rules of the adversary system. As negotiator, a legal profession in pursuing these objectives and lawyer seeks a result advantageous to the client but should help the bar regulate itself in the public consistent with requirements of honest dealing with interest. others. As intermediary between clients, a lawyer seeks to reconcile their divergent interests as an Many of a lawyer's professional responsibiliti es advisor and, to a limited extent, as a spokesperson are prescribed in the Rules of Professional for each cl~ent. A lawyer acts as evaluator by Conduct, as well as substantive and procedural law. examining a client's legal affairs and reporting However, a lawyer is also guided by personal about them to the client or to others. conscience and the approbation of professional peers. A lawyer should strive to attain the highest In all professional functions a lawyer should be level of skill, to improve the law and the legal competent, prompt and diligent. A lawyer should profession and to exemplify the legal profession's maintain communication with a client concerning ideals of public service. the representation. A lawyer should keep in confidence information relating to representation of A lawyer's responsibili ties as a representative of a client except so far as disclosure is required or clients, an officer of the legal system and a public permitted by the Rules of Professional Conduct or citizen are usually harmonious. Thus, when an other law. opposing party is well represented, a lawyer can be a zealous advocate on behalf of a cli ent and at the A lawyer's conduct should conform to the same time assume that justice is being done. So requirements of law, both in professional service to also, a lawyer can be sure that preserving cli ent clients and in the lawyer's business and personal confidences ordinarily serves the public interest affairs. A lawyer should use the law's procedures because people are more likely to seek legal only for legitimate purposes and not to harass or advic,e, and thereby heed the legal obligations, intimidate others. A lawyer should demonstrate when they know their communications will be respect for the legal system and for those who private. serve it, including judges, other lawyers and publi c officials. While it is a lawyer's duty, when In the nature of law practice, however, conflicting necessary, to chall enge the rectitude of official responsibilities are encountered. Virtually all action, it is also a lawyer's duty to uphold legal difficult ethical problems arise from conflict process. between a lawyer's responsibilities to clients, to the legal system and to the lawyer's own interest As a public c1t1zen, a lawyer should seek in remaining an upright person while earning a improvement of the law, the administration of satisfactory living. The Rules of Professional justice and the quality of service rendered by the Conduct prescribe terms for resolving such legal profession. As a member of a learned conflicts. Within the framework of these rules profession, a lawyer should cultivate knowledge of many difficult issues of professional discretion can

2 Arizona Rules of Professional Conduct: A Lawyer's Responsibilities

arise. Such issues must be resolved through the The legal profession's relative autonomy carries exercise · of sensitive professional and moral with it special responsibilities of self-government. judgment guided by the basic principles underlying The profession has a responsibility to assure that its the rules. regulations are conceived in the public interest and not in furtherance of parochial or self-interested The legal profession is largely self-governing. concerns of the bar. Every lawyer is responsible Although other professions also have been granted for observance of the Rules of Professional powers of self-government, the legal profession is Conduct. A lawyer should also aid in securing unique in this respect because of the close their observance by other lawyers. Neglect of relationship between the profession and the these responsibilities compromises the inde­ processes of government and law enforcement. pendence of the profession and the public interest This connection is manifested in the fact that which it serves. ultimate authority over the legal profession is vested largely in the courts. Lawyers play a vital role in the preservation of society. The fulfillment of this role requires an To the extent that lawyers meet the obligations of understanding by lawyers of their relationship to their professional calling, the occasion for our legal system. The Rules of Professional government regulation is obviated. Self-regulation Conduct, when properly applied, serve to define also helps maintain the legal profession's that relationship. independence from government domination. An independent legal profession is an important force Reprinted from the Attorney General Ethics in preserving government under law, for abuse of Manual. legal authority is more readily challenged by a profession whose members are not dependent on government for the right to practice.

3 Role of the Attorney General

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

4 Chronolo of Attorne s General

ENGLISH P ERSPECTIVE subsequent Attorney Generals of various coloni es, were subjected to much criticism because of their In the Old World, the Kin g of England appointed inability to execute the responsibilities of their a "King's Attorney" to perform certain duties and positions. One common element of this inability to initiate actions to recover rent and land, to resulted from the lack of qualified appointees. proceed against individuals who pronounced sentence of excommunication against royal In the Carolinas, the Attorneys General provided servants, to guard the king's right to present to opinions on various issues when requested by the churches, to investigate homicide, and to Governor. Statutory laws were implemented from determine what issues pertained to the Crown. Sweden, Netherlands, Roman Law and Indian Law. Such statutory implementation resulted from the Lawrence del Brok is recorded as England's first diversity of the colony 's population. "Kin g's Attorney. " Appoin ted by King John during the mid-th irteenth century, Brok's authority STATE PERSPECTIVE also included initiating legal action to protect State property and employees. Brok also exercised From a total of fifty states, thirty-four continued or official discretion to prosecute serious criminal created an "Office of the Attorney General" which cases as well as conduct special investigations at was included in their first state constitution. Eight the direction of the executive authority. other states established the office upon statehood. Today all fifty states, including th e six jurisdictions Durin g the late 1200's, royal appointments were of the District of Columbia, American Somoa, made to the first Council of Attorneys and Ser­ Guam, the Northern Mariana Islands, Puerto Rico geants to represent the king's interests at the and the Virgin Islands, have an Attorney General or King's Bench and Court of Common Pleas. In Chief Legal Officer. 1461 , the Crown appointed John Herbert as the first "Attorney General of England. " In the early ARIZONA PERSPECTIVE l SO 0' s, under the reign of King Henry III, the Attorney General served as a li aison between the In 1861, Arizona was established as a Confederate House of Lords and the House of Commons. As Territory. Upon this establishment, M. H. McWillie years passed, the Attorney General gave legal was appointed as the Attorney General for the Con­ advice to all departments of state and appeared in federate Territory of Arizona. In subsequent years court on their behalf. Throughout the years, the the following distinguished individuals have served Attorney General became less the King's as Attorney General of Arizona: Attorney, but more a publi c official responsible fo r justice

C OLONIAL PERSPECTIVE

Much of the New World Attorney General's responsibilities were patterned from the Old World concepts. A Colonial Attorney General's duties varied from colony to colony. Nevertheless, duties such as preparing indictments for murder, theft, mutiny, sedition, and piracy were common throughout all co lonial establishments. Richard Lee of Virginia was the first Attorney General in the New World (recorded in 1643). Lee, and many

5 Chronolo of Attorne s General

TERRITORY Name Years

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. R ush 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. Ki bbey 1903 -1904 E. S. Clark 1905-1908 John B. Wright 1909- 1911

STATE

George Purdy B ullard 191 2- 1915 Wiley E. Jones 191 5- 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- 19 59 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-

6 Summary of Attorney General Opinions: 7-1-91 to 6-30-92

91-027 (R90-157); 7/ 16/91; VOLUNTARY A.RS. § 32-230 l et seq. However, individuals TRANSFER OF VA CATION LEA VE (including state employees) are subject to the li censing provisions. The exemption granted by Local governing boards may adopt a policy A.RS. § 32-23 11(7) extends to municipal providing for voluntary transfer of accrued vacation employees when they apply pesticides as incidental leave to another employee who has a serious, to their work and when the pesticides used are not incapacitating illness as long as the transfer is not in toxicity categories I or II. A.RS. § 32-2311 (7) a gift of public funds. Such a policy must be does not apply to employees. adopted pursuant to rule, or must be a negotiated term in employee contracts. 91-032 {R90- 101 ); 10/9/91; INSURAN CE PREMIUMS FOR REEMPLOYED RETIREES 91 -028 {R91-023); 7/22/91; ISSUANCE OF SUBORDINATED DEBT The fund manager of the Publi c Safety Personnel Retirement System is authorized to make payments The bonding statutes authorize the issuance of to the Department of Administration (DOA) for subordin ated debt. There 1s no statutory health and accident insurance premiums for retired prohibition against deferring payment of principal members of the retirement plans who are on bonds, but the propriety of such deferral in the reemployed by the state and enrolled in the state's case of any particular bond issue depends upon the insurance program for active employees, so long as provisions of the bond resolution. The Bonding the reemployed retirees are receiving pension Statutes do not prohibit the use of capital benefits from the fund manager. Payments are to appreciation bonds. The original principal amount be made only to DOA and not to any retiree for of non-current interest bonds at the time of their health and accident insurance premium benefits issuance should be considered the total principal payable under the retirement plans for reemployed amount of the bonds retirees who are enroll ed in the health and accident insurance program. 91-029 {R91-034); 7/22/91; REGULATION OF OSTEOPATHIC MEDICAL ASSISTANTS 91-033 (R91-036); 10/17/92 OPEN MEETINGS USING ELECTRONIC MEDIA The proposed regulation of osteopathic medical assistants does not conflict with A.RS. The Community Coll ege District Governing Board § 32-200l(A)(6) and A.RS. § 32-200l(A)(7) nor may conduct business at open meetings by use of does it sanction unauthorized practice as a physical an electronic medium such as a telephone or video th erapist or physical therapist assistant. conference. However, Board members should strive to be physically present at meetings and 91-030 {R91-037); 8/26/91; SELLING LIQUOR ON should be present through electronic media only SPECIAL ELECTION DAYS when no reasonable alternatives exist. A ll open meeting laws must be observed. Licensees inay sell liquor on the dates of the special primary and general elections being held to 91 -034 (R91 -033); 11/26/91; TREATMENT OF fill the Second District Congressional seat. CHILD BY CHRISTIAN SCIENCE PRACTITIONER

91-031 {R91-022); 9/13/91; PEST CONTROL A.RS. § 8-546(B) acts only to prevent a child from LICENSING FOR STATE EMPLOYEES being considered an abused, neglected o r dependent child for the sole reason that the child is being The State and its political subdivisions are not treated by a Christian Science practitioner. It has subject to the li censing provisions contained in no effect where the child's health is in imminent

7 Summary of Attorney General Opinions: 7-1-91 to 6-30-92 ·

danger or is being damaged by the lack of 92-002 (R91-032); 02/20/92; CIRCULATION OF appropriate medical care. RECALL PETITIONS

91-035 {R91-043); 12/31/91; SEARCHES OF The Secretary of State does not have the statutory STUDENT LOCKERS authority to compel circulators to return and file petitions to recall state officers. Legislation will District personnel may not conduct random become effective November 4, 1992, which makes searches of students' persons or their personal it a misdemeanor for circulators of recall petitions effects, but may conduct searches only if they have to fail to file a recall petition or an affidavit stating reasonable suspicion that contraband will be found. that the recall petition was not circulated. A school district may not search students' motor vehicles. School districts must follow appropriate 92-003 (R92-003); 03/03/92; CLERK OF THE notice and hearing requirements before a student COURT CHILD SUPPORT DUTIES can be suspended, and parental attendance at school may be requested but not required. The Separation of Powers Doctrine and the Code of Judicial Conduct do not permit the Clerk of the 92-001 (R91-044); 01/08/92; SCHOOL BOARD Court to operate a program to establish, enforce, MEMBER PARTICIPATION lN HEALTH PLAN and modify child support pursuant to a contract with the Department of Economic Security. Participation of board members, former board members and their families in the district's health 92-004 (R92-009); 05/ 15/92; USE OF REVENUES insurance plan is permitted under A.RS. § 15 -3 87 FOR HIGHWAY OR STREET PURPOSES and self insurance as authorized in A.RS. § 15-382 does not disallow that participation. The controlling restriction in Article IX, Section 14 of the Arizona Constitution is the general "highway or street purpose" limitation of permissible expenditures. If the activity in question is for a "highway or street purpose," highway user revenues may be used even if the activity does not fall within one of the enumerated categories.

8 )> C. 3 -:J ARIZONA DEPARTMENT OF LAW tn- Office of the Attorney General ,-+ Q)"""" Administration Division ,-+ 0-· Grant Woods :J Attorney General m -->< CD (") C: First Assistant ,-+ Attorney General Robert B. Carey <-· CD

,-+en Q) \0 .....

Intergovernmental Communications Elections and Opinion• Affairs Legislative Affair! Regional Offices Lisa Hauser Steve Tscffos Mike Williams )> C. 3 ARIZONA DEPARTMENT OF LAW -·::::::s Office of the Attorney General -·t,n Administration Division ,-+ Management Services """0) ,-+-· Grant Woods 0 ::::::s Attorney General --s 0) ::::::s Chief of Administration 0) Thomas G. Augherton C CD 3 CD ::::::s ,-+ 0 en Administrative Services Financial Services Information Services Personnel Services Library/Research Section Section Section Section Services CD Jim E. Sawyer Paul A. Akers Douglas D. Caddell Harold L. Evans Lucy A. Trujillo Director Chief Financial Officer Director Director Director """< -(") CD Facilities Budget Client Employee t,n .. Management - Operations - Services .. Relations

Policy and Technical Employee i,,, .. Purchasing .. Planning - Services Benefits

.. Administrative .. General Application Operations Ledger - Services

Accounting - Operations Administration/Manaaement Services

ADMINISTRATIVE SERVICES SECTION placed on increasing individual personal computer ski lls through classes taught by the Information The Administrative Services Section is responsible Services Section. for managing, staffing, and implementing the central services of the office. These services In preparation for the implementation of the in clude faci li ties management, mail services, Uniform Statewide Accounting System (USAS) photocopying services and reception for July 1, 1992, the accounting staff spent several Management Services. The section also researches hundred hours designin g and setting up a new and ini'tiates many of the Attorney General's accounting structure for the agency. Much time Office operating policies and procedures. was also spent training staff on how to use USAS.

Emplo yee safety and building security are of INFORMATION SERVICES SECTION foremost concern to the Administrative Services Section. As such, new security procedures and The Information Services Section is responsible for equipment were designed and implemented to the planning, designing, implementing and combat increasing criminal activity on or near the maintaining all computerized information systems Attorney General's Office premises. Specific within the office. During the past year the section measures taken include the installation of a new, has focused on improving cli ent service and more reliable security card access system for prototyping new Local Area Network (LAN) employees, additional security li ghtin g on the technology to eventually replace its aging computer perimeter of the Law Building, employment of infrastructure. Computer faci li ties are structured off-duty Capitol Police officers to provide visible around an intra-state network of l O medi Utl} to security support in the Law Building and Capital large-sized Wang computers. These aging systems Center Building, and construction of security walls and their associated software are negatively and windows to ensure safety of employee work impacting the office. areas in the public access portion of the Law Building. The 12-person Information Services staff reorganized in March, 1992 to better serve its FlNANCIAL S ERVICES SECTION clients. This restructuring resulted in a sh ift of personnel from back-room operations to front-lin e The Financial Services Section has primary support of the office's staff In conjunction with responsibility for accounting, budgeting and th is cli ent service orientation, the Information procurement for the agency. In FY 1992 the Services Help Desk was established to provide section was reorganized to enhance its ability to office personnel with a single point of contact for better manage state and federal dollars. A all computer-related problems. The section also Budgeting unit was created to improve our ability established a new training center which provides to develop and execute the annual budget. This formal training to all office personnel in relevant unit will be an integral -part of the analysis of areas of computer use. current expenditures in order to establi sh an historical basis from which to develop more In February, 1992, a program was begun to identify accurate projections. and prototype new computer technology in order to eventually replace existing Wang systems, a As part of the reorganization, more emphasis was process which is occurring throughout the legal placed on staff education. It was done to not only industry. A successful model was implemented improve quality, but also to help employees better which allowed the section to confirm the office's understand their jobs by making them a part of the overall technology direction and acquire requisite decision-making process. Emphasis was also technical skills.

11 Administration/Management Services

LIBRARY/R ESEARCH SERVICES SECTION has an average library support staff of ten, but not less than seven. We provide a hybrid of services The Library/Research Services Section is to our lawyers comparable to, if not more compre­ responsible for providing research, reference, hensive than any of the largest firms in the State of consultation, support and inter-library loan service, Arizona, with a staff of four. as well as expert computer research assistance and training on Lexis and Westlaw, to the Office of the P ERSONNEL SERVICES SECTION Attorney General. Extensive legal reference and emergency research services are performed daily in The Personnel Services Section is responsible for the areas of Criminal, Administrative Law, Child a myriad of employment functions. These Support Enforcement, Civil Rights, Prison Law, functions include personnel recruiting, applicant Tort, Eminent Domain, Consumer Fraud, Real evaluations, preparation and certification of hiring Estate and in any ·other areas requested. lists, employee orientation, employee counseling, consulting on personnel rules and applicable Additionally , the Library staff continually reviews statutes, maintenance of employee benefits, all Arizona cases from the appellate courts and all conducting exit interviews, maintenance of other jurisdictions, state and federal, as well as any personnel files, inputting personal/position rule or statute changes, to keep abreast of the most information data, preparation of computer reports, recent legal occurrences locally as well as employee and/or position status changes, workforce throughout the United States. analysis studies and grievance procedures, fingerprinting, coordinating of activities associated The limited staff accepts and completes more than with performance evaluations, conducting training 2,400 requests per year. programs on the Employee Performance Appraisal System and Personnel Action Request System, and In a recent poll taken by the American Association performing other activities that are common to a of Law Libraries a firm with 120 or more lawyers personnel operation.

12 Attorne General's Workforce Com osition

This administration has emphasized increasing the (23 staff members), which represents an aggregate percentage of racial and ethnic minorities in its minority increase of 11 attorneys. workforce. Particular emphasis has been directed toward our attorney staff, where significant gains The following graphs reflect our workforce have been made in our goal to achieve adequate composition. Graph A illustrates attorney workforce representation for all minority groups. composition and Graph B (see page 14) illustrates support composition. Graph C (see page 14) During the past two years, our minority attorney demonstrates the combined workforce composition. staff (excluding non-minority females) has increased from 4.85% (11 staff members) to 9.30%

GRAPH A

ATTORNEY WORKFORCE COMPOSITION

NON-MINORITY FEMAL (42.1%)

(48.6%) NON-MIN OR ITY MALE

13 Attorne General's Workforce Com osition

GRAPH B

SUPPORT WORKFORCE COMPOSITION

NON-MINORITY MALE (20.3%)

MINORITY FEMALE NON-MINORITY FEMALE (1 6.6%) (58.9%)

GRAPH C

COMBINED WORKFORCE COMPOSITION

NON-MINORITY MALE (31 .5%)

NON-MINORITY FEMALE (52.2%)

MINORITY FEMALE (1 2.1%)

MINORITY MALE

14 -n <--· ARIZONA DEPARTMENT OF LAW C Office of the Attorney General -< Civil Division -en 0-· / ::l Grant Woods " Attorney General I Chief Counsel J. M. Howard I r I I I Administrative Law Licensing Enforcement Land & Natural Resources Transportation Section Section Section Section Fred W. Stork III Montgomery Lee Diane Hienton Richard Allemann Chief Counsel Chief Counsel Chief Counsel Chief Counsel

-V, Solicitor General & Consumer Protection & Tax Insurance Derense Health Opinions Section Antitrust Section Section Section ... Services Rebecca Berch H. Leslie Hall Gale Garriott Tom Prose Chief Counsel Chief Counsel Chief Counsel Chief Counsel

... Education ... Consumer ... Sales and ... Con-ections/ Fraud Use Tax Civil Rights

... Procurement ... Civil Income ... Liability Racketeering ... Tax Defense

Employment Law - ... Agency Property - Tax

General Law Antitrust Motor Carrier - - and Fuel Tax

Collection - Enforcement Civil Division

CIVIL ADMINISTRATIVE LAW SECTION legislation, contracts, leases, bonds and other miscellaneous legal documents; and reviewing for This Section consists of units of attorneys whose certification rules promulgated by client agencies. principal assignments focus them on specific subject matter areas of the law. In addition, the Employment Law Unit section provides day-to-day legal services to a number of the departments, boards and The five attorneys in the Unit handled matters for comm1ss1ons. virtually all of the agencies of state government; not just those assigned to the Section. During the year the 16 attorneys in the Section provided day-to-day legal advice to these During the year a number of significant projects departments, boards and agencies: consumed many hours of attorney time. Among them were a major review and overhaul of the The Judicial Branch and, within the Executive personnel rules of the Superior Court in Pima Branch, the Governor, Secretary of State, State County resulting in the issuance of the new Judicial Treasurer, Superintendent of Public Instruction, Merit System effective July 1, 1992. We Adjutant General, Department of Administration, commenced a review of the Superior Court's Arts and Humanities Commission, Department of personnel positions for a determination of their Commerce, Coliseum and Exposition Center, status under the federal Fair Labor Standards Act. Department of Corrections, Board of Deposits, Disease Control Research Commission, Department The Unit gave extensive advice to Project S.L.I.M. of Emergency and Military Affairs, Emergency on employment law and the rights and obligations Council, Department of Health Services, Arizona of government employers and government State Hearing Aid Dispensers Examiners Board, employees in the downsizing of government. Hospital, Arizona Historical Society, Council for Hearing Impaired, the Board and Department of Also requiring this Unit's attention is the new Education, Arizona School for the Deaf and Blind, Americans with Disabilities Act which will require Indian Affairs Commission, Department of Youth the State to make significant changes in its Treatment and Rehabilitation, Governor's employment practices. Regulatory Review Council, Radiation Regulatory Agency, State Board for Private Postsecondary The Unit saw a significant increase in its caseload Education, Postsecondary Education Commission, during the reporting year. For example on July 1, Pioneer's Home, Power Plant and Transmission 1991 it had 101 open Equal Employment Line Siting Committee, Private Enterprise Review Opportunity Commission cases. On July 1, 1992 Board, State Community College Board, Commerce the Unit had 220 such open cases. In addition, the and Economic Development Commission, State number of employee disciplinary actions appealed Lottery, Arizona Space Commission, Board of to the State Personnel Board increased from 59 Pardons and Paroles, Office of Tourism, State during FY 1991 to 78 during FY 1992. Retirement System, Veterans Service Commission and Department of Weights and Measures. Education Unit

The general day-to-day services included: advising The attorneys in this Unit were responsible for and counseling; writing opinions; representation representing the State Board of Education, the State in lawsuits, administrative hearings and other Superintendent of Public Instruction, the State contested matters; drafting and reviewing Department of Education, the State Board of

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Directors for Community Colleges,' the State students entitled to those services under the federal School for the Deaf and Blind and the State Board Individuals with Disabilities Education Act, for Private Post Secondary Education. The Unit required a great deal of attorney time in the also reviewed all county attorneys' opinions implementation stage. relating to education and drafted all opinions relating to education requested by the State Board The attorney's fees request made by the Arizona of Education and the Superintendent of Public Center for Law in the Publi c Interest was reduced Instruction. The attorneys in this unit also were substantially in the final Order. In house experts intensely involved in the certification of Rules handled defense of the attorney 's fee petition and promulgated by the State Board of Education. were quite successful in protecting state funds from further invasion. The Education Unit became a reality during 1991. This positive development allowed the attorneys in Unfortunately, the systemic problem revealed by the new Education Unit to focus their efforts in the lawsuit continues. Responsible state agencies education, rather than various aspects of general are functioning under both fiscal and systemic law. The creation of the Unit also recognizes that constraints in providing the special education education law is a vast and growing field with placements required by federal law. The fiscal great significance to the citizens of this state. impact of providing the required residential care is substantial and must be addressed through the T-he Education Unit continues to handle an legislative appropriations process. A substantial important and high profile case, The United States amount of time continues to be expended in Department of Education v. The Arizona working with the administrative offices of the Department of Education. The United States Arizona Supreme Court, the Department of Health Department of Education commenced this Services, the Department of Economic Security and proceeding before an administrative law judge in the Department of Youth Treatment and Washington, D.C. to recover from the State of Rehabilitation regarding implementation. Arizona approximately $777,000.00 in all egedly mis-allocated federal funds. This proceeding was In February of 1992, the Arizona Center for Law in complicated by criminal proceedings against Jimmy the Public Interest threatened a contempt action Don Hartgraves, Sr., the former Deputy against the Superintendent of Publi c Instruction, C. Superintendent of Publi c Instruction, who was Diane Bishop, for allegedly "allowing" the Superior responsible for administering the funds at issue. Court to "freeze" juvenile residential placements. Such federal audit recoupments are extremely The administrative offices of the courts, with the specialized and complicated, thus requiring a great support of the Arizona Department of Education amount of preparation The Unit has been most and the Governor's Office went to the legislature fortunate to have access to the services of a for a supplemental appropriation. The crisis was Washington, D.C. law firm that specializes in these averted. matters. The work done by that law firm should substantially mitigate the claims presently pending. Ongoing problems continue to exist, however, in the area of appropriations and systems operations. Hodges v. Bishop (U.S. District Court), a class Although counsel for all agencies involved in the action suit filed by the Arizona Center for Law in system have been successful in addressing and the Public Interest alleging failure to provide correcting some of the problems, serious systemic residential placements for educational purposes to and appropriations problems remain. Education

11 Thi s representation was handled by contract with a private law firm .

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attorneys are presently defending a Motion for and matters, and the defense of bid protests and Contempt and Request for Temporary Restraining contract claims. The Unit also provides assistance Order in federal court. in the revision of the Arizona Procurement Code and of the standard terms and conditions utilized in The attorneys in the Unit also investigated, initiated faci lity construction contracts and goods/services and prosecuted certification proceedings against contracts. teachers who were convicted of serious crimes and who engaged in unprofessional conduct. When In addition, the unit chief was a key player in the such actions were brought by lo cal school districts, formation and implementation of the Department of the unit attorneys advised the Professional Practices Transportation 's (" ADOT") Procurement Task Advisory Committee and eventually the State Force. ADOT's Procurement Task Force, which Board of Education. was comprised of agency representatives, the State Purchasing Administrator and the Assistant In June of 1992, we prevailed on a Motion for Attorney General, performed an extensive Summary Judgment against the Center for Law in evaluation and analysis of ADOT's $1.1 billion in the Public Interest in U. S. District Court in the annual procurements. The Task Force made Dreher case. In that case the Center had sought to numerous recommendations regarding the expand extraordinarily the concept of publicly centralization and streamlining of ADOT's funded "related services" to special education procurements, with an emphasis upon compliance students in private schools. The Center has with applicable statutes and rules. appealed the decision to the United States Court of Appeals for the Ninth Circuit. Health Services Unit

We also successfully defended the State The five attorneys and one legal assistant in the Superintendent of Publi c Instruction in Hoeft, et al. Unit handled a number of significant matters and v. TUSD and C. Diane Bishop, an appeal to the issues during the year. United States Court of Appeals for the Ninth Circui t. The Ninth Circuit, in a published opinion, Southwest Ambulance, Inc., v. Arizona Department upheld the District Court's dismissal of the action of Services brought under the Individuals with Disabilities Education Act by the Arizona Center for Law in Southwest Ambulance, Inc. ("Southwest") filed a the Public Interest on behalf of several elementary complaint chall enging the ambulance service school students with disabilities. The decision may schedule issued by the Arizona Department of help the public educational system avoid costly Health Services ("ADHS") approving the services future litigation in that it holds that the idea and rates that Southwest was authorized to provide requires exhaustion of administrative remedies and bill. An ambulance service schedule is before allowing access to the District Court. required by a ADHS rule.

