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A continuation from the developing story in the previous post.
S-R Reporter Camden covers WSBA initial ruling on the Swinton bar complaint by Tim Conner. Interesting. This is more reporting on the RPS bond fraud than I’ve ever seen by the S-R since moving here a year ago. Did I miss something? Did the S-R ever report the initial filing of this complaint as “new” news? Why report it now?
Anyway Camden does a fair job in his report but does gloss over the real crux of RPS bond fraud as being very complex public/private funding arrangement . Nothing really that complex here though – the foundation was a sham by the developers as determined by the IRS, Swinton was funneling money to Preston & Gates to obtain the 501(c)(3) status for the RPS foundation that never was issued, the first bond escrow was allowed to close by Preston & Gates Attorneys McDevitt and Ormsby knowing the bonds would likely tank, everybody was CYA’g. No one was going to get paid for a lot of legal work if this bond escrow didn’t close. The institutional bond investors sued for fraud.
Special City bond counsel Laurel Siddoway “gutted” the City’s “case in chief” for fraud and the citizens of Spokane were left holding the bag. This was after Mayor Powers fired Attorney O. Yale Lewis hired by the then Mayor John Talbott (Branded a “civic terrorist” by the S-R) who was on the verge of unraveling and exposing this fraud. Mind you Siddoway and her husband were large contributors to Powers’ campaign and our man Ormsby was his campaign treasurer. The citizens of Spokane are now paying to the tune of about $2M per year in general fund revenue to service the debt on the subsequent bonds issued to repay the defrauded bond holders. The IRS most likely because McDevitt was subsequently appointed as US Attorney for the Eastern District of WA, fell on their sword and never pursued this case criminally as a fraud. The IRS got their back taxes I’m told of some $8M paid through Preston and Gates in a concealed deal.
Seriously as a former planning commissioner with a graduate degree in public administration with course work in urban planning I have nothing against private/public redevelopment projects to spur development in areas that are really in decline by purchasing property to make larger chunks of property available that investors and new businesses may not have the capital to do otherwise. However with that said all the cards need to be clearly laid on the table, equitable sharing of the risks, and lastly when a project goes belly up the costs are equitably shared without the public getting left holding the bag and unduly shafted to the tune of some $100M. This smacks of a common con game to me. The stakes are just higher than in any pigeon drop or Three-card Monte game.
Yep no ethical issues with attorneys in this town!
Standby for the new game in town with the STA’s reissue of the sales tax increment financing. However this time without a “sunset clause.” I’m willing to vote for the STA reissue but without a “sunset clause.” When the STA is allowed to build a “bubble” of the public’s money they tend to make bad capital project decisions. Need I remind folks of the STA Transit Plaza that was built for some $20M on perhaps property that was staged in acquisition looking for a public project to fund the purchase. Of course no one wants to be reminded that there was a arson/murder fire where the STA Transit Plaza now sits. Oh heavens we can’t go there! Now it seems the Transit Plaza was poorly located and yet again will likely be moved because of the concentration of undesirables nearby that offends the noses of the denizens of the Sterling bank building.
OK for the record and demonstrating the true nature of my conspiracy theory personality, just wait STA will propose a light rail system for downtown linking Kendall Yards with cute little rail trolleys. They will dig up the streets that the citizens have already repairing and improving with a large road bond. Now I’m all for urban mass transit but the density in the Downtown corridor is still lacking to generate a self-sustaining revenue stream without a large public subsidy. Can’t we all get along and perhaps purchased more of those cute little trolley buses that sometime run empty. Now I’m all for completing the North/South link for US Hwy 395 to get the trucks off of Division.
What do I know I’m just a retired cop but we can be vicious when defending the sheep from an attack by the wolves. Take a read of this piece by Lt. Dave Grossman from an address at the US Naval Academy:
On Sheep, Wolves and Sheepdogs
(From the book, On Combat, by Lt. Col Dave Grossman)
Ron the Cop
Friends of Mark Fuhrman
Investigation finds no ethical breach by RPS lawyer
April 24, 2008
An attorney for the owners of River Park Square did not violate bar association rules against conflicts of interests when he represented the mall and the company that publishes The Spokesman-Review, an investigator for the Washignton State Bar Association said.
