Hazlehurst’s Blog
Insight and commentary from John Hazlehurst

Commission votes, mayor gloats

0

As predicted by many, the two-member Independent Ethics Commission cleared Mayor Lionel Rivera of any violation of the city Code of Ethics, as alleged in the complaint filed by Ron Johnson.

The report is carefully crafted, fair, judicious and as complete and accurate as it could be, given the limited scope of the inquiry.

As the report states: “the commission’s investigation was limited to a review of the Mayor’s actions concerning the project as they relate to the allegations contained in the complaint and its supplement.”

Such limitations were proper and necessary.  Johnson’s allegations should not, and did not, trigger a witch hunt, in which the commission might have interviewed dozens of witnesses, who might have made further allegations of unrelated misdeeds, which would then have been investigated, and so on ad infinitum.

Instead, the commission interviewed only the Mayor, Ray Marshall (accompanied by his attorney John Cook), councilmember Scott Hente, assistant city manager Mike Anderson, former councilmember Margaret Radford, and USOC consultant Jim Didion.  All witnesses appeared voluntarily, without subpoena.

The commission declined to interview any other individuals suggested by Johnson or his attorney, noting that “the information allegedly possessed by those individuals was either duplicative or not germane to the issue of the Mayor’s involvement in the USOC project.”

It’s pretty clear that none of the individuals interviewed held any animus toward the Mayor.  To the contrary, every one of them had powerful reasons to present the Mayor’s actions, and by extension their own, in the best possible light. 

During the time that the interviews were taking place, LandCo, the city, and the USOC were in the midst of renegotiating their deals with each other, in the wake of the disastrous collapse of the initial EDA.  Didion’s present role with the USOC, if any, is unknown, but Marshall, Anderson, Hente, and the Mayor have all been deeply involved in restructuring the deals.  Radford’s involvement ended with her council term last April, but she has long been an ally/admirer of the Mayor.

The city’s current spin on the collapse of the previous agreement is this: forget all the lawsuits, allegations, and angry words-it was all the economy’s fault!  In a presentation to council, Mike Anderson cited the “world financial meltdown” as the sole reason for the deal’s demise.  In other words, it’s nobody’s fault, so let’s all move on.

Based on the testimony of these individuals, the commission concluded that the mayor had no part in choosing LandCo as the designated USOC developer, did not take positions or actions that favored LandCo, and that any subsequent contacts with LandCo were made for the purpose of advancing the city’s interests, not LandCo’s.

The most significant omission on the list of witnesses may be that of former USOC CEO Jim Scherr, who, the report noted, had been quoted in “news reports” as saying that the LandCo selection had been made by the city, not by the USOC.  The commission chose not to interview him, both because of “overwhelming evidence” that the choice was made by the USOC, and because of Jim Didion’s statement that Scherr had little or no involvement in the process.

The omission is disturbing, because the “overwhelming evidence” that the report cites presumably comes from the testimony of the six interviewees.  One would think that possibly contradictory testimony would be welcome, even if it presented the two commissioners with the tiresome task of figuring out the truth of the matter from differing accounts.

The most interesting paragraph in the seven page report is this one, in which the commission gingerly tackles the question of Rivera’s failure to disclose a financial relationship with LandCo CEO Marshall

“Finally, the commission wishes to address the issue of whether the Mayor should have disclosed his prior business relationship with Mr. Marshall.  The Mayor’s explanation for not making the disclosure has been that it would constitute a breach of the UBS policy of respecting the confidentiality of its clients.  Had the Mayor disclosed the prior relationship it would probably have negated the suspicions that ultimately led to a request for an investigation.  In the Mayor’s view, it would also have been a serious violation of a business and ethical responsibility.  Whether the Commission agrees with the Mayor’s decision is not pertinent(italics added).  As noted previously, at the time the Mayor had the business relationship decisions were being made as to which developers would receive requests for proposals and, possibly, which developer should be selected to participate in the USOC project.  The Commission could find no evidence that the Mayor participated in any manner in these decisions.  Nor was there any evidence that the Mayor attempted to exert any influence, direct or indirect, in these decisions.  For these reasons the Commission does not believe that the Mayor’s failure to disclose constituted a violation of the Code of Ethics.”

Not even a slap on the wrist!  The commission simply decided that an apparent conflict wasn’t a conflict, since Rivera had, to the best of their knowledge, taken no actions that might unduly benefit LandCo, or disadvantage other applicants.