Procurement Law Unit Southwest initiated this civil challenge after learning that the Criminal Division of this Office The Attorney General established this new Unit just had scheduled the presentation of a case to the as the reporting year ended. State Grand Jury that Southwest and its owner fraudulently billed Medicare and the Arizona The attorneys in the Procurement Law Unit are Health Care Cost Containment System responsible for advising the Department of ("AHCCCS") for ambulance transports. The Administration Procurement Office and all state criminal case relied, in part, on the schedules agencies on contract and procurement law issues issued and approved by the Department.

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Southwest's challenge encompassed events from anticipated during the fall of I 992. Audit results I 985 when it was a participant in a hearing before will show that compliance has continued to the ADHS to be granted an initial Certificate of improve as defendants developed and implemented Necessity and to establish initial rates, fares and new systems and procedures. Compliance at the charges. The complaint included the period individual client level is not expected to improve in through September, 1991 when an amendment to the Monitor's third audit report because the system A.RS. § 36-2239 became effective and authorized is still in the beginning stages of implementation. Southwest's most controversial billing practices. The Monitor's office has been pleased with the The Superior Court determined that the schedules combined efforts of ADHS, the Governor's office, issued by the ADHS should have been adopted as the Legislature and other agencies that affect the rules pursuant to the Administrative Procedures state's ability to comply with the law. The Act. This Office filed a Notice of Appeal on Monitor stated that if progress continues at its behalf of the ADHS to obtain clarification of current pace it is possible that the court will whether the ADHS may lawfully adopt the establish exit criteria in 1995 and dismiss the case. schedules as part of an adjudicative rate setting proceeding or whether it must employ rule-making There has been a positive attitude shift at ADHS as to adopt a schedule after it approves a change in an staff execute the Implementation Plan. Newly ambulance service's approved rates, fares and developed contracts with Regional Behavioral charges in an adjudication. Health Authorities (formerly entities) g ive ADHS greater control over how services are delivered, Arnold v. Arizona Department of Health Sen1ices payments for services are made, state funds are used, record keeping and reporting are maintained, The ADHS and Maricopa County are defendants in and quality assurance is guaranteed. The new Arnold v. Sam, a class action suit that requires the framework will revolutionize the behavioral health state and county to provide the services to the system in Arizona provided ADHS is allowed to seriously mentally ill that are provided in A.RS. continue with its Implementation Plan. § 36-550 et seq. The final compliance agreement of May 6, 1991 ("the Implementation Plan"), Assistant Attorneys General E il een Bond and requires state and county defendants to accomplish Theresa Dwyer have been integral participants in 246 items over a five-year period. The the development and success of the systems Implementation Plan was entered as a court order, described below. These attorneys have participated and therefore, defendants' noncompliance cou_ld in every part of the Implementation Plan including: result in court sanctions. participating in each meeting, court appearance and negotiation session; drafting and negotiating all The Court Monitor for the case issued two progress contracts; participating in drafting the rules and reports covering the periods from May 6, 1991 to Implementation Plan; and providing the Department October 3 0, 1991 and from November 1, 1991 to of Health Services with legal advice on all issues April 30, 1992. Compliance as reported in the first raised by the Center for Law in the Public Interest report was slow as the state and county began the and the Court Monitor. planning and implementation process. The second compliance report showed more substantive ADHS has relied and is continuing to rely on the compliance. The Monitor measured compliance on Attorney General 's Office daily to participate in the individual client level at 29.5% based on her every level of the planning and implementation 1st audit. process. During much of the time in question we were involved in work at the program level because A third report from the Monitor's office 1s ADHS was without a Medical Director or Assistant

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Director for Behavioral Health. Furthermore, the estimates that ADHS achieved 90% compliance at Division of Behavioral Health experienced a high the system level in putting a framework together turnover of personnel so that consistent expertise in that will support a comprehensive, unified mental the behavioral health arena was often lacking. health delivery system.

I . Timeline Compliance: ADHS has completed a. Meeting Service Development Requirements approximately 85% of its assigned tasks for (rules): Seriously mentally ill behavioral health the first two years. rules have completed the public hearing stage and should be ready for implementation in 2. Substantive Compliance with Tasks and Octobe·r, as described above. Behavioral health Responsibilities: The Monitor agrees that li censing rules have been distributed for ADHS achieved substantive compli ance in informal comment. Negotiations concerning approximately 75% of its assigned tasks for the behavioral health li censing rules with the the first two years. These tasks included Monitor and plaintiffs' counsel are scheduled. acceptabi lity and completeness of system Publi c hearings will be held in October, and outreach, quality assurance and training plans adoption is expected thereafter. These ru les and rules due under the Implementation Plan . have a statutory exemption from the rulemaking process. a. Mental Health Rules: ADHS developed and negotiated a set of rules covering the delivery b. Establishing a Unified System of Care between of mental health services to the seriously State and County Programs and across Inpatient mentally ill. Article I creates a system of and Community-Based Programs: In order to client advocacy at the state and regional levels. establish a unified system of behavioral health Article II covers client rights, including care, contracts had to be redesigned, negotiated restraint and seclusion. Article III describes and new systems put in place. the manner and method in which individual service planning for clients must occur, Contracts were negotiated with the state's six including appeal rights. Article IV provides a Regional Behavioral Health Authorities grievance system for · clients. Article V (RBHA). The entire regional system was addresses the areas of court-ordered evaluation redesigned with one RBHA per region. and treatment. The Monitor and plaintiffs' counsel have accepted this rule package. An Intergovernmental Agreement (IGA) with ADHS obtained a legislative exemption from Maricopa County was signed and money and the normal rulemaking process. Nevertheless, services are being delivered. An IGA with the the Department distributed the rules for publi c Maricopa County Sheriff and jail system will be comment and held public hearings throughout completed within the month. the state. The rules are scheduled for formal adoption and submission to the Secretary of State at the end of September, 1992. Management Information Systems (MIS): Contracts are in place with EDS as third party b. Quality Assurance Plans, Outreach Plans, and payor for provider claims and IBM for setting Training Plans: These plans are in progress up and maintaining a statewide MIS and are scheduled for mid-September 1992 communications system. All six RBHA completion. locations are now connected to EDS and the ADHS systems. The RFP process for a RBHA 3. Progress in Developing a Comprehensive automated case management and financial Unified Delivery System: The Monitor network is almost complete with vendor

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selection planned for September 15. This is the Ms. Ford's home. Because ADHS can only final stage of the MIS plan. All systems should prohibit unlicensed activity and the Attorney be in place by January, 1993. An independent General is the only person who can bring elder consultant hired by the Monitor indicated that the abuse and neglect charges and receive permanent MIS system being implemented by ADHS meets mJunctions, ADHS requested the Attorney almost al l expectations and was designed General's Office institute an action based on elder appropriately to accommodate suggested neglect to preclude Ms. Ford from ever operating modifications. a home again. •

c. Meeting the Funding Requirements of the On June 12, 1992, a temporary restraining order Implementation Plan: ADHS increased was issued and a criminal investigation started funding through pursuing Title XIX matching against Ms. Ford. A week later, preliminary and funds, increasing state budgetary allocations, permanent injunctions were issued which bar Ms. implementing a capitated payment system, Ford from operating a home until the outcome of requiring stringent reporting and accountability the neglect proceedings. The state is all eging that procedures, emphasizing outpatient treatment, Ms. Ford neglected and severely injured three of and implementing a managed care approach to her residents from February through June, 1992. service deli very. Josh L. v. Symington Service Development Requirements & Future Steps: The Monitor estimates ADHS has Josh L. v. Symington is a class action lawsuit in the achieved 45% compliance in this area, but U.S. District Court, originally fi led in May 1991. notes that until Steps 1-3 are complete and in The Complaint was amended in March 1992 and operation, low compliance is anticipated. denominated J.K. et al v. Caldwell et al. In the Amended Complaint, plaintiffs all eged that State v. Corless Ford adequate mental health services are not provided to many children in Arizona who are entitled to State v. Corless Ford is an action against Ms. treatment and who are eli gible for Title XIX Ford, who operated various unlicensed residential Medicaid services. Specifically, plaintiffs all eged elder care homes for over two years. ADHS had a complete denial of adequate behavioral health issued several administrative orders and had services in the Tucson area. imposed $14,000 in civi l penalties on Ms. Ford, all of which she ignored. She filed bankruptcy just To achieve resolution of this matter without the after the civil penalties became final. It became · need for protracted litigation, the State has prepared clear that she was not going to obey administrative and submitted a Descriptive Narrative, describing orders. In February, 1992, ADHS found some the actions which are underway to reform the disturbing evidence of neglect. The Health Unit behavioral health servi~e delivery system in had DHS take photographs of conditions in the Arizona. Plaintiffs (represented by the Arizona home and monitor the home frequently, while it put Center for Law in the Public Interest, Tucson) together a comprehensive Cease and Desist Order agreed to stay litigation and the District Court has which could ultimately be enforced through extended the time limits to give ADHS an injunctive action in Superior Court. The Order was opportunity to implement the plan. A status issued at the end of March and was ignored by Ms. conference was scheduled for October 6, 1992. Ford, who did not request a hearing or judicial review. ADHS v. ADAPT AND ADHS v. CCN

In May, ADHS again found a pattern of neglect in In May, 1992, two "Entities" (private non-profit

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corporations) with which ADHS contracted to commitments, and court testimony. It is actively provide community-based behavioral health care in involved in continuing education for _hospital staff specific geographic areas of the state (ADAPT and and family groups to help them understand the CCN) were identified as retaining funds that were commitment process. to have been used for patient services, but were instead earmarked by the Entities to be used for Because of the increasing number of "not guilty by unauthorized purposes (severance pay, etc.). Both reason of insanity" acquittals in Arizona, and ADAPT and CCN indicated that they considered because there is a conflict between the substantive the money to be theirs for their• administrative and procedural laws in the State, the Unit prepared costs, despite their contractual obligation to the a petition to amend Rule 25, Arizona Rules of contrary. The Health Unit coordinated the Criminal Procedure. That rule provides that, preparation and filing of a Complaint and Request following a finding of not guilty by reason of for Temporary Restraining Order and Permanent insanity, the prosecutor is to commence civil Injunction, seeking to restrain the Entities from commitment proceedings, pursuant to Title 36. spending any of the funds before trial, and to have This rule conflicts with A.RS. § 13-3994, which the funds returned to ADHS for the use intended. requires an acquittee to be automatically committed CCN subsequently stipulated to return the funds, to the hospital for an indefinite commitment. An which amounted to over one million dollars. Assistant Attorney General in the Unit with the Motions for Summary Judgment are under Criminal Rules Committee obtained approval of the advisement pending a future trial date in the petition from the State Bar Board of Governors. ADAPT case. The petition has been signed by Executive Director Bruce Hamilton and is pending disposition by the Representation of Arizona State Hospital Arizona Supreme Court.

On a daily basis, Assistant Attorney General Vicki An Assistant Attorney General in the Health Gotkin-Adler was called upon to give advice on the Services Unit submitted an article to the Arizona general operations of the Arizona State Hospital. Bar Journal on the subject of not guilty by reason In addition, the Health Services Unit prosecuted of insanity acquittals, to be published in October, approximately 15 civil commitment hearings per I 992. The Hospital hoped that the article would month, and also appeared regularly in criminal lessen the confusion regarding the handling of these court regarding not guilty by reason of insanity cases. acquittees, who are seeking their release from the hospital. Oral argument was presented before the Arizona Court of Appeals in the matter of State v. Helffrich, The Health Services Unit significantly changed the a not guilty by insanity case, on September 30, procedures for handling civil commitrryents, 1991 . The issues raised in that case concern the discharges, and judicial reviews; having patients constitutionality of the release provisions of the brought back to the hospital from outpatient Arizona insanity commitment statute, which is treatment (if they fail to comply with the conditions much like the statute approved in Jones v. United of their release); tracking guardianship renewals; States, 463 U.S. 3564 (I 983). The Court of and processing criminal matters. The Unit has Appeals' opinion found that the statute did not streamlined th e affidavits used m court violate either due process or equal protection and proceedings. that indefinite conditional release for criminally co·mmitted defendants was rationally related to the The Unit has participated in training of the entire purposes for the commitment, despite the limitation staff at the Hospital regarding Title 36 upon conditional release for civilly committed commitments and guardianships, Title 13 patients. The court remanded the case to the trial

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court, however, because the judge failed to make Department of Health Services' Omnibus Health findings whether the defendant was still a danger to Bill. Senate Bill 1502 amends existing law to himself or others at the time he denied the allow ADHS, via an intergovernmental agreement defendant unconditional release. It ordered a with AHCCCS, to extend Title XIX/Medicaid hearing to consider whether the defendant was, funding to adult seriously mentally ill individuals based either on the record before it, or following commencing October 1, 1992. The attorneys in the another evidentiary hearing, a danger to self or Health Services Unit actively participated in others. If the defendant shows that he is no longer drafting this legislation. We have also participated a danger to himself or others, he is constitutionally in drafting the intergovernmental agreement. entitled to unconditional release; if not, his conditional release will stand. OTHER STATUTORY AMENDMENTS

In September, 1991, the Arizona Center for Law in Two of our attorneys participated in drafting a the P ublic Interest filed a lawsuit challenging the statute that will allow state courts to recognize quality of mental health services provided to female tribal court orders of civil commitment to the inmates in the Department of Corrections and Arizona State Hospital, provided that the orders do obtained a temporary restraining order preventing not require the Hospital to violate state law with the Arizona State Hospital from discharging several respect to treatment, and provided that the tribal inmates to Department of Corrections. Under governments enter into Intergovernmental A.RS. § 31 -226, female inmates of correctional Agreements with ADHS regarding discharging institutions who need intensive mental health patients and review of commitment orders. The treatment in a hospital setting may be transferred to statute was passed last session, and we are the Arizona State Hospital. currently in the process of organizing meetings to discuss IGA provisions and implementation. This The state court dismissed the action due to lack of was a most important step 1n improving state-tribal jurisdiction. Following the dismissal, the Hospital relations, because the Inter-Tribal Council had been discharged the patients to the Department of trying unsuccessfully for several years to Corrections, because they had reached maximum implement such legislation. As far as we know no hospital benefit prior to the issuance of the other state has such legislation, and our statute and temporary restraining order. The neX:t day, the the procedures to be developed will be viewed as Center filed a new lawsuit in federal court. H.B. et a national model. al v. Arizona State Hospital et al. The Health Services Unit participated in a protracted trial in EMBARGO ORDERS ON GROWING CROPS November. Pursuant to a stipulation to dismiss, the federal court dismissed the Hospital from the ADHS received notification from the state and lawsuit in early 1992. Recently the federal court federal Departments of Agriculture that several ruled that the Department of Corrections had failed fields of food greens (kale, collard greens, parsley to provide adequate mental health services to its and bok choy) were inadvertently · sprayed with female inmate population. malathion that was used on a nearby cotton field. Assistant Attorney General Terri Skladany worked Projects with ADHS 's Office of Disease Prevention to compile the facts and draft the legal Order to TITLE XIX COVERAGE FOR SMI embargo the crops. This was the first time that LEGISLATION ADHS had issued an order to embargo growing crops. At the conclusion of its most recent session, the legislature passed Senate B ill 1502, the Arizona This office also worked with the Office of Disease

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Prevention to develop draft food embargo Notices health services on their Reservation. This has and Orders for food contaminated by nuclear turned out to be a complex task because two state radiation as part of a nuclear emergency drill which agencies (AHCCCS and ADHS), two behavioral ADHS participated in with the Nuclear Regulatory health programs (Medicaid and fully state funded) Commission. This drill was conducted in the area and (to • date) six separate Tribes (Navajo, surrounding the Palo Verde Nuclear Power Plant. . Pasqua-Yaqui, White Mountain Apache, Colorado River Indian Community, Salt RULES River-Pima-Maricopa and Gila River Indian Community) are involved. Each Tribe wishes to The Health Services Unit has been extensively implement a program tailored to its own needs and involved in helping ADHS fine-tune the adult care capacities which, nevertheless, must conform to the home rules in order to better protect the elderly statewide programs being implemented. ADHS residents of those homes. At the same time, the paid the cost of sending Eileen Bond to a special Unit helped the Adult Care Home Managers Board training program on Indian Law to assist her in this to write rules establishing minimum qualifications task. for managers as well as curriculum for the manager's training course. We are also actively involved with ADHS in drafting amended IGAs with the Department of The Health Services Unit assisted ADHS with Economic Security and the Administrative Offices advice on necessary changes to the Alcohol of the Arizona Supreme Court which have Concentration Rules, Hearing Aid Dispenser Rules responsibility for delivery of behavioral health and Emergency Medical Services Base Hospital, services to designated populations. Emergency Medical Technician and Ambulance Rules. It is ADHS' intention to develop an integrated behavioral health service delivery system across the The Health Services Unit also worked with ADHS state which will allow the el igible client ready to develop prepaid dental plan rules and behavioral access regardless of agency or geographical entry health licensing rules. point.

REVIEW AND APPROVAL OF General Law Unit INTERGOVERNMENTAL AGREEMENTS (IGAs) Arizona, North Dakota, South Dakota and California are members of the Southwestern The Health Services Unit initiated a new contract Low-Level Radioactive Waste Disposal Compact, review procedure with ADHS 's Procurement which provides that California is to open a Office to expedite legal approval of IGAs and low-level radioactive waste disposal site by January upgrade contract content. The Unit attorneys 1, 1993, at which time the three currently-available responsible for contract approval, review the disposal sites will be closed. However, in the contracts prior to execution and provide input and spring, actions taken by California's Senate Rules training to Department staff, when necessary. Final Committee seemed likely to postpone opening of review is done ·efficiently because problems are the facility until at least July 1994. A number of resolved and corrected early in the contract review interested parties in California filed an original process. action in mandate in the Supreme Court of California, seeking to require the California This Unit assumed responsibility for drafting IGAs Department of Health Services to act on the license with each of the Arizona Tribes which wish to application immediately. An attorney in this contract with ADHS for the provision of behavioral section prepared and filed an amicus curiae brief

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for the State of Arizona, arguing that the delay office received over 85,000 telephone calls this would violate the provisions of the Compact, as year. The number received last fiscal year was well as state and federal law. The action was 45,000 telephone calls. Likewise, the number of transferred to the Third District Court of Appeal, written complaints received in Tucson and Phoenix which accepted Arizona's brief for filing and set increased from 8,304 to 13,595. the case for oral argument on September l 5, 1992. A new telephone consumer conciliation program Durin g the year an attorney in the section appeared was instituted. Volunteers, who collectively give and argued in the Arizona Court of Appeals on more than forty hours a week, negotiate by behalf of the Arizona State Retirement System in telephone voluntary resolutions of many Mclead v. Pima County et al. in which the court consumers' complaints. As a result of the written was called upon to determine whether increases in complaint process and the new volunteer telephone state employee retirement benefits that were conciliation effort, over $288,000 worth of money authorized after the benefiting employees had and services was voluntarily returned to consumers. retired violated the extra compensation and gift clauses of the Arizona Constitution or impaired the Again this year, emphasis was placed on truth in obligations of contract of the other vested members advertising. Judgments were entered against two of the state's several retirement plans. In August, companies who engaged in classic bait-and-switch 1992, the Court of Appeals held that because the tactics, Scottsdale Meats and Triad Security chall enged benefits were paid from funds that did System. not belong to the State, they were not unconstitutional extra compensation. In addition, Throughout the year, the World Rental Car Sales the court decided that because the expenditures case was actively litigated and concluded served a valid public purpose for adequate successfully with the defendant World admitting consideration and did not endanger the financial violations of the Consumer Fraud Act and agreeing stabili ty of the several retirement plans, they did to pay up to $350,000. World was charged with not violate the gift clause and did not impair the defrauding consumers through misleading contract of other retirement plan members. advertisements and sales practices. World at one time was the second largest advertiser in the State CONSUMER PROTECTION AND ANTITRUST of Arizona and, at the time the lawsuit was filed, SECTION had five locations. Shortly after the settlement of the lawsuit, World Rental Car Sales ceased doing This section is charged with enforcement activities business. in consumer fraud, civil racketeering, antitrust, banking, real estate, insurance and securities. The Attorney General Grant Woods, over the Labor section was formed in January, 1991, by combining Day weekend, in conjunction with the Department the former Financial Fraud Division and Antitrust of Weights & Measures, conducted a state probe of Division. gas stations across Arizona. Over 600 gasoline samples were obtained from 261 stations around Consumer Fraud Unit the state and delivered to Weights & Measures laboratory for analyses. The test results revealed As a result of Attorney General Woods' increased 60 samples with actual octane ratings lower than emphasis upon enforcement of the Arizona those posted on the pumps. As a result of this Consumer Fraud Act, the number of telephone action, the octane mislabeling was immediately inquiries and actual complaints filed with the office stopped and a number of Assurances of has increased over the last year. For example, the Discontinuances regarding the mislabeling were Complaint and Information Center in the Phoenix negotiated.

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A nationwide pyramid scheme called North owner's insurance company. The insurance American Grocery Club was ordered to stop company would then pay on the fraudulent claim. operating its illegal scheme. Arizona joined with Judgment was obtained against Bonnie Berryman, Oregon and Cali fornia to bring action against the the "chop" shop operator and the center of the company and eventuall y forced the company to go scheme. Judgments were also obtained against a out of business and to return monies to consumers. number of the vehicle owners.

The largest Arizona verdicts against telemarketers In another matter, a judgment of approximately were entered against Baron Financial Group and $180,000 was obtained against the accountant for Legacy Unlimited, State v. Sgrillo and State v. a fraudulent mortgage investment firm, A van ti Rowe. Sgrillo , a telemarketer who, through Baron Mortgage. Additionally , the judgment against the Financial Group, marketed "preapproved credit company itself and the principals was finalized. cards" was ordered to pay $2 million in civil That judgment totals more than $84,000,000. The penalties to the State of Arizona. Shortly principal of that corporation is currently in prison. thereafter, Robert Rowe who operated Legacy Unlimited, a company which lured victims to buy Agency Unit over-priced products through promises of expensive prices, was ordered to pay the State $1 million in The Agency Unit provides legal advice and civil penalties and restitution to victims. represents the Banking, Insurance and Real Estate Departments, and the Securities · Division of the Other cases filed during the year involved charities Corporation Commission, in judicial and fraud in State v. Lamont. Lamont operated the administrative cases. In connection with these "Children's Gift Workshop" which claimed to be assignments, the Agency Unit is also responsible soliciting funds to purchase gift certificates for for representing the Arizona Property and Casualty Christmas toys for children. The company claimed and Life and Disability Insurance Guaranty Funds, to be associated with Easter Seals and to have a the Real Estate Recovery Fund, and the Real Estate track record of giving gifts to youths. The Advisory Board. company's claims were false as it had no connection with the legitimate charity Easter Seals Banking and had never given any toys in the past The company, as a result of the Attorney General's The Unit prosecuted cases on behalf of the action, immediately went out of business and Superintendent of Banks that involved embezzled eventually $5,000, the money the company trust funds and fraudulent schemes perpetrated by co ll ected, was given to a legitimate charity. persons holding escrow, debt collection and debt managemeht licenses. The Unit also prosecuted Civil Racketeering cases against persons who failed to obtain licenses in Arizona under various banking statutes. The During the past year the Consumer Protection & Unit continued to work on cases, such as Liberty Antitrust Section has continued to pursue law Title and Landmark Title, two escrow companies breakers by using available civil racketeering that had trust account deficiencies. The Landmark remedies. For example, a number of cases were case involves litigation in federal court over the pursued against people involved in a scheme to authority of the Superintendent to revoke the defraud insurance companies. Car owners would company's license even though it filed for hand their vehicles over to a "chop" shop operator. bankruptcy. In the Landmark case the The "chop" shop would cut the car apart, sell the Superintendent has been appointed receiver and is parts, and then notify the owner to report it stolen. attempting to find owners of various trust accounts. The owner would then tell the police and the The Unit has also provided substantial advice to the

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Superintendent regarding complicated legal issues provide improvements as represented in subdivision involving the interpretation of state and federal reports. statutes that impact his jurisdiction. Securities Insurance The Agency Unit represented the Securities The Unit has prosecuted numerous administrative Division of the Corporation Commission in actions and civil actions, regarding insolvent insurers, the filed in Superior Court, as well as administrative issuing of un authorized and fraudulent insurance, proceedings before the Commission. In most cases, embezzling funds, misappropnatmg insurance the Superio r Court actions were filed jointly by the premiums, and other violations of the Insurance Commission and the Attorney General to enforce Code. The Unit has also prosecuted many matters the Securities and Consumer Fraud Acts, in matters involving the fitness of appli cants to be1icensed as involving fraudulent investment schemes impacting insurance agents. hundreds of victims. Typical cases involved real estate limited partnerships, precious metals During the year, the unit filed receivership actions investment programs, and investment contracts. against insolvent insurers, such as Old Hickory The Unit also prosecuted a number of cases Insurance Company, AMS Life Insurance involving registered broker/dealers an d salesmen Company, and North American Indemnity for misconduct in sales of securities, involving Insurance Company. Each of these insolvent suitabi li ty and disclosure issues. The Unit also companies was placed under the control of the spent substantial time in advisin g the Securities Di rector of Insurance as receiver. Division on rules to enhance investor protection and streamline the regulation of securiti es. Finall y, The Unit also spent substantial resources pursuing the Unit assisted the Securities D irector in unauthorized insurers in administrative actions, in implementing the Arizona stock exchange order to protect the public from possibly fraudulent legislation that created an Arizona based exchange or non-existent insurance coverage. The Unit also designed to promote economic development. spent substantial time in advising the Director of Insurance on legal matters and assisting her in the Antitrust Unit issuance of important rules that protect the elderly from Medicare insurance fraud. The Antitrust Unit investigates and prosecutes federal and state antitrust damage actions on behalf Real Estate of the State of Arizona, its political subdivisions and consumers within the state. In addition, the The representatio n of the Real Estate Department Unit investigates and prosecutes ci vil enforcement was primarily directed at administrative litigation, actions under state antitrust law. The Antitrust and providing legal advice on numerous questions Unit also counsels state agencies regarding matters directed to the Attorney General by the Real Estate relating to antitrust and competition. Commissioner and his staff Allegations of misconduct and violations by agents and brokers of The Antitrust Unit continued prosecution of major various statutes and rules regulating agents and the treble damage lawsuits fi led in earlier years. The sale of real estate are usually at issue. The Unit most significant of which is In re: Re.fined prosecuted numerous cases involving agent Petroleum Products Litigation, MDL- 150. misconduct, subdivision violations, and license Following the reversal of a summary judgment denials. These cases involve misrepresentation or dismissing this consolidated price fixing case embezzlement by agents, or the failure of brought by Arizona, California, Oregon and subdividers to disclose defects in property or to Washington against the major oil companies in

27 Civil Division

1975, extensive trial preparation and damages time in the last few years, perhaps a sign of the discovery was completed. Extensive settlement poor economic times. Litigation matters in the negotiations were conducted resulting in settlements LNRS perhaps tend to be fewer in number than with four defendants totalling $72.83 million. · A other sections of the Civil Division but often four-to-six month trial against three remaining include complex legal issues and very high dollar defendants commences in February, 1993 in Los amounts. Angeles, California. The primary cli ent of the LNRS is the Arizona The Bank of America and Security Pacific Bank State Land Department, a major-revenue producing merger was investigated by the Antitrust Unit. state agency charged with the management of Arizona, California, Oregon and Washington Arizona's state trust lands. Attorneys in the LNRS worked together with the U.S. Justice Department also represent the Arizona State Parks Board and Antitrust Division to scrutinize and evaluate Department and its several related councils, the anticompetitive consequences from the largest bank Arizona Game and Fish Department and merger in U.S history Following extensive Commission, the Arizona Racing Department and analysis and negotiation, Arizona entered into an Commission, the State (Indian) Gaming Agency, agreement with BankAmerica whereby the bank the Department of Agriculture and its numerous agreed to divest approximately 1.8 billion in councils, the Arizona Board of Real Estate Arizona assets and spin off an operating bank to a Appraisal, the State Geologist, the Mine Inspector competitor, to reduce the effects of concentration. and several other smaller state agencies.

