Arizona officials want to take another look at Rhodes-Kenny connection

Maybe, just maybe, the Arizona Corporation Commission can get some answers for us to this lingering question: What in Hades did Erin Kenny do for Jim Rhodes that was worth more than $200,000 a year?

The question has the potential to torpedo the Las Vegas developer's effort to build 130,000 homes in Arizona's Mohave County. Millions of dollars are at stake.

Odds are that you (like me) know little about the Arizona Corporation Commission. But it's a publicly elected body, sort of a combination of our Public Utilities Commission and our secretary of state's office.

Rhodes needs the commission's permission to operate sewer and water companies necessary for huge developments he's planning in Mohave County.

Arizona laws are different than ours. In Arizona, someone has to have a "fit and proper" character to operate utilities. Unfit and improper characters aren't Arizona-worthy.

For more than two years, Rhodes has sought permission from Arizona authorities to create the Perkins Mountain Water Company and the Perkins Mountain Utility Company.

But when former Clark County Commissioner Erin Kenny testified June 28 in the Don Davidson corruption trial that she's been on Rhodes' payroll as a consultant ever since she left the County Commission in January 2003, eyebrows in Arizona were cocked.

Now, two of the Arizona Corporation commissioners want to take another look at the character of the man who bootstrapped himself up from a carpenter to become one of the biggest homebuilders in Nevada and now wants to build 130,000 homes in Arizona. Commissioners William Mundell and Kris Mayes each said the investigative part of his application should be reopened based on Kenny's testimony.

"Additional questioning of Mr. Rhodes and possible others, under oath, regarding Mr. Rhodes' connection with Ms. Kenny will be necessary for me to make a determination whether or not the Perkins Mountain companies, which are fully controlled by Mr. Rhodes, are fit and proper entities to operate in Arizona," Mundell wrote less than a week after Kenny confirmed she was on Rhodes' payroll.

Mundell and Mayes need a third commissioner to support the reopening of the investigation. Mayes also wants to know whether Kenny will have any relationship with the sewer and water companies in Arizona. (I sort of doubt she will since she'll be in a women's prison for 30 months, but the commissioners apparently don't want her in the picture, even after she serves her time.)

During Kenny's sentencing Wednesday, her attorney said she is no longer on Rhodes' payroll. Only a dim bulb would doubt that the Mundell-Mayes letters had a part in that decision. Kenny has become a liability to Rhodes.

A Scottsdale publicist representing Rhodes declined to answer questions about why Kenny is no longer on the payroll and what she might have done for the company in Arizona.

"The company has no comment on Erin Kenny's case," Lisa Urias said Thursday.

Rhodes became a player in Mohave County in December 2006 when his $58.6 million bid was the highest for 1,000 acres of state land, which was accompanied by the right to master-plan the surrounding 6,700 square acres. Buying the land didn't require that the buyer be "fit and proper" by the Arizona Land Department. Its only requirement was that the check didn't bounce.

The commissioners with questions about Rhodes' suitability to be a sewer czar presumably want to ask him about former topless club owner Michael Galardi's testimony in the 2006 trial of convicted Clark County commissioners Dario Herrera and Mary Kincaid-Chauncey. Galardi said Kenny complained he wasn't giving her enough. "Jim Rhodes gives me $20,000. You only give me $10,000," Kenny said (according to Galardi). Galardi also testified that he was good friends with Rhodes and confirmed with the developer that he was paying Kenny the amount she claimed he was while she was a commissioner.

Rhodes, who hasn't been charged with anything in Nevada, told the East Valley Tribune in Arizona that Galardi was "a bald-faced liar."

Nevada authorities seem to have hit a roadblock for any potential investigation into Kenny and Rhodes. Kenny insists that Rhodes didn't bribe her, and her sentencing Wednesday indicates that she won't be testifying any more.

Those curious about the symbiotic relationship between the corrupt ex-commissioner and the big-time developer will need to keep watching what happens before the Arizona Corporation Commission.

Jane Ann Morrison's column appears Monday, Thursday and Saturday. E-mail her at Jane@reviewjournal.com or call 383-0275.