But here’s the crux of the matter: no person can serve two masters.  The Mayor can either serve his employer, or the people of this city.  He can’t just walk a tightrope, and pretend to serve both.  If his employment is of such a nature that he can’t reveal possibly conflictual actions, he should resign either from UBS or from elected office.

That may seem unfair-but too bad.  It may be that you can’t both be Mayor of Colorado Springs and an ambitious go-getter at the same time.

Clearly, neither the Mayor’s enemies nor the opponents of the USOC deal will be happy with this report.  Too bad for them-game, set, and match to Lionel.

There will still be questions and whispers, as in: How much did the Mayor make from his business relationship with Marshall?  Were there other accounts?  Was all the testimony truthful?  What really happened-surely seven pages of dry legalese can’t close the book on all this juicy gossip?

But from now on, it’s all pointless speculation. We’ll never know.

 In a few hours, the curtain will rise on what may be the final act in the USOC saga, when council is expected to approve the new USOC deal in all of its sleek, gleaming perfection.  It’ll cost the hapless taxpayers $40 or $50 million-but who’s counting?  Not I-I’ll be there, hoping that I can get USOC boss Stephanie Streeter to autograph my copy of the agenda…

 

 

 

 

 

 

 

 

Posted by John Hazlehurst on August 11th, 2009 :: Filed under Blog
Tags :: , , , , , , , , , , ,

Mason, Berlin not interviewed by ethics commission

0

As of early this morning, the Independent Ethics Commission had yet to release the results of their investigation into alleged conflicts of interest involving Mayor Lionel Rivera.

We don’t know who the ethics commission interviewed during their investigation, or whether they made use of their notably weak powers of subpoena. As we pointed out when the investigation was first launched, the commission has the power of subpoena, but there’s no prescribed penalty for failure to comply.

We may not know who was interviewed, but we do know a few individuals who were not.

Real estate investors Jack Mason and Ward Berlin, both of who were involved in now-settled lawsuits with LandCo and Ray Marshall, were not asked to appear.

Why not?

Berlin and Mason may know the details of any financial involvement that Mayor Rivera may have had with Marshall and LandCo. Mason’s lips are sealed, however, because the court documents that may conatin any such details were sealed by court order, and remain so, as a consequence of the settlement agreement.

If the commission has subpoenaed the documents, who knows what might have happened? Would have Mason’s lawyers released them-or would have lawyers representing LandCo, Marshall or the mayor contested any such release? We’ll never know-and not because the ethics commission has been careless or negligent.

The scope of any commission inquiry is limited by law to events that took place no more than a year prior to the receipt of a complaint. The Mason/Berlin lawsuits were filed well before that deadline, so the commission has evidently concluded that they fall outside the purview of the investigation.

So whatever the commission decides, the rumors may continue to fly. That’s unfortunate - but it’s the inevitable result of the commission’s inherent toothlessness, not because of any coverup or failure to investigate the obvious.

<-Back to CSBJ.com

Posted by John Hazlehurst on August 6th, 2009 :: Filed under Blog
Tags :: , , , , ,

USOC, LandCo blank city in doubleheader

0

Finally playing two long-postponed games, the Colorado Springs nine failed to score a single run during 18 innings, playing both LandCo and the USOC at Imaginary Field in downtown Colorado Springs.

While most pundits gave the nod to the powerful USOC team, the Springs had been expected to dispose of LandCo fairly easily. Since the last meeting between the two, LandCo had been riven by internal disputes, and by the off-field problems of star pitcher Ray Marshall.

Long suspected of throwing spitters, Marshall was both feared and despised by both opponents and former teammates. Rumors have swirled around Marshall for months, as anonymous accusers have alleged that he conspired with Colorado Springs manager Lionel Rivera to fix games, and even bet on the results through secret bank accounts. As a result of these allegations, which are reportedly under investigation by Commissioner Dan May, it was though that Marshall’s career had come to a sad and ignominious end.

Neither Marshall nor Rivera have commented on the allegations, although some of their teammates have publicly supported each man. Recent additions Steve Long and John Stinar, both acquired in mid-season to shore up the top of LandCo’s batting order, have been Marshall’s biggest fans and most valuable teammates, coming with game-winning hits and sparkling defensive plays.

Eagerly anticipated by fans of all three teams, the two end-of-season games would decisively affect the standings in both leagues. Two teams would advance to the playoffs-and one would stay home.

LandCo’s Marshall took the mound against a visibly overconfident Colorado Springs team. The leadoff batter, player/manager Rivera, was caught looking at a called third strike, as Marshall threw one of his famous sinkers. Rivera protested bitterly to umpire Mike Moran, but to no avail. Moran pronounced the ball clean, as Marshall smirked at his one-time teammate from the Class D Monument Mudlarks.