In the national arena, Arizona participated in The State of Arizona owns 13% of the land area or vanous national antitrust cases brought by the approximately 9.4 million acres of State Trust states. These included a tying arrangement lands. These lands are not "public" in the way a regarding a schizophrenic drug, resale price park or fore?t might be considered "public. " To the maintenance m electronics products and contrary, trust lands cannot be available for the free insurance-industry boycotts. Arizona joined use of the public but must be managed by the State amicus briefs in a number of other antitrust matters to produce revenue for the beneficiaries of the trust on appeal. including the common schools. The trust fund that has grown from this management has increased The Antitrust Unit has also been involved in dramatically and last year reached $5 00 million. investigations involving alleged intra-state antitrust violations including: monopolization/predatory During 1991 -1992, there was a continuing increase pricing, bid-rigging and horizontal boycott. in major litigation for the State Land Department as litigants sought to void contracts entered into with LAND AND NATURAL RESOURCES SECTION the state and challenged the State Land Commissioner's orders through the administrative The Land and Natural Resources Section (LNRS) review process in superior court. of the Civil Division is staffed by 9 attorneys, including the section chief, and one part time and Other representative litigation matters include 3 full time legal secretaries. Unlike many other numerous quiet title suits and bankruptcy actions sections of the Civil Division, much of the attorney filed by trust land lessees. time is spent in giving daily advice on land use planning, contract negotiations and transactional Urban lands issues require a major dedication of work such as land leases, sales, acquisitions and attorney time in representing the State Land program grants. However, administrative and court Department in complex negot1ations and litigation matters have occupied more and more transactional work. Three major urban planning

28 Civil Division

projects are currently underway which require Department and the Game and Fish Commission . signifi cant attorney time: 1) Desert Ridge involves Timber issues continue to require m uch of his the planning, negotiating and drafting of documents attention this year. In addition, the GAF attorney for th e first master planned community continues to handle construction contract matters in development ever undertaken by the Land administrative hearings before the Arizona Department; 2) Core North project in north central Department of Administration , and in Superior Scottsdale encompasses land use plans for 2,400 Court. He successfully defended a lawsuit brought acres; 3) Pittsburgh Point, the island in Lake to compel inspection of documents under the Publi c Havasu City which the Land Department acquired Records Act. The court exempted the Director's in a three-way exchange involving the Department, staff minutes under Executive Privilege. This BLM and State Parks. Governor Symington has attorney was also responsible for defending the publicly suggested that the island could be returned Commissioner's unsuccessful decision to to State Parks. Various issues to resolve include implement an emergency elk hunt. A suit to have the trust's receipt of fair valu e for the property and the statute precluding non-resident guides declared subconcessionaires' rights. unconstitutional is also pending in U.S. District Court. Legal advice is often necessary when Statutory and constitutional issues have been dealing with ongoing grazing, antihunting, litigated and are on appeal regarding grazing leases environmental and wildlife depredatio n issues. and classification of lands as agricultural or commercial. Both the GAF attorney and the attorney for Parks have experienced an increase in legal questions As the manager of 9.4 million acres of State Trust arising out of the Heritage Fund, passed by popular Land, 27 State Parks and innumerable wildlife initiative in 1990. Moreover, each agency has had areas, the LNRS agencies require significant to reorganize and increase staff in order to assistance in the area of environmental law. prudently manage the infusion of $20 million Attorneys in the LNRS are responsible for annually in Heritage Funds. Attorney support has providing advice, drafting lease and sales contract been required to accomplish these tasks. clauses dealing with environmental issues, pursuing trespassers who cause environmental damage on State Parks land acquisitions and construction state trust lands and defending the interests of the contracts figured heavily in the duties of the Parks trust when environmental problems are found to attorney this year. Also, many legal issues arise exist on State Trust Lands. requiring legal counsel with respect to the Parks Board's operation and management of 27 State As State Forester, the Land Commissioner is in Parks. The Parks' attorney commonly advises the charge of wildfire suppression and accomplishes agency regarding statutory interpretation, this through cooperative agreements with other fire administrative issues, federal/state interrelationships fighting entities, including the United State Forest and Constitutional questions relative _to public Service. Attorneys in the LNRS assist the forestry parks. In addition, a new statutory advisory division of the Land Department with the drafting Commission, the Off Highway Vehicle group, was of such cooperative agreements and, in 1991, added to the Parks attorney's responsibilities. assisted the Department with legislation in Other boards requiring legal assistance include the furtherance of its reciprocal aid responsibilities. Arizona Outdoor Recreation Coordinating Commission and the Arizona Conservation Corps One attorney continues to work with the Land Commission. Department on its major overhaul of its rules. The Game and Fish Department (GAF) provides The attorney for Parks also handles Land the salary for one attorney who represents the Department matters and is responsible for all of the

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federal condemnation cases. Nearly $1 million was and irrigation districts are looking to the State for obtained through federal condemnation actions in payment of the taxes under our contracts with the 1991-92. districts. ·At least 5- 10% increased attorney time for these matters is anticipated in the next two The LNRS handled all matters for the Department years. of Agriculture. In 1991 the pesticide enforcement responsibi lity was transferred to the Environmental ENVIRONMENTAL LEGISLATION AND Enforcement Section of the Criminal Division. LITIGATION INCREASE New legislation effective in January of 1991 created the new Department of Agriculture in place The LNR agencies have all been impacted as land of the former Agricultural and Horticultural managers by increased regulatory impact in the Commission. The reorganization of the Department en vironmental area. As a land acquisition agency, and the addition of several new councils and the Parks must also perform environmental due Livestock Board under the umbrella of the diligence studies for any intended acquisition. Department have added to the demand for legal Moreover, due to the real estate market collapse, services this year. Significant attorney time was former State Trust Land purchasers are seeking spent assisting the Department in drafting several ways to void transactions, sometimes for new rule packages. One attorney who also handles environmental reasons. Increased attorney time of Land Department matters presently represents the 10% in each of the next two fiscal years is Department and its related councils. anticipated.

One attorney in the LNRS devotes a portion of her NAVIGABILITY LEGISLATION: A.R.S. § 37-110 time to representation of the Racing Department ET. SEQ. and Commission and also to the new Real Estate Appraisal Board. She responds to requests for Navigable watercourse legislation passed in 1992 legal advice and represents the agencies at public imposes an entirely new set of complex meetings and at licensing hearings. In addition to responsibilities on the State Land Department, most handling representation of a number of smaller of which require legal advice and many of wh ich agencies, such as the Mine Inspector, the Minerals will require legal representation in administrative Department, the Prescott Historical Society and the hearings or court actions. Many land title disputes State Geologist, members of the LNRS served this have been postponed while claimants have waited year on the Attorney General's Opinion Review for either a judicial or legislative solution. The Committee, the Open Meeting Law Enforcement legislature has now acted. LNRS lawyers wi ll now Team (OMLET), the Office Continuing Legal be actively involved on many levels in the Education Committee, and the office Contracts resolution of these disputes. Committee. No later than January 2, 1992, the Land Expected Increase in Demand for Legal Department must begin its investigation to Services: 1992-1993 and 1993-1994 assemble evidence relevant to determining the navigability of Arizona watercourses for the CENTRAL ARIZONA PROJECT IRRIGATION Navigability Commission. A.RS. § 37- 1124. DISTRICT LITIGATION Because navigability is a question of both law and fact, LNRS lawyers must be involved with the Increased attorney time will be then devoted to Land Department at the outset of the investigation working with the Land Department to develop the of each reach of a watercourse. LNRS lawyers will use of Central Arizona Project and municipal and provide direction as to the technical, historical and industrial water. State land lessees are defaulting legal research required in each specific reach

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investigated. After a decision is made by the Indian gaming issues. Navigability Commission, the Land Commissioner, represented by section lawyers, must chall enge or Perhaps I 0%-20% increased attorney time wi ll be defend Commission decisions as may be required required in this area for the next few years. By to protect trust interests. A.RS.§ 37-1 102(3). We way of example, the State of Nevada currently has anticipate a I 0- 15% increase in attorney time for 12 full time Assistant Attorneys General assigned these issues during the next two fiscal years. to gaming. Because Arizona has 2 1 Indian tribes, it is likely that additional attorneys wi ll be required TAKINGS LEGISLATION A.RS. § 37-220 ET in the future as more compacts are signed. SEQ. ARIZONA APPRAISAL BOARD The legislature has passed new legislation regarding private property rights. Two LNRS attorneys have The LNRS was assigned representation of the Real been assigned to the Attorney General Committee Estate Appraisal Board when it was created in which by statute, must draft "takings implication 1990. The Board was required by federal law and assessment" guidelines. Moreover, the legislation must ensure that Arizona appraisers meet federal has already been appli ed by a Superior Court in standards before Arizona appraisers will be deemed Platt v. State to void a condemnation clause in a quali fied to do federal appraisal work. state land lease. It is anticipated that many agency actions and rules will be legally challenged during Two attorneys from the LNRS drafted the the next few years under this legislation. Perhaps Appraisal Board Rules and assisted the new Board 15% or more attorney time will be required in with its testing and hearing procedures. At least 1992-93, with less time in 1993-94 after the I 0% increased attorney time is anticipated to assist guidelines are drafted. the Board as it begins to implement its rules, hold disciplinary hearings, etc. INDIAN GAMING REGULATORY ACT LITIGATION AND NEGOTIATIONS: A.RS. HERITAGE FUND: A.RS. § 17-296 ET. SEQ. § 5-601, ET SEQ. AND § 4 1-501 ET. SEQ.

As a result of new federal and state legislation, one Due to the receipt of $20 mi llion to administer LNRS attorney has now been assigned virtually full annually under · the Heritage Fund Initiative, the time to litigation and negotiation duties resulting Parks and Game and Fish attorneys anticipate a from the federal Indian Gaming Regulatory Act. A large impact due to increased agency new State Gaming Agency has been created within responsibilities. The agencies have increased their the Racing Department. Thus far, two gaming grant programs by several hundred percent, land compacts have been entered into between the State acquisitions for wildlife and recreational purposes and Indian tribes. Compact negotiations continue are anticipated and State Parks has expanded its with 11 of the State's 2 1 Indian tribes, with more construction budget to qevelop much needed tribal requests for negotiations likely to follow. infrastructure and facilities for decaying parks. That attorney formerly provided legal support to Increased legal assistance with contract matters, the Land Department in trespass and environmental administrative advice, grant administration and land matters and also represented the Department of acquisition assistance is anticipated-perhaps an Racin g. Those duties have been reassigned to increase of 10% per agency. other section attorneys due to the new demands of

3 I Civil Division

STATISTICAL SUMMARY1

Number Amount A. TOTAL ACTIVE CASES:

Litigation (Admin. & Court) 87 Prefiling/Adv ice 165 Cases Inactive 37 Cases on Appeal: __7 296 (3 5 cases opened; 3 7 cases closed)

B. SERVICE MEASUREMENTS BY AGENCY:

1. STATE LAND DEPARTMENT

Urban Planning Projects (major) 3 Land Leases Applications 2,023 Leases 1,831 Subsurface Leases/Permits 8,165 Mineral Royalties Leases 396 $8 . l million Rights-of-ways 742 Appraisals 657 Bankruptcies (monitor) 53 Administrative Hearings 441 Administrative Reviews 37 Default Proceedings 336 Publi c Land Auctions 98 Land Sales (Deeds, Patents, CP's) 54 $27 million Condemnation Actions 4

2. GAME AND FISH

Civil Penalty/License Hearings 35 Contracts Reviewed 40 $8 .9 million

3. ARIZONA STATE PARKS

Intergovernmental Agreements 20 Construction Contracts 14 $3.7 million Administrative Appeals 2 State Grants Contracts Issued:

1 / Direct legal support not required for every project. However, the statistics reflect volume of agency work re quiring legal support.

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Number Amount

Local/Regional/State Parks 39 $5,565,000 Trails 13 $695,675 Historic Preservation 47 $1,049,735 SLIF 18 $3,633,969 BLESF 6 $595,788 TOTAL: 123 $11,540,167

Federal Grants $ 420,430 Land Acquisitions 3 Park Openings: 2 Fools Hollow State Recreation Area Redrock State Park

4. ARIZONA CONSERVATION CORPS

Project Area Agreements 5 (Flagstaff, Globe, Payson, Tucson, Yuma)

5. ARIZONA DEPARTMENT OF RACING

Disciplinary Hearings 30

C. ATTORNEY TIME BY AGENCY

State Land Dept. 56% Game and Fish 10% State Parks Board 9% Racing 9% Agriculture 3% Other 12%

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REVENUE GENERATED DURING FISCAL YEAR

1. STATE TRUST LAND REVENUES 1 Condemnation $935,294 Trespass Settlement $4,000 Quiet Title $2,337 Other $41 800 $983,431 2. GAME & FISH Civil Assessments $26,790

3. DEPARTMENT OF RACING Racing Fines $425

4. TOT AL ALL REVENUES $1,010,646

E. REVENUE SAVED BY DEFENDING LAWSUITS

1. STATE LAND DEPARTMENT Golder v. State $116,000,000 (on appeal)

2. GAME & FISH Construction Contract Claims $122,000 Wildlife Depradation Claims $69,723

INSURANCE DEFENSE SECTION Grant Woods, with funds provided by the Risk Management Division of the Department of The Insurance Defense Section represents the Administration, must provide for the defense of departments, agencies, boards, comm1ss10ns, these lawsuits either through his office or by officers, employees and agents of the State of appointment of outside legal counsel. During the Arizona in lawsuits alleging State liability for past year we have continued our practice of personal mJuries, property damage and defending most lawsuits through the Office of the constitutional law violations. This Section defends Attorney General. Approximately eighty percent of the State against the standard allegation of all tort lawsuits filed against the State were negligence and also defends the State against civil defended by the Insurance Defense Section rights allegations brought by prisoners as well as attorneys while twenty percent of those lawsuits wrongful discharge from State employment lawsuits were assigned to outside legal counsel. Virtually and employment discrimination actions. one hundred percent of all of the civil rights actions brought by prisoners are defended in-house Pursuant to A.RS. § 41-621.L, Attorney General by this section. ·

1 / Depending upon the source of the revenue, the proceeds are deposited into the "Permanent Fund," the interest of which is distributed to the schools and other trust beneficiaries, the "Expendable Fund," which may be used for current expenses or the State General Fund.

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The lawyers in this section handled over seventeen The Licensing and Enforcement Section staff hundred lawsuits during the last fiscal year which currently consists of a chief counsel, ten staff is an increase of about 3 50 compared to the prior attorneys, two paralegals and six legal secretaries. fiscal year. Of these cases, 3 79 were dismissed by section attorneys provided legal services to state motion to dismiss and 172 were dismissed through officers and agencies which license and regulate a motions for summary judgment. 136 cases were variety of professions and occupations. During settled on terms favorable to the State and 25 cases fiscal year 1991 -92 the Section was given the task were tendered to insurance carriers for contractors of providing legal services to seven additional of the State so that the State did not have to pay regulatory agencies bringing the total to twenty­ for either the legal defense or the settlement or seven. judgment in these cases. This section provides legal services for the This section has continued to take appropriate cases following regulatory bodies: Accountancy Board, · to trial. During the past year this Section Barber Board, Behavioral Health Examiners Board, completed 16 trials, winning eight defense verdicts. Chiropractic Examiners Board, Cosmetology Board, Eight of these were jury trials and six of the eight Dental Examiners Board, Homeopathic Medical were defense verdicts. In these l_ 6 cases plaintiffs Examiners Board, Joint Board of Physicians asked the jury and court to return verdicts for more Assistants, Department of Liquor Licenses and than $2,500,000 against the State. Of that amount Control, Board of Medical Examiners, Medical the State was required to pay less than $150,000. Radiologic Technology Board, Naturopathic Physi­ cians Examiners Board, Nursing B oard, Oc­ Therefore, over 40% percent of all lawsuits handled cupational Therapy Board, Dispensing Opticians by the attorneys in this Section last fiscal year were Board, Optometry Board, Osteopathic Physician resolved either through settlement, dismissal, tender Examiners Board, Pharmacy Board, Podiatry Board, or trial. In addition to these lawsuits the attorneys Private Post Secondary Education Board, also monitored over 800 claims filed against the Psychologists Examin ers Board, Registrar of State. They also assisted in the responses to Contractors, Respiratory Care Examiners Board, approximately 300 charges of discrimination filed Structural Pest Control Commission, Technical against the various State agencies. Registration Board and Veterinary Medical Examiners Board. Finally, this section has implemented an Alternative Dispute Resolution Program designed to utilize The legal services provided by this section include: alternatives to civil litigation which is time advising and counseling; writing legal opinions, consuming and expensive. Our program is a timely initiating and defending lawsuits and appeals; match with the newly adopted rules of court that prosecuting cases at administrative hearings and require the parties to disclose all relevant handling other contested matters; drafting and information at the beginning of a lawsuit. This reviewing contracts, bonds and other miscellaneous enables the attorneys in the section to evaluate the legal documents and reviewing for certification all lawsuit early and, in appropriate cases, offer the rules promulgated by the client agencies. plaintiff the option to engage in private non-binding alternate dispute resolution such as mediation. Thi~ In order to maximize the productivity of available will result in less time and money expended in the attorneys, the section uses volunteer legal assistant defense of a lawsuit while achieving a result that is interns, joint investigative efforts with other law both fair to the plaintiff and favorable to the enforcement agencies, and a computer assisted taxpayers. litigation support system. Although client agencies have been complimentary about the quality of legal LICENSING AND ENFORCEMENT SECTION services the section has provided, they are

35 Civil Division

di ssatisfi ed with the quantity and the time required FY 1991 -92 saw a dramatic increase in the volume to provide services. Nonetheless, fiscal year and complexity of cases handled by this office 199 1-92 has been a very productive year. before the Chiropractic Board. Of the 176 complaints received by the Board (an increase of Accountancy Board 50% over FY 1990-91 ), 24 cases resulted in administrative hearings (an increase of 50% over In the past year the Accountancy Board's need for FY 1990-91 ). As anticipated; significant fraud legal services has grown dramatically. The Board cases became more prevalent in FY 199 1-92 as did received 331 complaints regarding issues ranging cases involving sexual abuse of patients. from major audit failures to tax preparation errors to non-compliance with continuing education section attorneys organized, prepared and requirements section attorneys represented the prosecuted one case involving over 120 factual Board in a substantial number of the 130 hearings allegations of insurance fraud. The chiropractor conducted before the Board and assisted the Board who was ultimately convicted of a felony for the in reaching consent agreements resulting m six same conduct, was billing third party payers for revocations and 299 license suspensions. treatments never rendered. section attorneys prosecuted this case resulting in the revocation of The Accountancy Board will continue to requ1re the chiropractor's license. substantial legal services from the section as investigations and prosecutions of charges that "Big section attorneys devoted a substantial amount of Six " accounting firms engaged in improper audit legal resources for the Chiropractic Board in the procedures proceed. In one of these cases, In the Doctor's Choice Weight Loss Centers investigation Matter of Arthur Young & Co., Ernest & Young, and prosecution. The eight chiropractors associated Jack D. Atchinson, Richard C. Barnes, Albert J. with the operation advertised extensively for the Boose, Kenneth D. Kroese and Nancy A. weight loss program but when the patients arrived Martusiski/ 90. 170 (consolidated). The section at the clinic, they were also "converted" to pursued an action arising out of Arthur Young and chiropractic patients so as to enable the Co. 's audit of the financial statements for chiropractors to obtain reimbursement from American Continental Corporation and Lincoln insurance companies. Little or no pre-diet physical Savings and Loan. Pursuant to a Stipulation and examination was conducted on these patients nor Order negotiated by the section, in addition to were they monitored once placed on a liquid diet. augmenting existing standards for future audits, the Chiropractic treatments billed to third party payers parties agreed that Ernest & Young pay the Ac­ were often not rendered. Unnecessary x-rays were countancy Board $1.625 million. The license of also taken of these patients, ostensibly to Jack D. Atchinson was also suspended for four "diagnose"_ thyroid and glandular dysfunctions years. which is medically impossible. Five of the eight chiropractors involved have proceeded through a The section also prosecuted a case against Charles lengthy hearing process. The section's efforts Smith, a former employee of Coopers & Lybrand, resulted in the revocation of all five licenses. The who was accused of improperly billing for services remaining three chiropractors, owners of the clinics, all egedly rendered and for fraudulently billing await hearing on these allegations as well as all e­ personal items on his former firms credit card. gations involving irregularities in billing practices. Smith's li cense was suspended for one and half years and he was fined over six thousand do ll ars. At least three chiropractors have been involved in sexual assault/molestation/abuse situations during Board of Chiropractic Examiners FY 1991 -92. All three had their li censes summarily suspended as a result of the section's

36 Civil Division

efforts. Two of the three ultimately lost their for less than three years. Accordingly , they do not li censes to revocation. The third is awaiting formal have the benefit of prior experience in organizing administrative hearing. and operating a governmental certification and regulatory agency or in dealing with the legal During FY 1991 -92, the Board became more problems facing regulatory agencies. Such group aggressive in its efforts to enforce the advertising in experience has resulted in greatly increased regulations and laws which govern chiropractors in dependence upon advice from the section. The this State. section attorneys anticipate that section has provided legal services in researching fraudulent and deceptive advertising cases will legal issues and in advising and counseling the in crease during FY 1992-93. Board and committees on all aspects of the organization and operations of a regulatory board. Section attorneys were active during FY 1991 -92 section attorneys provided guidance in the most providing the Board and Board staff with legal fundamental areas, including compli ance with the advice on an almost daily basis. In addition, Open Meeting Laws and Public Records Laws, section attorneys assisted the Board in drafting two promulgation of rules, requirements for separate admin istrative rule submissions and certification, the principles of due process and in continue to assist Board staff through the rule conducting meetings. certification process. The past year has been focused on drafting rules In FY 1991 -92 section attorneys prosecuted cases for certification by each of the four credentialing before the Chiropractic Board resulting in 11 committees. Rules for handli ng adverse actions, license revocations, two suspensions, three such as, complaints or denials of certifications were summary suspensions, four probations and three also a major consideration by staff and the Board civil penalties. itself.

