Maricopa County Supervisor Don Stapley had been trying to talk Mesa officials into expanding the city's boundaries into Pinal County, and to buy a utility company owned by controversial developer George Johnson. Johnson was willing to sell the company, Johnson Utilities, for $50 million in about 2004, Stapley learned in his discussions with city officials.
Nothing ever came of those talks, at least not between Johnson and the city.
But about six months later, Stapley took that information to Conley Wolfswinkel, an East Valley land developer and longtime business associate of the Mesa Republican. Wolfswinkel eventually struck a deal with Johnson, but the $50 million purchase ultimately fell through.
Stapley was never paid anything for the information.
That is how Wolfswinkel describes his failed attempt to buy Johnson Utilities in the almost 600 pages of a deposition that he gave last June in a lawsuit over land and water service in the Maricopa area of Pinal County. It is the only section of the deposition that deals directly with Stapley that has not previously been disclosed in documents related to the 118-count indictment against the supervisor that was announced in December.
Stapley is charged with multiple counts of perjury and forgery for failing to list real estate and business deals on financial disclosure forms that he is required to file as an elected official. Included in the land deals that prosecutors say were not properly documented were a series of sales and exchanges in Pinal County between Stapley and Wolfswinkel-connected companies that began in 2003.
The deposition in the civil case was sealed, and Wolfswinkel's lawyers are battling to keep it that way. However, Maricopa County sheriff's investigators obtained a copy in January when they searched the offices of land investment companies related to Wolfswinkel. The Tribune obtained a copy of the deposition through a public records request filed with the sheriff's office.
The relationship between Stapley and Wolfswinkel is at the core of what sheriff's investigators have characterized as an ongoing bribery investigation. A series of search warrants have been served by deputies on Wolfswinkel-connected companies and business associates. On Thursday, deputies searched Stapley's office in the county building for additional information about his ties with the Tempe-based developer.
Wolfswinkel, who was convicted on federal fraud and conspiracy charges in 1993, acts as a consultant to land investment businesses owned primarily by his sons.
The discussions about buying Johnson Utilities came about the same time Stapley entered into a series of land transactions with Wolfswinkel companies in Pinal County. Stapley bought about 210 acres from two Wolfswinkel companies in August 2003 for $2.3 million, according to county land records and court documents.
Stapley later sold that land back to the Wolfswinkels. He acquired two other parcels in Pinal County - one 70 acres and the other 80 acres - through a complex land swap with Wolfswinkel-related companies.
According to Wolfswinkel's description, Stapley had been trying to get Mesa officials to buy Johnson Utilities. Johnson had agreed to sell the water and sewer company to the city, but then backed out, according to Wolfswinkel's account of his conversation with Stapley.
"Don Stapley told me that he was trying to get the city of Mesa to buy Johnson Utilities or he had some conversation with somebody," Wolfswinkel said in describing how he got involved in efforts to buy Johnson's company. "And he said George (Johnson) had agreed to sell it for 50 million. I believe that was the number, and then he backed out.
"Donald had talked to Mesa, and I think they were interested. And then when Don went back to George (Johnson), George went silent on Don."
Wolfswinkel said Stapley was not paid anything for the information about Johnson's price, which came up in a casual conversation between longtime friends.
A $50 million sale of Johnson Utilities to a Wolfswinkel company eventually was agreed upon, but both sides backed out before it was finalized, according to the deposition.
Brian Tompsett, vice president of Johnson Utilities, confirmed in an interview Friday there had been a deal between Johnson and the Wolfswinkels to sell the company, but that both sides canceled it by mutual agreement. Tompsett said he does not recall any discussions about selling the company to the city, or any involvement by Stapley.
Johnson still owns the utility.
Current and former Mesa officials confirmed Stapley did try to get the city to annex into Pinal County, and that there had been some discussions about buying Johnson Utilities to provide water and sewer service.
Mike Hutchinson, former Mesa city manager, said he recalls Stapley trying to convince city officials several years ago to annex into Pinal County to preserve future growth corridors. Hutchinson said he does not recall any specific discussions about buying Johnson Utilities.
Bill Haney, former Mesa water director, said he knows someone in the city above his level did have discussions about acquiring Johnson Utilities. But he added those talks never went far enough that he was brought into the discussions.
Paul Charlton, Stapley's lawyer in the criminal case, said he has not seen Wolfswinkel's deposition, so he could not comment.
Lee Johnson, a Wolfswinkel lawyer, said he could not discuss the deposition because it has been sealed by the judge in the civil case in which it was taken.
Wolfswinkel is a defendant in the lawsuit, which involves his acquisition of a water and sewer utility in the Maricopa area from Johnson in 2004, and whether that put other area landholders at a competitive disadvantage. Documents related to that case were sealed from public disclosure under an agreement by the litigants.
But last month, the Maricopa County Attorney's Office filed a motion seeking to have the deposition unsealed, arguing it might contain information relevant to the criminal investigation.
Sheriff's investigators subsequently obtained a copy during a Jan. 22 search of Tempe-based W holdings, the umbrella company for Wolfswinkel's family businesses.
Wolfswinkel's lawyers have opposed efforts to unseal the deposition.
A hearing on whether the copy of the deposition obtained by sheriff's investigators should also be sealed is scheduled for Thursday.