Picture Elmer Fudd as the lead in Oliver Stone's Nixon, and you've got Arizona Attorney General Tom Horne in a nutshell.

Truly, the FBI's massive, 3,000-plus page investigative file detailing its year-long probe of Horne's office reads like a tragicomic novel wherein a powerful but goofy politician does a colossal belly-flop into a pool of sleaze and chicanery, ending any likelihood that he could become governor someday.

COMMENTARY

Lately, Horne is in full-on denial mode, apparently having dodged federal obstruction-of-justice and witness-tampering charges from the FBI inquiry. He still suggests to gullible reporters that he could be a gubernatorial candidate in 2014, though he confesses that simply seeking re-election is more likely.

In October, Maricopa County Attorney Bill Montgomery punked out on pursuing state criminal charges against Horne regarding the shenanigans exposed in the FBI's investigation, part of which was conducted with the assistance of Montgomery's office.

Instead, the county attorney opted to pursue a civil penalty against Horne and his 2010 campaign operative, Kathleen Winn, now in charge of outreach for the AG's Office, for alleged coordination between Business Leaders for Arizona, the independent-expenditure committee she ran during the general election, and Horne's own campaign.

Such coordination is illegal under state law and is punishable by civil penalties of three times the amount in question.

The FBI amassed a mountain of circumstantial evidence to back the charge that Winn and Horne colluded in raising more than $500,000 to fund an attack ad against Horne's Democratic opponent, Felecia Rotellini, whom Horne bested statewide by a mere 63,298 votes.

Winn and Horne have a hearing before an administrative law judge in late January. Hypothetically, the judge could fine the pair $1 million each.

Still, Horne and Winn could appeal any such decision, handing the case to county Superior Court. There also are underlying issues concerning the constitutionality of the state statutes involved.

Horne also continues to battle, for the moment, a local criminal traffic charge of vehicular hit-and-run, which occurred March 27 during a rendezvous with his alleged mistress, Assistant Attorney General Carmen Chenal. The fender bender was witnessed by two FBI agents as they dogged Horne.

The State Bar of Arizona is investigating charges that Horne violated ethics rules in relation to the traffic accident and the alleged campaign finance improprieties.

Far worse for Horne than any fine or slap on the wrist by the Bar is the humiliation of the FBI's detailed account of Horne swapping cars, donning a baseball cap, stopping off for takeout from Pita Jungle, and rear-ending an SUV before he and Chenal ended up back at her Roosevelt Street apartment.

The hit-and-run alone might buy him a one-way ticket to the political graveyard. And the continued employment of his girlfriend as an assistant AG at a six-figure salary remains a colossal embarrassment, one that had the potential to land Horne in the federal pen for a variety of crimes he may have committed in an effort to keep clandestine his extramarital affair.

Horne's inner circle is a tightly knit, dysfunctional little bunch. Many served Horne during his eight years as state Superintendent of Public Instruction. They worked on his campaigns and followed him from the Department of Education to the AG's Office after his election in 2010.

Among these are longtime spokeswoman Amy Rezzonico, chief of staff Margaret Dugan, policy specialist Doug Nick, and Sharon Collins, head of constituent services at his Tucson office.

His second-in-command, Rick Bistrow, is Horne's former law partner. They go back to Horne's days as a Democrat, when they both sat on the governing board of the Paradise Valley Unified School District.

Then there's Chenal, whose ex-husband, Thomas Chenal, works for the AG as chief counsel for public advocacy. The Chenals divorced in 1999.

Most of Chenal's legal experience has been in construction and real estate law. She briefly was a partner in Horne's law firm before Horne became state school superintendent in 2003.

In January 2006, at Horne's prompting, the Department of Education hired Chenal as a program specialist in special education at a salary of nearly $63,000 a year, a pay rate that would increase to $80,000.

As was originally reported by New Times in 2006 ("Changing the Chenal," April 27), Chenal was hired to this position despite no experience working in special education.

