The Arizona Treasurer has called for an independent investigation to decide if $1.1 million in payments to the attorney general’s office last year was legal.
The money is at the heart of an ongoing investigation by the Maricopa County Sheriff’s department looking at whether the deal was made to secure legal leniency for then-Treasurer David Petersen, who was under investigation for financial mismanagement.
Representatives with the Attorney General’s office said the payment made last June were fees for recovering lost investments with the Ohio-based National Century Financial Enterprises. The firm collapsed in 2002 in the wake of a federal fraud investigation.
Dean Martin, a former Arizona senator who became state treasurer in January, contends the state should not have paid the Attorney General’s office because it did little to help recover the money. The state had lost about $131 million in the investment scandal, according to state records.
Petersen resigned Nov. 30 after he pleaded guilty to one misdemeanor charge of failing to report outside income while in office.
State law requires elected officials to list any sources of income of more than $1,000 from any employer.
Petersen was charged with filing a false or incomplete financial document for not disclosing a $4,200 payment he received for selling character education supplies to schools.
Petersen, who was elected in 2002, was ordered to pay a fine and placed on probation in December as part of the plea deal.
That ended an extensive investigation by the Attorney General’s office into allegations of financial mismanagement of public money.