Behavioral Health Examiners Board Certification in the four separate areas continue to be the primary concern of the Board and it is in The section continues to provide considerable legal that area where the most legal services are services to the Behavioral Health Examiners Board. required. The Board has implemented an appeal The Board was establi shed effective July 1, 1989. procedure that requires prospective candidates to go The Board and its four credentialing committees through several levels prior to final denial. There are responsible for the certification of individuals have been approximately 25 written complaints on engaging in practices of counseling, marital and file dealing with applicants pending certification of family therapy, social work, and substance abuse which six . resulted in denial of certification, 13 counseling. Since each of the four credentialing were certified after a review and the remaining are committees has statutory duties separate and apart still being investigated. There has been no from the Board for developing the application completed disciplinary action taken against a process, reviewing applications, investigating certified member. disciplinary complaints and conducting administrative hearings, providing legal services to The section's major focus has been in advising the the Behavioral Health Examiners Board is tanta­ Board and its four credentialing committees on mount to providing legal services to five new proper certification procedures and the handling of agencies. disputes in the future, either administratively or judicially. The section wi ll undoubtedly be The members of the Behavioral Health Examiners devoting many hours during the coming fiscal year Board and the credentiali ng committees as well as on these issues and in administrative hearings since their staff have served in their respective capacities the Board has cleared the initial lo gjam of

37 Civil Division

appli cations for certification. license revocations and 10 resulted in li cense suspensions for a total of 51 days Additionally, Board of Dental Examiners the Department collected $60,300 in civil penalties over the past year in cases handled by section Throughout the past year, the section again devoted attorneys. a substantial portion of its advisory and litigation resources to the Board of Dental Examiners. Our A significant number of the cases dealt with sales primary focus on behalf of the Board involved the of alcohol to minors and intoxicated persons which successful prosecution of disciplinary actions to are areas of significant interest to the Department. protect the public from dangerous professionals in In addition, toward the latter part of the fiscal year, the field of dentistry. The section has continued to several cases involving topless nightclubs were take an active role in major Board investigations in handled by section attorneys. preparing these matters for prosecution. During the past fiscal year the Board has received and acted In addition to administrative disciplinary matters, upon over 25 0 complaints. Disciplinary actions section attorneys represented the Department on taken by the Board included letters of concern, more than 77 applications for licenses, license restitutions, fines, censures, continuing education transfers and appeals before the Arizona State requirements and restrictions from practice. Seven Liquor Board. have been referred to formal hearings. Recently, the Board has even taken the extraordinary step of Section attorneys continue to provide legal advice summarily suspending three licenses pending to the Department on a myriad of issues involving hearings based upon the need to protect the interpretation of statutes in the licensing and publi c's health and safety. There continues to be enforcement arena. Most notable among these was a substantial desire by the Board to enjoin the the resolution of the issue surrounding alcohol at practice of dentistry by unlicensed and Sun Devil Stadium during Phoenix Cardinal's unscrupulous persons. · home games by the granting of a Series 6 Bar Spirituous Liquor License at the Stadium. The Board has been one of the most aggressive agencies in its disciplinary activity. Consequently, Board of Medical Examiners the Board has increasingly come under attack by various interests seeking to undermine its efforts to The Board of Medical Examiners kept its two protect the public safety. One form of attack has assigned Assistant Attorneys General very busy been attempts by dentists whom the board has during FY 1992. The Board met for a total of 22 discipli ned to obtain a reversal of Board sanctions days during this period and reviewed over 6700 in Superior Court. The section has represented this complaints and malpractice actions. The Assistant Board at all levels of the state courts (Superior, Attorneys General attended all Board meetings. Court of Appeals, and Supreme Court) as well as before the U.S. Federal Bankruptcy Court (dealing Almost one dozen cases were ordered for a formal with the sanctioning abilities of the Board when a hearing, resulting in eight formal complaints being li censee goes into bankruptcy). filed during this fiscal year. As a result of this process the Board revoked four li censes and Department of Liquor Licenses and Control accepted one inactivation of a license with cause. The remaining matters have been carried over into In FY 1991 -92 the section received 123 the next fiscal year and are awaiting formal Board administrative disciplinary cases from the action. Department of Liquor Licenses and Control (Department). Of these, eight cases resulted in Also, during these meetings, the Board conducted

38 Civil Division

13 5 informal interviews which resulted in the cosmetic surgery. The administrative hearing was issuance of approximately 20 decrees of censure or conducted over 20 days and resulted in Findings of orders of probation, and approximately 24 Fact and Conclusions of Law from the hearing stipulated orders (which are often agreed to in lieu officer which described Doctor Rosen's conduct as of disciplinary action). Six administrative penalties "egregious" , "unconscionable", and "either grossly were rendered, and for the first time in three years, negli gent or criminal. " On April 8, 1992, the the Board ordered two restitution payments. The Board unanimously voted to revoke the physician 's Assistant Attorneys General assigned to the Board li cense after adopting the hearing officer's were actively involved in all informal interviews Findings of Fact and Conclusions of Law. This and preparation of documents resulting therefrom. matter is now on appeal to the Superior Court.

In addition, the Assistant Attorneys General Another major case, also prosecuted by Assistant assigned to the Board also recommended changes Attorney General Nancy Beck, was In the Matter to the Board's statutes, some of which were passed of Dr. Edward Gertz. The Complaint against in the last session of the Legislature. During the Doctor Gertz alleged that he sexually molested two past legislative session the Board was reviewed by in capacitated young male patients. The doctor was the Legislature under the Sunset Act. summarily suspended pending a formal hearing before a hearing officer. The administrative Among the other routine activities performed by hearing was conducted over 24 days and resulted in the Assistant Attorneys General assigned to the Findings of Fact and Conclusions of Law from the Board were the handling of subpoena requests, hearing officer which concluded in extensive detail researching and advising on numerous issues that the physician had in fact molested the patients. including the "corporate practice of medicine", the On June 20, 1992, the Board adopted these Board's authority over Indian Health Services Findings of Fact and Conclusions of Law and doctors, the Americans with Disabilities Act and revoked the doctor's license to practice medicine. issues involving li censees infected with the HIV This matter is on appeal to the Superior Court. virus. One formal Attorney General opinion was rendered to the Board regarding the Board's Arizona Stat_e Board of Nursing comparative advertising statutes. During FY 1992, section attorneys prosecuted a The Board increased its attention to the unlicensed significant number of administrative cases before practice of medicine. To date, no formal injunctive the Nursing Board involving a wide range of requests have been necessitated. However, many unprofessional conduct. Of the 659 complaints letters demanding th e cessation of certain received by the Board during FY 1992, 253 advertising or medical activi ties have been sent, as resulted iri hearings or consent agreements. · The well as referrals to other agencies. The Assistant section continues to maintain a very close working Attorneys General assigned to the Board are relationship with the Board's nurse consultants in encouraging this activity. investigating, developing and preparing cases for prosecution as well negotiating and facilitating the One of the major cases prosecuted by Assistant consent agreement process. In all, 29 hearings Attorney General Nancy Beck this past fiscal year were conducted in FY 1992, a 50% increase over was In the Matter of Dr. Barnch D. Rosen. The the previous year. complaint against Doctor Rosen alleged numerous charges, including his association with the Most cases before the Board involve physical and unlicensed practice of medicine, false and sexual abuse of patients or chemically fraudulent statements, mislabeling of controlled dependent/impaired nurses. One particularly substances, and harmful conduct in connection with egregious case ultimately resulting in license

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revocation involved a male nurse who sexually Section attorneys were instrumental in assisting the abused and fondled terminally ill male IDV / AIDS Board in drafting legislation for the regulation of patients as well as at least one teen-age male Nurse Aides. While the legislation was not quadriplegic. Upon learning of this conduct, implemented during last session, the Board will section attorneys, with the assistance of Board staff, re-submit the matter, with modifications, during the quickly put the case together for the initial upcoming legislative session. summary suspension of the license pending formal administrative hearing. Section attorneys were also involved in the implementation of the Board's diversion program This section also developed and successfully (Chemically Addicted Nurses Division Option - prosecuted a case against an RN accused of CANDO) as an alternative to the disciplinary physically abusing elderly patients in a nursing process. As a result of this highly successful home in Tucson. Not only was the nurse striking program, the Board has seen more self-reporting by patients and using excessive force to restrain them, nurses and a resultant decline in the number of but she also was found to be over-aggressive in disciplinary cases involving impaired nurses. Most bowel and bladder care often resulting in serious importantly, the program offers members of the injury to the patients. nursing profession in Arizona an opportunity and structure to obtain treatment in a non-adversarial Another case currently pending administrative setting. hearing involves a male RN-Nurse Practitioner who, during the course of conducting The Assistant Attorney General assigned to the pre-employment physical exams, also performed Board has conducted a number of training unauthorized breast examinations on female sessions/presentations to the Board and Board staff applicants and made inappropriate and sexually relative to the investigation and administrative suggestive comments to them in the process. processes and currently enjoys a close working relationship with the entire Board staff and Board The Board continues to be very aggressive in its members. section attorneys continued to provide efforts to discipline nurses who are not in legal advice on contractual, licensing and personnel compliance with the terms of probation imposed in matters as well as other administrative matters such previous disciplinary actions. By far the greatest as ensuring that the agency is compliant with the number of non-compliant nurses are those who fail requirements of the Americans With Disabilities to satisfy alcohol or drug treatment requirements. Act (ADA). This section has successfully revoked a number of those licenses for failure to comply with the section attorneys also continue to provide legal Board's orders. Not only are these nurses assistance and guidance not only at formal monthly considered an ongoing threat to the health and Board meetings but at meetings of the Board's safety of the public, but they have demonstrated committees and at staff meetings. that they are not worthy of licensure by virtue of ignoring their professional responsibility despite In cases prosecuted by section attorneys during FY prior discipline. 1992 the Board ordered 20 license revocations, nine suspensions, two summary suspensions, 60 The section handled many practice related probations, 29 decrees of censure, 52 letters of complaints regarding charting, medication errors concern and 81 civil penalties. and the unauthorized administration of medications by nurses. The section continues to assure proper Boar-d of Pharmacy investigation and prosecution of these oftentimes life threatening matters. In FY 1992 the section received 18 cases from the

40 Civil Division

Board of Pharmacy. Sixteen of these cases resulted ordered child support. In the first case in Consent Agreements and two of these cases implementing the child support enforcement resulted in formal hearings before the Board. statutes for licensed professionals, the Board placed A substantial number of these cases involved Dr. Flores on probation on condition that the record infractions which were found by the arrears in child support were made current. In a Pharmacy investigators following formal audits. subsequent action the Board indefinitely suspended Dr. Flores when it learned that Dr. Flores not only Of the 18 cases that were received by the Attorney failed to make up the arrears but allowed the General's Office from the Board of Pharmacy, two arrears to increase substantially. resulted in revocations of licenses, nine resulted in suspensions of licenses, 17 resulted in orders of Registrar of Contractors probation, and nine resulted in the imposition of civil penalties for a total of $9,550. In FY 1992 the Section received a total of 128 · cases from the Registrar of Contractors, including section attorneys also provided a great deal of legal over 30 Superior Court cases, such as judicial services to the Board of Pharmacy by answering reviews of the Registrar's administrative decisions. general legal questions. In addition, the Board of Section attorneys conducted over 51 administrative Pharmacy meets once a month and section hearings and opposed numerous petitions for attorneys were available for those meetings to rehearing. provide legal advice. A substantial number of cases that we prosecuted section attorneys continued to prosecute before the Registrar of Contractors involved license pharmacists before the Board who have illegally denials due to past felony convictions of the diverted controlled substances to support their drug applicants or due to revocation of the applicant's abuse addictions and were involved in the previous licenses. Section attorneys also investigation of consumer fraud issues resulting prosecuted disciplinary actions against licensees from advertisements offering generic birth control who had been convicted of felonies, and against pills at ,a reduced rate when a "prescription plan" licensees whose officers were on other licenses that was purchased. were disciplined. Section attorneys also brought disciplinary actions against licensees who had Psychology Board knowingly contracted beyond the scope of their licenses and/or assisted another person who was not Services provided to the Psychology Board by the licensed to evade the Registrar's rules and section include legal advice, litigation and an regulations. increasingly active role in investigation of cases presented to the Board. The volume of complaints A positive change taking place with the Registrar filed with the Board continues to increase as of Contractors is the willingness to enter into more demonstrated in the 44 cases handled by the section Consent Agreements. Section attorneys were for the Board. section attorneys have provided involved in numerous negotiations for Consent extensive legal advice to the Board on the Agreements and were able to obtain the implementation of its revised statutory authority for disciplinary action the Registrar wished to impose licensing and disciplinary activity (effective even prior to incurring the expense of a formal September, 1991 ). hearing. For example, in the Arizona Housemovers case the licensee, a repeat offender of violations of One of the major cases section attorneys have safety codes, consented to a suspension, probation handled for the Board involves Dr. Theresa Flores and an increase in bond. who was found in arrears in the payment of court

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Section attorneys and legal assistants spent a restitution of several hundred do llars. Many of the considerable amount of time reviewing files cases that settled resulted in homeowners obtaining received from the Registrar's office for the extensions on termite treatment warranties. Also, preparation of complaints. A great number of these the Commission issued Cease and Desist Orders complaints involved contracting without licenses, and imposed fines against un li censed operators. working beyond the authorized scope of licenses, and aiding and abetting unlicensed activity. Assuring proper preparation of wood infestation reports, which indicate whether a home is infested Section attorneys also provided legal services to the with termites, continues to be an important goal of Registrar of Contractors in opposing improper or the Commission. These reports are often required questionable claims against the Contractors' by a lender prior to the sale of a home and Recovery Fund. The majority of these cases are in Commission investigators have kept a close eye on administrative hearings; however, several of these them in order to reveal any fraudulent or Recovery Fund oppositions are in Superior Court incomplete reports. Many of the cases the section lawsuits. Cases litigated by section attorneys saved handled involved improperly completed wood the Contractor's Recovery Fund thousand of infestation reports, second only to cases involving do ll ars in limiting excessive claims. improper preconstruction subterranean termite treatments. Most of the remainder of the cases There were several cases over the past fiscal year involved pesticides being appli ed in a manner in which section attorneys had to file Notices of inconsistent with label directions, failure to Intent to Take Administrative Action with the maintain records, failure to certify and register Bankruptcy Court where the Registrar wished to applicators, unlicensed activity, and failure to take disciplinary action against a Contractor who maintain proof of financial responsibility. had filed for Bankruptcy protection. One high profile case that the section pursued this In addition to case work and providing legal advice fiscal year was against Daley Exterminating, for to the Registrar of Contractors, section attorneys illegally dumping termiticide into the Escapule have worked with the Registrar to draft, promulgate Wash near Sierra Vista. A settlement agreement is and certify new rules regarding regulation of pending which would place this licensee on proba­ landscape contractors and landscape maintenance tion for two years, and requires reporting, contractors who use nonrestricted pesticides inci­ continuing education, and reimbursement of over dental to their work. $2,300 of investigative costs to the Commission. This agreement would become part of the terms of Structural Pest Control Commission probation . of Daley's criminal plea agreement, which is pending with the U.S. Attorney 's Office The Structural Pest Control Commission continues and the Environmental Crimes section of the to be one of the section's busiest agencies, with Attorney General's Office. approximately 54 cases opened by the section for prosecution in FY 1992. Section attorneys handled A project on which section attorneys spent about 31 administrative hearings, 13 settlements, 11 approximately 200 hours from November 1991 to responses to petitions for rehearing, and four August 1992 was the Commission 's sizeable new Superior Court judicial review actions. Section rules package. The certification review process for attorneys' efforts have led to the Commission these rules required research, numerous meetings taking the following action against licenses or and revisions. In addition, section attorneys wrote certificates: four revocations, seven suspensions, one Attorney General Opinion during this fiscal seven orders of probation, eight administrative year regarding licensing requirements for warnings, 22 fines totalling over $90,000, and government entities and their employees. The

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section also spent several hours providing legal based upon the documentation received by the advice each month to the Commission and its staff Veterinary Board, without any type of hearing. regarding statute and rule interpretation, as well as a great deal of time reviewing and revising There was a steady stream of complaints which led contracts between the Commission and University to the discovery of substance or alcohol abuse by of Arizona. In addition, section attorneys par­ veterinarians. The section generall y was able to ticipate.cl i_n every monthly meeting, each of which negotiate a settlement with the veterinarian in these takes about eight hours of preparation. cases, whereby the veterinarian agreed to attend substance abuse programs, random urine testing, Board of Technical Registration and other practice restrictions. Section attorneys handled the drafting of the consent agreements in In FY 1992 section attorneys handled a number of those matters. administrative hearings and superior court matters on behalf of the Board of Technical Registration. Statutory changes, effective September 1991, In addition, an extremely comprehensive rules regarding licensing by endorsement, led to a host revision by the Board was reviewed by section of legal questions about procedures and attorneys and ultimately certified by the Attorney interpretation. The attorney assigned the Board General. researched and answered these questions. One instance arose in which an applicant threatened to The overwhelming majority of section attorneys' sue the Board for all egedly improperly interpreting time with the agency has been in providing legal its license by endorsement statutes. This situation advice to both the Board and staff on a variety of took numerous hours of phone calls, letter writing legal issues. Among the issues addressed were and meetings to resolve. · whether matters should be released from confidential investigative files, whether current In addition to revising and reviewing three engineering registrants could be registered in the contracts pertaining to veterinarian and veterinarian new fire protection branch of engineering without technician exams, section attorneys attended each examination and whether any tenant improvement monthly Board meeting to provide legal advice and construction project requiring a building permit to assist the Board in handling their informal from a local governing body would also require interviews, which involved reviewing the that it be designated by a registrant. In addition, documentation and advising the Board as to which section attorneys have worked with the Board statutes or rules may apply. · The Board would investigative staff in reviewing their more complex probably vote more of its cases to a formal hearing, investigative files to assist them in determining if it had adequate funding. The Board's whether a possible violation of statute or rule exists disciplinary action after an informal interview is and whether further investigative effort should be limited to probation and fines. Thus, the Board expended and, if so, what direction that may want to consider legislative changes that investigative effort should take. provide authority to impose more severe discipline after an informal interview, if it does not receive Veterinary Medical Examining Board funding to hold formal hearings.

In FY 1992 the Veterinary Board received 86 One major investigation that continued this fiscal complaints against veterinarians. Most of these year that will proceed to a formal hearing is against complaints were handled by informal hearings a Mesa veterinarian, who is currently on probation where the role of the assigned section attorney was with the Board for various violations of its statutes, to attend and provide legal advice to the Board. including illegal substance abuse. Current Some of the complaints were dismissed solely allegations against this veterinarian involve

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instances of animal abuse, improper record keeping Structural Pest Control Commission, Board of or altering of medical records, possible continuing Technical Registration, Water Quality Appeals substance abuse, and other violations involving Board. During the past fiscal year, the section unprofessional conduct. provided advice to agencies at least 85 times, often while attending agency hearings. SOLICITOR GENERAL AND OPINIONS SECTION The section has also provided assistance and advice The Solicitor General and Opinions Section is in a year-long rules certification, assisted the responsible for the management and supervision of Attorney General in approximately 25 research civil appeals in the Attorney General's office. In projects, and investigated a request to the Attorney FY 1992, the section reviewed or supervised General to recover monies alleged to be ill egally approximately 100 appeal briefs and special spent by a state agency. Additionally, the section actions, and attended 10 moot courts. Additionally has updated the A.G. Fee Digest, and provided the section handled approximately 10 cases, appeals assistance in attorney fee litigation. The section or special actions in -house. has participated in many committees (including Retreat Committees, Civil Justice Reform Act The Solicitor General and Opinions Section is also Committee, RAJI Committee, Budget Task Force, responsible for reviewing all Attorney General's Southwest Border Conference Steering Committee Opinions. The section reviewed 66 requests for and CLE Committee). Attorney General Opinions, and wrote or reviewed 16 Attorney General Opinions in FY 1992. The following highlights the significant litigation Additionally, the section has reviewed 38 amicus and appeals handled by the Solicitor General and requests and has joined the State in 16 of the briefs Opinions Section during the past fiscal year: reviewed. · Arizonans for Fair Representation v. Symington The Solicitor General and Opinions Section gives independent advice to state agencies and boards This is the case brought to redraw Arizona's that hear administrative cases in which other congressional and legislative districts following the attorneys general are advocates. Those agencies and 1990 Decennial Census. It is being heard by a boards include the following: Accountancy Board, three-judge federal panel. Following a trial in Department of Agriculture, Air Pollution Control April, the court drafted its own plan for Arizona's Hearing Board, Board of Appraisal, Department of congressional districts, including the new 6th Building and Fire Safety, Board of Chiropractic Congressional District, after the Arizona Examiners, Board of Dental Examiners, Board of Legislature failed in its attempts to adopt a Education, Department of Environmental Quality, congressional plan. The Arizona Senate and the Board of Funeral Directors and Embalmers, Game Hispanic Intervenors have appealed this plan to the and Fish Department, Office of Governor, Land United States Supreme Court. Department, Land Department Board of Appeals, Law Enforcement Officers' Advisory Council, The court stayed its action concerning the state Department of Liquor Licenses and Control, Board legislative plan after the Legislature passed a plan of Medical Examiners, Nursing Board, Board of but later authorized the use of an amended plan as Nursing Care Institution Administrators Examiners, an emergency interim plan for the 1992 elections. Optometry Board, Physical Therapy Examiners The interim plan is now on appeal to the United Board, Physicians Assistants Examiners Board, States Supreme Court. Board of Podiatry Examiners, Board of Psychologists Examiners, Department and Commission of Racing, ·Board of Regents,

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Bromley Group v. Department of Revenue District Court preliminarily enjoined enforcement of the statute. The district court granted our Claiming that it was only a nominal party, the motion to dismiss based upon the Eleventh Department of Revenue appealed an award of Amendment to the United States Constitution. attorney's fees against it. The Court of Appeals held that the Department of Revenue cannot be a State Comp. Fund v. West nominal party under A.RS. § 12-348, regardless of its position on the merits of litigation, if it has a This section represents the Governor and other state pecuniary interest in the outcome of the litigation. defendants in a special action by the State This case significantly affects the state's ability to Compensation Fund. The suit challenges an claim nominal party status. The Department of assessment in lieu of taxation against the State Revenue petitioned the Arizona Supreme Court to Compensation Fund. The case is set for oral review the Court of Appeals' decision. The argument before the Supreme Court on October 6, Supreme Court denied review. 1992.

Common Cause v. Woods Yniguez v. State (the "Official English" case)

The plaintiffs sought a declaratory judgment as to The Federal District Court declared Article XXVIII the proper interpretation of the A.RS. § 16-905 of the Arizona. Constitution (the Official English campaign contribution limitations in the context of provision) unconstitutional. Although the district family loans to candidates. The trial court granted court dismissed the state from the lawsuit, the 9th the Attorney General's motion to dismiss on the Circuit held that the State of Arizona may brief and grounds that Common Cause lacks standing to seek argue the constitutional questions raised in the this declaratory relief and that both declaratory and appeal. mandamus relief against the Attorney General are inappropriate. Common Cause filed a petition for TAX SECTION special action in the Arizona Supreme Court seeking reversal of this ruling, and, after oral The responsibilities of the Tax Section of the argument, the court declined jurisdiction. Attorney General's Office are to represent various state agencies concerning their authority and duty Hodges v. Bishop to impose a wide variety of state taxes. The primary agency represented by the Tax Section is In a class action brought on behalf of a group of the Arizona Department of Revenue. The Section handicapped children pursuant to the Individuals also represents and advises the Arizona Department with Disabilities Act and section 504 of the of Transportation, the Arizona Department of Rehabilitation Act of 1973, the Department of Insurance, the Property Tax Oversight Commission, Education entered into a consent decree. This the Economic Estimates Commission and the section objected to the attorney's fee request filed Municipal Tax Code Commission. The Tax by plaintiffs as prevailing parties. The court Section also collects debts owed to the State awarded fees in an amount less than the amount through the CERF (Collection Enforcement requested. Revolving Fund) program.

Planned Parenthood v. Neeley These agencies and commissions receive legal representation in a wide area, including day-to-day Planned Parenthood challenged the constitutionality legal advice, representation before administrative of A.RS. § 36-2153, the statute requiring parental and judicial tribunals, rule certification and consent for minors who seek an abortion. Federal development of long-term goals regarding

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legislation and other tax-related matters. In (vehicle weight-mil e) taxes, use fuel taxes, luxury addition, Tax Section attorneys draft Attorney taxes, insurance premium taxes, garnishments, General Opinions involving questions of tax law bankruptcies and miscellaneous matters. and expenditure and levy limitations, and handle a significant number of constituent letters and The Tax Section advises the Property Tax telephone calls on a wide variety of tax questions Oversight Commission, the Economic Estimates and concerns. Commission and the Municipal Tax Code Commission on a wide variety of legal matters The Tax Section staff of 16 attorneys, five including questions involving primary property tax paralegals, one office administrator, eight legal levies, expenditure limitations and amendments to secretaries, two co ll ectors, two clerk-typists and the Model City Tax Code. The Tax Section one co ll ections administrative assistant is organized assumed the representation of these commissions into five functional units: Sales and Use Tax, because the Director of the Department of Revenue Income Tax, Property Tax, Motor Carrier and Fuel chairs each commission. Tax, and Col lections. The attorneys, paralegals and legal secretaries are assigned primary One indicator of the performance of Tax Section responsibili ties within these units as well as personnel is m_oney recovered during the fiscal secondary and tertiary duties in both their own year. These recoveries may be measured not only units and the other units, as needed. by the money flowing into the State of Arizona treasury and other funds, but also by the money not Within these units, a wide variety of subj ect areas refunded due to Tax Section efforts ( e.g. litigation , exists, including, for example, ad valorem property settlements, etc). A summary of the recoveries taxes (real and personal property), income taxes and savings generated by the Tax Section is as (individual and corporate), transaction privilege follows: (sales) taxes, use taxes, luxury taxes, motor carrier

RECAPITULATION OF SAVINGS TO THE STATE 1 July, 199 I - June, 1992

Amount Amount TYpe of Tax In Issue Saved Totals

SUBSTANTIVE CASES Income $ 1,970,9 16 $ 1,968,723 Motor Vehicle $ 1,754,586 $ 1,498,672 Sales $ 19 ,244,563 $ 12,2 14,085 Coll ection (non-CERF) $6 783 $6 783 $22,976,848 $ 15,688,263 $ 15,688,263 $ 1,483,835 TOTAL RECOVERIES 7/9 1 - 6/92 $ 17,1 72 ,098

As compared to 7 /90 - 6/91 $ 12,008,293

1 Savings lo the state for substantive taxes are generated by two categories of cases, refund cases and audit assessment cases. In refund cases, the taxpayer or claimant requests a refund or recovery of monies that were previously paid to the state. Any amount by which the claim is diminished is reported as savings to the state. Audit assessment cases involve the validity of tax assessments issued by taxing agencies. Generally ta xes are not paid at the time the protest to an assessment is filed. Savings to the state are reported to· the extent the validity of an assessment is upheld.