Her law license recently had been suspended, and she was placed on two years' probation by the State Bar of Arizona for serious ethical and legal lapses, such as bouncing checks to the clerk of court, altering a letter from an expert witness in a medical-malpractice case, and taking a domestic-relations case in Illinois, where she was not authorized to practice.

Chenal declared bankruptcy in 2004. She had a DUI charge from 2001 on her record that she pleaded down to reckless driving.

Nevertheless, she was hired by the Department of Education, where both she and Horne were known for taking three-hour lunches.

"She would leave around noontime and come back around 3, about the same time as Tom," a source who formerly worked at the DOE told me.

Chenal's cover for a three-hour absence reportedly was that she was "working in the law library."

Chenal and Horne once were spotted leaving her apartment.

"Everyone knew [Chenal] was his girlfriend," another DOE source said.

Indeed, the events that transpired the day of Horne's March hit-and-run may have been standard for the pair, minus the fender bender and FBI agents.

Each left work separately, Horne in his gold Jaguar, Chenal in a black VW Passat borrowed from a co-worker.

They met in a nearby parking lot, leaving Horne's car behind with him, wearing the baseball cap and taking the wheel of the Passat. A quick stop for takeout from Pita Jungle, then over to Chenal's digs, outside of which the accident transpired.

The FBI agents following Horne noted that after he backed into the other vehicle, neither he nor Chenal got out to inspect the damage. Chenal later told the Passat's owner, Linnea Heap, that she had hit a parked car, but there was no damage to the other vehicle.

Such duplicity could be seen as an attempt to avoid embarrassing questions as to why Horne was in Heap's car with Chenal in a parking structure next to Chenal's apartment.

When I inquired in 2011 about the nature of their relationship, Horne's flack, Rezzonico, replied that it was purely a professional one between a "former law partner and valued employee."

Recently, I e-mailed Horne, Chenal, and Rezzonico, asking if Horne and Chenal have ever had a sexual relationship. Rezzonico got back to me with a file of cases Chenal has worked while at the AG's Office, but my question remains unanswered.

Horne, 67, has been married for 40 years to wife Martha, whom everyone calls "Marty." They have four adult children.

Chenal, 58, has three children with her ex and has not remarried.

A pale, thin brunette, Chenal was born in Cuba. It's said that her family was forced to flee the communist regime there after the revolution.

Like Horne, who was born in Canada, Chenal is a naturalized U.S. citizen.

Martha Horne and Chenal know each other. During the 2010 campaign, they were seen mingling with Horne loyalists at Rezzonico's house, awaiting returns from Horne's GOP primary battle, in which Horne faced former County Attorney Andrew Thomas.

Horne ultimately bested the now-disbarred Thomas by 899 votes.

The entire Horne posse (Chenal and Mrs. Horne included) were together again at the Hyatt in downtown Phoenix on the night of Horne's general election win over Rotellini.

"Marty looks the other way," a DOE staffer explained to me about Horne's infidelity. "I think it's easier for her to pretend it doesn't exist than to acknowledge it."

Following his election, Horne was determined to take Chenal with him to the AG's Office, and not just as some aging office flower.

The AG-elect testified during Chenal's late-2010 Bar reinstatement hearing. Horne promised the hearing officer that he would hire Chenal as an assistant attorney general if she were re-admitted.

When the Bar counsel countered that supervisors at the AG's Office would be "very reticent" to hire someone with Chenal's checkered past, Horne came to her defense.

"The supervisors that I would hire would have no reticence to hire Ms. Chenal," he averred.Chenal was reinstated April 19, 2011, with two years' probation and the requirement that she continue to see a psychiatrist and therapist.

But Chenal already was at the AG's Office, having been hired in early January 2011 as a "strategic planning director" at an annual salary of more than $80,000.

Her move up the ladder to assistant attorney general was a done deal.

Days before the Arizona Supreme Court was to issue an opinion on her Bar status, Chenal excitedly e-mailed her new boss, section chief Ted Campagnolo, anticipating her move.