Randy Beitel, the senior disciplinary counsel for the bar association, said he was dismissing the complaint by independent journalist Tim Connor against Duane Swinton, saying the attorney was following the directions of one client, Cowles Co., which own both businesses.
“Mr. Swinton’s duty of loyalty ran to that one client, Cowles,” Beitel wrote in a letter to Connor explaining the bar’s decision. If there were competing interests that had to be balanced between the mall and the newspaper, “those were issues for Betsy Cowles and Stacey Cowles and their staff to resolve.”
Dick Adams one of S-R Editor Smith’s little green men sent this comment to S-R Reporter Jim Camden:
From: Dick Adams
Sent: Thursday, April 24, 2008 12:31 PM
Subject: RPS attorney story 4/24
Your story today regarding the RPS attorney stuff was candid, straight forward, and fair. You did good.
Having said that, at some point in time, common sense has to dictate the truth and nothing but the truth. If Swinton for example, is representing one big company and also represents smaller subsidiary companies, 2 or 3 of which may be the news media, how can he fairly represent both the newspaper which has a responsibility to explain to its subscribers and the public at large all known truths, good or bad, and be honest too both?
One example might be corporate welfare. Usually either social or corporate welfare is money taken from the public trough/public cash register. Swinton, may even be covering up money deals he might think are of a questionable nature?
I remember looking into real estate tax exemptions many years ago. I discovered while snooping around at the court house, the Spokesman Review building had been granted a 10 year historic building tax exemption. Looking deeper at the exemption, I found out the owners of the Spokesman Review building, not only the structure was tax exempt but the land the building sits on was also exempt. The owners (Cowles) paid zero tax on the building or the land the building sits on. Furthermore, I discovered, the owners built another building attached to the old one and for the record, recorded that the new building was needed for the structural integrity of the old building. Guess what? The newer part of the (built in the early 1980`s) building was also granted a tax exemption, on both the building and the land. I investigated records at the Tax Equalization Office where I noticed Swinton`s had signed documents on behalf of the Cowles for several structures.
During my investigation it was obvious Attorney Swinton was involved in many Cowles` records. I tried for years to get the SR to print about the corporate welfare regarding the Cowleses historic preservation and such a huge tax exemption I felt were unfair. To no avail.
I think my story was newsworthy yet my investigative work was for not. Impossible to expose the tax payer`s money that was given away. It was`nt only the Cowles family with its snoot in the public trough but other know elite movers and shakers that also live in the Lilac City.
I have more examples of stuff not published, which in my opinion is a disservice to the public. Ask yourself next time you look in the mirror, if what I say is true, and it is, how come these kinds of things are withheld not published in the Spokesman Review? Does attorney Swinton, looking after the many interests of the big company and others have anything to do with what is or what is not reported? Conflict of interest?
Common sense should dictate.
Dick Adams, a subscriber of the SR for over 20 years.
S-R Reporter Jim Camden replies to Dick Adams’ email:
rom: Jim Camden
Sent: Wednesday, April 30, 2008 12:03 PM
To: Dick Adams
Subject: RE: RPS attorney story 4/24
Thanks for your e-mail. I did receive it, but I was out of the office (and out of state) for much of the last week.
Not sure I can address all your points to your satisfaction, but I’ll try. First, thanks for the compliment. Above all else, we try to be fair.
As far as the ins and outs of legal conflicts of interests, I have to leave it to the bar association to address their rules. I’m no expert on it at all, and all I can do is report what they say. Common sense may or may not have something to do with this (as in many legal matters); I believe that Mr. Swinton felt he could serve both the newspaper and the mall development companies, and thus the parent company, well. The management of the newspaper, when it discovered what happened regarding the secret agreement made by RPS in 1999 to make the lease payments if AMC pulled out (a story that was first reported in The Spokesman-Review, by the way) decided that was not the case, and no longer uses Mr. Swinton or his firm for any stories related to RPS. They and Mr. Swinton have a difference of opinion on this point; I don’t know who’s right, and I don’t really care. From my standpoint, if I need legal advice on how to shake loose a document on RPS, I call a lawyer in Tacoma; if I need legal advice on anything not related to RPS, I call Mr. Swinton, who in some 25 years of advising me, has generally done a good job. I think the newspaper has a responsibility to use the best tools it has available, and as far as legal advice on things related to the news media, Mr. Swinton remains one of the best in the state. I have no reason to think he is “covering up money deals he might think are of a questionable nature.”