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The total amount represents an increase of more has been agreed upon by the parties. than 40% from the previous fiscal year. The recoveries and savings generated by the Tax Marley v. State of Arizona Section represent an extraordinary rededication of effort by existing Tax Section personnel, especially This case involved the question of whether the since the section operated with no personnel taxpayers' agricultural operation (maintenance of in creases from the prior fiscal year, despite an a goat ranching operation) was bonafide. The Tax inordinate caselo ad increase. Court allowed the agricultural classification on only five out of thirteen sections of land, representing a Clearly, this demonstrates the growing efficiency of savings of approximately $300,000 in taxes. The the Coll ections unit and the wisdom of expanding case has been settled for tax years 1989, 1990, the co ll ectio n efforts of the State of Arizona as 1991 and 1992. The taxpayers made increasing opposed to "farming out" such collections to agricultural use of the property in years 1991 and private entities. 1992 and there was some compromise on the valuation of nonagricultural parcels, but in no year Some of the major cases now being handled by the were all the parcels considered agricultural. Tax Section are: Hayden Partners (AM Community Developers v. Bohr v. Waddle Maricopa County)

The issue in thi s case is whether or not the State of Approximately 150 actions throughout the State Arizona is li able to refund in excess of $250 were filed to reclassify property from Class 4 to million in purportedly illegally coll ected Arizona Class 5. If successful, this would change the income tax to Arizona residents who are federal assessment ratios from 16% to l 0% for purposes of retirees. The Arizona Tax Court held that refunds taxation. All cases have been consoli dated and the would have to be given in an amount that, if issue is the constitutionality of A.RS. §· 42- l 62(B) affirmed on appeal, would only be between and § 11 -506 as amended by Senate Bill 1370 $5,000,000 and $6,000,000. Plaintiffs and the State (having a 5-year retroactive appli cation). Although Defendants appealed and cross-appealed, there is no written decision, the court has rendered respectively. The case has been briefed and argued an oral decision. The judge ruled that Senate Bill at the Court of Appeals. A decision is awaited. 13 70 was unconstitutionally retroactive for all years prior to 1991 in that it impaired taxpayers' vested Kerr v. Waddle rights. However, the court denied all (A.RS. § 11 -506 and § 42-204) discrimination claims; This case involves a claim by federal civil service ruled for the government for year 1991; and will employees that imposing Arizona income tax on allow evidence of increase of valuation and li mited contributions to their federal retirement systems, property value by the government to offset any while simultaneously exempting similar claims for refund. Three motions for contributions by State and local government reconsideration are pending. The case will employees, violates the intergovernmental tax definitely be appealed. Individual trials on all immunity doctrine and 4 U.S.C. § 111. The parcels will be scheduled next year on the factual Arizona Tax Court has held that A.RS. § 43-1021 issues of valuation and classification. is ill egal but the Court applied its decision prospectively only. Plaintiffs' motion for Waddle v. 38th Street Partnership v. Maricopa reconsideration was denied and judgment was County and Department of Revenue entered. Plaintiffs and the State have appealed and cross-appealed, respectively. A briefing schedule An action filed by the Department of Revenue

47 Civil Division

against approximately 500 taxpayers whose The issue in this case is whether the Department property had been appealed administratively and has the authority to define Arizona adjusted gross classified from vacant land to residential land. income for property tax credit purposes in This is the -companion case to Hayden Partners Department instructions and not by rule. The Tax above. The Tax Court ruled that Senate Bill 1370 Court has granted summary judgment to Plaintiffs. was valid and retroactive to January 1, 1991 and The amount of attorney fees to Plaintiffs is applicable to all defendants. No written decision currently being considered. The potential refunds yet, but oral judgment for the State. The taxpayers to claimants may be in the range of $ 10,000,000 to have filed a motion for reconsideration on the issue $12,000,000. of discrimination. The case will definitely be appealed. State v. Talley Industries, Inc. and Subsidiaries

Gila River Indian Community v. State of Arizona The Department disallowed the Talley group's method of combined reporting to Arizona for The issue in this case concerns the taxability of income tax purposes and required each corporation various non-Indian operations conducted near doing business in Arizona to file a separate return. Firebird International Raceway, within the The Tax Court held that Talley and subsidiaries boundaries of the Gila River Indian Community. were a unitary business that could lawfully be The question is whether the State of Arizona has required to file a combined report. The State has jurisdiction to impose the State transaction privilege filed a Motion for Reconsideration on the grounds ("sales") tax upon the non-Indian operators of that Talley's method of separate reporting in other faci li ties such as Compton Terrace and related states shows that the nature of the Talley group's operations. The matter is presently pending in U.S. operations permit separate reporting and a District Court for the District of Arizona. combined report would not accurately reflect income earned in Arizona. APS. et al. v. Department of Revenue, et al Scottsdale Princess Partnership v. Maricopa The Plaintiffs have challenged the constitutionality County and Department of Revenue of A.RS. § 15-992, which imposes an additional qualifying tax rate for education. The case One of the Issues m this case IS the involves claims for refunds of approximately constitutionality of the possessory interest tax $150,000,000. Motions and cross-motions for statutes. The Plaintiff alleges that the exemptions summary judgment have been filed and the matter from the possessory interest tax set forth in A.RS. is set for trial and oral argument on October 5. § 42-684 are discriminatory and a denial of equal protection ·because most other similar resorts are Estate of Ladewig v. Waddle exempt under A.RS. § 42-684(13). If found to be unconstitutional, the Plaintiff is requesting that the This case involves an attack on the constitutionality entire possessory interest tax scheme be declared of the Arizona income tax deduction for dividends void. received from corporations doing more than 50% of their business in Arizona. The claims include Ball Ball and Brosamer v. Arizona Department of commerce clause and equal protection violations, as Revenue well as a 42 U.S.C. § 1983 action against the Director and Deputy Director of the Department of The issue in this case is whether the Department Revenue. has discriminated in the privilege taxation of contracting, thereby violating the taxpayer's equal Hamilton et al. v. Department of Revenue protection rights and entitling it to a refund of

48 Civil Division

almost $1 million in privilege taxes paid. An these matters were handled in the past. That alternative issue is whether the taxpayer is entitled legislation failed but will be resurrected in the to the refund in any case because the receipts it upcoming session so that a positive step can be paid the tax on are exempt from tax. The case is taken toward solving this problem. set for trial in the Tax Court. TRANSPORTATION SECTION Tucson Newspapers v. Arizona Department of Revenue The Transportation Section provides legal services to the Arizona Department of Transportation This case involves a newspaper's claim that the (ADOT) and the Department of Publi c Safety privil ege taxation of newspapers, and not other (DPS). information media, is prohibited by the First Amendment and violates its equal protection rights. With the exception of motor vehicle tax matters, This matter is in abeyance at the Board of Tax which are assigned to the Attorney General's Tax Appeals while the City of Tucson pursues the same Division, all legal services required by ADOT's issue with the same taxpayer in the appellate five organ izational divisions (Highways, courts. Transportation P lanning, Motor Vehicle, Administrative Services and Aeronautics) are Cypms Sierrieta v. Arizona Department ofRevenue provided by the Transportation Section. All legal services required by DPS are furnished by attorneys The issue in this case is whether liquids that a in this section, except for matters relating to its mining company purchases to use in its smelting criminal law enforcement activity and personnel and metallurgical operations are exempt from use matters which are assigned to other divisio ns of the tax machinery or equipment. This matter is before Attorney General's Office. the Tax Court on the Department's appeal from an adverse decision of the Board of Tax Appeals. The attorneys in the Transportation Section provide as much as 95% of all the civil legal services Conclusion required by ADOT and DPS, two of the State's largest agencies, and, in addition, provide legal The past year has been another eventful but mostly services to other state agencies relating to the positive one for the Tax Section. The section's acquisition of lands for construction or alteration of resources continue to be drained by the commit­ public works. ment to assist Maricopa County (and to a lesser extent, Pima County) in defending locally assessed Legal services provided by the Transportation property tax cases. This problem was explained in Sectio n i.nclude the litigation of complex some detail in last year's report. Basically, the construction contract claims, personal injury, phenomenal growth in the volume of these cases wrongful death and property damage claims, to has outstripped Maricopa (and Pima) County's civi l rights complaints, eminent domain actions, abil ity to handle such matters. The Attorney motor vehicle license revocations and/or General's Office has agreed to provide assistance suspensions, and personnel appeals. In addition to with these cases and has taken on about 600 a year, litigation cases, section attorneys provide a which requires attorney, paralegal and secretarial considerable amount of administrative services for efforts that otherwise could be devoted elsewhere. their assigned agencies. These services include During the legislative session that just ended, contract negotiation, rule drafting and certification, legislation was introduced that would have opinion writing, and daily oral advice on various provided a mechanism for the counties so they agency matters: could handle these cases themselves, which is how

49 Civil Division

Eminent Domain Litigation The case mentioned last year, Musil, et al. v. Charles L. Miller, challenged the constitutionality Funding for right of way acqu1s1t1on and/or of A.RS. § 28-694, the administration per se DUI construction of the urban freeway system, otherwise statute. The Transportation Section obtained a known as the MAG system, is still very limited favorable ruling upholding the statute as because of the downturn in the economy and the constitutional and not violative of the equal fact that the revenues have not kept up with the protection or double jeopardy clauses. Because the demand. case received wide attention, not only from the U.S. Department of Transportation but from other An update on a case that was mentioned in last States (since approximately 30 states have similar year's report, State v. Title USA would be in order. statutes), a request was made to publish the Argument on pretrial motions began on January 27, opinion. The opinion was published and supported 1992 and continue. It is anticipated that a jury will by the National Highway Safety Administration in be called toward the end of September. This is the the U.S. Department of Transportation. first of nine trials to be scheduled in this case. Another case of interest which was decided this The section continued its winning ways in the area past year was Owens v. James S. Creedon. The of eminent domain. One case involved a project Court of Appeals held that there was no on State Route 95 through Bullhead City. Another requirement under the implie.d consent statute that was on East Papago through Scottsdale. The the arrest be a valid arrest, only that the officer Bullhead City verdict was approximately 50% of needs reasonable grounds. The Court also held that the amount that had been deposited and a refund the case of Sherrill v. ADOT, which places the check was subsequently received from the property burden of proof to establish all of the elements of owners. a refusal on the State, does not apply if there is evidence of noncooperation. In· another case, one of the attorneys was ab le to suggest a design change on a parcel of land on the Environmental Litigation Outer Loop Freeway which resulted in a $2.3 million savings to the Department of As anticipated, environmental concerns are Transportation. Less property was required and continuing to increase in their importance -- not significant severance damages were avoided. only in the acquisition of right of way, but in the Because of the change in design the Department of conduct of the construction of the highways and Transportation received a $768,000.00+ refund their maintenance. Two cases were mentioned last check from the amount that had originally been year. deposited and the case was settled. McCarthy, which sought to terminate federal This section closed 55 eminent domain cases over funding for violations of the Federal Clean Air Act, the course of the year. has finally been decided by the District Court in favor of the Department. However, the Plaintiffs Legal Services for the Motor Vehicle Division have appealed to the Ninth Circuit.

The Motor Vehicle Division (MVD) continues to State v. Gabrielli is still pending. This case is exercise the heaviest demand for legal services of complicated due to the contamination and the all the ADOT divisions. The number of telephone clean-up costs, which are estimated to be call s requesting legal advice on a day-to-day basis approximately $1.5 million for property that is has continued to increase. During the course of the valued by the Department at $1.3 million. Further year 122 MVD cases were closed. complicating the matter is the fact that the property

50 Civil Division

owner is in bankruptcy. There are ongoing State v. Hatch. The case is currently pending 1 negotiations with the Olin-Mathieson Company, before the Supreme Court on a Petition for Review. which is responsible for the original contamination, No decision by the Court has been reached as to and the current property owner. whether the case will be accepted. In the in terim, pending final decision by the Appeals Court, Legal Services for the Department of Public parallel hearings in front of the Department of Safety Water Resources were conducted to determine which individuals actually had water rights in the As anticipated, the request for departmental records stock tank that was condemned and how much pursuant to the publi c records statute has continued water they could claim. The hearing officer has to increase, requiring a significant amount of time. reached a tentative decision that was favorable to A substantial number of these requests are coming the Department. The Director of Water Resources from the press. The tow truck regulations are still has not final ized that decision. An appeal will be in the rewrite format, and a new criminal history taken from Water Resources' decision, if it is statute was written and passed by the Legislature unfavorable. The decision will have a direct and signed by the Governor. (A.RS. §41 - 1750). impact on the condemnation case so any potential Civil liti gation against the Department all eging a retrial of that case would await final determination variety of causes of action involving tort claims of the water rights and civil rights claims is on the rise. Under the umbrell a of work done for the Department of Construction Contract Claims Publi c Safety, is work done for the Arizona Law Enforcement Officers Advisory Council Construction claims continue to require a (ALEOAC) A significant case was disposed of significant amount of time. In keeping with the this past year. Re Barlow involved the office policy, most of the litigation and arbitration administrative revocation of Mr. Barlow's peace in this area has been retained in -house. However, officer certification due to his practice of there were several large cases which were sent to polygamy. Mr. Barlow was the town marshal! for outside counsel because they would overburden the the community of Colo rado City. A special action resources of the section. was filed which resulted in an order directing ALEOAC to dismiss its proceedings. This order Litigation was appealed. The Court of Appeals reversed the Superior Court ruling stating that ALEOAC did Edward Kraemer and Sons. Inc. , v. State have the right to revoke on these grounds. Subsequently , a hearing was conducted and the A $3 million claim involving work on the Council voted not to revoke Mr. Barlow's Roosevelt Bridge, which was constructed to replace certification, thus ending this matter. the highway that was built on top of the Roosevelt Dam. Kraemer claims that the negligent design Legal Services for the Aeronautics Division and improper supervision caused substantial delays on the project. This section continues to provide day-to-day advice to the Aeronautics Division for such things as The parties have gone through a non-bi nding approval of grants-in-aid to local airports and arbitration process. It is hoped that the parties will advice relating to the management and operation of settle on the basis of the Arbitrator's decision. the Grand Canyon Airport, the only State-owned airport. Arrowhead Landscaping v. ADOT

A significant case that was discussed last year is Arrowhead Landscaping claimed that it suffered

51 Civil Division

$1.8 million in damages due to encountering rocks inches in diameter) were unexpectedly found on below the surface in performing its landscaping some drilling on the East Papago Freeway along work for ADOT. ADOT counterclaimed, stating the Salt River at Scottsdale Road. APOT beli eves that Arrowhead owed ADOT liquidated damages that an experienced driller would have known that due to the late completion of the job. The parties there were boulders in this area along the Salt settled by ADOT waiving its claim for liquidated River. FNF's total claim was approximately $3 damages and Arrowhead waiving its claim for million. The claim was settled during construction, damage due to the underground rock. without the filing of any lawsuit, for $1.2 million.

Pavarini Constmction, Inc., v. State Tanner Companies: ADOT claims that Tanner is liable for latent defects on the bridge at the Pavarini was the excavation subcontractor on a interchange between I-10 and the Maricopa landscape job. ADOT withheld $40,000.00 from Freeway near Sky Harbor Airport. ADOT will its pay to the prime contractor after Pavarini probably have to sue Tanner for damages relating damaged some fiber optic cable. The prime to these defects. The costs may exceed $1 mi llion. contractor in turn withheld the money from Pavarini 's payment. Pavarini sued ADOT and the Cannon Structures Inc.: Cannon claims that ADOT prime contractor, claiming breach of contract. In has unduly interfered with its work on the Oak addition, Pavarini has claimed consequential Creek Bridge on Highway 89A near Sli de Rock. damages due to loss of future work, in the amount This job was supposed to be completed before the of $45 million. The case has not been set for trial. summer of 1991, but was not completed until 1992. Arbitration is scheduled to determine fault for the Cannon placed some concrete that failed to meet fiber optic damage. the strength specification and the bridge may have to be removed or substantially reconstructed in Claims order to maintain the strength intended by the designers. Several claims were resolved, but the This section continues to encourage ADOT to contractors' remaining claims on this job may involve its attorneys early in the claims process in easily exceed $2 million. order to mitigate or obviate problems. There are Arbitrations: A.RS. § 12-1518 provides that all several of these matters pending: construction claims of less than $1 00,000.00 are to be decided by arbitration rather than litigation. The INF Construction & Drillers, Inc., as subcontractor: Transportation Section attorneys handled 20 Dri ll ers claims that boulders (rocks larger than 12 arbitrations in the past year.

52 ("') ~ 3-· :l- -0) C ARIZONA DEPARTMENT OF LAW -< Office of the Attorney General -en Criminal Division 0-· :l Grant Woods Attorney General I Chief Counsel Michael C. Cudahy I

V, w

Criminal Appeals Criminal Trials Drug Enforcement En•ironmental Organized Crime & Special ln•estigations Tucson Criminal Section Section Section Enforcement Section Fraud Section Section Section Paul J. McMW"die Steven C. Mitchell Gary A. Husk Patrick J. Cunningham Sherry K. Stephens Lee L. Rappleyea JobnE. Davis Chief Counsel Chief Counsel Chief Counsel Chief Counsel Chief Counsel Chief Investi!l,ator Chief Counsel

Drug Ci•il AHCCCS H Racketeering 4 Enforcement ~ Fraud Control

Financial Criminal Victim y Remedies Enforcement Witness 1 ~ Pro!!,ram Criminal Division

The Criminal D ivision of the Attorney General's matters, charges and cases in litigation contain ed in Office is divided into seven sections: the Criminal this annual report are merely accusations. Appeals Section; the D rug Enforcement Section; Suspects/defendants are presumed innocent until the Environmental Enforcement Section; the proven guilty. Organized Crime and Fraud Section; the Special Investigations Section; the Trial Section and the CRIMINAL APPEALS SECTION Tucson Criminal Section. The specific responsibilities of each section are described below. The Criminal Appeals Section represents the State In addition, the Division is supported by agents in of Arizona in all of the criminal appeals filed by the Special Investi gations Section, most of whom convicted felons. It also represents the state in all are peace officers, and the Victim Witness federal court proceedings arisin g out of state court Pro gram, which acts as a liaison with victims of convictions where the defendant is incarcerated by the crimes. the Department of Corrections. In addition, it provides trial and research assistance to the county All Crimin al D ivision sections work closely with attorneys upon their request. the Consum er Protection Section of the Civil Divi sion, the special agents of the Attorney In addition to the appellate matters, the Criminal General's Special Investigations Section, Appeals Section handles all pet1t1ons for Department of Publi c Safety, Federal Bureau of post-conviction relief filed in death penalty cases. Investi gation, the Drug Enforcement This enabl es the office to explore thoroughly the Administration, the United States Customs Service, relevant issues at the trial court level and to make Pho enix Poli ce Department, and many other a complete record for subsequent review in state federal, state, and local law enforcement agencies. and federal courts. By using a group of attorneys knowledgeable about Arizona and United States Many of the complex and sophisticated cases Supreme Court death penalty decisions, the office investi gated and prosecuted by the Criminal has taken a consistent approach in presenting the Division cannot be handled by local prosecution applicable law to the reviewing courts, subject only agencies, since they must concentrate their to a case-by-case analysis based on the different resources on the overwhelming number of "street facts of each crime. This has resulted in a more crimes. " If the Attorney General's Office did not expeditious appellate review process than if each investigate and prosecute these cases, the county attorney retained responsibility for the case. perpetrators of many serious crimes would, in large This approach resulted in Arizona's first execution part, be left unpunished. The Divisions's policy is in 29 years. The section fully expects the number to fully implement and use the enforcement and of executions to increase in the very near future. remedial potential of the Arizona Racketeering Act in carrying out its responsibilities, including civil With approximately 103 inmates on death row, the remedies contained in those statutes. The Division death penalty cases continue to generate also serves as legal advisor to the state grand jury considerable legal work as the defense attorneys and prosecutes all indictments returned. come up with new and different challenges to the capital punishment system. The Arizona superior Some of the significant publicly filed court cases courts have been increasingly liberal in allowing handled by the Crimin al D ivision in 1991 - 1992 are inmates to fil e successive pet1t1ons for described below. A substantial portion of the post-conviction relief resulting in many cases Division's resources were also devoted to pending litigating issues and relitigating issues already criminal investigations, which generally are not decided. Although the State ultimately prevails in described in this public report because of ethical almost all of these cases, the result is that many and confidentiality constraints. All investigative hours of time are expended opposing these

54 Criminal Division

petitions. adding additional attorneys. Maricopa County increased their public defender appellate section by Several other events have led to a dramatic increase five attorneys. D ivision Two of the Court of in the workload of this section. As a result of an Appeals ordered the Pima County Public Defender increasing prosecution emphasis and punishment not to accept additional cases until their backlog for crimes again st chi ldren and narcotics violations, was reduced. The net effect of this action was to an in creased number of defendants are going to substantially increase the workload of the Criminal trial rather than pleading guilty. This, along with Appeal's Section. other things such as the overall crime rate increase, has caused the superior courts to use an increased The section anticipates another surge in the number number of judges pro tern. The effect is to of appeals we will receive in the next 6 to increase the number of appeals this office must 9 months. In July, the Pima County Superior Court handle. This is dramatically reflected in _the implemented a "Criminal Case Delay Reduction attached statistical analysis. From 1985 through Program." This program is designed to eliminate 1990, this section handled approximately 1,650 by year end the 1,700 crimin al cases presently cases per year. In 1991, we received nearly 3,000 backlogged in Pima County. As these 1,700 cases cases. In the first 6 months of 1992, we have wend their way through the appellate system, the already received 1,095 cases. This enormous number of appeals to be handled by the Attorney in crease in appellate cases required both the General's Office will increase. Maricopa and Pima County Public Defender's A statistical analysis reflecting the section 's Offices to seek relief in reducing their case load or workload for the 1992 year follows this narrative.

CRIMINAL APPEALS SECTION SUMMARY OF YEARS FROM 1985 TO JUNE 1992 FILES OPENED

1985 1986 1987 1988 1989 1990 1991 1992*

FILES OPENED 1,099 1,706 1,621 1,627 2,038 1,844 2,904 1,095

NEW FILES OPENED January 1992 195 February 1992 159 March 1992 194 April 1992 187 May 1992 166 June 1992 194

TOTAL 1,095

55 n CRIMINAL APPEALS SECTION 11 ::!. 1992 3 Superior Ct./Appeals District Ninth United States -· Courts Suereme Ct. Court Circuit Suereme Court TOTAL II~- BRIEFS RECEIVED C January 1992 116 16 132 February 1992 152 26 1 179 -·< March 1992 164 16 1 181 tn-· April 1992 159 7 5 171 -·0 May 1992 173 9 182 June 1992 193 12 1 206 ::l

TOTAL 957 70 17 7 1,051

RESPONSIVE BRIEFS FILED January 1992 71 13 3 1 88 February 1992 49 8 2 2 61 March 1992 75 6 3 84 April 1992 84 13 3 100 May 1992 80 12 4 96 June 1992 78 18 6 2 104 ~ I TOTAL 437 70 21 5 533

OTifER RESPONSES FILED January 1992 13 159 22 3 197 February 1992 11 147 26 3 1 188 March 1992 9 146 22 4 2 183 April 1992 10 161 19 4 2 196 May 1992 8 175· 19 8 1 211 June 1992 14 232 27 2 275

TOTAL 65 1,020 135 22 8 1,250

ORAL ARGUMENTS January 1992 3 2 5 February 1992 1 2 3 March 1992 2 1 3 April 1992 4 2 6 May 1992 5 5 June 1992 1 5 1 7

TOTAL 5 20 2 2 29 Criminal Division

CRIMINAL TRIALS SECTION conv1ct1ons were overturned. New evidence has surfaced and they have again been charged. The The attorneys assigned to the Criminal Trials Dunlap/Robison trial 1s now scheduled for Section provide assistance to the various County November 9, 1992. Attorneys for matters referred to the Attorney General 's Office because of a conflict-of-interest State v. Bradtke, Gibbons, et al. or for other policy or economic reasons, including complex homicide cases which require a substantial Contractors and city officials conspired and rigged allocation of resources. This section is also bidding procedures resulting in kickbacks to responsible for investigating and prosecuting certain Avondale City Engineer Glen Gibbons and Publi c white-collar crimes. Works Director Donald Bradtke. Four contractors and city employees involved were convicted. The fo llowing cases illustrate some of the Bradtke 's trial lasted one month and resulted in a contributions this section has made: lengthy jail sentence and restitution in excess of $25,000. State v. Willoughby State v. Jones This defendant was convicted of First Degree Murder and Conspiracy to Commit Murder. Defendant was convicted of three counts of Defendant and his transsexual lover conspired to Aggravated Assault, Class 3 dangerous felonies, kill, and ki ll ed the defendant's wife in Puerto fo llowing two trials, the first endin g in a mistrial. Penasco (Rocky Point), Mexico. Yesenia Patino, Defendant had barracaded himself in his apartment the transsexual lover, was brought to Arizona from after threatening numerous individuals in the a Mexican prison to provide testimony in apartment complex. He fired through a sliding Willoughby's trial. Patino was the first witness glass door at three Phoenix Police officers. He was brought to the U.S. pursuant to the Mutual Legal on probation at the time for Endangerment. He Assistance Treaty betwee!1 the U.S. and Mexico. had, just months before, shot at two other Patino is being tried in Mexico for murder. individuals for allegedly making racial slurs. He was sentenced to three li fe sentences because he State v. Hinchey committed a dangerous offense while on probation.

Defendant shot and beat to death his 17-year old State v. Good step-daughter. He was convicted of First Degree Murder and received the death penalty. Defendant was tried and convicted of one count of Aggravated Assault, a Class .3 dangerous fe lony. State v. Mavis Defendant had removed a sawed-off shotgun from an individual and pointed it at the victim while Defendant stabbed and killed one victim and threatening to kill him. Defendant . was sentenced stabbed a second during an argument at a Glendale to 7.5 yrs (2/3 time) in prison and on the Class 5 bar. The Defendant was convicted of First Degree non-dangerous to 2 yrs (I/2 time) in prison These Murder and sentenced to life imprisonment. sentences are running consecutively.