"Ted," she wrote. "The Supreme Court will review my matter this Tuesday so, god willing, I will be admitted this Tuesday!!! May I then move in next Wednesday? . . . Tom mentioned to let him know what, if anything he can do to help this happens, as we all know I need training!"

Chenal had been doing paralegal work for Campagnolo, senior litigation counsel with the fraud and special prosecutions section of the AG's criminal division, headed by former Superior Court Judge Jim Keppel.

Shortly after Chenal was re-admitted, Campagnolo assigned her to be criminal division prosecutor in charge of foreign extraditions.

"Thanks again for assigning me to be the 'foreign prosecutor' for the AGO," Chenal wrote Campagnolo. "I told Tom Horne you assigned me . . . he was very pleased."

According to her e-mails, Chenal handled her first grand jury case on May 23, 2011. She was coached in advance by Assistant AG Steve Duplissis.

"Steve will be sitting by me," she e-mailed Campagnolo. "Tom Horne will also be there to meet the grand jury and then watch me."

Chenal's post in the criminal division is a big deal. In a 2011 memorandum, office Security Chief Andy Rubalcava wrote that Chenal had "become the face of [Horne's office] in pursuit of criminals [who] have committed major felony crimes in Arizona and have fled the country."

As a result, Chenal's salary was bumped up to $108,000 a year.

Is it proper for a prominent politician to hire his mistress at a taxpayer-funded six-figure salary?

There is nothing in state personnel rules published on the Arizona Human Resources website that explicitly forbids such a hire.

The closest these rules come to addressing this situation is the policy on hiring relatives, which prevents "a supervisor or manager at any level" from making an employment decision directly benefiting anyone "within the third degree of relationship."

That would include a spouse — but not a lover.

By all accounts, the Horne-Chenal relationship is consensual. So would state and federal laws against sexual harassment apply?

Phoenix attorney Julie Pace's expertise is employment law. She regularly shows companies how to avoid sexual-harassment lawsuits.

"You try to teach a company that managers should not be dating subordinates," she says. "If they do, they risk a lawsuit. The subordinate could claim it was harassment or that they felt they were compelled to be in the relationship."

A relationship can start consensually, Pace observed, but it may not stay that way. If the relationship sours, a legitimate sexual-harassment claim could result.

Ironically, the Arizona Attorney General's Civil Rights Division partners with the U.S. Equal Opportunity Employment Commission in enforcing sexual-harassment laws.

Julie Pace notes that there are additional concerns related to the public nature of Carmen Chenal's employment.

"Anytime you're using taxpayer dollars for personal benefit . . . that may raise concerns and potential liability," Pace says.

Add to this the damage done to the state office's reputation.

Horne's "Chenal-gate" has been as high profile locally as a similar scandal on a national level involving former CIA director and retired four-star Army General David Petraeus.

Petraeus recently resigned his CIA post after revelations of an extramarital relationship with his biographer, Army Reserve Lieutenant Colonel Paula Broadwell.

The FBI played a starring role in both scandals — by making public the sexual peccadilloes of powerful men.

In Horne's case, the FBI investigation was the result of an attempt by Horne to keep his affair with Chenal hush-hush. Paranoid about the FBI probe, he doubled down on a cover-up, straying into dangerous territory for the state's highest-ranking law enforcement official.

If Horne hadn't ordered AG's special agent Meg Hinchey to investigate who in the office had leaked information on Chenal to New Times, Hinchey never would've gone to the FBI with allegations of wrongdoing by Horne and the FBI probe never would've occurred. Horne's March hit-and-run never would've come to light, and the public might've thought Carmen Chenal was nothing more than a fancy French perfume.

Nor would Horne be looking down the barrel of a potential fine of $1 million.

And the state wouldn't be the target of a $10 million legal claim by Hinchey.

