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Updated Oct 11, 2013 - 3:24 pm

No prosecutions from Tucson redevelopment project

TUCSON, Ariz. -- State prosecutors have decided that nobody will be criminally charged in connection with Rio Nuevo, a mismanaged project to redevelop downtown Tucson that squandered millions of taxpayer dollars.

A joint state-federal investigation found ample evidence of bungling by the city, Rio Nuevo board members and others but concluded it didn't rise to criminal conduct despite $250 million having been spent with virtually nothing to show for it, the Arizona Daily Star reported Friday.

The conclusions are contained in a newly released December 2012 memo in which the state attorney general's office said the case was being closed without prosecutions.

``We've lived and breathed this case. And there is nothing criminal at this time,'' Assistant Attorney General Mike Jette said in the memo. ``So everyone needs to take a deep breath and move on.''

Rio Nuevo produced widespread skepticism in Tucson as well as criticism from state officials and others who saw it as a boondoggle that wasted tax dollars.

The 18-month investigation led by Jette began in 2011 after two former Rio Nuevo board members reported criminal allegations surrounding numerous proposed projects, including one for a hotel for Tucson's convention center.

Allegations of wrongdoing included fake vendors, overbilling, conflicts of interest, bribes and kickbacks.

The memo said obstacles to criminal prosecutions included inaccurate information provided to investigators, passage of time and media coverage that made it difficult to catch interview subjects off-guard.

The memo also cited a U.S. Supreme Court ruling in 2010 on cases of alleged fraud against taxpayers. The ruling made it difficult to prove wrongdoing occurred without direct evidence of bribery or kickbacks, the memo said.

Mayor Jonathan Rothschild said the city can now put Rio Nuevo behind it and focus on the future.

``The two agencies did thorough investigations and reached the right result,'' Rothschild said. ``It has long been time we looked forward about downtown. We have been doing that the past 20 months, and we are seeing the rapid results.''

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