S-R – ‘Counsel’s RPS strategy faces criticism’ by Jonathan Brunt

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[Note: Original sent my email on 06-09-08. This is a MS Word Doc. Slight changes have been made for format readability. Several slight grammar tense errors as well as typos have been corrected. Instead excerpts I have attached the entire Camas Magazine articles I referenced as PDFs. These PDFs do not have active HTML links. Go to the originals at Camas Magazine’s archives for the HTML links to other referenced Camas documents]

June 9, 2008

Jonathan Brunt, Reporter
999 West Riverside Ave.
Spokane, WA 99201

Re: ‘City’s RPS strategy faces familiar critic’ by Jonathan Brunt

Dear Mr. Brunt:

Whether you realize it or not your article has opened the door to unraveling this Gordian Knot of the RPS bond fraud by an ongoing criminal enterprise headed by the Cowles Co e.g., Betsy Cowles, that uses the S-R as a cover for its criminal actions. I see where the S-R has printed a correction regarding Mayor Verner ‘s statement as to the, “. . . guarantee [of] payment of the federally backed loan,” and not as originally reported, “. . . Cowles Co. to guarantee payment on the bonds.”

Mr. Brunt the issues surrounding the collaterializing of the RPS HUD loan are the key to unraveling this fraud. As I provided you the information regarding the recently disclosed O. Yale Lewis documents, I have more information that will help you set the record straight on the RPS HUD Loan fraud. As I previously wrote in an email, I would also strongly encouraged a read of Attorney Mark Schwartz’s letter at the end of these released documents as to Laurel Siddoway’s claim of innocence in the RPS “bailout” settlement. In my opinion this bailout was a compounding of the first fraud. Further as I wrote to City Clerk Terry Pfister it is my strong belief that the public has the right to know the substance of what is contained in these Lewis documents currently being withheld on the basis of an attorney/client privilege as proffered by the City Attorney.

As I explained in my email to Ms. Pfister:

Dear Ms. Pfister,

Thank you for your update regarding my PDR for the Lewis documents. I see that S-R Reporter Brunt received his copies re his PDR on the Lewis documents and they are now posted on the S-R website. I’m assuming these are all the Lewis documents that are available for release. If not please let me know and I will come into your office to review them. I do know that there was a letter sent to several of the council members by the City Attorney Office regarding the release of these documents. I requested this letter and I don’t see where it is among the redacted documents.

Of course I differ re the determination of the City Attorney to withhold these redacted documents as a matter of attorney/client privilege. If the Spokesman-Review does not pursue them I may initiate legal action to obtain them. In my opinion the citizens of Spokane are the “true” clients. The withholding of these documents interferes with the citizens’ ability to hold their governmental accountable for potentially criminal acts. In reality former Mayor Talbott, former City Councilperson Cherie Rodgers, and Attorney O. Yale Lewis will not sue if these documents are disclosed. The only ones likely to support their withholding from public disclosure are the ones that have potential criminal liability in the apparent ongoing criminal conspiracy regarding the RPS bond fraud. This includes Ms. Laurel Siddoway who is captioned in many of these documents. This is especially apparent in the now released letter from Attorney Mark Schwartz. In my discussions with Mayor Talbott, Mr. Lewis was retained to unravel the RPS bond fraud and to make whole the citizens of Spokane. Mr. Lewis’ charge was not to provide criminal defense for city officials or their contract employees that were complicit in this fraud. In my opinion the interest of the publics’ right to know to hold their government accountable when there is reasonable cause to believe that they were defrauded in the RPS project in an ongoing criminal conspiracy, trumps any potential attorney/client privilege in documents in the possession of and paid for with taxpayer funds of those complicit in the fraud. The citizens of Spokane after all are now saddled with a new indebtedness of approaching $100M.

Please kindly forward my email to the City Council and the City Attorney.

The S-R has never reported the following information which goes to the very heart of the RPS bond fraud and the collateralizing of the RPS HUD loan. See the following excerpts from Camas Magazine reporting regarding “Inside Job: The Paper Trail” (07-15-2002). I specifically call your attention to the “confidential” memo from City Attorneys Jim Sloane and Stan Schwartz, – “Confidential, 6-page memo from city attorneys Jim Sloane and Stan Schwartz to Mayor Jack Geraghty and city council.” I would also call your attention to, “Stan Schwartz confirms to HUD that Cowles Guaranty only comes into play after all CDBG funds are spent.”