A seasoned investigator and member of a local FBI-led task force on public corruption, Hinchey says she was the target of retaliation, including a smear campaign by Horne and Deputy AG Bistrow, after she went to the feds with allegations unrelated to her initial inquiry.

According to her claim notice, Horne called her untrustworthy after he learned he was under investigation by the FBI in late January.

A Democrat, Hinchey donated $53 to Horne's 2010 general election rival, Rotellini, making her suspect in his eyes.

Horne, according to Hinchey, also spread false rumors of a lesbian affair between Hinchey and Rotellini, who is divorced.

Criminal division chief Jim Keppel's notes, part of the investigative file, confirm this.

"[Horne] asked if [assistant AG Steve Duplissis] knew of any 'lesbian relationship' between [Meg Hinchey and Felecia Rotellini] and other questions re [Hinchey's] political leanings," Keppel wrote in late February.

This was quite a shift from July 2011, when Horne handpicked Hinchey to lead the investigation on the recommendation of Hinchey's boss, chief investigator Rubalcava,

Horne also approached his predecessor Terry Goddard's employee services director, Susan Schmultz, about picking Hinchey to do the internal investigation. The AG expressed concern about the leak of information during a lunch with Schmultz.

"[He] had wanted specifically to talk about the articles that had been happening in New Times," Schmultz told the FBI. "He had a concern that someone interior in the office was leaking information about Carmen."

Horne's worry preceded my first column on the subject in New Times, as I had been pummeling the AG's Office with public-records requests concerning Chenal's employment.

In Hinchey's timeline in the FBI file, she notes that the investigation was precipitated by my public-records requests and started a week before my first article was published ("Attorney General Horne Hired Carmen Chenal to a Highly Paid Top Post -- 'Cause She's His Goomba," July 14, 2011).

"I was advised by Chief Special Agent Andy Rubalcava," wrote Hinchey on July 7, "that while on vacation, AG Horne had requested that I be assigned to conduct an administrative internal investigation to determine who . . . leaked sensitive information to New Times reporter Stephen Lemmons [sic]."

Hinchey and Rubalcava met with Horne and his chief of staff to discuss the investigation. Hinchey was granted authority to work with the AG's IT director "to recover hard drives from personnel suggested as possible sources for the leak."

Horne had retained several Democratic employees from the Goddard administration, and they became a source of angst for him. Suspicion fell on Democrats Gerald Richard, a special prosecutor now employed by the Phoenix Police Department, and assistant AG Mike Flynn.

Horne and others also suspected Kathleen Winn, in charge of outreach for the AG's Office. I knew Winn from before her involvement with Horne.

It was Winn who gave me a heads-up about the 2010 primary-watching party at Rezzonico's house, precipitating my interest in Horne and his effort to deny Thomas the GOP nomination.

I know nothing about Flynn, save from what I've read in public records. I know Richard as a contender for the Democratic nod in 2008 for county attorney.

None of these individuals, including Winn, was a source for the July 2011 column on Chenal.

So it's interesting to see the result of that column: a doorstop of official interviews of AG employees, signed statements from the interviewees acknowledging they could be fired if they do not cooperate, and a search for my cell-phone number in all state phone records.

(One two-minute phone call to my cell came from the desk of an AG employee in Tucson who claimed no knowledge of the call to investigators.)

Horne gave Hinchey permission to search employee e-mail accounts, and she combed through online comments attached to my article, knowing that some of them had come from within the office.

"I later learned," wrote Hinchey in her FBI statement, "that AG Horne . . . recruited a group of persons to blog in support of Horne and Chenal and question . . . the article."

Hinchey added that this information was confirmed by Horne and Rezzonico.

Apparently, Horne made an online comment on my column under the name "Arizonatruth," mentioning a memo that had been sent to me by Rezzonico, one I had not published or quoted.

When I spotted the comment, I responded, noting that the commenter must be in the AG's Office.

"Mr. Lemons," Arizonatruth replied, "what makes you think these posts are coming from inside the office? Again, proving my point that you will say things that have no truth or facts to back it up."