Don Bolles Homicide State v. Stapleton

On June 2, 1976, Don Bolles was fatally wounded Defendant was convicted of Kidnapping, a Class 4 in a bombing of his automobile. The murderers felony. Defendant had kidnapped the victim with were subsequently convicted, but in 1980 their the intention of extorting money from him. The

57 Criminal Division

victim was in the defendant's custody for 24 unit frequently takes a proactive role in major hours. During this time the defendant simulated a investigations to ensure that search warrants, drug ripoff and inurder to frighten the victim. financial search warrants and electronic surveillance Defendant was sentenced to probation by Judge are effectively used against drug traffickers. Lindsay Ell is. Recently, the Drug Racketeering Unit helped Drug Free School Zone Program develop a prosecution strategy for narcotics cases for federal , state and county prosecutors. This Over the past year, at the direction of Grant strategy assures that cases with a particular interest Woods, the Attorney General's Office has been are prosecuted by an agency that is capable of working and developing Drug Free School Zones. devoting specific resources to such prosecutions. This process includes working with law Thi s coordination is anticipated to generate enforcement and school districts, and implementing considerably more cases initiated by federal comprehensive pl~s to create safe havens on agencies for state prosecution. school campuses. Specifically, it involves zero to lerance for drugs and other crimes on campus, Although the sensitive nature of the cases th at this and long-term solutions for drug and alcohol unit prosecutes precludes detailed discussion of problems. To date, we h&-ve implemented the pending cases, the following is a sample of the program in many school districts in Arizona and, types of cases handled by this unit and their hopefully, by the end of this school year, the disposition: program will be ful ly implemented state-wide. State v. John Kenton Gilb ert, et. al DRUG ENFORCEMENT SECTION The State Grand Jury in dicted five Tucson area The Drug Enforcement Section of the Attorney individuals for conspiracy to sell marijuana, sale of General's Office is a relatively new section of the marijuana and illegally conducting an, enterprise. office, which is composed of two distinct units. This enterprise exported approximately 25 0 pounds The Drug Racketeering Unit is responsible for the of marijuana ($25 0,000) every two weeks between criminal prosecution of major narcotics cases. The October, 1990 and March, 1991 . Defendants Maria Financial Remedies Unit, by comparison, is Romero and L uz Bacahui entered guilty pleas and primarily responsible for initiating civil forfeitures were sentenced to probation. Maria Romero was of assets acqui red with drug proceeds or used in sentenced to three months in jail as a condition of illegal drug activities. The consolidation of these probation. Lawrence Bacahui pied guilty and was two units has had a positive affect on narcotics sentenced to 5.25 years in prison. John Gilbert and investigations and prosecutions by providing a Rene Rornero were tried over three weeks (April - more thorough and coordinated approach to May, 1992). Both were convicted. Gilbert was narcotics interdiction. sentenced to 10. 5 years in prison. Romero is a fugitive. Drug Racketeering Unit State v. Darrell Bryant Ketchner The primary objective of the Drug Racketeering Unit remains the aggressive prosecution of Thi s case involves the distribution of cocaine in the individuals and organizations involved in drug Kingman area from 1982 - 1988. Defendants are trafficking, money laundering and other types of charged with Conspiracy to Sell Cocaine, Sale of ill egal activities. The unit enjoys an outstanding Cocain e, and Illegally Conducting an Enterprise. working relationship with various federal, state and Defendant Darrell Ketchner pied guilty to local law enforcement agencies. Consequently, the conspiracy to sell cocaine. On July 24, 1992 he

58 Criminal Division

was sentenced to 10 years in prison in the defendants are pending trial before Judge Hertzberg Department of Corrections. Defendant Fetrow pied (currently scheduled for 8/24/92). guilty to Conspiracy to Sell Cocaine (Class 2 Felony) from, 1982-85. He received probation in State v. Russell Jay Singleton return for cooperation with the State. Peterson also agreed to cooperate and testify. He pied guilty to On March 11, 1992, 3 2 pounds of a Class 4 Felony, possession of cocaine. Both will methamphetamine were seized from a storage be sentenced on September 3, 1992. locker in Spring Valley, Arizona, rented by Russell Singleton. Subsequent investigation involved State v. Ramos-Chavez (JI) executing many additional search warrants and interviewin g witnesses. This case is pending trial. This was a large cocaine-heroin distribution ring operating between California and Phoenix, Arizona. State v Robert Villalobos Those defendants apprehended have been convicted and given the following sentences: This case involves a reverse sting by the Department of Public Safety involving 100 pounds Guadalupe Armenta - 36 months probation of marijuana. The defendants showed up with $80,000 in U.S. currency to take delivery of the Javier Corral - 4 months in jail, 84 months marijuana. The case is pending trial. probation The Drug Racketeering Unit has established itself Raul Landerros - 168 months jail as an aggressive and innovative group of prosecutors. It is dedicated to providing training for Oscar Manual Ramos - 84 months in prison law enforcement agencies and to identifying and prosecuting all aspects of drug trafficking Jose Santos Ramos-Chavez - 84 months in enterprises. pnson Financial Remedies Unit Luis Enrique Ramos-Chavez - 108 months in pnson The fundamental goal of the Financial Remedies Unit is to use civil remedies against drug traffickers Maria Sanchez - 6 months in jail, 60 months and their enterprises. Through the use of civil probation forfeiture, the unit deprives drug traffickers and financiers of the substantial profits that encourage Frandsco L. Verdugo - 84 months in prison illegitimate activity. This unit is nationally regarded as the premier unit of its type and its Other Defendants remain fugitives. members are frequently called upon to assist other states and federal agencies in establishing similar State v. Alberico Pietrocarlo units or developing model legislation.

Pietrocarlo is one of the most infamous drug A major focus of this unit has been the dealers in Arizona. This is the 6th time he has investigation of those businesses that assist drug been caught. This case involves marijuana traffickers in laundering their illegitimate proceeds. trafficking by Pietrocarlo and two confederates, This unit has joined with other law enforcement including a delivery of a 10-pound sample of agencies in pursuing state, national and marijuana and tape recorded conversations about international businesses that engage in money the delivery of 300 pounds of marijuana. All 3 laundering activities. The following projects are

59 Criminal Division

operated through the Financial Remedi es Unit. focus civil and crimin al remedies on the drug industry alo ng our southern border. Legal and FORFEITURE SUPPORT PROJECT investigative resources are being increased in Tucson, and an investigative office has been leased The Forfeiture Support Project, funded by ACJC, is in Nogales to further this project. a team of investigative, financial, analytical, and legal speciali sts whose goal is enhancin g the power SPECIAL INVESTIGATIO NS SECTION of local agencies and prosecutors to use effective civil remedies. Its focus is depriving drug The Special Investigations Section is a section traffickers and financiers of the profits that give within the Criminal Division of the Attorney them the incentive to capitali ze, and operate their General's Office th at provides investigative drug enterprise. Servi ces provided by th e project support for the Attorney sections of the office. The in clude location and financial analysis of assets; section has 60 employees, 52 of whom are computerized asset and evidence tracking; property investigators, analysts or auditors. The section is management; statewide currency transaction and divided in to nine units: Consumer Protection Unit, movement analysis; financial investi gation; Tucson Un it, Major Fraud Unit, Special Proj ects li tigation of selected cases; and filing of amicus Unit, Organized Crime Unit, Environmental Crimes briefs in civil racketeering appeals. Unit, Fin ancial Remedies Unit, AHCCCS Unit, and Administrative Staff. Supporting county attorney litigation has been a major part of Forfeiture Support Proj ect case~. The The Special Investigations Section provides project has cooperated in major civil litigation with expertise in the specialized areas of prosecution. each of the four border county attorneys during the That expertise is generall y not avai lable at other past year. During the past year, the property law enforcement agencies. Many of the cases management function has expanded dramatically, described in other portions of the Criminal Division and new contracts have been negotiated with a report were investigated by the Special broader group of contract property managers to Investigations Section. meet the needs of the Ari zona civil remedies community. ENVIRONMENTAL E NFORC EMENT S ECTION

HIDT A TARGETING AND PROSECUTION This section 's function is to represent the State of Arizona and to advise all state agencies on HIDTA is a federal grant which provides funding environmental enforcement matters, both civil and for drug enforcement in the Southwest Border criminal. The section 's principal cli ent is, of whi ch has been designated a High Intensity Drug course, the Arizona Department of Environmental Trafficking Area. HIDT A funding has enhanced Quali ty, to which it supplies all legal services, two unit abi liti es: First, the funding will support consisting of day-to-day legal advice, assistance in the Unit's evolving efforts to obtain and use the rule development process, and representation in financial and transaction reporting data to guide all ci vil li tigated matters including administrative statewide resource allocation, improve strategic and judicial prosecution and defense. The section (regional and categorical) targeting, enabl e tactical also prosecutes, in behalf of the State, persons (case-specific) targeting and support all accused of violating the criminal environmental investigations. laws of the State, and, where appropriate, together with the federal government, violations of federal Second, HIDT A funds support major long-term environmental laws. The section is charged with joint proj ects with the U.S. Customs Service and the responsibility of prosecuting, in behalf of the other state, lo cal, and federal agencies designed to Department of Agriculture, civil violations of the

60 Criminal Division

state pesticide laws. in the legislative process.

The section is also deeply involved in providing Working with this section is the Western States assistance in the development of environmental Hazardous Waste Project, staffed by four people, legislation for the office itself, and, where called including its project director. This project was upon, the Arizona Department of Environmental established pursuant to a grant awarded from the Quali ty and the Legislature. The section, through United States Environmental Protection Agency in the Water Rights Adjudication Team (WRAT), 1987 and consists of fourteen members: Arizona, represents the State as a claimant under the Gila New Mexico, California, Utah, Colorado, Nevada, and Little Colorado General Stream Adjudications. Idaho, Oregon, Washington, Alaska, Hawaii, special civil cases deali ng with the adjudication of Alberta, British Columbia and the Defense claims to the use of water on those streams and Criminal · Investigative Service. The project their tributaries. In this connection, WRA T coordin ates hazardous waste management and represents primarily the State Land Department, general environmental enforcement throughout the which has filed some 8,000 claims on over 9.6 western United States and Canada, and provides million acres of trust land, the Game & Fish information and training to state personnel involved Commission, which has filed 150 claims in 10 in the enforcement of the laws dealing with adjudication areas, and the State Parks Board with hazardous waste, air pollution, water pollution, and claims for recreation and historic parks. WRA T so lid waste, including lawyers, investigators, and also represents several other state agencies, technical staff. including the Board of Regents, Community College Board, National Guard, Department of Civil Environmental Enforcement Unit Transportation, and the Department of Corrections in this litigation. This unit is staffed by its unit chief, ten staff attorneys, one paralegal, and five legal secretaries. The section is staffed by nineteen lawyers, including its chief counsel; civil, criminal and Among the specific matters handled by the Civil water rights unit chiefs; fifteen staff attorneys, an Environmental Enforcement Unit during the past administrative assistant, four technical support staff year are the following: members, three paralegals, a historian, a librarian, eight full-time secretaries, and a receptionist. State v. Allied Aircraft Sales, Inc.

In summary, the Environmental Enforcement A Civil Complaint had been filed all eging that this Section 's responsibilities include general agency Tucson-based aluminum recycler had illegally advice to the Arizona Department of Environmental disposed of approximately 3000 tons of aluminum Quality and, as requested or required by particular containing high levels of lead and cadmium. A circumstances, to other state agencies on consent judgment was executed by the parties environmental matters; rule development assistance; pursuant to which Allied Aircraft paid a civil the prosecution and defense of civil matters, both penalty of $120,000 and proceeded with the administrative and judicial, including injunctive cleanup of the property. relief, civil penalties, "fines" and damages; investigation and prosecution of all eged violations Alan Auto Sales of the criminal environmental laws of the State and, as appropriate, of the federal government; the This case involved the delivery by a Scottsdale civil prosecution of pesticide cases in behalf of the used car dealer to its customers of used cars that Department of Agriculture; and heavy involvement had not passed the emissions and tampering in the development of legislation and participation inspections required by law. The Superior Court

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ordered the closure for 90 days of the dealership A settlement was reached with the Town of and a $3,000 civil penalty. The matter was Fredonia requiring the installation of a water appealed to the Arizona Court of Appeals, Division filtration system and the payment of a $ 10,000 civil l, but before the appeal was perfected, it was penalty. This was achieved in a lawsuit in which withdrawn by Alan Auto Sales. it was alleged that the town had fai led to install anadequate filtering system to disinfect its own Mountain View Water Company water. The town was required further to employ a certified operator for the system, provide public An injunction was issued by the Apache County notice of the violations set forth in the settlement Superio r Court against this drinking water company and to submit appropriate and adequate sampli ng lo cated in the Saint John's area requiring it to reports to ADEQ follow state guidelines and to monitor contaminants in its water supply. The company was also Talley Industries directed to submit an engineering study addressing the repairs and modifications needed to bring the This case involved numerous hazardous waste system up to state standards. violations by this large defense contractor including an explosion on its premises. A consent judgment Page Steel was executed whereunder Talley agreed to a $500,000 civil penalty. A consent judgment was executed with the owners of Page Steel, a commercial steel fabrication and TRW, Inc. sales company, based upon violations by the company of Air Quality Laws. Under the terms of This case involved the illegal storage of hazardous the judgment, the company agreed to stop waste by this company for a period beyond that unpermitted open burning and operation of an authorized by law, thereby effectively turning it aluminum sweat furnace and pay $2,500 in civil into an unpermitted treatment, storage, and disposal penalties for illegal burning which occurred in its facility. The matter was settled by a consent yard. Additionally, the company appli ed for a judgment whereunder TRW agreed to pay a $3,500 permit to operate the furnace. civil penalty.

Scottsdale Nissan Tyson Wells RV Park

This case involved the delivery by this Scottsdale This case involved violations of law by this automobile dealership of several untested used wastewater treatment facility. A consent judgment vehicles to retail customers. A settlement was was entered into whereby the facility agreed to a reached with the company whereby its authority to civil penalty of $5,000. inspect vehicles under the fleet emissions provisions of the law was suspended for 90 days Mobil Oil Corporation and the company agreed to pay a $17,000 civil penalty. The Department of Environmental Quali ty This is an ongoing matter in Superior Court in subsequently agreed to a reduction in the terms of which a preliminary injunction was obtained the suspension because of the dealership's prompt requiring Mobil to take corrective action in efforts to set up safeguards sufficient to control response to gasoline contamination at a former future violations. service station site in Yuma. The matter, in which we are seeking up to $15 million in civil penalties Town of Fredonia and a permanent injunction against future violations of this nature, 1s scheduled for trial on

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September 22, 1992. Circle K

19th Avenue Landfill This case involves the bankruptcy of Circle K Cor­ poration to the extent that, in the bankruptcy The City of Phoenix and the State of Arizona proceeding, the corporation is attempting to reject entered into a consent agreement requiring the city leases at a number of its retail store sites in to implement the estimated $42 million cleanup of · Arizona and across the country which have leaking the 19th Avenue landfill. In the agreement, the undergroundstorage tanks. This section is involved city agrees to assume all costs of remediation in monitoring those actions and contesting them on including the State's oversight costs and all any sites where the corporation has underground unknown future contingencies, including potential storage tanks which have leaked product into the groundwater remediation. In State v. Motorola, a environment. Six states have joined Arizona in related cost recovery action, the State and the city U.S. Bankruptcy Court and U.S. District Co urt of Phoenix sued 17 companies seeking recovery regarding the rejection of le~ses by Circle K of from those generators, transporters, and property stores which have leaking underground storage owners for past and anticipated future response tanks. costs of remediating the landfill. To date, nine settlements have been negotiated for a total Water Rights Adjudication Team recovery of $20,670,000. Two significant events occurred in the Gila BF! Landfill Adjudication, a very complex superior court case, in which approximately 65,000 rights to the use of This was an application for a permit by BFI to surface water and groundwater must be confirmed construct and operate a landfill on the banks of the in trial proceedings that will continue for several Agua Fria river in El Mirage. The landfill would years. First, our office examined more than 10,000 have posed a serious danger downstream in the claims in the San Pedro sub-watershed on behalf of event of flooding, as well as to contiguous the State Land Department and filed 409 objections properties. This section assisted ADEQ in review to protect state interests. Hearin gs likely will of the permit by providing all legal services commence next year. Second, the Supreme Court necessary and the permit was ultimately denied of Arizona in a special interlocutory appeal with no appeal taken by BF! Redi Strip; Tri -City confirmed the validity of special statutory Oil; Saguaro Campground; and Sunbelt Refining procedures followed by the State in commencing Company: Complaints have been filed in Superior this litigation. It also upheld other rules adopted Court against these companies alleging numerous by the trial court to ensure that the 12,000 Gila violations of the environmental laws of this state parties can participate without burdensome cost. consisting of hazardous waste violations (first two The Attorney General acted as lead counsel in this companies), drinking water system violations, and proceeding. We have also filed briefs in a second air qual-ity installation permit violations interlocutory appeal wherein the Supreme Court has respectively. These actions are currently pending. agreed to review the fundamental laws of our state concerning the relative priority between surface and Phil Barnes Aviation groundwater users who are or may be competing for the same water supply. This case will be A complaint has been filed in the United States argued in the fall, with a decision expected next District Court against this company for hazardous sprmg. waste violations stemming from unlawful discharges of hazardous materials. The Litile Colorado Adjudication is a case similar to Gila, with another 20,000 rights in Northern

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Arizona at issue. During the past year, our office to the crimes after they are committed. The Unit's served as lead counsel in preparing a pretrial obj ective is to see that tomorrow's environmental statement defining all issues that will be determined clean-up problems are avoided by today's efforts. in a precedent-setting trial scheduled to start in December. Also, settlement negotiations have The Criminal Environmental Enforcement Unit has begun involving the Navajo and Hopi Tribes and provided two workshops for state and local law non-Indian water users in the Little Colo rado basin. enforcement officers this past year to educate them While representing state proprietary and regarding the detection and prosecution of environ­ environmental interests in the negotiations, we have mental crime. These workshops were a part of the chaired some of the sessions and faci li tated the periodic conferences of the Arizona Law exchange of information among parties. We expect Enforcement Coordinating Committee. the pace of negotiations to increase next year and wi ll continue promoting settlement as an alternative The unit had previously established three to protracted and costly trials. environmental crime task forces in central, southern and northwest Arizona to provide assistance to and Criminal Environmental Enforcement Unit coordination among state, county and local govern­ ments in environmental enforcement. The newest The Criminal Environmental Enforcement Unit task force is the environmental crimes task force of investigates and prosecutes cases involving criminal the State/Federal Law Enforcement Coordinating violations of the state's environmental laws, and Committee (LECC). provides investigative assistance to the Arizona Department of Environmental Quality. It performs The unit conducts periodic training sessions for the background investigations on businesses and Department of Environmental Q uality and with persons seeking permits from the state to operate local governmental agencies involved in businesses involved in the treatment, storage, environmental enforcement to fami li arize personnel ordisposal of hazardous waste. The unit also in these agencies with the criminal enforcement investigates allegations of organized crime provisions of both state and federal environmental involvement in the hazardous waste industry. law. The unit has also sponsored the attendance of the Department of Environmental Quality and The primary purpose of this unit is to prosecute Arizona Game and Fish Department personnel and cases and seek substantial penalties, including police officers from Phoenix, Bullhead City, possible incarceration in certain cases, to: I) deter Tucson, Tempe and the Department of P ubli c other potential misconduct and environmental Safety at the Federal Law Enforcement Training abuse; 2) reduce the competitive advantage and Center's program on environmental crime. economic incentive of disregarding the environmental statutes; and 3) seek a just Members of the unit also appear before private punishment for offenders. organizations at seminars to educate the private sector about their responsibilities and li abilities Environmental crimes may directly affect our under the state's environmental laws. health today or the health of generations to come. They are crimes that place an immeasurable cost on Among the significant matters handled by the the public treasury in contending with the still­ Criminal Environmental Enforcement Unit during undetermined effects in cleaning up existing sites, the past year are the following: and in trying to apprehend the violators. The Criminal Environmental Enforcement Unit is State v. Edlin attempting to aggressively seek out and predict where criminal offenses will occur rather than react On January 28, 1992, the defendant Denny Edlin

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was indicted by the State Grand Jury for knowingly disposed of at the Pi ma County Tangerine Landfi ll and illegally disposing of hazardous waste. The between September, 1988, and April , 1989, defendant abandoned approximately sixty drums of according to the indictment. This case is pending. chemicals containing hazardous waste in storage lo ckers in Tucson, Arizona. Among the chemicals State v. Atlas, et al. present were methyl ethyl ketone, a highly dangerous explosive upon exposure to heat or On April 22, 1992, the State Grand Jury returned flame, formaldehyde, sodium cyanide and sodium an indictment against Atlas Construction Company, azide. The defendant entered a guil ty plea to Inc. and three corporate officers charging them with reckless disposal of hazardous waste on September violations of Arizona's hazardous waste laws. The 3, 1992. As part of the plea agreement, the eight-count indictment also charged conspiracy to defendant has agreed to clean up the site at a cost violate the state's hazardous waste laws and of $3 0,000-$40,000. In addition, the defendant will obstructi ng a criminal investigation Atlas reimburse th e Department of Environmental Quality Construction Supply is a wholesaler of concrete and the Attorney General's Office for investigative building products located in San D iego, California. costs and expenses incurred in the matter. The company has a branch in Phoen ix. The indictment all eged that sixteen to twenty drums of State v. Sunbelt Refining Company miscellaneo us chemicals constituting hazardous waste were dumped in the desert near Avondale, Sunbelt Refining Company, near Coolidge, Arizona. Trial is currently set for November 9, Arizona, has been in dicted by the State Grand Jury 1992. on criminal charges for conspiring to rig a device that ensures air pollution control equipment is State v. Daley functioning and for maintaining false records. The indictment names Sunbelt Refining Company; In a joint prosecution the Arizona Attorney Huntway Partners, the parent company; and plant General's Office and the United States Attorney's manager Loren Pritzel, charging two felony counts Office cooperated in a clean water felony of conspiracy and fraudulent schemes and practices. indictment against Dennis Daley for discharging The indi ctment resulted from a tip received by state pesticides into the Escapul e Wash, a tributary of officials that a monitoring device had been the San Pedro River. Daley has entered a plea of disconnected and that false air quality information guilty to violating the Clean Water Act, a felony, was being recorded on an electronic chart graph. and agreed to pay $3 0,000 in restitution. Thi s case is currently pending. State v. Collins, dba Mohave Valet Cleaners State v. Hazchem In a joint prosecution with the Mohave County In the first case of its kind, a Tucson environmental Attorney's Office, the defendant was charged with consulting firm has been indicted on criminal fraud one count of ill egal disposal of hazardous waste. and other charges for its part in dumping hazardous The wastes were generated as a result of the dry waste at a Pima County land fi ll. This is the first cleaning operations. On January 6, 1992, the case in Arizona in which an environmental defendant was sentenced to two years probation, consulting firm has been indicted for an including ten days in j ail and $3,000.00 fine. The environmental crime. The charges resulted from a defendant also agreed to pay all clean up costs Joint investigation by the Arizona Attorney resulting from the disposal. General's Office and the Pima County Attorney 's Office. The hazardous waste, consisting of sludge State v. Bradiey from an electroplating operation, was ill egally

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On January 30, 1992, the defendant Lloyd E. complicated and require a substantial time Bradley was charged with knowingly and illegally commitment by the assigned section attorney. The discharging a pollutant into the waters of the state section also prosecutes cases referred by the Real and criminal littering or polluting. The incident Estate Department. These cases often involve occurred in Coconino County, Arizona. The violations of the securities laws. defendant, according to the complaint, disposed of approximately 300 pounds of construction debris State v. John Lawrence Pomerenke and concrete into an unnamed wash in northern Arizona. The case is pending. Pomerenke, dba J.P. Lawrence & Co., defrauded over 180 investors out of approximately $5.2 ORGANIZED CRIME AND FRAUD SECTION million in connection with a fraudulent investment scheme involving various stock and commodities The Organized Crime and Fraud Section markets. Pomerenke has pied to two counts of investigates and prosecutes white-collar and theft, and under the plea agreement he has agreed organized criminal activity including, but not to a ten-year prison term, · followed by 5 years li mited to, securities fraud, computer fraud, probation and full restitution to the victims. The AHCCCS (Arizona Health Care Cost Containment investigation is continuing to determine crimin al System) fraud, telemarketing fraud, charity fraud, culpability of others involved in the operatio n of tax fraud, public corruption, insurance fraud, the company. embezzlements, and other types of financial crimes that fall within conspiracy statutes. The section has State v. Janssen and Kossick also resolved some matters by using the civil remedies set forth in the RICO Statutes and has Janssen and Kossick, dba LaJolla Properties, additionally handled forfeitures in connection with engaged in a fraudulent real estate scheme from at the cases prosecuted by the section. The section least July, 1986 through December, 1987. At least attorneys have also handled some cases forwarded 22 victims lost a total of $1,8 15,152 in connection to the office because another prosecuting agency with the scheme. Trial set for November 4, 1992. had a conflict of interest. State v. Peterson During FY 1992, the Organized Crime and Fraud Section was involved in hundreds of investigations Mr. Peterson was involved in a scheme whereby he and numerous significant prosecutions. To negotiated to purchase distressed properties, would facilitate the investigative and prosecutorial take them over before paying a cent, and would process, the attorneys assigned to the Organized sell off assets or trade the properties to others for Crime and Fraud Section administer and work cash, even though he had no clear title. The closely with the Arizona State Grand Jury. The properties included hotels, a yacht, artwork and a fo llowing cases, categorized by subject matter, are fishing lure company. Victims lost in excess of examples of matters the section attorneys handled $2,000,000. Peterson was sentenced to 5 years th is past year. prison, followed by seven years probation.