I think corporate welfare is a term a bit like congressional pork. If you think it’s a worthwhile project, it’s a wise investment in the local infrastructure; if you disagree with it, it’s corporate welfare. The mall deal involved programs that leveraged public money. The decision to do that was made by the city council, and as you and I both know (and no doubt remember) it was a political decision. They made it after some people told them to do it and others told them not to. The circumstances of their decision were covered at the time, and have been written about repeatedly since then. It may not have been covered to everyone’s satisfaction and in the detail that later surfaced, but it was covered. There were some things that were not revealed when the council voted, most notably the Nordstrom lease; but remember the superior court ruled (and was later affirmed on appeal) that the lease was not a public document until public money started to flow into the project. It was, however, public after that point (and reported on). I can’t reconstruct all the RPS stories that have been written here; all I can say is that the newspaper did it’s best to tell people what was going on with the mall, both financially and politically. You can believe me or not, but no one from the parent company — not Stacey or Betsy Cowles, their uncle, the company’s treasurer, Mr. Swinton, or their PR firm –, ever told me to change one of my stories or made a change in one of my stories through an editor. I’m not ashamed of the newspaper’s coverage, and have talked freely to Camas Magazine, the televisioin stations, the Washington News Council and others, but I’m not going to rehash all of the arguments now. My view on the whole mess is that the deal was too complicated, relied too heavily on streams of money that weren’t as reliable as people thought, began to fall apart when garage revenue was way below estimates, and was further complicated by a huge shift in the political structure of Spokane. You’re free to disagree with me on any and all of this, but I’m not going to debate it.
As for the tax exemption, I don’t know anything about it, and so it’s dangerous for me to offer conjecture, but here goes: The company that owns the newspaper remodeled the Review Building, which if memory serves, is one of the oldest buildings in town, in the mid 1980s, and also built the tower next to it around the same time. They had to shore up the original building because it was not earthquake proof, so they anchored it to the new building. In making changes they did certain things to maintain the historic character of the old building, for which they received some tax breaks. I know all of this because I wrote stories about the building project some 20+ years ago. Whether this is connected to the tax breaks you mention, I don’t know. I can’t tell from your note whether you think there’s something illegal or just unsavory about what they did. But from what I know about the tax breaks for restoring historic buildings, I don’t see either problem — that program exists for a reason that some government body has determined to be worth the cost. You may not agree with it, but that doesn’t make it illegal. The fact that Mr. Swinton signed the paperwork is not some huge smoking gun: he is the coroporation’s attorney for many things, and would have had to review legal documents…Again, this is conjecture on my part I’m not an attorney or even a reporter who concentrates on business and tax issues; if you think there’s something wrong, why not ask the county officials who granted the exemption?
You are entitled to your opinion that such tax exemptions are unfair. That does not make them wrong, or illegal. They may, in fact, be bad public policy, but that would be something to take up with people in the position to make tax law, not with me. I think that’s the common sense position on this point.
You are also entitled to your opinion that by not reporting this, I am committing some sort of disservice to the public. In fact, I’m a reporter who covers other issues, have more stories than I have time, and frankly don’t consider it news that a company in Spokane, whether it’s a Cowles entity or someone else, uses a legal tax exemption. Maybe I’m missing something, but absent something much more than you’ve stated here, I’m not likely to agree, and even if I did, I’m not likely the reporter who would write about this. You might be better off to suggest the story to other reporters at the S-R or at any other news outlet in Spokane who are better versed in these topics.
Again, thanks for the e-mail, and for being a subscriber for all these years.
S-R Reporter relies to my email:
Thank you for your e-mail. I apologize for being slow to respond, but I was out of the state for much of the last week, and unable to reply to e-mails while gone.
While I usually leave discussions of the newspaper’s coverage to editors, I should point out a couple of inaccuracies in your message.
The Spokesman-Review did cover Mr. Connor’s filing of the bar association complaint. We don’t always write about the filing of bar association complaints, because they are not made public at the time, and not even formally acknowledged by the bar association when filing occurs. But when we do find out about them, we sometimes report them in a brief story, and await the bar association’s determination. That’s what we did with Mr. Connor’s complaint, which was in a column of “Briefs” on page B-1 on July 24, 2007. It wasn’t very large, perhaps you missed it.