Through Rezzonico, Horne requested a meeting with me for an off-the-record conversation, which we had on July 19 at the First Watch restaurant in downtown Phoenix.

I cannot divulge the content of our conversation because of an off-the-record agreement.

Hinchey's investigation dragged on for several months.

Incidentally, there is nothing illegal about a government employee talking confidentially to a reporter. The information I was seeking, via my public-records requests, did not relate to a grand jury or criminal investigation.

In fact, all the information in the original July 2011 column came from public records, much of it from Chenal's file with the State Bar, which a judge since has partially sealed on the request of Chenal's lawyer.

Meg Hinchey's investigation revealed the AG's Office to be a viper's nest of backstabbing, gossip, and resentment. And the investigation uncovered potential illegality unrelated to its initial purpose.

For instance, Assistant AG Mike Flynn, like many others, told Hinchey he believed Kathleen Winn to be the leak.

He opined that Winn might have "narcissistic personality disorder" and offered that he had heard a rumor of an affair between Chenal and Horne in a passage redacted in the AG's release of Hinchey's case file.

According to Hinchey's report to the FBI, Horne stated in a meeting, with Hinchey and Bistrow present, that "he had been told by two women previously that Winn had said she wanted to have sex with him, but he didn't believe that to be true."

Apparently, there was some rivalry between Chenal and Winn for Horne's attention.

"He always defends her," Chenal told Hinchey. "The only thing Tom and I have fought over in 30 years is Kathleen."

In her interview with Hinchey, office legal assistant Lucia DeVernai attributed salacious quotes to Winn.

"C'mon," Winn supposedly said to DeVernai. "If Tom was going to have an affair, who do you think he would have one with, Carmen or me?"

DeVernai claimed Winn told a woman (not Chenal) who liked Horne, "I'm the new girlfriend; you're the crabby old woman."

When I asked Winn about such remarks for this article — specifically the comment about "an affair" — she conceded it sounded like something she might say.

"I could've said it kiddingly," she said. "But I don't remember saying that at all."

Winn, who's married to a retired Boeing executive, possesses a ribald sense of humor.

Like her response when I asked her about DeVernai's claim that a woman (not Chenal) offered to "arm wrestle" Winn for Horne's attention.

"I think we should do a big mud-wrestling thing," she cracked to me. "I'd be more than happy to take Carmen on."

Regarding rumors of an affair with her and Horne, Winn said that "would never happen," even if "Tom and I were the last man and woman on Earth."

When I first heard rumors of a Chenal-Horne affair in 2011, I asked Winn about them. She told me she had no knowledge of any such liaison.

Because people were aware that we knew each other, and because there was apparent hostility between the blonde in the office (Winn) and the brunette (Chenal), all roads in Hinchey's probe led back to Winn.

Even Horne suspected Winn, but he wouldn't allow Hinchey to question her. It seemed to many that Winn was protected, or "bulletproof" (DeVernai's word).

According to Keppel's notes, Horne told him that if either Democrats Flynn or Richard were discovered to be the leak, "he would probably fire them."

What about Winn?

"I can't fire her." Horne told Keppel and others. "She could really hurt me."

Apparently, this was a reference to allegations of coordination between Horne and Winn's independent-expenditure committee, Business Leaders for Arizona, during the 2010 campaign.

Certain people said as much to Keppel and Hinchey, including Horne spokeswoman Rezzonico.

In her $10 million notice of claim, Hinchey says that Rezzonico, "during the course of [our] conversation, spontaneously disclosed . . . that independent expenditures had occurred for Horne, at his direction, during the 2010 campaign."

In his notes, Keppel says he asked Rezzonico why Horne would say Winn could hurt him.

"[Rezzonico] said it's because of the 'independent-expenditure account' that [Winn] managed during the campaign for [Horne]," Keppel wrote.

In September 2011, Hinchey went to the FBI with allegations regarding coordination between Horne and Winn's Business Leaders for Arizona.