Securities and Real Estate Fraud State v. Puglisi

The Organized Crime and Fraud Section prosecutes Defendant, a licensed investment broker, convinced cases generated by the Securities Division of the twenty-one of his clients to transfer funds into his Arizona Corporation Commission, which provides name so he could re-invest for them. Puglisi did expert staff attorneys who assist in the criminal not invest the funds, but embezzled them for his case prosecution. These cases are generally very own uses. He stole $600,000 from twenty-two of

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his clients. Puglisi plead guilty to one count of Harper and Mehren, mortgage brokers, placed class 3 felony theft and was sentenced to five years investors in speculative real estate investments, probation, one year of jail, and ordered to pay misrepresenting to them the nature of the risk res ti tuti on. involved and, in some cases, omitting to disclose to investors that properties were in default on trust State v. Smith & Yocum deeds. The loss to the 1200 victims exceeded $50 milli on dollars. In addition, investor money was Smith and Yocum sol9 over $4 mi ll ion in general secretly diverted to Mehren. A racketeering and limited partnerships in various real estate j udgment in the amount of $1 0 million doll ars was ventures to over 200 investors nationwide. entered against Harper and Mehren, with Harper Suspects put all of the various partnerships into also sentenced to nine years in prison and Mehren financial collapse by taking kickbacks, ch urn ing sentenced to ten years in prison. Controller Robert bogus transactions, and embezzli ng funds. Smith Carone was convicted of a felony based on his and Yocum were indicted for 12 counts of theft. removal of money from Harbor Financial after it Smith pleaded guilty to one count of theft and was became insolvent and before creditors took control sentenced to ten years prison. Yocum is awaiting of the assets. Carone has made fu ll restitution. trial. The AHCCCS Fraud Control Unit State v. Corrigan The AHCCCS Fraud Control Unit 1s a 75% Corrigan was a promoter who solicited investors in federall y funded group of attorneys, investigators, various private offerings. He was convicted of auditors, and administrative staff who engage in the embezzling $470,000 from 18 of his investors and investigation and prosecution of medical provider was sentenced to 7 years probation, I year fraud and patient abuse/neglect affecting the incarceration and restitution. Arizona Health Care Cost Containment System (AHCCCS). The unit is primaril y located in the State v. Ehrman Offices of the Arizona Attorney General in Phoenix. In January, 1991, a Tucson branch was Licensed stock broker used investor money for hi s established with one attorney and one investigator. own gambling debts. He was convicted of steali ng The personnel at both the Phoenix and Tucson $430,000 from 11 cli ents and was sentenced to Offices occupy a designated area within the probation, restitution and one year of jail. Attorney General's Criminal Division. Currently, the unit is staffed with one attorney/director, two State v. Miller assistant attorneys general, two supervising special agents, five investigators, three auditors, one Defendant collected $93,000 from 8 investors to medical program services review speciali st, three purchase land. He made the first two of the fi ve legal secretaries and three data entry personnel. payments, but kept the investors' third install ment. Unpaid, the seller defaulted the property and the During the past twelve months, the unit has worked investors were out their entire investment. on 111 cases which are categorized as follows: Defendant was indicted on eight counts of securities fraud, sale of unregistered security, sale AHCCCS contracted plan of security by unregistered salesman, and one count provider personnel 4 of theft. Case is pending trial. Nursing home facilities 11 . Nurse's aides 29 State v. Harper. Mehren and Carone Nursing home employees 2 AHCCCS employees 2

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Patient family members . ""."" "" .. 7 required to pay $171,623 including interest. Residential care homes .. "." ". 6 Transportation providers ...... 3 The following is a short summary of some of the Respiratory Therapists ...... 2 cases the AHCCCS Fraud Control Unit has Home health care workers ...... 6 prosecuted during the past 12 months. Clinics ...... 2 Medical doctors/Osteopaths . . . .. 21 State v. Yantz Dentists ...... 2 Nurse Practitioners ...... 2 A complaint was filed in Glendale Justice Court, Pharmacy ...... 4 charging nurse's aide, Yantz with two counts of Medical equipment suppliers 3 aggravated assault, class 6 felonies. While working Lab 3 at Colter Village, Yantz slapped a Village, male Miscellaneous 2 resident with his hand. Yantz pied guilty to one count of assault, a class 1 misdemeanor and was Twelve individuals and three facilities were sentenced to three years probation, 48 hours of charged with criminal conduct relating to the work order program and $1,080 in costs and fines. AHCCCS program. Of those indictments/complaints of various crimes and State v. Todd, Quiburi Mission Samaritan Center charges, seven involved allegations of abuse/neglect; four involved allegations of fraud; Nurse's Aide Todd was charged with one count of three involved charges of forgery; one theft of assault and two counts aggravated assault in funds belonging to patients in AHCCCS contracted connection with incidents involving three different long term care facilities; two involved allegations patients in an ALTCS contracted skilled nursing of neglect and one involved allegations of sexual facility. Todd entered a plea of no contest to one abuse. count of aggravated assault, a class 6 felony and was sentenced to three years probation and a fine The Unit has obtained eleven conv1ct1ons during of $685. the past year. Seven for patient abuse, one for theft of patient funds, one for securing the proceeds State v. Hamer of an offense (kickback), one for theft (kickback), one for fraud, and one was for illegal enterprise, A complaint was filed charging Harner with one fraud, forgery, aggravated assault, and neglect. count fraudulent schemes and artifices, one count of theft pursuant to A.RS. § 13 - 1802(A)(2), and A total of fifty-one abuse/neglect/financial one count of theft pursuant to A.RS. exploitation complaints were investigated by the § 18- 1802(A)(3). The indictment all eged that unit, usually in conjunction with the Arizona Harner, a payee for purposes of receiving social Department of Health Services, the AHCCCS security benefits for her mother, who was in a Administration, Arizona Adult Protective Services nursing home, converted over $15,000 to her own or the Attorney General's Elder Abuse Project. Of use rather than pay the required share of the cost to those cases, twenty-three are still active the nursing home for AHCCCS benefits. Hamer investigations, fifteen have resulted in filed charges, pied guilty to one count theft, a class 3 felony and twelve have been closed due to insufficient was sentenced on that day to three years probation, evidence and one closed pre-indictment as $10,542.77 restitution and $2,500 costs of defendant voluntarily paid $3,000 recovery to the prosecution. victim. · The Unit is also responsible for the imposition of $145,000 in federal civil monetary State v. Jaskiewicz and Higbee (I); State v. penalties reached against a physician who will be Jaskiewicz and Martin Higbee (II)

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Jaskiewicz, a licensed Family Nurse Practitioner State v. Cook and the head of Pima Long Term Care Services (PL TCS), the Pima County agency responsible for Cook, co-proprietor of Angel's Quality Care, an the care of Medicaid eligible long term care adult care facility located in Clay Springs, Arizona, patients, and Higbee, a non-tenured clinical was charged with two counts of fraudulent schemes associate professor with the University of Arizona and practices, in connection with false statements Col lege of Pharmacy, were indicted on fraud and made to Department of Health Services surveyors conflict of interest charges stemming from their concerning his relationship to AHCCCS member involvement with two drug studies conducted on Louise D unning Cook entered guilty pleas to both PL TCS patients by the defendants. The cases were counts, in connection with a pre-indi ctment plea consolidated for a six week trial before a Pima agreement. Cook was sentenced to three years County jury which returned guilty verdicts for probation, I 00 hours of community service and Jaskiewicz on two co unts of fraudulent schemes $200 in fines. and artifices and two counts of failure to disclose conflict of interest. Higbee was acquitted of all State v. Siegel counts. On August I 0, 1992, Jaskiewicz was sentenced to two years probation. Three former officials of what was once the second largest health care providers under the Arizona State v. Wa ltermann Health Care Cost Containment System (AHCCCS) program were indicted on July 28, 1989 for alleged A direct complaint was filed in Maricopa County theft of $1, l 00,000 of AHCCCS funds through Superior Court, charging respiratory technician, thefts and frauds. Defendant entered plea of guilty Hugh Waltermann with three counts of sexual on July 1, 1992 to three counts faci litation of abuse, pursuant to A.RS. § 13 - 1404, class 3 thefts, class 6 felonies. Siegel was sentenced to felonies and two counts of sexual abuse, pursuant three years supervised probation, $8,619 restitution, to A.RS.§ 13 - 1404, class 5 felonies. Waltermann, $50,000 costs of prosecution, $50,000 whi le employed at Hacienda De Los Angeles, a reimbursement for attorney fees, $14,000 fine skilled nursing home, all egedly sexuall y fondled payable in fu ll on November 2, 1992 to the the breasts of a ten-year-old unresponsive Attorney General's Anti-Racketeering Fund. post-drowning victim female patient and a patient over the age of 14 years who was in a persistent State v. Hirsch vegetative state. Defendant was sentenced to three years probation State v. Carbajal & Angel's Quality Care on his conviction of one count of fraudulent schemes and practices, a class 5 felony and two Adult Care faci li ty Angel's Quality Care and its counts of faci litation of theft, class 6 undesignated co-owner, James Carbajal, were indicted on charges felonies. Defendant is subject to exclusion for five of fraud, forgery, aggravated assault, and neglect in years as a medicare/medicaid provider; Defendant connection with the operation of the business with paid a fine of $ 14,000 in full at sentencing; respect to recruiting patients and caring for them. $50,000 in costs of prosecution and up to $40,000 Carbajal plead guilty to illegally conducting an in restitution. Defendant's medical license in enterprise, fraud, forgery, aggravated assault and Arizona has expired. neglect. On June 6, 1992, Carbajal was sentenced to twenty-one and a half years incarceration; five State v. Killingsworth years probation upon release and $24,692.25 restitution. Defendant was sentenced on July 31, 1992 on two counts of facilitation of thefts, class 6 undesignated

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felonies involving her act1v1tles at Health Care Insurance Fraud Providers and was sentenced to three years probation; restitution of $4,556; $5,000 cost of The Organized Crime and Fraud Section prosecuted appointed attorney fees; and a fine of $5,400. insurance fraud matters referred by the_ Arizona Department of Insurance, the Insurance Crime A1·izona Depa1·tment of Revenue Prosecutions Prevention Institute, various insurance companies throughout the country, and law enforcement One attorney in the Organized Crime and Fraud agencies around the state. The cases range in Section works exclusively on criminal referrals complexity from matters as simple as individuals generated by the Arizona Department of Revenue. staging accidents to collect on insurance policies to A brief sample of the cases prosecuted this year sophisticated arson rings that stage fires to collect follows. the insurance proceeds.

State v. Aldabbagh & Abuhamdieh State v. Blewer

Aldabbagh and Abuhamdieh own and operate Owner of a variety store business in Casa Grande numerous topless bars and show clubs in Arizona is charged with arson and insurance fraud arising and other states. D.P.S. has been investigating from the destruction by fire of that business in them on various charges for some time and January, 1990. Case is awaiting trial. requested a Department of Revenue investigation. On May 19, 1992, the State Grand Jury indicted State v. Lester each defendant on 9 counts of failure to file personal and corporate income tax returns. The Lester was indicted on 4 counts of fraudulent matter is set for trial. schemes and artifices, 2 counts of attempted fraudulent schemes and artifices, 4 counts of theft, State v. Rifley 2 counts of attempted theft and 5 counts of fraudulent insurance claims in connection with his Rifley is a paving contractor who has under receipt of more than $20,000 from a number of reported his income and whose companies have not insurance companies pursuant to fraudulent remitted their sales tax. Department of Revenue personal injury claims. Lester has been extradited estimates that Rifley owes hundreds of thousands from the State of Washington, and a trial date has in state taxes. The State Grand Jury indicted been set. Rifley and his wife on twenty-one counts of fraudulent schemes and artifices, failure to file State v. Berenter, Holowach, Malloy, and O 'Bier corporate returns, and filing fraudulent personal returns. This case evolves out of a cooperative investigation between the Department of Insurance, the Registrar State v. Bonato of Contractors, the Phoenix Fire Department, the Mesa Fire Department, the Insurance Crime The case is part of the Bullhead City Project Prevention Institute, and the Attorney General's ("Operation Tax Cheat"), wherein approximately Office. As a result of the investigation, an arson thirty people in Mohave County were prosecuted insurance fraud ring was exposed and a public for failing to file Arizonan income tax returns. insurance adjuster lost his license. The State Grand Joseph and Marla Bonato were indicted on three Jury indicted four defendants all eging that they had counts of failure to file, class 5 felonies. They engaged in a complicated insurance and arson fraud have admitted to one count each. The matter is set scheme resulting in the loss of thousands of dollars for sentencing. by insurance companies throughout the country.

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To date, all four defendants have pied guilty, one contractors, were indicted by the Arizona State defendant is awaiting sentencing. Grand Jury on bribery-related charges arising from kickbacks paid by contractors to Window Rock State v. Allen School District officials. The investigation, a joint effort of the F.B.I., the Apache County Attorney's All en pied guilty to embezzling approximately Office and the Attorney General's Offic e resulted $700,000 from an insurance company while acting in guilty pleas by all ten individuals. Several as its authorized local agent. Allen admitted defendants have been sentenced, with the school creatin g phony loss files and nonexistent companies district director of buildings and grounds receiving to assist in his scheme. two years in prison and ordered to pay $200,000 restitution; the high school principal receiving six Public Corruption months in jail; and the plumbing/sewer contractor being ordered to pay approximately $160,000 in The Organized Crime and Fraud Section racketeering damages for kickback payments made, investigates and prosecutes matters involving non-performance and inferior performance on jobs. criminal conduct committed by state, county, and local employees and public officials. The most Miscellaneous Financial Crimes significant prosecutions conducted th is year are summarized below. In addition to the cases already mentioned, the section attorneys prosecuted and investigated cases State v. Hartgraves involving computer fraud, exploitation of the elderly , home improvement frauds, telemarketing Hartgraves, former deputy superintendent of the fraud, investment schemes, worker's compensation Arizona Department of Education, pied guilty to fraud, fraud perpetrated against the state or its fraudulent schemes, bribery and money laundering agencies, chop shops, and trafficking in stolen in connection with his corrupt issuance of property. A representative sample of these cases fraudulent school supplies contracts totaling nearly follows. $1,000,000. Hartgraves made payments for non-existent materials and inferior materials, after State v. Wagner which Hartgraves secretly received kickbacks from the vendors. A racketeering judgment in favor of Wagner, while acting in his capacity as an the State has been entered in the amount of accountant for the Catholic Church, embezzled $2,900,0 00. Hartgraves' state retirement pension, more than $250,000 from the case collection plate automobile, and personal residence have been and school tuition fees. Wagner pied guilty to two forfeited to the State. Hartgraves faces up to 14 class 3 f~lony theft offenses, carrying a possible years in prison when sentenced. sentence of up _to 20 years in prison.

Daryle Cue, who received over $400,000 of the State v. Louvier fraudulent school supplies contracts in return for non-existent products and services, pied guilty to Louvier is charged with fraudulently inducing the two counts of theft and faces up to ten years in victim to go into a fashion clothing design prison when sentenced. business. The victim suffered . losses exceeding $400,000. Apache County Public Procurement Fraud Investigation State v. Pierce

Ten individuals, public employees and private Pierce owned and operated three leather retail

71 Criminal Division

stores throughout the Phoenix area. He is charged fraudulent schemes and artifices and one count of I I with theft and fraud resulting from shutting down illegally conducting the affairs of an enterprise, Ii those operations in the middle of the night and arising out of a business investment deal whereby fleeing to Mexico with the merchandise without they solicited funds to loan to personal injury paying creditors. Losses to creditors exceeded litigants. Victims in both Y uma and Maricopa $300,000. counties lost all of their savings, which Thomas and Friedman misappropriated for their own use. State v. Negrete Friedman was sentenced to seven years prison, and Thomas to nearly four years in the Department of The defendant was charged with multiple counts of Corrections. fraud and theft for misconduct related to his furniture-moving business. Negrete would State v. Gill deliberately low-bid to move a customer's furniture, and then later "discover" the actual Gi ll altered a lottery ticket and then attempted to weight and demand significantly higher fees before cash it. He pied to one count of criminal he would deliver. In effect, Negrete held peoples' simulation. furniture hostage while he extorted more money for delivery. The defendant misrepresented to Operation Bootleg customers that he had insurance coverage when he did not, often leaving those clients with thousands The Attorney General's Office executed 22 search of dollars in losses that could not be recovered. warrants at various valley locations at which More than 100 customers complained about individuals were selling counterfeit merchandise, Negrete and his business, Payless Moving. Per a and seized more than 50,000 counterfeit items plea agreement, Negrete agreed to sell his business valued at approximately $225,000. and use the assets to pay a $25 0,000+ restitution judgement. In addition, Negrete was sentenced to State v. Jacobs seven years prison, followed by seven years probation, during which he can not participate in The first of many workers compensation fraud any type of moving business. cases. Arizona is in the forefront of the states prosecuting workers compensation fraud. Jacobs State v. Bobhtz, et al. has been charged with six counts of fraudulent schemes and is awaiting trial. The fourteen defendants in this case were charged with computer fraud and telecommunications fraud State v. Tackman for accessing unauthorized telephone lines to make long distance phone · calls. At the time the calls Two brothers were convicted of trafficking in were being made, the defendants were inmates in stolen property arising from the theft of computer a state correctional faci li ty. Thousands of calls equipment from approximately 100 v1ct1ms were made, with losses totaling over $70,000 over throughout the Phoenix area. Each defendant a three-month period. Eight of the defendants have received a 10 year prison sentence and was ordered entered into guilty pleas with sentences ranging to make restitution (following a very lengthy from twenty-four months to probation. The other restitution hearing). defendants are awaiting trial. State v. Maready State v. Friedman & Thomas Defendant is charged with fraud and theft in two The defendants were charged with six counts of separate cases involving three victims who lost

72 Criminal Division

more than $500,000 in connection with various TUCSON CRIMINAL SECTION investment/loan scams. Matter is set for trial in September, 1992. The Criminal Section in Tucson prosecutes narcotics, county referrals, and fraud and State v Shaw racketeering cases throughout Southern Arizona. The forfeiture program is an instrumental Shaw was convicted of theft for fraudulently component of the section 's activities. It is the obtaining approximately $3 00,000 in unsecured most active real estate forfeiture program in Pima no-interest oral "loans" from a 90 year-old County. Chandler widow. Shaw, a tree trimmer, ingratiated himself with the widow and lied concerning the The primary emphasis in narcotics is conspiracy need and purpose of the loans, and failed to prosecutions of smugglin g operations, and drug disclose that the money was being spent and that it reversals. These prosecutions are brought to the could not be repaid. Shaw was sentenced to four section by the Drug Enforcement Administration months in jail and ordered to pay restitution. (DEA), Arizona Department of Publi c Safety (DPS), and Pima County Sheriff's Office. State v. Poundstone This year the Tucson office convicted 86 defendants by trial or plea. Major assistance was Poundstone has been indicted by the State Grand provided to Cochise County with the prosecution of Jury on fraud and theft charges and accused of numerous drug cases. Significant assistance was embezzling $235,000 from a Tempe business where provided to the Tucson Police Department in the he was employed as the controller. Poundstone prosecution of racketeerin g cases and to the Pima all egedly responded to a placement agency County Sheriff's Office in the prosecution of newspaper advertisement, was hired by the narcotics cases. company based on a falsified resume and then used his position to divert money to himself through One major investigation, Southern Acceptance payments to fake vendors. P oundstone allegedly Corporation, involves an alleged advance fee loan has five prio r theft-related felony convictions. scheme which operated in Tucson and defrauded out-of-state victims of approximately $450,000 Charles Keating, American Continental during its three month operation. Indictments are COJporation pending against the two principals. $21,000 in property was forfeited for the victims. The Attorney General's Office contributed investigation and attorney resources to a federal The Tucson office also tried State v. Marshall Ott, task force investigation of Charles Keating and his a major fraud case involving a mining scam in associates, and their operation of American Pinal County. Ott was convicted after a five week Continental Corporation, Lincoln Savings and Loan jury trial on multiple counts of fraud scheme, Association and their affiliates. The collapse of conspiracy and sale of unregistered securities. He these companies caused a loss to the taxpayers in awaits sentencing. the amount of approximately $2.5 billion. Ten defendants have been indicted on bank The Tucson office also played a key role in fraud-related charges. Eight defendants have pied assisting several major federal prosecutions. Two gui lty, with a trial against Charles Keating and his of the unit's prosecutors are Special Assistant U.S. son expected to occur in approximately October, Attorneys. In the past year a federal conviction 1992. was obtained on Jaime Figueroa-Soto, and a major fraud investigation was brought by the Special Assistants.

73 :c C: 3 Q) ARIZONA DEPARTMENT OF LAW :::s Office of the Attorney General (,/) Human Services Division CD <~ (')-· Grant Woods CD Attorney General tn I C Chief Counsel -< Cecil B. Pan erson, Jr. -tn I -·0 :::s

Community Relations Civil Rights Economic Security Section Section Section -..J Phillip A. Austin Richard M. Martinez Kirk A. Burtch .j:s. Chief Counsel Chief Counsel Chief Counsel

Elder Fair .. Enforcements Affairs - Housing --

Employment Child Support .. Mediation - Discrimination -- En fore em en t .. Education Public ..... Protective and Outreach - Accommodations Ser-vices - Disabilities

Voting L Rights Human Services Division

CIVIL RIGHTS SECTION 5. Development and adoption of bylaws.Staffing during the fiscal year averaged twenty The Civil Rights Section I is responsible for positions. This included one chief counsel, enforcement of the Arizona Civil Rights Act, Title four attorneys, nine investigators, and six and 41, Chapter 9 Articles 1-7. This includes the areas one half clerical personnel. Staffing levels of discrimination in employment, fair housing, continue to be wholly inadequate to meet the public accommodations, and voting rights. Offices number of discrimination complaints received are maintained in Tucson, Phoenix and Flagstaff. by the office, causing a major backlog in investigations This is especial ly true in the The section's principal activities are investigating Tucson office. charges of discrimination and litigation. The section also developed and presented seminars Funding for the Civil Rights Section was provided across the State. . by both state and federal monies. The Equal Opportunity Commission and the Department of The Civil Rights Section also provided substantial Housing and Urban Development were the sections assistance in the legislative process. These efforts source of federal funding. included Fair Housing and the Arizona Disabilities Act. Litigation activities during the year in cluded three major appeals , they are: The Civil Rights Section continued to provide staff support throughout the year for the activities Civil Rights Division and Burris v. City of Phoenix, conducted by the Civil Rights Advisory Board. involves allegations that the City discriminated Board members are Morris F. Johnson III, Ramon against Burris by denying him employment because Jordan, Margaret J. Marquez, June Webb-Vignery, of his history of cancer. Issues on appeal include Jose Rivera, George Yang, and Mary Nackard. Mr. (I) whether the provisions of the Arizona Civil Johnson was chairperson during the 1991 -92 Rights Act, which prohibit discrimination because period. of an individual's handicap, also prohibit discrimination because an individual is perceived as Their activities for the year included: handicapped or has a history of handicap; (2) whether a Maricopa County Superior Court erred in l . Martin L. K ing, Jr. luncheon in Tucson denying Burris back pay and full attorney's fees attended by over 600 individuals including 200 after concluding that he had been discriminated Tucson area high school students; against because of his handicap; and (3) whether punitive damages and a jury trial are avai lable in 2. Joint meeting with the Arizona Board of actions brought under the Arizona Civil Rights Act. Regents; St. Lukes Healthcare System v. Civil Rights 3. Meeting with Dr. Pacheco, University of Division, involves questions as to whether the Arizona; Arizona Civil Rights Act protects physicians whose hospital privileges were revoked or limited, 4. Publi c hearings statewide concerning proposed allegedly because of their national origin, and Fair Housing rules; and whether A.RS. § 36-445.01 prohibits the Division from obtaining hospital peer review information necessary to determine whether or not those

~ A.R.S. § 14-4 10l(A) specifically creates the Civil Rights Division within the Department of Law. Under the Attorney General's current organization, the Division is identified as the Civil Rights Section.

75 Human Services Division

revocation decisions were made because of the 1. Passage of the Arizona Disabilities Act; physicians' national origin. The lower court had concluded that while the section had jurisdiction to 2. Achievement of substantial equivalency status investigate a complaint by a physician against a with HUD based on Arizona's new Fair hospital which revoked or limited his privileges, Housing Act; that the peer review information necessary to conduct that investigation was privileged under 3. Finalization of Fair Housing Agency program A.RS. § 36-445 .01 and not discoverable in the status with HUD; section's administrative investigation. Those holdings are the subject of cross appeals filed by 4. Completion of Fair Housing Rules Hearing both parties. process;

Finall y, Moraga and State v. City of Tucson, is a 5. Implementation of docket reduction plan certified class action in which plaintiffs alleged that resulting in lowering employment backlog by a pencil and paper test used by the City. for 25 0 cases statewide; screening applicants for entry level jobs as housing maintenance workers had a disparate impact upon 6. Completion of advanced training for all section classes of Blacks, Hispanics and Native Americans investigators assigned to employment; and and was not justified by business necessity. The trial court ruled against the Division in September 7. Implementation of Fair Housin g investigative 1989 and the Court of Appeals affirmed that ruling unit. in Apri l 19 92. A Petition for Review has now been filed with the Arizona Supreme Court. A summary of the Civil Rights Section's annual performance with respect to compliance activities Major accomplishments for the section include: is as follows:

CIVIL RIGHTS SECTION ANNUAL PERFORMANCE SUMMARY July 1, 1991 to June 30, 1992

A. CHARGES FILED:

Phoenix Tucson Type Charge Office* Office Total

Title VII bases 219 299 518 Age 43 65 108 Handicap 80 47 127 Public Accommodations 6 5 11 Housing 19 ---12 68 TOTAL: 367 465 832

76 Human Services Division

Phoenix Tucson Type Charge Office* Office Total

I. EEOC DEFERRALS/TRANSMITTALS:

Title VII bases 9 0 9 Age 9 0 9 Total Deferrals/Transmittals _ll 0 _ll TOTAL: 385 465 850

B. CHARGE RESOLUTIONS:

Title VII bases 262 194 456 Age 54 13 67 Handicap 53 30 83 Publi c Accommodations 3 2 5 Housing __9 __7 _ 1_6 TOTAL: 38 1 246 627

C. DOLLAR BENEFITS (CHARGES SETTLED):

Title VII bases $462,555 $300,079 $762,634 Age 282,374 3,807 286, 181 Handicap 106,044 49,897 155,941 Public Accommodations 42 0 42 Housing 750 l 000 l 000 TOTAL: $851,765 $354,783 $1,206,548

D. INVENTORY OF OPEN CHARGES:

Title VII bases 2 15 432 647 Age 28 26 54 Handicap 100 95 195 Public Accommodations 6 2 8 Housing __l1 36 _21 TOTAL: 366 591 957

*Phoenix includes the Flagstaff office

77 Human Services Division

COMMUNITY RELATIONS SECTION The voluntary financial restitution during FY92 totaled $144,468. This amount does not reflect As of July 1991, a new section, the Community restitution made to clients referred to our Mediation Relations Section, was officially established with unit, or monies recovered as part of successful the Human Services D ivision. Therefore, this litigation. report reflects the section's first full year of operation. Below are figures that summarize a very active and productive year for the Elder Affairs Program: The Community Relations Section has three major programs: Elder Affairs, Mediation and Alternative Complaints Opened 136 Dispute Resolution, Fair Housing and Immigration Education and Outreach. Complaints Closed 13 1

The following program reports reflect that the Information and Referral 2,400 Community Relations Section is fulfilling its mission of educating the community and providing Speeches/Presentations 57 cost effective techniques to resolve conflicts and promote harmony. Active Volunteers 14

Elder Affairs Program Volunteer Hours 3,659

Data for fiscal year 1992 illustrates the short and Value of Vol. Hours long term impact of the Elder .Affairs Program. $49,132.00 The year was characterized by volume and diversity as staff streamlined the complaint intake Financial Recovery procedure. Changes in the client intake process $143,168.00 expedited service delivery to elder citizens wanting information or access to community resources. Training/Technical Assistance More important this process eliminated the need for program staff to open every complaint that came to Staff provided training and or technical assistance the Elder Affairs P rogram. The immediate impact for many professional groups in this fiscal year. is demonstrated by the amount of time staff spent · Training included such topics as Elder Abuse, processing open cases and the large number of Consumer Fraud, At-Risk Factors in Elder Abuse, referrals made internally and externally, specifically and Caregiving. Technical assistance was provided 20% of all cases. Equally significant is the ratio of in areas . such as legislative, recognition and cases opened to cases processed ( closed/completed) prevention of elder abuse, Adult Review Board i.e. 136 open cases to 131 closed cases, a 96% procedures. Groups represented included: completion rate. Northwest Chamber of Commerce Volunteers played a significant part in the Arizona Chapters of BPEO achievements of the Elder Affairs Program during Sun City Community Council FY92 as 14 active volunteers contributed 3659 Maricopa County Superior Courts hours, this translates to a monetary value of nearly Area Agency on Aging $50,000.00. Many of these hours were given to Governors Council on Aging other Attorney General's sections i.e. AHCCCS Phoenix Advocacy and Counseling for the Elderly Fraud, Consumer Fraud and Economic Security to (PACE) name a few. Crime Victims Foundation

78 Human Services .Division

Arizona Publi c Health Association COURT RELATED South Eastern Arizona Government Organization Texas Adult Protective Services l. Maricopa County Justice Courts: mediation of Pima County Sheriffs Department small claims, injunctions, truancy, harassment American Association of Retired Persons (AARP) and civil suits for fifteen Justice Courts in Tempe Council on Aging Maricopa County. Navajo Nation Attorney General, Commonwealth of Massachusetts 2. Maricopa County Juvenile Court: mediation of Western Arizona Council of Governments dependency actions filed with Juvenile Court Yuma Police Department (to start October 1, 1992). Pima County National Association of Attorneys General 3. Municipal Courts: Mediation of minor criminal Arizona State University filings. National Committee for the Prevention of Elder Abuse 4. Bullhead . City Justice Court - Mediations of National Council on Aging small claims and harassment actions filed with Northern Arizona Council of Governments the court. DES, Long Term Care Ombudsman Program AGENCY REFERRED MEDIATION Public Awareness Activities l. Registrar of Contractors - Mediation of Staff were interviewed by the media including: complaints by residents and businesses against contractors fi led with ROC. Television 2. Consumer Fraud - Mediation of complaints of Channel 8 fraud, faulty service by consumers against Channel 3 merchants. Channel 4 - Tucson 3. Civil Rights - Mediation of employment, Newspaper housing and public accommodations discrimination complaints. Wall Street Journal Mesa Tribune 4. Child Welfare - mediation of disputes between Arizona Republic Child Protective Services, families and others Lake Havasu Today News regarding child welfare issues.

