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In the weeks leading up to last September's Republican primary election for sheriff, challenger Dan Saban predicted that someday someone inside Sheriff Joe Arpaio's inner circle would disclose damaging information that would end Arpaio's political career.

Might that day soon arrive?

Federal prosecutors now have a rare opportunity to obtain sworn testimony from one of Arpaio's top aides about longstanding allegations of criminal misconduct inside the nation's fourth-largest sheriff's department.

It's up to U.S. Attorney Paul Charlton to seize the moment and convene a federal grand jury to shine a spotlight on Arpaio and his executive staff.

Charlton has a star witness at his mercy. If he chooses, the U.S. Attorney can dig deep into Maricopa County Sheriff's Office operations by grilling Sergeant Leo Richard Driving Hawk Sr.

As a former member of Arpaio's notorious threat assessment squad, Driving Hawk knows details of some of the MCSO's most sensitive and controversial investigations. The sheriff personally assigns deputies to this unit, which was officially formed to investigate alleged death threats against Arpaio, but also probes the sheriff's political rivals and disgruntled employees.

Something else that puts Driving Hawk in the know about the MCSO's inner workings is his latest supervisory position in the department's internal affairs division.

But what has gotten Driving Hawk in trouble with the feds has to do with his other job as vice president of the United States Reservation Bank & Trust Company. In that role, along with his father and brother, he is accused of orchestrating an $88 million Ponzi scheme; the three allegedly siphoned more than $2.5 million into companies controlled by their family.

On August 2, Driving Hawk signed an agreement with federal prosecutors to plead guilty to one felony count of concealing from authorities that his company was committing wire fraud.

As part of the deal, Driving Hawk is required to provide information to the government on "all criminal activity known to the defendant."

A lot of people are hoping that Charlton won't just use Driving Hawk's testimony to prosecute others involved in the bank scam, but will require him to testify about MCSO operations.

Driving Hawk is facing up to three years in prison and a $250,000 fine, but he could receive supervised probation depending on his level of cooperation with authorities.

Charlton should milk Driving Hawk for every ounce of information about the internal operations of the sheriff's office. Driving Hawk and Arpaio are joined at the hip. Arpaio has provided cover for the officer for more than three years and continues to make sure he gets a healthy paycheck.

If Charlton puts the screws to Driving Hawk, the 15-year MCSO veteran could become Arpaio's version of John Dean, the infamous aide to former President Richard Nixon who revealed during Watergate hearings the existence of secret tape recordings in the White House that eventually led to Nixon's resignation in 1974.

Arpaio may not have incriminating tapes, but he does possess a ton of public records that he's refused to release to New Times, despite my persistent requests that he produce them under the Arizona public records law. Just recently, Superior Court Judge Michael D. Jones ruled against New Times in our attempt to establish that the MCSO acted in bad faith by refusing to release public records either in a timely manner or at all ("Histrionics Lesson," August 11).

It is my hope that Charlton, who is removed from the good-old-boy county courts and prosecutorial system, will do what local and state appeals court judges in this town are loath to do -- stand up to the self-proclaimed "toughest sheriff in America."

There's no doubt in my mind that the sheriff's top aides have helped their boss further his political career by working to destroy rivals and silence critics.

Driving Hawk has played a key role in several MCSO witch-hunts, including the infamous entrapment case against James Saville ("The Plot to Assassinate Arpaio," August 5, 1999) and the politically driven retribution investigation of Jim Cozzolino ("Joe's Spies," March 25, 1999).

Saville, Cozzolino and Saban all have civil suits pending against the sheriff's office alleging that the MCSO abused its police authority for political purposes.

In Saban's case, Arpaio's people spread a ridiculous pre-Republican primary claim that Saban, 49, had molested his foster mother when he was a young teenager ("Outlaw Joe," July 22, 2004). The sheriff's goons dropped the dime on a TV reporter, who was fired when it was learned that he had aired the report after contributing to the sheriff's campaign. The investigation by an outside police agency was dropped for lack of evidence, naturally, but the damage was done.

Current and former MCSO employees tell me that Arpaio's senior staff has ordered destruction of public records, installed unauthorized wiretaps, and bent the truth at personnel hearings to weed out department employees seen as disloyal.

The groundwork for a federal grand jury investigation has already been laid. Saban, Saville and Cozzolino, among others, have provided extensive information to a Phoenix FBI agent related to allegations of serious misconduct by the MCSO.

I don't know whether the FBI is actively conducting an investigation or is simply collecting information about the actions of Arpaio and his senior staff. The FBI agent involved didn't return my call.

But I do know that Arpaio's close relationship with Driving Hawk raises a tsunami of serious questions for a grand jury.

Arpaio has known for years that Driving Hawk was facing potentially serious problems. The Securities and Exchange Commission filed a lawsuit in April of 2002, naming Driving Hawk as one of the defendants in the Ponzi scheme.