Hinchey already had approached the FBI in August about allegations that Winn did mortgage-business work on state time and about possible fraud in a grant application.

These issues fizzled. Horne told others that he'd approved Winn's extracurricular work when she was hired. The grant application in question was reviewed and the allegation deemed unsubstantiated.

The focus of the FBI investigation became the issue of coordination, and the possibility that Horne and others might have been involved in money laundering and wire fraud, funneling funds from out of state into the independent-expenditure committee to pay for an attack ad against Horne foe Rotellini.

Eventually, FBI special agents Brian Grehoski and Merv Mason suspected Horne and his associates of coaching witnesses on what to say — they believed Horne was obstructing justice and urging people to lie to them.

Keppel and Hinchey already had documented very un-AG-like behavior by Horne.

On October 7, Horne asked Hinchey and Rubalcava whether he was allowed to tell them "something that he may have learned as a result of someone listening into another person's phone call in the office."

According to Hinchey's report, they told Horne no, that if they were aware of something like that, they would have to investigate it because listening to someone's phone conversation without a warrant is illegal.

Keppel's notes describe a December 12, 2011, discussion with Deputy AG Bistrow.

Presumably with Horne's knowledge, Bistrow asked whether Hinchey's investigative file "could be destroyed/removed from [her] computer."

The ex-judge told Bistrow that doing so would be a crime under state law. Bistrow asked whether Hinchey's reports could be considered "drafts" or moved to Hinchey's state personnel file, which is shielded (for the most part) from public-records requests.

Keppel told Bistrow no on both counts.

Afterward, Keppel tipped off Hinchey about Bistrow's inquiry. She then scanned her notebook on the probe, saved a copy to the AG's Office server, and made digital copies, giving one to the FBI.

After Horne learned of the FBI investigation in late January, he approached Keppel directly, according to Keppel's FBI interview, "about seeing that [Hinchey's] report doesn't leave the office."

Horne told Keppel he wanted Hinchey's notebook on the investigation and wanted "everything on the investigation taken off her computer."

Keppel did not agree or disagree but made notes of the conversation and turned them over to Hinchey, who in turn gave them to the FBI.

In late March, Keppel resigned his post as chief counsel of the criminal division.

Under Arizona law, destroying or altering public records is a class-4 felony.

Obstructing a criminal investigation, destroying evidence, and tampering with witnesses are federal crimes, with possible punishments of five to 20 years in prison.

FBI investigators interviewed scores of witnesses in several states during their investigation, from employees of the AG's Office to contributors to Winn's independent-expenditure committee to campaign consultants.

On several occasions, they cautioned people that lying to the FBI is a crime, using as an example the prosecution of TV personality Martha Stewart, sentenced to five months in the federal pen for doing just that.

When agents Grehoski and Mason interviewed Horne's former executive assistant, Vanessa Deatherage, they warned her that there could be more serious things afoot than campaign-finance violations.

"[You] need to be careful and not get yourself wrapped up in something," Mason told her. "There's a potential for an obstruction case . . . People tampering with witnesses."

The agents visited Rezzonico at her home. She, too, got the "Martha Stewart" warning.

When they talked to Linnea Heap, who lent Chenal her car for Chenal's infamous rendezvous with Horne, they pressed her on what Chenal told her about the fender bender.

"[You're] familiar with why Martha Stewart went to jail?" Mason said still again. "It wasn't securities fraud. It was an interview just like this. She lied to FBI agents."

My federal law enforcement sources speculate that the agents probably had Horne under surveillance because they suspected him of trying to make contact with and coach witnesses.

Sharon Collins, who handles constituent services in the AG's Tucson office, told agents of a conversation she and Horne had while he was attending a Lincoln Day dinner held by Cochise County Republicans in February.

Horne peppered Collins with questions about Chuck Diaz, who, as a contributor to Winn's independent-expenditure committee, was called by the FBI. Horne wanted to know what the FBI said to Diaz about their investigation.