Subsequent batters fared no better. Cleanup hitter Mike Anderson seemed to lack bat speed, as he failed to connect on three straight swings. First basewoman Pat Kelly fared no better, hitting a weak grounder back to the mound, which Marshall contemptuously tossed underhanded to first base for the out.

Final score: LandCo two free & clear floors in a downtown building, Colorado Springs zero.

While Marshall, Longand their LandCo teammates celebrated, the Springs had to take the field immediately against the USOC’s fearsome lineup.

Some observers predicted that the USOC’s frequent lineup changes had created a team that, although talented, didn’t have the cunning or guile to defeat the city. That wasn’t the case.

To the surprise of many observers, Rivera had let the trading deadline pass without acquiring any new players. Perhaps, as seasoned sports observer John Whitten claimed, that’s because no one wanted any of the players whom Rivera had repeatedly tried to trade. Fireballing lefty Tom Gallagher has been in the manager’s doghouse for months, and seems certain to leave the team when his contract is up. Kelly, Larry Small, and Randy Purvis are veterans at the end of their careers, and promising youngsters such as Bernie Herpin need a few more years in the league to realize their potential.

Rookie pitcher Stephanie Streeter, in her first appearance in Colorado Springs, utterly overpowered the hometown boys (and girls), throwing a dazzling array of fastballs, tightly-breaking curves, and a particularly devastating splitter to silence Springs batters.

Rivera, who has been criticized for staying with the same lineup throughout the season, stuck to Anderson, Kellyand Scott Hente at the top of the lineup, inserting himself into the cleanup spot.

“That’s an incomprehensible decision” said seasoned baseball observer Freddie W., who proudly wears his own World Series ring, “Rivera can’t hit, he can’t run, and he can’t even see the curveball, let alone hit it. He should leave the game, and get a job at a bank.”

Final score: USOC 53 million, Colorado Springs zero.

It’s about what we expected,” said Streeter, “we came here expecting to score 53 million or so, so we’re happy with the outcome.”

After the game, Rivera and his players dodged the press, scheduling an end-of-season press conference at 4 p.m.

<-Back to CSBJ.com

Posted by John Hazlehurst on July 31st, 2009 :: Filed under Blog
Tags :: ,

Groucho, Karl and the USOC

3

“History repeats itself, first as tragedy, second as farce.”- Karl Marx

Last week, councilmember Jerry Heimlicher vowed loudly and publicly that, joined by a majority of his colleagues, he would insist that council be updated on the USOC deal in open session.

That didn’t happen. 

Yesterday during the informal City Council meeting, avisibly chastened Heimlicher made only fleeting reference to his former devotion to the public’s right to know,  saying that “the press has reported that we’re within days of a new EDA (economic development agreement), and we promised the public that it wouldn’t be done behind closed doors.”

Assistant city manager Mike Anderson, who introduced himself as “assistant city attorney Mike Anderson,” gave a brief presentation on the progress of the deal.

A grim-faced Anderson characterized the negotiations as “complex,” involving as many as 13 lawyers representing the interests of the city, LandCo, and the USOC.  He noted that the USOC had not yet “staffed this to their board,” and that, since the organization’s board members are dispersed throughout the country, meetings are more difficult to plan than those of city council.

Mayor Rivera chimed in, saying that “I’ve been very cautious (about forecasting the date of a new EDA).  (But) the intention of Scott (Hente) and myself and Mike is to have a very public (process).”

Anderson finished his presentation by, in essence, saying that the “finalized agreement” would be brought to council for a public unveiling as soon as it was…well, agreed and finalized.

Councilmembers, having nothing of substance to talk about, then ruminated at length on what to call the document that they so yearn to see.  “Finalized agreement” sounded too much like a take it or leave it backroom deal-how about “finalized draft”?  Or maybe “coordinated draft?” 

Then, as if actors in Kabuki theater, councilmembers fell into long-practiced rituals, praising city staff, and condemning the evildoers of the media.

Vice mayor Larry Small sorrowfully sympathized with Mike Anderson.

“I see the anguish on your face,” he said, “and I hope when this is over you can go back to looking 20 years younger than your age.”

And councilmember Tom Gallagher’s often-tangled rhetoric reached new highs.

“So we need to mitigate the malcontents,” he said, referring to the ink-stained wretches of the fourth estate, “you ignore ‘em, they just grow and fester.”

“Growing and festering”- that’s us! 