If it was covered in a few paragraphs then, why write considerably more now, you might well ask? Because we had the document from the bar association that dealt with the complaint and the investigator’s determination of the complaint. It also takes a bit of space to explain the parts of the River Park Square case that were germaine to this complaint.
You are correct that this story does not deal with all of the elements of River Park Square. No single story could, and this one wasn’t designed to do so. It was trying to stay on point with Mr. Connor’s complaint, which had nothing to do with Ms. Siddoway, the status of the foundation, O. Yale Lewis, John Talbott or Jim McDevitt. It was specific to Mr. Swinton’s role as the attorney for two entities owned by the same parent corporation, and the story stuck with that.
You may recall that we did do a larger story when Mr. Connor and former councilwoman Cherie Rodgers’ bar association complaint regarding US Attorney Jim McDevitt. That was, in fact, an exception to what we normally do, because it involved a public official (Mr. McDevitt) a former public official (Ms Rodgers), a series of public statements by both of them and a referral to the Justice Department. To explain all those associated pieces to the story, we wrote more than we normally would for the filing of a complaint. When a decision on the complaint is forthcoming, I suspect we will do a story as long as last week’s on the Swinton complaint, or perhaps longer. It’s hard to predict until we see the decision.
You say this is more reporting on the RPS bond fraud then you’ve ever seen by the S-R since moving here a year ago. It’s very possible, then, that you missed some of the past coverage of River Park Square by this newspaper, including an 8-day, multi-part series, some of which Mr. Connor tells me were instrumental in his decision to file the complaint. There was also coverage of the trial, the finances of the project and many other things that pre-date your residence here. I’d be happy to send you links to some of those, if you are truly interested. As I’m sure you can appreciate, the newspaper cannot reprise its past coverage just because you have moved to Spokane. You may have also forgotten our coverage of the Connor/Rodgers complaint against Mr. McDevitt…I’m sure you read it at the time because you sent me e-mail about it.
Please understand, I’m not volunteering to engage in a protracted debate about how the newspaper does or does not cover this or any issue. That”s not my job here. I’m a reporter, and one of the things upon which I report over the years has been River Park Square. Readers are free to take issue with anything I write. I just thought, in the interests of accuracy, perhaps you’d be interested in reading it before you comment.
Again, thanks for the e-mail, and your assessment of the story as fair. (I’m assuming that what you meant was that it was reasonable and balanced, as opposed to somewhere between mediocre and good…although even if the latter, I suppose that’s still a compliment.)
I replied with this comment:
Thank you for your reply. Yes I did miss the piece in the “Briefs.” Thank you for calling it to my attention. I don’t know if this was before or after I called the Swinton bar complaint to the attention of Mr. Smith. Yes your article was a “fair” representation of the issues surrounding the Swinton issue. I also found it refreshing re the RPS context that was added. Yes I know there has been reporting in the past but there has been a dearth of late except for the public outing and sanctioning of the two attorneys of Preston & Gates (Ormsby). Ormsby I might add has now been brought on by the STA. I think I would have waited until after their ballot proposition was voted on. I also find it amusing that Stan Schwartz has been brought in to represent the City et al in its condemnation action on Glenn Cloninger’s property.
And yes I’m aware of the bar complaint re Jim McDevitt as well as the subsequent coverage. The last I understood the WSBA has put this on hold until the feds finish their review. My only complaint was that the info that led to his recusal was readily available and no one called him on it until he appeared on the Mark Fuhrman Radio Show. I find that interesting as well as his relationship to Mike Ormsby. Ormsby’s loan to the Hession campaign was not put in context until I complained to the S-R.
My complaint right now is why the S-R hasn’t done any follow-up inquiries with the US Attorney’s Office in Seattle re RPS et al and the Savage death. They’ve had this case a long time. An update story would be appreciate even if they say this is an ongoing investigation/review and won’t say anything. It’s a way of keeping them honest and not let the statute of limitations run on Sheriff Bamonte’s allegation that this death was a first degree manslaughter under Washington law. . .