Judge reopens Rhodes investigation

Developer Jim Rhodes will be asked to give sworn testimony about his relationship with a disgraced former Nevada politician, under an order that was issued Monday by an administrative law judge.

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Rhodes needs to explain why he continued paying former Clark County commissioner Erin Kenny more than $200,000 per year after she admitted to taking bribes from a Las Vegas strip club owner more than four years ago, according to Judge Dwight Nodes of the Arizona Corporation Commission.

Nodes’ order reopens the investigative portion of the commission’s case involving Rhodes, who is seeking permits to operate water and sewer companies to serve more than 50,000 homes that he plans to build in Mohave County.

Rhodes, a Las Vegas homebuilder, became a key player in the East Valley’s development in December when he bought more than 1,000 acres of prime state trust land in Apache Junction, as well as the rights to master plan the adjacent 6,700 acres of state holdings.

The Tribune detailed Rhodes’ connections to Kenny and other Nevada politicians in a three-part series published in April.

Last month, Kenny testified in a criminal trial in Nevada that she was still being paid by Rhodes as a government affairs consultant. Kenny went to work for Rhodes the day after she left the Clark County Commission in January 2003.

That May, Kenny admitted to federal agents that she had been taking payoffs from the strip club owner and a real estate consultant while on the commission. She ultimately pleaded guilty to three counts of conspiracy and fraud, and testified against other former Nevada commissioners who were taking bribes.

Kenny was sentenced to 30 months in prison earlier this month.

Rhodes has not been charged with any crime.

Though Rhodes testified in March to the Arizona commission, which regulates utilities, he was not asked about his relationship with Kenny, and it was not known then that she was on his payroll.

Nodes said in his order that the new revelations about Kenny’s ongoing relationship with Rhodes warrant reopening the portion of the commission’s case in which testimony is taken, which had been closed after he testified. While his order does not order Rhodes to testify again, Nodes made clear that would be the purpose of reopening the hearings.

Rhodes filed an affidavit last week stating that he has severed his relationship with Kenny and that she had no involvement with any of his Arizona projects. The affidavit was attached to a motion from Rhodes’ lawyer, who argued against reopening the hearing phase of the commission’s case.

Neither Rhodes’ lawyer, Jeff Crockett, nor his spokeswoman, Lisa Urias, could be reached for comment.

Corporation Commissioner Kris Mayes said Rhodes’ affidavit is not enough and she is prepared to have a subpoena issued compelling him to testify if he fights efforts to call him back to the stand.

“We need to know what the nature of the relationship between Mr. Rhodes and Kenny was, and why he was paying her $200,000,” said Mayes, who requested earlier this month that the hearings be reopened, given Kenny’s Nevada testimony. “We aren’t going to get answers to those questions from an affidavit,” Mayes said. “We need Mr. Rhodes in person.”

Commissioner Gary Pierce also said it is important to have Rhodes explain why he kept paying Kenny as a consultant for four years after she cut a plea deal in which she admitted taking bribes.