State treasurer hires lawyer in inquiry - East Valley Tribune: East Valley Local News

State treasurer hires lawyer in inquiry

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Posted: Friday, March 3, 2006 5:02 am | Updated: 4:22 pm, Fri Oct 7, 2011.

Embattled state Treasurer David Petersen on Thursday said he has hired an attorney to defend him against allegations of fraud, theft of public money and violating conflict of interest laws.

Nearly two weeks after the Arizona Attorney General’s Office served a search warrant on the treasurer’s office, Petersen said he hired Mesa-based lawyer Craig Henley to handle his case.

When contacted by the Tribune late Thursday, Henley said he could not comment.

“I think when it’s all done he will be vindicated,” said Paul Petersen, a lawyer and son of David Petersen. “I think the attorney general’s office has a lot more to worry about than whether the treasurer promoted an education program.”

It’s been alleged by top David Petersen aides that he would submit travel reimbursement requests with the state for trips he made on behalf of Character First!, an Oklahoma City-based firm that promotes character building.

David Petersen’s ties with the Character First! program go back to at least 1999, when, as a state lawmaker, he pushed through legislation aimed at getting schools to adopt character education courses.

He also has been accused of hiring family members as well as creating a hostile work environment that drove a high turnover rate.

In an affidavit used by investigators for a search warrant, David Petersen also is suspected of accepting payments for speaking engagements even though he was advised he could not legally do so.

During a search of the treasurer’s office Feb. 18, investigators seized computer equipment and financial records, according to legal documents.

David Petersen, who was elected in 2002, recently said he would not seek another term in office.

The treasurer is the state’s chief financial officer, overseeing 30 employees and handling about $9 billion in banking, cash management, investments and accounting services.

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