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Richard Shaffer, who headed the DPS Criminal Investigations Bureau at the time, says that at Ortega's request, investigators spent about two weeks trying to determine if Lacey was involved with cocaine.
New Times had recently purchased a weekly newspaper in Miami, and Lacey began making occasional trips to Florida in the late 1980s.
State agents tailed Lacey around Phoenix, and according to Shaffer even followed him to Miami on one occasion. Investigators also worked up a financial profile of Lacey, to see if he was living beyond his means, the source says.
Shaffer, now retired, says he cannot recall the exact time of the probe. All records of the investigation were destroyed, Milstead says, a routine practice when an investigation turns up no evidence of criminal behavior.
Lacey was completely cleared in the investigation, Shaffer says, but it was neither the first nor the last time Ortega would try to link Lacey to drugs.
Also in 1988, Ortega met personally with a small-time criminal named Ernie Toscano. Toscano knew Ortega's wife, and the two had once discussed the chief's distaste for New Times.
Toscano says Ortega asked him if he knew of any drug use by Lacey. "He said, 'Well, do you know if he does drugs?' I said, 'I don't know.' He said, 'Do you think you could find out, or could you make a sale? Could you get that close to find out if he's doing coke, or anything?'" Toscano recalled in a jailhouse interview with Lacey earlier this year.
Toscano says Ortega asked him to set up Lacey for a drug purchase. Through an intermediary, Toscano tried to contact Lacey, claiming he had a story idea for New Times, but Lacey says he was not impressed with the proposed story and the meeting never took place.
Toscano's brother, Jay, an officer at Valley National Bank, says he remembers his brother telling him about the conversation with Ortega shortly after it occurred.
Ernie Toscano, his brother says, agreed to help Ortega because he wanted to curry favor with the chief.
Despite the best efforts of himself and the state's most powerful law enforcement agency, Ortega never found any evidence that Lacey was involved with cocaine.
Lacey says he is outraged by the investigations, and calls Ortega's efforts to link him with drug trafficking "a fundamental abuse of power."
"I was never involved in cocaine smuggling. I am not involved in cocaine smuggling," Lacey says. "The entire thrust of what Ortega was up to was simply a matter of trying to punish a critic."
The chief would take one more swipe at Lacey--and longtime foe Pat Cantelme of the firefighters union--in the investigation that would ultimately bring his years as police chief to a close.
@body:From the moment it broke, wary observers of Ruben Ortega say they knew the AzScam political corruption sting was the most flagrant example of a police chief run amok.
During his tenure, Ortega had spearheaded a series of sensational investigations that produced great headlines but few results, including a much-publicized probe of alleged cocaine use by the Phoenix Suns basketball team.
At an April 1987 press conference, Ortega and then-county attorney Tom Collins announced that 13 men--including five current or former Suns players--had been indicted on drug counts, the result of an investigation into charges that the Suns had shaved points in a game with the Milwaukee Bucks.
The sensational charges quickly crumbled under scrutiny, as the state's key witness began to backpedal. Most of the charges were dropped, and no one ever went to jail.
Headlines sprouted again in 1991 when Ortega, allied with County Attorney Rick Romley, unleashed a questionable undercover agent, Joseph Stedino, to try to induce state legislators to take bribes in exchange for support of legislation to legalize gambling.
Some of the legislators took the money, and went to jail. But in the little-noticed undercurrents of AzScam, Pat Cantelme and Michael Lacey were again targets of Ortega's investigation.
Stedino repeatedly tried to get close to Cantelme to snare him in the AzScam net (AzScam's Real Target," December 30, 1992). Lacey was again pursued for alleged cocaine activity that was never found to exist.
But AzScam would be Ortega's last hurrah. Stunned by the heavy-handedness of an investigation launched with no obvious probable cause, the city council finally began to question Ortega's unbridled power.
At an executive session shortly after AzScam broke in 1991, councilmembers began asking that the chief be held more accountable.
Ortega exploded. On a Sunday evening, he began the bizarre dance that would constitute his final days in office by telling Republic reporter Collier that he was going to quit if the council did not back off from its efforts to hold him accountable.
But not councilmember Linda Nadolski. Nadolski praised the chief for keeping the citizens of Phoenix safe, but told reporters, "We also need to know that we're safe from Chief Ortega."