It’s not often that you have the privilege of witnessing history.
Today’s hearing of the city’s Independent Ethics Commission might, in retrospect, become a defining moment in the city’s history.
After veteran Springs attorney Lindsay Fischer, who has practiced law in Colorado Springs for 45 years, made his presentation on behalf of his client, Central Bancorp chairman Ron Johnson, it seemed unlikely that the commission would take the action that they had requested. Johnson had alleged that Rivera had an undisclosed fiduciary relationship with LandCo CEO Ray Marshall, that he had not disclosed that fact, and had thereby violated the city’s ethical guidelines.
But Johnson had no direct proof of his allegations – so he asked the commission to exercise its subpoena powers to determine the facts.
Then attorney John Cook, who has represented Ray Marshall in a variety of lawsuits, came forward and said, in effect, yup, Rivera was Ray’s financial advisor until the end of 2007, and yup, here are the account records.
So what’s next?
Here are the obvious questions.
-Did the Mayor reveal his fiduciary relationship to Marshall to his fellow council members? No. He simply assured them that he had no conflict and cited UBS policy in saying that he could neither confirm nor deny the existence of any customer account – such relationships, he has said, are absolutely confidential.
-Did the relationship amount to a conflict of interest? In my opinion, absolutely. Mr. Marshall may have controlled large sums during the 2005-2007 period when the Mayor acted as his financial advisor. The mayor may have received substantial compensation as a result of that relationship – or his compensation may have been negligible. In any case, an undisclosed past fiduciary relationship with the developer who, three months after severing the relationship, was chosen to partner with the city and the USOC, constitutes a glaring omission at best, and a severe conflict at worst.
-How could have the Mayor avoided the conflict?
There’s no easy answer to that one. By recusing himself from the deliberations leading up to the selection of LandCo, Rivera would, in effect, be revealing that one of the developers was a client – which would have been contrary to his firm’s policy. It would have also been contrary to his obvious desire to drive the whole USOC process, to lead the city as its Mayor, and to assure the success of the project. He probably saw the whole LandCo/Marshall involvement as a minor sideshow, one that would affect neither his judgment nor his actions on behalf of the city.
There’s yet another complicating factor. The accounts in question are almost certainly those which are referenced in multiple lawsuits filed by Mason Investments III and Jack W. Mason against Marshall and LandCo. In the suits, Mason alleges that Marshall illegally transferred funds from limited liability company that he ran, without the knowledge or consent of other investors, and used the funds to leveraged securities speculation. If Rivera managed these accounts, and if the accounts incurred losses, and if Rivera knew, or should have known, that Marshall did not in fact have the authority to invest them, then there may be additional lawsuits filed.
The whole situation is at best murky, at worst damning. It seems to me that the Mayor has little choice but to resign, and thereby end the whole circus. He can no longer effectively lead this city, and at a time of fiscal crisis, the city needs firm, trustworthy leadership.
To him, this must seem absurdly unfair. But life, as President Kennedy once remarked, isn’t fair-and neither is politics.