You can term it anyway you like but Mr. Schwartz mislead the Council with regard to collateralizing of this loan. Mr. Schwartz omitted from his presentation to the Council that the City’s CDBG annual allocation of $4.5M per year would come first before any Cowles Guaranty would kick in on any loan default. It is interesting to note as a tangential matter that Mr. Schwartz is now representing the Cowles Co real estate interests in the Spokane Valley and has been retained by the City in its condemnation action against Glenn Cloninger’s property across from the Convention Center. How coincidental. In my opinion there is nothing that happens in this town that is coincidental. Watch the videos of this Council meeting on the Camas website and decide whether Mr. Schwartz mislead, misrepresented, or in fact lied to the Council based on his previous confidential memo with Mr. Sloane to the Council.

And lastly Mr. Brunt I direct you to this article by Camas Magazine, “The Missing Man” [See selected excerpts attached]. In this article it clearly shows the specific intent and cavalier and brazen attitude of Betsy Cowles. It is as if she believed the public treasury was her own personal checkbook in her memo which has been called the “divide and conquer” memo. In this memo she demonstrates the extent to which she would go to conceal these secret negotiations from the public that she was indeed “robbing” them. The RPS bond issuance was a fraud through and through by the players involved as evidenced by this memo and other Camas documents that stand alone on their face. The IRS in as much said this was a fraud in its ruling disallowing the tax-exempt status of the RPS bonds as I described in my latest letter to S-R Editor Steve Smith:

. . . My operating hypothesis is based in part on my read of the IRS ruling disallowing the tax-exempt status of the first RPS bonds and as reported by Camas Magazine in ‘The Casino was Rigged‘. Based on the IRS report I don’t know why the IRS didn’t pursue criminal fraud charges against those involved. My speculation based on my experience is that IRS knew that pursuing such a criminal case was a losing cause based on the relationship of the current US Attorney for the Eastern District of WA, Jim McDevitt, and his previous personal relationship with the RPS bond fraud and with his former colleague Attorney Michael Ormsby at the law firm of Preston & Gates.

I asked independent investigative reporter Larry Shook of Camas Magazine to provide an analysis of your article in light of his own research. Shook’s complete reply is attached. Here are key excerpts:

My view is that the story in question leaves unreported one of the most significant aspects of the RPS controversy. Namely, the documented conspiracy between City of Spokane officials and the Cowles family to keep secret the refusal of the Cowles family to meet federal guidelines in providing collateral for the $23 million HUD loan. As evidence of this conspiracy, please see the memo that Cowles Publishing Co. chairwoman and RPS president Betsy Cowles wrote to RPS project manager Bob Robideaux on 3/9/95. In it you’ll note Ms. Cowles’s acknowledgement that there will be no letter of credit. You’ll also note her stated intention to keep secret her plan to use the $23 million HUD loan to subsidize construction of the new Nordstrom building. You’ll find this memo linked to the story “Missing Man” at . .

“The evidence is clear that both Betsy Cowles and her brother Stacey, the newspaper’s publisher, were deeply involved in trying to maneuver the River Park Square garage deal through city hall at the time [an important] October 23, 1996 story was published. Behind the scenes at the same time Boggs’s story was being purged of the unwelcome Walker cost estimates, the Spokane city council was reeling from the sticker shock caused by the Cowleses’s asking price.

“That hidden drama is recounted in a memo Stacey Cowles wrote to his sister on the same day, October 23rd. In the memo Stacey Cowles relayed political intelligence on the council’s deliberations that had been gathered by ‘Karen’—probably Karen Valvano, then-president of the Downtown Spokane Partnership. Mr. Cowles was chairman of the DSP’s board of directors.

“Laurent Poole did an incredible amount of damage,” Mr. Cowles wrote. Poole, an executive with the Sabey Company, had recently made a presentation to council members. The Sabey Company then operated the Northtown Mall and was complaining, among other things, that the proposed RPS garage deal was an unfair and unwise public subsidy to a competitor. . .

Clearly, this may be important evidence of the ongoing conspiracy you allege. That The Spokesman-Review has never reported on this (and a great deal of other) damning evidence lends further credence to your charges both of the newspaper’s role in this conspiracy and the self-censorship Spokesman-Review personnel impose upon themselves in ignoring and even suppressing aspects of the RPS saga that incriminate their owners. That the 6/7/08 story perpetuated suppression about the Cowles HUD collateral appears to satisfy at least one textbook example of self-censorship. . .

Whether federal criminal investigators will ever subject this evidence to meaningful scrutiny remains to be seen. Given the damning conclusions reached by the IRS concerning RPS (please see “The Casino was Rigged” at, so far government at all levels is at least as implicated in the aura of self-censorship surrounding RPS as Cowles employees are themselves, in my opinion.