Despite the happy talk, it seems clear that the proposed deal has hit some major snags.  If your mortgage broker tells you that your application is “very complex-but we’re making very good progress,” that means you’re not getting the loan.  If your attorney-or your assistant city manager-looks like death warmed over as he announces that 13 attorneys are working on your “very complex” business deal, you’d better hire a bankruptcy lawyer.

What’s holding up the deal?  We don’t know, but we can guess.

Holdup # 1: LandCo can’t perform according to the terms of the original EDA, but they can prevent a new deal from being done.  It’s simple: pay ‘em, and they’ll go away.

Holdup # 2: The original deal called for LandCo to give the USOC  16 million big ones.  LandCo can’t do it-but the USOC still wants the $-show us the money!!

Holdup # 3: The city is broke, and getting broker by the week.  The usual suspects-El Pomar, the state, local philanthropists aren’t stepping forward.  So where’s the money?

Holdup # 4:  The city doesn’t want anything in writing when it comes to the $16 million-no use getting those unmitigated malcontents all riled up!  The taxpayers just wouldn’t understand…but the USOC wants cash, or a firm commitment to provide the cash at a date certain.  Money talks, BS walks.

Actually, the deal’s simple.  Just find lots of money, and give everybody some!  That’s fine-but don’t ask the taxpayers.

“Those are my principles, and if you don’t like them… well, I have others” - Groucho Marx

 

  

 <-Back to CSBJ.com

 

 

 

Groucho Marx

Posted by John Hazlehurst on July 14th, 2009 :: Filed under Blog
Tags :: , , , , , , , , , ,

USOC/LandCo/City circus ending?

2

This morning’s joint press release from the USOC and LandCo, announcing that they have “resolved all disputes relating to the USOC and LandCo’s relationship as part of the project to retain the USOC in Colorado Springs” almost certainly signals that a similar resolution between the city and LandCo is in the offing.

So here’s the question: what will the agreement look like?  More to the point, who will pay, and what will they pay for? 

Rumor has it that Stephanie Streeter, the newly-appointed CEO of the USOC, worked out a deal with the City a month ago, which would kick in as soon as the LandCo dispute was resolved.

It has been clear for months that, while LandCo’s finances were not strong enough to move the project forward, they were nevertheless in a position to stall the deal indefinitely.  Such stalling tactics may have seemed unsporting and ungentlemanly, but real estate development is a rough game, and you play with the cards you’re dealt - unless you can deal yourself an ace off the bottom of the deck.

In all probability, LandCo has cut a deal, allowing the company to exit gracefully from the agreement in return for considerations of some sort-maybe in the form of debt relief, or real estate equity, or even, as some particularly suspicious folks have theorized, future tax relief for a project in which LandCo may have a residual interest.

More questions: is there a new developer, ready to step in and take over LandCo’s role?  Has the city filled the gaps with some combination of taxpayer dough, El Pomar grants, contributions from civic-minded citizens, and promises of future largesse?  Will the agreement be submitted to voters for approval, or will Council, as is its wont, just rubber-stamp it with no debate and a hearty round of mutual backslapping?

We’ll see - maybe even by tomorrow.

<-Back to CSBJ.com

Posted by John Hazlehurst on June 10th, 2009 :: Filed under Blog
Tags :: , , , ,

City terminates LandCo deal

4

The withdrawal notice from the city to its erstwhile partners in the U.S. Olympic Committee headquarters deal, LandCo and the USOC itself, gives a preview of the defense that Colorado Springs will offer to the lawsuit LandCo filed against it and the USOC.

The USOC withdrew from the Economic Development Agreement last month.

The city seems to be following a simple strategy: It’s all LandCo’s fault!  Poor, gullible, misunderstood, slandered, libelled, seduced, betrayed and left at the altar - that’s us!  The city alleges that LandCo has been in breach of the ill-fated EDA for well over a year - in other words, from the moment it was signed. 

While reciting LandCo’s alleged breaches of contract, misrepresentations and multiple failures to perform, the city admits to no shortcomings and mentions none by the USOC.

Clearly, the script we’re seeing is a minor variation on that of “Heathers”, the classic mean girl movie of the 1980s.  The USOC is the alpha Heather and the city is, it hopes, another Heather - and LandCo is the spurned, ridiculed and derided Veronica Sawyer.

The Heathers just want to ditch Veronica and find a new BFF, a suitably cool girl to hang out with … but what’s Veronica going to do?  Will she just go home and cry?  Oh, nooo … watch out, Heathers!! Veronica’s got a gun!!