"Did they say to Chuck that it was [about] possible lying, possible fraud?" she quoted Horne as wondering.

Collins says she told Horne, "[Diaz] just said he's been lied to [about his contribution to Winn's committee] and [that] there's fraud, but [Diaz] is not in trouble."

She said Horne was "clearly upset," and she asked Horne whether he wanted her to call Diaz before he was interviewed by FBI agents.

"[Horne] said to just wait until he talk[ed] with his lawyer, [that I] might need a script," she recalled.

By March, Horne felt the FBI closing in, according to Sharon Collins, who in a subsequent interview with FBI agents said that Horne had lost weight and was consumed with worry.

"I'm dying a thousand deaths every day," Collins quoted Horne as saying about the FBI probe. "I don't know what they have."

"Did you take that to mean there's something to have?" Grehoski asked.

"I did," said Collins.

Collins said Horne's chief of staff, Margaret Dugan, had taken a look at campaign-finance reports from Winn's Business Leaders for Arizona and concluded, "Boy, that's illegal."

Winn had been active early in Horne's primary campaign, determined to deny Andy Thomas a shot at the AG's Office. She formed the BLA committee in December 2009, but it remained dormant during the primary.

In a sworn affidavit submitted to the county attorney, Winn says she worked with Horne's campaign until "a few weeks after the election was certified and Mr. Horne was the primary winner."

She says she left the campaign to run the BLA and "was able to raise $535,000 in approximately 10 days," with which she financed an attack ad against opponent Rotellini, made with the help of Lincoln Strategy Group, a political-consulting firm.

"There was absolutely no coordination between anyone in Mr. Horne's campaign or at his direction with myself or my independent campaign," Winn states in the affidavit. "The ad was my idea . . . It was produced by me and only me."

But FBI agents were pursuing a theory based on statements Horne flack Rezzonico supposedly made to Hinchey and Keppel, suggesting that Horne was behind Winn's committee all along, as a way of eluding state campaign-finance laws restricting the maximum dollar amount individuals can contribute to a candidate.

On an independent-expenditure committee, there are no such limits.

According to Hinchey, Rezzonico said, "Winn was pushing back and resisting taking orders from Chenal so as a way for AG Horne to 'separate' the two women. He told Winn, 'You go do this independent expenditure and take care of this money for me.'"

During one of her FBI interviews, Collins claimed Horne "asked me to put Kathleen [Winn] in touch with Chuck [Diaz]."

Diaz contributed $5,000 to the BLA.

Collins' story was slightly different in another interview, in which she remembered that she put Diaz in touch with Winn.

Another issue: the $115,000 in contributions to the BLA made by Horne's brother-in-law, Richard Newman.

Newman says Horne didn't prompt the contributions. Horne's sister, Christine Newman, told FBI agents that she and her husband met Winn at a party after Horne won the primary.

The agents were skeptical, questioning the Newmans extensively about frequent phone calls from Horne to his wealthy sister around the time the bulk of the money was donated.

Horne told reporters it would've been better for his relatives to donate directly to his campaign, instead of to Winn's independent-expenditure committee because of an exception on donation limits to a candidate from family members.

Perhaps, but $115,000 was not enough, on its own, for Winn's ad buy. And that money made up for an anticipated $100,000 deficit in what was needed for the ad.

A national group called the Republican State Leadership Committee initially considered giving $450,000 to Winn's committee but later reduced the amount by $100,000.

Six days before the election, Horne forwarded an e-mail to Winn with polling data showing that Rotellini was beginning to peel away Republicans from Horne, telling her, "Maybe with this we can try again for the $100K."

Horne also forwarded that e-mail to national RSLC director Casey Phillips, constituting apparent evidence that Horne was attempting to direct Winn's committee, in direct conflict with the law.

Winn's riposte? She never attempted to get an extra $100,000 from the GOP leadership committee, as Horne was suggesting.

