By Amy Silverman
By Olivia LaVecchia
By Monica Alonzo and Stephen Lemons
By Chris Parker
By Michael Lacey
By Weston Phippen
For much of his 36 years, suspected racketeer and former Arizona Corporation Commission executive secretary Jack Rose has "felt deeply ashamed and unhappy about my family and about who I was."
His Ivy League banter implies that he was born into a patrician world, but Rose grew up dirt poor in Mohave Valley, a small Arizona town that rests just south of Bullhead City on the Colorado River. He was the youngest of eight kids who lived in a single-wide trailer with their Seventh Day Adventist mother, a conservative woman who cleaned houses for a living. To escape his family, he spent his free time in the public library. He didn't get along with his blue-collar stepfather. Rose's real father split with his mother when he was a toddler, vanished entirely from their lives, and, Rose adds bitterly, "never paid child support."
But these days the Mohave Valley wunderkind is a disgraced ex-state official who, along with his devoted ex-boss, Corporation Commissioner Jim Irvin, is being investigated by the FBI. In a November 1999 search warrant, the FBI says it suspects both men committed mail and wire fraud in connection with a failed gas-company merger. The high-stakes $1.8 billion merger between an Oklahoma company, Oneok (pronounced wun-oak), and Las Vegas-based Southwest Gas would have created the largest gas company in the nation.
More important, if the merger had succeeded, it would have enriched Jack Rose, who had contracted to act more or less as an agent for Prudential Securities. Rose would have scored a hefty commission if Prudential had underwritten the merger.
Beyond the FBI criminal probe, the unfolding scandal has spawned several multimillion-dollar lawsuits, including a federal racketeering lawsuit in Phoenix that accuses Rose and Irvin of improperly lobbying and corrupting public officials to grease the Oneok-Southwest deal.
All of this happened after two years of Byzantine infighting at the Corporation Commission, where commissioners battled bitterly over how, exactly, to deregulate Arizona's electric companies.
Philosophical disagreements devolved into an acrimonious feud between Irvin and Commissioner Carl Kunasek, both Republicans. Which helps explain why, with Kunasek's blessing, Kunasek's aide Jerry Porter in May 1999 tipped a lobbyist about Irvin and Rose's irregular behavior in advocating for the merger. The lobbyist worked for Southern Union, a Texas-based company that also wanted to buy Southwest Gas but was spurned by the Southwest Gas board in favor of Oneok.
The Porter tip caused Southern Union to investigate the matter and ultimately file a fraud and racketeering lawsuit against Rose, Irvin, Oneok, Southwest Gas and a passel of its senior executives. The lawsuit, in turn, triggered the ongoing FBI criminal investigation.
Nobody has been charged with any crime yet. But if the FBI's suspicions are ever proved in criminal court, Rose and Irvin could wind up in prison.
Irvin, who has asserted in court that he did nothing illegal, refused several requests for an interview.
But in a July 1999 press release, issued after Southern Union filed its lawsuit, Irvin said the "false allegations" were based on "unsupported mudslinging."
"I categorically deny each and every civil and criminal allegation.... It's no secret that I have political enemies within this commission who will take any opportunity to drag my good name and good reputation through mud, but their attempt to discredit me and shift my focus from important consumer issues in electric and telecommunication deregulation will be unsuccessful."
Rose says again and again during a lengthy interview that he has done nothing wrong. He likens himself to a squashed bug.
"This has been the worst year of my life," says Rose.
"This has wrecked my career."
The story of Jack Rose's Icarian nose dive from apple-cheeked Yalie to accused racketeer can only begin with his own account of his flight from Mohave Valley.
When he was 13, he says, he escaped his lousy family life by enrolling in various Seventh Day Adventist boarding schools. Before graduating from Scottsdale's Thunderbird Academy in 1981, he says, he scored a 1510 on his Scholastic Aptitude Test, noting that "in today's scoring that would be [a perfect] 1600."
Even though his family did not value a college education, he says, he was determined to attend an Ivy League university: "I was very focused on getting out of Mohave Valley, getting out of the single-wide trailer on a dirt road."
So he took a post-high school year at an upscale boarding school in the East, where he acquired the necessary credits ("I was in the top 1 percent of every class") to apply to the best schools. His acknowledged embarrassment over his Mohave Valley roots must have pained him when he attended Haverford College, an elitist Pennsylvania school. To make ends meet at Haverford, he says, he got grants and student loans, worked in the library and also on construction jobs.
In 1985, after two years at Haverford (Yale would come later), Rose returned to Mohave County, where he successfully ran for county supervisor. He was 21. His résumé says he was "the youngest county supervisor ever to be elected in the nation." Press clippings indicate that Supervisor Rose supported a developer's ill-fated but grandiose plan to build a $40 million resort billed as the world's first scientific Disneyland (funded by county bonds).