Having the SEC climb up your backside over alleged violations of securities laws isn't normally the best way to further a law-enforcement career. But it certainly didn't hurt Driving Hawk's.

In August of 2003, about 16 months after the SEC filed suit, Arpaio amazingly promoted Driving Hawk to the supervisor's position in internal affairs. Anybody who has watched a police drama on TV knows that this is the division that investigates bad cops.

With that promotion came a pay raise. What's more, as part of his new duties, Arpaio's confidant -- who, I repeat, was under investigation for violating U.S. securities laws -- was put in charge of MCSO financial audits!

It's enough to make me believe the persistent rumors that the 73-year-old sheriff is getting progressively more senile.

Unless there's an ulterior motive?

Charlton should at least ask Driving Hawk if anybody at the MCSO received any of the Ponzi scheme money. I'm saying, the fact that Arpaio continues to stand behind his flunky after Driving Hawk signed the plea agreement is very troubling. Once an employee admitted to a felony, any aboveboard sheriff in his right mind would demand that employee's resignation.

Not Arpaio. He placed Driving Hawk on paid administrative leave. That's right, we taxpayers are continuing to pay this admitted criminal's $65,000 annual MCSO salary.

I'm not alone in wondering if Driving Hawk's continued salary in the wake of his admission of guilt could be hush money.

This arrangement could continue for some time. Driving Hawk won't have his police-officer certification automatically revoked until after he enters a formal guilty plea. A date is yet to be set for him to do that. It wouldn't surprise me if the MCSO continues to pay Driving Hawk as a civil employee after he loses his badge.

Chris Gerberry, president of the Maricopa County Deputies Association, says Driving Hawk's role in the Ponzi scheme is just the "tip of the iceberg" of serious problems permeating the MCSO's command staff.

"This shows you the mindset of what's going on at the MCSO," Gerberry says. "The fact that Driving Hawk can be promoted and kept around shows that this place is totally awry."

U.S. Attorney Charlton has an opportunity to do what no other public official in Arizona has had the courage to do: Conduct a thorough criminal investigation of the MCSO and Arpaio. Charlton has a potential stool pigeon in his grasp.

Driving Hawk will be eager to avoid three years in federal prison. He's bound to spill.

Charlton will have a far easier time finding out what's going on inside the sheriff's department than I have. (Not only did the New Times suit fail in Superior Court, but a suit before the state court of appeals also was turned down.) Charlton's not only a federal prosecutor who's got the power to force the issue, he's got a bird in hand.

There's a major scandal brewing at the Arizona Department of Transportation that inside sources tell me is costing taxpayers hundreds of millions of dollars in unnecessary payments to contractors building highways.

The problem appears to have resulted from mismanagement of ADOT's Audit and Analysis Office, which is supposed to closely monitor highway contracts and internal operations, including the security of the Motor Vehicle Division's computer systems.

But a former auditor tells me that senior audit managers have suppressed reports by line auditors who discovered waste and fraud. The former auditor says contractors often underbid projects and, once contracts were awarded, submitted change orders that drove up the price of the projects. The change orders were rarely questioned by ADOT auditors.

In addition, highway contractors received hundreds of millions of dollars in indirect costs that included overhead and other expenses that ADOT failed to monitor. The indirect costs were sometimes as much as three times the actual construction costs, the former auditor says.

Another concern is that hackers can easily break into the MVD's computer database that contains detailed personal information on every driver in the state. The potential for identity theft is huge.

Despite the computer security worries, the previous auditor overseeing information technology didn't issue an audit for 10 years.

ADOT's problems worsened earlier this month after I received information that that the agency's chief auditor, Michael R. Spector, signed a consent decree in 1997 to settle a Security and Exchange Commission securities fraud investigation.

In a 1996 lawsuit filed in federal court in New York, the SEC alleged that a New Hampshire accountant named Michael R. Spector participated in a $2.1 million securities scam in which his company received at least $97,000.

At first, I wasn't positive that the Spector who signed the SEC consent decree was the same person working for ADOT.

But I knew that ADOT's Spector had worked in New Hampshire for 30 years as an accountant before moving to Arizona in 1996. ADOT hired Spector in April of 1999 as a $46,000-a-year auditor. He was quickly promoted to ADOT's chief auditor in November of 2000 and received a significant salary increase to $74,000.

I contacted Spector on August 3 and asked him about the SEC investigation and consent decree.

"I have no idea what you're talking about," he said before hanging up the phone.

But Spector apparently did know what I was talking about. He resigned from ADOT on August 8.

Doug Nintzel, ADOT's public information officer, declined to comment on Spector's sudden resignation and refused to release other information about him except his salary and hiring and promotion dates.

It's a very bad sign when a state agency the size of ADOT hires someone as its chief auditor who's signed an SEC consent decree to settle a fraud investigation.

Governor Janet Napolitano should quickly begin a major housecleaning of ADOT's upper management. If she doesn't, ADOT's serious financial problems could mushroom into a major campaign issue for her next year.

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