The USOC deal is, slowly but surely, heading for a denouement.  The city and the USOC have signalled that they won’t play nice any more.  Marshall and LandCo might be on the ropes, but they’ve still got some fight in ‘em.

Will Marshall and LandCo seek an injunction preventing the city and USOC from moving forward?  Will UMB foreclose on the half-completed headquarters building at 27 S. Tejon St.? Will LandCo file for Chapter 11 bankruptcy, and simultaneously file fresh lawsuits against the city and USOC?

LandCo, Ray - it’s your move.

And thanks, all three of you, for the free fireworks - with this kind of show, who needs Memorial Park?

<- Back to CSBJ.com

Posted by John Hazlehurst on May 21st, 2009 :: Filed under Blog
Tags :: , , , , ,

Come clean, Mr. Mayor

1

The ethics complaint filed May 4 against Mayor Lionel Rivera by the Ron Johnson, CEO of Central Bancorp,  makes serious allegations against the mayor, to which he ought to respond swiftly, openly and honestly.

Johnson complaint alleges, among other things, that “The Mayor has and continues to negotiate on behalf of the City with parties (Landco) and Ray Marshall) with whom a direct conflict of interest exists. The conflict exists by virtue of Mayor Rivera’s employment and compensation at UBS Securities where Mr. Rivera manages accounts controlled by Landco and Ray Marshall, from which Mr. Rivera receives direct or indirect compensation.”

Rivera is an investment adviser and Marshall had money available for investment.  The mayor can hardly survive on council’s miserly stipend of $6,250 annually, so he has to work.  Advising investors is, in part, what he does for a living.

So where’s the impropriety?

Here are the alternatives:

- The mayor had no such business relationship, and, ergo, no impropriety of any kind.

- The mayor had such a relationship, and it was of such a nature that he profited thereby, and he did not disclose this to council. While he has a fiduciary relationship with his customers, he is also an elected official who owes his loyalty to the residents of the community.  In a case where loyalties so clearly conflict, he must notify council of an undisclosed conflict regarding negotiations with LandCo, and recuse himself from all votes and negotiations. 

- The mayor’s relationship was so inconsequential, or so fleeting and transitory, that he simply didn’t regard it as conflictual.  In such a case, he should have disclosed it anyway, but his failure to do so is understandable.  

Rumours regarding the alleged accounts have been circulating through the city’s business community for months. The time has come for the mayor to act, and to tell the people who elected him to office the whole truth.

It won’t do for him to hide behind the supposed “confidentiality” policies of his employer or his industry.  It’s difficult to understand how the interests of the city, of UBS or of the mayor himself are served by continued stonewalling.

Every politician who tries to cover up his or her missteps finds that the coverup is more damaging than the original mistake.  Confession and contrition work - lies and evasions don’t.

<- Back to CSBJ.com

Posted by John Hazlehurst on May 8th, 2009 :: Filed under Uncategorized
Tags :: , , , , ,

Let the games end!

2

The U.S. Olympic Committee/city/LandCo drama continues, with no end in sight - or if there is, the principal players aren’t talking. 

We don’t know whether the Mayor Lionel Rivera’s clandestine fundraising campaign to prop up the deal continues (to read the letter in its entirety, click here), or whether the USA Boxing still wants a $3 million purse to stay in town (to read the letter from USA Boxing to the mayor, click here), or whether LandCo can raise the $16 million required to make the deal work, or whether El Pomar is ready to drain its treasury and take over as principal funder or whether a Deus ex Machina will descend from above (The USOC supplemental stimulus bill, maybe?).

Here’s what we do know.  The deal has a fuse.  If it’s not done by the end of this month, it might never happen.  We also know that the USOC has an exit strategy.

It’s not clear whether Jim Scherr’s abrupt exit is in any way linked to the deal, but it is clear that the new leadership at USOC is less committed to the well-being, comfort and morale of the staff, and more committed to organizational survival.  If, come October, Chicago gets the nod to host the 2016 Olympics, you can expect to see the de facto departure of most of the USOC to Chicago. 

Some support staff will remain here, as of course will the Olympic Training Center, but the real USOC will be headquartered in a real city, where senior executives can more easily interact with sponsors. 

In the end, the USOC is a big, quasi-international business - kind of like, say, Citigroup on a much smaller scale.  And, like all such businesses, they have dragons to slay and mountains to climb.

<- Back to CSBJ.com

Posted by John Hazlehurst on March 13th, 2009 :: Filed under Blog
Tags :: , , , , , ,