5. Tax Audit - Mediations of disputes between taxpayers and the Arizona Department of KTAR Revenue regarding tax audits.

Mediation and Alternative Dispute Resolution 6. Elder Affairs - Mediation of financial and Program health cares issues involving the elderly.

The Mediation and A lternative D ispute Resolution PUBLIC POLICY MEDIATION Program implements a statewide dispute resolution program through its three offices (Phoenix, 1. Jurisdictional disputes and those involving Flagstaff and Tucson) in the following areas: governments and communities e.g. public

79 Human Services .D ivision

violence, environmental issues, etc. are volunteer program. Our volunteers have grown in mediated. number and although we have lost some volunteers from the earlier groups, we are left with a PROGRAM HIGHLIGHTS productive team of dedicated mediators.

Statistical Report These volunteers maintain high visibility in the office and now travel with us to coordinated sites The Mediation Program scheduled its 300+ for mediation, assist in the office in the preparation volunteer mediations to resolve a record 1988 of agreements, and coordinate mediations with referrals. Eighty four percent of the mediations prospective clients. We find that their input is held resulted in successfully mediated agreements invaluable in the continued growth and which resolved the matter. Trained mediators development of the Mediation Program, and greatly volunteered more than 5,700 hours to mediate these appreciate their continued support cases which relieved the participatory courts and agencies of this workload. More than $884,000 Registrar of Contractors was obtained for disputants during this year. Meetings with ROC staff have ensured steady Volunteer Program referrals from their agency to Community Relations for mediation. A very high percentage of cases Approximately 150 additional volunteers were referred from the Registrar of Contractors have trained statewide during the year. In-service settled successfully in mediation. In addition to training for current volunteers was held in Phoenix, Phoenix, Tucson and Flagstaff mediators have been Tucson and Flagstaff In addition to mediations, trained and successfully handling cases in Lake volunteers staff the Advisory Board, provide Havasu City. clerical help in the office and participate as instructors during training. Interns provided Consumer Protection valuable assistance in the office on telephone mediations and assisted the Chief of the · The Consumer Protection and Anti-Trust Section Community Relations Section m developing was provided with a profile of our program to statistical information. The Speakers Bureau, familiarize them with our referral system, file consisting of volunteers and staff, gave routing system, the mediation process, and closure presentations throughout the state to city and of cases. This sharing of information has greatly county groups, fraternal organizations and legal enhanced the processing of cases to and from CIC groups. in that· they have a clearer understanding of the function of our program. The Yuma, Sierra Vista, Prescott and Bullhead City mediators, originally trained in Fair Housing In Tucson, a Task Group of mediators comprised of mediations are now, due to additional training in volunteers from Sierra Vista and Tucson was 1992, equipped to successfully mediate other types organized in April 1992 to review and mediate of cases ( e.g. community relations, consumer fraud, cases referred from Consumer Protection. These civil rights, Registrar of Contractors, and child volunteers offered up to ten hours a week and welfare). devoted much of their time to reviewing cases, contacting the parties and facilitating the mediation. Great efforts have been made to preserve the value This arrangement allowed more flexibility for the of our volunteers. In-services have offered Coordinator and secretary to manage larger volunteers more insight into the mediation program, caseloads generated from Consumer Protection in and has greatly broadened the scope of the addition to allowing more time to devote attention

80 Human Services Division

to programmatic needs. resolution techniques. These volunteers mediated not only charges but will also provide general Civil Rights, Fair Housing, Employment outreach assistance and education. Discrimination, Etc. Staff has hired and trained on fair housing issues The Mediation Program has maintained consistent and the appli cation of mediation training for the communication with the Civil Rights Division. A resolution of fair housing disputes. r7ferral system was designed to provide mediators with guidelines for more successful settlements. Hearings were held and volunteer mediators trained Staff is currently working together to identify cases in Yuma, Prescott, B ullhead City, Sierra Vista and which are not appropriate for mediation based on Globe. Mediators are resolving fair housing and recurring circumstances such as monetary issues, other referrals in these locales. willingness or unwillingness of parties to mediate prior to sending the cases to mediation. Early Immigration Reform and Control Act (IRCA) screening of cases assists both Mediation and CRD in determining the probability of a successful In Spring 1991, the Attorney General's Office, mediation. A file routing system based on Community Relations Section entered into an programmatic needs of both Civil Rights and Inter-Agency Service Agreement with the State Mediation has ben developed. Single Point of Contact to do the following:

Closures have increased significantly and as the The Attorney, utilizing the Arizona Civil Rights flow of cases from Civil Rights increases, these Advisory Board members and staff, will hold numbers, will again reflect the increased closure public meetings throughout the State to educate rate. vanous groups regarding employer's responsibilities and anti-discrimination Education and Outreach Programs provisions of the Immigration Reform and Control Act (IRCA) of 1986. Literature such Fair Housing Incentive Program (FHIP) as brochures, fact sheets, newsletters and video tape presentations will be used to disseminate The Community Relations Section implemented an information. The Attorney will also cooperate educational and outreach program regarding fair with and provide legal counsel regarding housing issues pursuant to the Fair Housing IRCA 's anti-discrimination provisions to SPOC Incentive Program (FHIP) Grant. In that proposal and Community Based Organization (CBO's) the section committed itself to the following who may receive contracts to provide such objectives: information to employees and applicants for employment within the State. The first prong of the program involved the assistance of the AZ Civil Rights Advisory Board, Pursuant to that mandate the CRS began with the who will hold public monthly meetings throughout development of its employer education program on the state for the purpose of educating community July 1, 1991. groups, schools, religious institutions, adult education classes, neighborhood groups, civil rights During FY 1992, presentations on employer laws and housing discrimination. sanctions, verification procedures and non-discrimination were made to more than 500 The second prong of this program involved training employers and almost 2,000 employees around the and educating volunteers from the communities and State of Arizona. Surveys conducted by staff housing industry throughout the State in dispute revealed that employment practices have been

81 Human Services Division

modified to comport with the requirements of the • representation of DES m employee personnel Immigration Reform and Control Act. The appeals; program continues in FY 1993. • establi shment of paternity and establishment, ECONOMIC SECURITY SECTION modification and enforcement of child support orders; The Economic Security Section provides legal services to the Department of Economic Security • collection of overpayment in the unemployment (DES), the second largest state agency. and welfare programs, as well as other debts owed DES; DES administers more than 40 major programs funded by a combination of federal and state • representation of DES rn administrative monies, and employs about 8,000 employees. Its hearings; annual budget for program distribution, contracting for equipment, supplies, leases and services and for • prosecution of persons who fraudulently obtain staffing and administration exceeds $1 billion from unemployment and welfare benefits and state and federal sources. employees who defraud DES;

Legal services are provided to a!! programs • representation of the state in child abuse administered by the Department, with primary proceedings which include temporary separation emphasis on: 1) adult and child protective ( dependencies) and permanent separation services; 2) child support enforcement; 3) (termination of parental rights) of the abused or unemployment benefits and contributions; 4) neglected child from the family, as well as contracts and collections; 5) criminal prosecution; training DES caseworkers, and 6) food stamps and welfare; 7) developmental disabilities, including long term care; and 8) • representation of DES in the administration of personnel hearings and training of DES employees. long-term care to the developmentally disabled, as well as advice and counsel to DES relative Legal services provided by this section of the to its obligations as an AHCCCS provider; and Attorney General's Office are quite varied. They review of contracts. include: The Collection Unit of the section obtained 267 • federal administrative and district and appellate judgments for the Unemployment Insurance court litigation relating to various federal Program of DES totaling about $298,553 during the programs administered by DES; 1991 -92 Fiscal Year, a 30% increase over Fiscal Year 1990-91. In the welfare food stamp • representation of the state in adult protective overpayment area, the Unit obtained 159 judgments services cases; amounting to approximately $248,633. The activity of this unit resulted in a satisfaction of $471,583 in • general advice and counsel to DES; judgments. This amount was paid directly to DES. • defense of appeals from DES administrative decisions; As a deterrent, the section, through its Criminal Prosecution Unit, prosecutes cases involving the • enforcement of unemployment msurance tax fraudulent acquisition of unemployment and collections; welfare benefits. In Fiscal Year 1991 -92, the unit filed 228 cases involving $653,159 in fraudulently

82 Human Services Division

obtained benefits, a 40% increase over last year. recipients who had requested assistance. The Unit This effort resulted in 160 convictions. A total of established paternity for 473 children. Attorneys in $5 22,686 was either repaid prior to the conviction the unit also reviewed and gave advice on a or ordered as restitution by the . courts. Courts number of cases that were not litigated. ordered $7,827 in fines, and 8,260 hours of community service. Also, 36 defendants have been The Protective Services Unit is primarily sentenced to a total of 47 years 4 months in jail. responsible for providing legal services to the social services programs within DES, including The Criminal Prosecution Unit which last year Adult and Child Protective Services. Legal actions began prosecution of parents who failed to provide are instituted to help children and adults who are support for their children, filed 2 additional cases being exploited, neglected or abused. this year resulting in a total of 3 years jail time and restitution ordered in the amount of $106,132.00. In Fiscal Year 1991-92, the Protective Services ·Unit filed 928 dependencies, attending in excess of Through its Child Support Enforcement Unit 4,800 hearings, and 230 petitions for termination of (C SE), the section establishes paternity and support parental rights. This unit also provides advice and obligations, modifies and enforces these representation for the Adult and Aging Programs, obligations for public assistance and non-public as well as the Family Assistance Administration of assistance recipients alike, assists other states in DES, which administers the family assistance establi shment and enforcement of support orders programs such as Food Stamps, AFDC and General through reciprocal actions and recovers monies to Assistance. reimburse the state for AFDC. It also represented the state's interests in federal bankruptcy court. The Civil Unit of the section provides general advice and representation for DES. This unit also During Fiscal Year 1991 -92, the CSE Unit represented the client agency at approximately 60 represented the Program at 4,306 appearances in administrative and judicial proceedings and in the Superior Court, an increase of more than 75% from preparation and review of 464 contracts. last year. The amount of judgments obtained by this Unit totaled more than $9.5 million during this They also handled 92 personnel cases. period for the state and for non-public assistance

83 Volunteer and Internship Proarams

In an outreach effort to better serve the people of help mediate and/or conciliate consumer complaints the State of Arizona, the Attorney General has received by Consumer Information & Complaints taken major strides in the area of Section staff that do not involve fraudulent activity. volunteer/internship programs. We highlight the Volunteers also answer and research questions or following accomplishments: inquiries from consumers. This program serves to effectively and efficiently resolve consumer VOLUNTEER PROGRAMS comp Iain ts.

Elder Affairs Volunteer Program Victim Witness Assistance Program

This volunteer program is administered through the Twenty to twenty-five volunteers in the Organized Human Services Division, Civil Rights Section, Crime and Fraud Section of the Criminal Division Office of Elder Affairs. Eleven volunteers support provide victims with information regarding their the program staff by responding to the needs of rights, inform them of the case status, and help elder (senior) citizens to resolve problems/issues victims participate in the justice system. On a regarding abuse, neglect, fraud and exploitation of daily basis, they perform the following: elder (senior) citizens. • Identify and respond to the needs of victims Extern/Intern Volunteers involved in cases handled by Attorney General's Office. Volunteers are accepted throughout the year and provide much-needed assistance in the areas of • Inform victims of their constitutional rights, legal research, drafting and writing. The office in keep victims involved with the status of their turn provides hands-on experience and credit hours cases and assist them in their participation towards their law school studies. throughout the justice process.

Mediation Program Reduce the inconveniences that victims may encounter when involved in the justice system Administered through the Human Services in order to promote continued cooperation and Division, Community Relations Section, over 250 a possible reduction in future victimizations. volunteers throughout the State of Arizona (Phoenix, Tucson, Flagstaff, Sierra Vista, Prescott, • Promote justice and healing for the victim. Yuma, Lake Havasu City, Bullhead City) help

resolve approximately 2,000 referrals from the • Assist the Attorney General's Office in seeking Ii courts. Their purpose is to intervene as neutral third justice. persons to help disputing parties to reach an agreement through mediation or voluntary INTERNSHIP PROGRAMS arbitration. Conflicts settled include Consumer Fraud, Registrar of Contractors, Child Protective Paralegal Internship Program Services or any other agency or area needing their intervention. The paralegal internship program is administered by the Attorney General's Office Law Library, to Telephone Conciliation Program train and provide practical experience to paralegal students from Phoenix College, American Institute Administered through Consumer Protection & and Sterling School, the three local-area training Antitrust Section, Consumer Information & institutions recognized by the Arizona Bar Complaints. Nine volunteers ( 40 hours per week) Association. Three to four interns are selected

84 Volunteer and lnternshi rams

each year and placed in various sections of the Summer Internship Program office under the supervision and guidance of a qualified, on-staff paralegal. Their purpose is to Students may apply or are recruited from local law gain experience and provide assistance in the areas schools, as well as out of state. Those selected of research, document handling, file preparation, serve a three-month internship. During the three and writing. For their assistance, they receive months, experience is gain ed in the areas of legal experience and credit hours towards their paralegal research and writing, communication, experience in studies. the courtroom and agency hearings. Interns are challenged to perform as if they are public attorneys' while maintaining ethical and professional standards.

85 'Tl C: TABLE 1 c..:::::s -·:::::s 0 ATIORNEY GENERAL'S OFFICE Q) :::::s FY 1992 EXPENDITURES BY FUNDING SOURCE c.. (Shown in Thousands) m >< 'C CD c..:::::s .....-· ..C: CD GENERAL DIRECT FEDERAL OTIIER OTIIER (I) FUND IGAs FUNDING _FUNDS APPROPRIATED NON-APPROPRIATED TOTAL

PERSONAL SERVICES 15,120.6 1,406.5 9,194.1 2,157.9 47.5 929.4 28,856.0 ~ I PROFESSIONAL AND OUTSIDE (P&O) 155.2 502.9 7.2 9.5 350.7 396.9 1,422.4 2 OPERATING EXPENSES 2,122.3 58.8 1,445.0 355.9 27.1 860.7 4,869.8

SUBTOTAL 17,398.1 1,968.2 10,646.3 2,523.3 425.3 2,187.0 35,148.2 DISBURSEMENTS TO 01HERS 0.0 0.0 0.0 45.6 250.3 6,647.3 6,943.2

TOTAL 17,398.1 1,968.2 10,646.3 2,568.9 675.6 8,834.3 42,091.4

Includes salaries and all employee related expenses. 2 Includes in-state travel, out-0f-state travel, and capitalized equipment Fundin and Ex enditures

In FY 1992, total funding for the Attorney sections that are directly funded by other state General's Office was $42,091,400 from various agencies from appropriated funds: (1) the sources (see Table 1). As can be seen from Graph Economic Security Section, paid by the Department D (see page 88), the state General Fund contributed of Economic Security; (2) the Insurance Defense 41.3% of this amount, 25.3% was directly funded Section, paid by the Risk Management Division of and monies from non-appropriated sources was the Department of Administration, and (3) the 21.0%. Intergovernmental Agreements (IGA), Transportation Section, paid by the Department of federal funds, and other appropriated funds Transportation. represented another 12.4%. FEDERAL FUNDS Graph E (see page 89) illustrates the expenditure of these monies. It shows that 68.6% of all funds Funds are received from a variety of federal expended in FY 1992 were for salaries (Personal agencies for many purposes. Following is a Services). This includes employee-related costs and consolidated list of funding received in FY 1992: benefits. Federal Agency Purpose GENERAL FUND Housing & Urban Develop­ Fair Housing Enforcement ment Actual expenditures from the state General Fund of $17,398,100 represented a 2.1 % decrease from Equal Employment Employment FY 1991 expenditures of $17,779,400. However, Opportunity Commission Discrimination when new funding for legislative mandates is excluded, FY 1992 expenditures represented a 3 .1 % Health & Human Services Medicaid Fraud decrease from FY 1991 expenditures. As can be Prosecution

seen in Graph F (see page 89), Personal Services Environmental Protection Hazardous Waste accounted for 86. 9% of total General Fund Agency Management expenditures. - Department of Justice Victim Witness Support INTERGOVERNMENTAL AGREEMENTS Narcotics Trafficking Drug Cartel Prosecution Money Laundering Intergovernmental Agreements (IGA) are contracts between the Attorney General's Office and other In FY 1992, federal funds represented 6.1 % of total state agencies for legal services. In most instances funding and expenditures (see Graph D). IGAs are entered into with state agencies that are not funded through the state General Fund, such as OTHER APPROPRIATED FUNDS the Board of Medical Examiners. In FY 1992, IGAs represented only 4. 7% of total funding. Of In FY 1992, funding was provided from the the $1,968,200 expended, 71. 5% was for Personal Corrections Fund in the amount of $349,100 for Services. defense of an especially complicated lawsuit. The entire amount was expended. Also appropriated DIRECT FUNDING was $376,3 00 from the Victims' Rights Implementation Fund. Monies for this fund are Direct funding refers to areas in the Attorney received from a $25 penalty on all misdemeanor General's Office that are paid for directly by other convictions. 77.7% of the $326,500 expended was state agencies. This means that no funds are disbursed to agencies across the state for the transferred between the agencies, as in the case of implementation of requirements mandated by the IGAs. The Attorney General's Office has three Victims' Bill of Rights.

87 Fundin and Ex enditures

OTHER NON-APPROPRIATED FUNDS (2) Court-Ordered Trust Funds

Monies in this category reflect the following (3) Revolving Funds vanous sources: 75.2% of these expenditures were distributions (!) Pass-through from the Criminal Justice made to other entities. Enhancement Fund to the Arizona Prosecuting Attorneys' Advisory Council and to each county attorney's office.

GRAPH D

FY 1992 EXPENDITURES BY FUNDING SOURCE

OTHER NON-APPROPRIATED (21 .0%)

OTHER APPROPRIATED (41.3%) (1.6%) GENERAL FUND

FEDERAL FUNDS (6.1 %)

88 Fundin and Ex enditures

GRAPH E

TOTAL FUNDS EXPENDITURES

DISBURSEMENTS TO OTH ERS

OPERATING EXPENSES (11.6%)

(3.3%) P&O

GRAPH F

FY 1992 GENERAL FUND EXPENDITURES

OPERATING EXPENSES (1 2.2%) p & 0 (0.9%)

PERSONAL SERVICES (86.9%)

89 Outside Le al Counsel: Fiscal Year 1993

Occasionally, the Office of the Attorney General has a need to employ the professional 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 t~affic 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 1993:

Bruce D. Alper, P.C. Phoenix Jeffrey F. Arbetman Phoenix Ayers & Brown, P.C. Phoenix Beer, Toone & Ryan, P.C. Phoenix Bess & Dysart, P.C. Phoenix Broening, Oberg & Woods Phoenix Ernest Brown & Co. Tempe Burch & Cracchiolo, P.A. Phoenix Campana, Vieh & Strohm Scottsdale Dan Cavett, P.C. Tucson Chandler, Tullar, Udall & Redhair Tucson Cruse, Firetag & Bock Phoenix DeConcini, McDonald, Brammer, Yetwin & Lacy, P.C. Tucson/Phoenix Dioguardi, Poli & Ball, Ltd. Phoenix Joseph C. Dolan Phoenix Duffield, Miller, Young, Adamson & Alfred, P.C. Tucson Faith, Ledyard & Dagilis Avondale Law Office of M. Jay Felix Tucson Franklin, Blumberg & Doyle Phoenix Gallagher & K ennedy, P.A. Phoenix Glover & Van Cott, P.A. Phoenix Graham & Associates, Ltd. Phoenix Green & Baker Scottsdale Gust Rosenfeld Phoenix Guttilla & Murphy, P.C. Phoenix Paul S. Harter, P.C. Phoenix Hazlett & Wilkes Tucson Nancy L. Hinchcliffe Phoenix Holloway, Odegard & Sweeney, P.C. Phoenix Horne, Kaplan & Bistrow Phoenix Jaburg & Wilk, P.C. Phoenix Jennings, K epner & Haug Phoenix Jennings, Strouss & Salmon Phoenix Johnson & Whiteman Scottsdale Johnston, Maynard, Grant & Parker Phoenix

90 Outside Le al Counsel: Fiscal Yea r 1993

Jones, Skelton & Hochuli Phoenix David M. Juarez Flagstaff Junker and Doherty, P.C. Phoenix Kimble, Gothreau & Nelson, P.C. Tucson Ronald A. Lebowitz, P.C. Phoenix Stan A. Lehman, P.C. Prescott Lieberman, Dodge & Sendrow, Ltd. Phoenix Ralph Mahowald Phoenix Mangum, Wall , Stoops & Warden Flagstaff Benson T. Maple Phoenix Marsical, Weeks, McIntyre & Friedlander, P.A. Phoenix Martin, Hart & Full erton Mesa Kevin E. Miniat, P.C. Tucson Mitten, Goodwin & Raup Phoenix Munger and Munger Tucson Murphy, Goering, Roberts & Berkman, P.C. Tucson Ortega & Moreno, P.C. Phoenix Rake, Downey, McGovern, Shorall & Cohen, P.C. Phoenix Renaud, Cook, Videan, Geiger & Drury, P.A. Phoenix Ridenour, Swenson, Cleere & Evans Phoenix Roberts; Ellsworth & Rowley Mesa Thomas M. Rogers Phoenix David S Rosenthal, P.C. Phoenix D. Jay Ryan Phoenix Ryley, Carlock & Applewhite Phoenix Scult, Lazarus, French, Zwillinger & Smock Phoenix Sears & Goodman, P.C. Prescott Kenneth W. Seidberg Phoenix Shimmel, Hill, Bishop & Gruender Phoenix Slutes, Sakrison, Even, Grant & Pelander, P.C. Tucson Snell & Wilmer Tucson/Phoenix Struckmeyer & W ilson Phoenix Surrano & Massey Phoenix Teilborg, Sanders & Parks Phoenix Thomas, Burke & Phillips, P.C. Phoenix Tryon, Hell er & Rayes, P.C. Phoenix Turley & Swan, P.C. Phoenix Udall, Shumway, B lackhurst, Allen & Lyons, P.C. Mesa Warner, Angle, Roper & Hallam, P.C. Phoenix Waterfall, Economidis, Caldwell, Hanshaw & Villamana, P.C. Tucson Weyl, Guyer, MacBan & Olson, P.A. Phoenix Wilenchik, Bartness & Zuckerman Phoenix Robert E. Wisniewski, P.C. Phoenix

91 Telephone Directory: Division & Section Heads

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 Lisa Hauser 542-4266 Executive Assistant to the AG Christine Bonfilio 542-4266 Executive Assistant to the AG John MacDonald 542-4266 Intergovernmental Affairs Mike Williams 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 Chi ef Counsel Jim Howard 542- 1401 Civil Administrative Law Section Fred Stork 542- 1610 Consumer Protection & Antitrust Section Leslie Hall 542-3702 Land & Natural Resources Section Diane Hienton 542-1401 Insurance Defense Section Tom Prose 542-495 1 Licensing & Enforcement Section Monty Lee 542-1610 Solicitor General & Opinions Section Rebecca Berch 542-3333 Tax Section Gale Garriott 542- 1719 Transportation Section Richard Allemann 542- 1680

CRIMINAL DIVISION (CRM)

Division Chief Counsel Mike Cudahy 542-3881 Criminal Appeals Section Paul McMurdie 542-4686 Criminal Trials Section Steve Mitchell 542-3881 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

HUMAN SERVICES DIVIS ION (HSD)

Division Chief Counsel Cecil Patterson 542-1401 Civil Rights Section Richard Martinez 542-5263 Mediation 542-4192 Community Relations Section Phillip Austin 542-2124

92 .Tele hone Directo : Division & Section Heads

Economic Security Section Kirk Burtch 542-1645 Chi ld Support 258- 1473 Child Welfare 542-1645 Enforcement 542-1645

PHOENIX OFFICES

Law Building Capital Center 1275 West Washington I 5 South I 5th A venue Phoenix, AZ 85007 Phoenix, AZ 85007

General Information 602-542-5025

Consumer Fraud Complaint 602-542-5763 Consumer Fraud Complaint Toll-Free 800-3 52-843 l

TUCSON OFFICES FLAGSTAFF OFFICES

Main Office Civil Rights Suite #3 15 Suite #8-A 402 West Congress 250 I North Fourth Street Tucson, AZ 85701 - 1367 Flagstaff, AZ 86004 773-0474

Insurance Defense Economic Security Suite#ll05 Suite #l 00 177 North Church 2323 North Walgreen's Street Tucson, AZ 85701 Flagstaff, AZ 86004 628-6044 527-0924/5 26-8029

Information ...... 628-6504 KINGMAN OFFICE · Civil Rights ...... 628-6500 Economic Security Criminal ...... 628-6504 Child Support Enforcement Economic Security ...... 628-6574 Site Code 4 l 4C-4 Special Investigation 628-6504 2611 Kingman A venue Kingman, AZ 86401 YUMA OFFICE 753-441 l Economic Security Child Support Enforcement SIERRA VISTA OFFICE 1595 South First Avenue Economic Security Yuma, AZ 85364 Child Support Enforcement Fax # 783 -9514 Haymore Adobe Plaza 343-0940 Suite #L-13 East Fry Boulevard Sierra Vista, AZ 8563 5 459-6523

93

Office of the Attorney General 1275 W. Washington Phoenix, AZ 85007 (602) 542-5025

Published by the Management Services Division

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