As in my first letter to S-R Editor Steve Smith I painstakingly detailed the elements of a criminal conspiracy and put him on notice regarding his character assassination of me:

Investigative reporters and criminal investigators share many common tools and techniques. In one way we differ is the manner we pose probative questions to potential witnesses and suspects. We all seek the truth and ultimately serve the public. I won’t restate my operating hypothesis outlined in the Brunt email but I will say from my review of the Camas Magazine documents there is a clear pattern and practice in a series of public/private projects in Downtown Spokane where “tainted” public financing was used to enrich the pockets of a few individuals at the expense of the public. Based on my training, education, and investigative experience this is an ongoing criminal enterprise where individuals at different times have acted together in concert to commit criminal acts and/or individually carried out with the knowledge and approval of this group. This by definition, Mr. Smith, is a criminal conspiracy.

In my review of the circumstances and evidence I believe there is reasonable cause to believe a similar MO is apparent in the STA Transit Plaza Project. I don’t know who burned out whom in the Zukor Building arson fire or in the District 81 Building arson fire but some of the same individuals clearly economically benefited from these fires. Generally if anyone aides, abets the principals in the commission of these acts, with criminal knowledge personally benefits, conceals information and/or impedes the investigation is criminally liable. As a criminal investigator I most assuredly would be asking probative questions to seek the truth. I would in a heartbeat use as a “hammer” as any cop would who wasn’t green behind the ears, that Captain Hanna was killed fighting the Zukor Building fire. I would make it very clear this was an arson/murder fire and further ANY involvement could bring criminal liability for murder under the general felony/murder rule. This applies as well to the Savage death in the RPS Parking Garage that both former Sheriff Bamonte and I believe was a negligent homicide arising to the level of a first-degree manslaughter in Washington.

Other than Mr. Smith’s being totally incompetent and or totally oblivious to the canons of “journalism of verification” as I rather doubt, there is little else to infer than he’s part and parcel of this ongoing criminal enterprise. He continues to marginalize and dismiss the collective of works of Tim Connor and Larry Shook. He regularly impugns publicly as captured in the latest S-R Ombudsman’s Column my character and professional integrity. This is now done with malicious intent to harm after warned by Tim Connor as Mr. Smith wrote:

I suppose I might misremember, and if that is the case, I do apologize. I certainly had no intention of libeling them.

Insulting them, marginalizing them, ridiculing them, well yes, that is often my intention with Connor/Shook.

Mr. Brunt I see this as important “new” news that has never before been reported by the S-R. Will you ask the probative questions? Will you report it? And more importantly if you are not allowed to report this “new information” that is so adverse and damning to the core interests of the Cowles Co, this will be a further affirmation of my operating hypothesis regarding the S-R being part of this ongoing criminal enterprise:

. . . S-R is nothing more than an instrumentality of the Cowles Co’s ongoing criminal enterprise to cover it’s criminal activity. This is done by it’s active self-censorship of stories and censorship of comments in S-R blogs. This information is highly detrimental to the owners that would otherwise inform the public. The public once alerted, educated and informed would hold their elected/appointed officials accountable for their criminal acts who have been systemically co-opted/corrupted by this ongoing criminal conspiracy

As I expressed in my latest letter to S-R Editor Mr. Smith this is not my opinion alone but is shared by Spokane veteran KXLY radio icon Mike Fitzsimmons:

We know firsthand in Spokane about what can happen. The River Park Square story in Spokane, was deliberately and unethically under-reported by the Spokesman Review and one television station in our community, to protect the family that owned the mall and the media outlets. Imagine what might have been possible had this local media powerhouse controlled many more sources. The public might not have learned about this fiasco at all.

I look forward to reading your follow-up story. I trust Mr. Cowles, Mr. Smith, and Mr. Graham will abide by the S-R’s new Code of Ethics and obtain an outside editor to handle this developing story because of the very apparent Cowles Co conflict of interest.


Det. Ron Wright (Retired)


Camas Magazine Excerpts: “Inside Job . . . “ & “Missing Man
Email from Larry Shook

Sheriff Ozzie Knezovich, County of Spokane, WA
Mayor Mary Verner, City of Spokane, WA
City Council, City of Spokane, WA
US Attorney Jeffrey C. Sullivan, Seattle, WA
Assistant U.S. Attorney Kurt Hermanns, Seattle, WA
Assistant U.S. Attorney Robert Westinghouse, Seattle, WA
Agent Frank Harvill, Federal Bureau of Investigation, Spokane, WA
Sgt. Ken Wade, Washington State Patrol, Spokane, WA
Chief Anne Kirkpatrick, City of Spokane, WA
Acting City Attorney Pat Dalton, City of Spokane, WA
Sheriff Bamonte (Retired), Spokane, WA
Breean Beggs, Center for Justice, Spokane, WA
Cherie Rodgers (Former Councilperson), Spokane, WA
Larry Shook, Spokane, WA
Mayor John Talbott (Former), Spokane, WA