She also contends that if Horne had been directing the independent-expenditure committee, he would've focused on a rebuttal to a pro-Rottellini ad in which an out-of-state Democratic group, the Committee for Justice and Fairness, attacked him.

County Attorney Montgomery has ordered Winn and Horne to refund all the money from individual and political contributors beyond the maximum allowed by law during the 2010 election cycle.

They are challenging the order, and a hearing is scheduled to begin January 22.

Among other matters, the hearing will address more than 150 phone calls between Winn and Horne from the end of the primary to Election Day, with a spike during the time Winn and Brian Murray from Lincoln Strategy Group were working on the anti-Rotellini ad.

Murray became extremely concerned when Winn forwarded the e-mail from Horne about the polling data on October 27, 2010.

"I warned [Winn] on numerous occasions that she needed to cease contact with the candidate and any agents of the campaign," Murray, concerned about legal liability, wrote in a note to his firm's lawyer.

Records from October 2010 show Winn on the phone with Horne as she corresponded with Murray about the ad's content.

Winn maintains that she was assisting Horne with the sale of his personal property at Seventh Avenue and McDowell Road.

She also says she had been advised by counsel that she could maintain contact with Horne and others in his campaign as long as they did not discuss the campaign.

"I think he missed seeing me," Winn told me, referring to the abundance of phone time.

In a rebuttal to Montgomery's order, Winn and Horne's attorneys argue that the evidence against their clients is weak, that no one knows the content of these phone calls, other than Winn and Horne.

They also argue that "the statutes under which this action has been brought have been declared unconstitutional by the [county] Superior Court in the matter of the Committee for Justice and Fairness."

The CJF is the independent-expenditure committee that helped Rotellini with an anti-Horne ad. The committee did not register in Arizona or file campaign-finance forms, as required by state law.

Which is where the irony gets thick. Horne filed a complaint in 2010 to the Arizona Secretary of State's Office about the CJF's breaking campaign-finance law, and the Secretary of State's Office pursued the matter.

Like Horne's independent-expenditure problem, the CJF issue ended up before an administrative law judge, who ruled against the committee. Its lawyers appealed to Superior Court.

In October, Superior Court Judge Crane McClennen ruled in favor of the pro-Rotellini independent-expenditure committee, finding that all of Arizona's campaign-finance-reporting laws were unconstitutional under the U.S. Supreme Court's controversial Citizens United ruling.

Citizens United declared that the government couldn't suppress the "free speech" of independent-expenditure committees by passing laws restricting them.

McClennen's ruling isn't a precedent and has no force beyond the CJF case. At least, not yet.

Secretary of State Ken Bennett has vowed to appeal McClennen's ruling. The decision of a higher court could set a precedent and potentially junk all the state's campaign-finance laws.

So even if an administrative law judge punishes Winn and Horne with a massive fine, they can appeal it to Superior Court, arguing that Arizona's anti-coordination law is unconstitutional and the matter should be dismissed.

And apparently there are no criminal charges in the offing for Horne's monkeyshines.

In addition to Montgomery's declining to pursue state criminal charges, the Arizona U.S. Attorney's Office now says it has "no ongoing investigation" into Horne.

Any future federal indictment of Horne is unlikely, speculates former Arizona U.S. Attorney Paul Charlton.

"It is unusual for the FBI to share its investigative reports . . . if there's going to be a future federal prosecution on those same issues," Charlton says.

But by releasing this incriminating case file — along with the police reports of the car accident — the FBI has made it impossible for Horne to win the office he always has coveted: governor.

The FBI's conclusion on the fender bender is telling: Agents wrote that Horne's "motive" for not stopping was that he was "having an affair with Chenal," was "using Chenal's apartment in furtherance of that affair," and didn't want anyone to find out.

The same could be said of the entire cover-up and all the criminal acts Horne allegedly engaged in, each of which was a result of Horne's desire to keep hidden an extramarital affair.

Thus, Horne has been the instrument of a self-inflicted wound that may never heal.