FreeMarketDuck.com

Idaho's Weekly Journal of Local & National Commentary  Week 3514

 

Home • Up • About us • Contact • Glossary • Links

 

 

Boise's Watergate
 University Place and All The Governor's Men

by

 Deep Throat II

 

Chapter 11 - UIF fires Cryptic Partners for $18 Mil?
Excuuse Me?

 

 

Boise’s Watergate was planned.  It was a shark frenzy by the perps for taxpayer money and it wasn’t just local.  Boise’s Watergate was bad.  And it was nation-wide."
-- Deep Throat II

         The perps’ plan to recover -- and cover up before an end of year audit -- $21 million in illegal interim financing by the U of I Foundation for Boise’s Watergate fiasco had backfired.  The UIF received $0 reimbursement.

   ISBA Director, Wayne Meuleman, dropped a bombshell:  the $136 million in ISBA bonds could not retain their tax-exempt status unless:

ü     Ownership of the University Place property was simplified.  At the end of the bond payments after 30 years, the Water Center property title must belong to the ISBA.  Currently, the U of I Foundation was developing the IWC land for the U of I and was leasing it from Cryptic Partners who was granted exclusive development rights along Boise’s Court House Corridor and leasing it from the CCDC (Boise’s Urban Renewal Agency) who was leasing it from the Ada County Commissioners which turns out to be you and me:  the unsuspecting taxpayers,

ü     The ISBA must oversee the management of the University Place development, not Cryptic Partners

ü     The tenants of University Place must be ISBA-approved entities that qualify for IRS tax-exempt status, such as the U of I or the Idaho Department of Water Resources or another state agency.  (That’s why it was critical that Gov Kempthorne and All the Governor’s Men secure the IDWR, Idaho Department of Water Resources, as the main tenant) and, 

ü     The ISBA bonds could only reimburse “reasonable costs.” (Cryptic Partners’ pre-development costs were considered “excessive.”)

   However, as we discovered in the last Chapter, this did not faze the perps.

   As soon as they discovered that they were going to receive $0 in reimbursements for the U of I Foundation, the perps immediately ran out and illegally borrowed another $6 million from UIF endowment funds to funnel more money to Cryptic Partners, driving the UIF indebtedness up to $28 million.  Remember, when Cryptic Partners got paid, the shark lawyers got paid since they represented both sides of the table – the UIF and Cryptic Partners -- in backdated nolo conflicto agreements.

The major concern of the perps was not how the UIF was going to recover their illegal funding or repay the U of I.  The perps saw a great opportunity to funnel even more money into their pockets through Cryptic Partners.  If Wayne Meuleman, ISBA Director, was dumping Cryptic Partners as the University Place project managers, then there must be an official “firing,” right?

Right.

An official “firing” – or changing of the guard – must be accompanied by official-looking legal paperwork, right?

Right.

Hey, I know.  How about creating a “Reconciliation Agreement” – you know, a pink termination slip -- in which the U of I Foundation “fires” Cryptic Partners and the following payment terms by the U of I Foundation are laid out:

1)     $2.5 million up front payment to Cryptic Partners,

2)     $10.5 million -- $350,000 per year for 30 years ($317,000 if the US Forest Service occupies at least 24,000 square feet) annual payment to Cryptic Partners,

3)     $5 million to construct the physical structure under the Idaho Water Center,

4)     monthly parking fees, and

5)     $777,000 reimbursement to the UIF from Cryptic Partners to “equalize” the expenses paid by the UIF to build a public CCDC parking structure. 

If (4) and (5) cancel each other out, then the total rip-off is $18 million.

The absurd “Reconciliation Agreement” was signed by both Cryptic Partners and the U of I Foundation on August 13, 2002.  One hardly wonders why when lawyer Roy Eiguren of law firm Givens Pursley represented both sides of this patently ridiculous nolo conflicto.  In fact, the legal beagles from both law firms, Givens Pursley and Elam & Burke, were up to their eyeballs in alligators vis a vis nolo conflictos.

 As the investigative Prince Report revealed:

  • Ryan Armbruster, general counsel for the UIF, also represented UIF's adversary CCDC (Capital City Development Corporation, aka the Urban Renewal Agency).
  • Ed Miller, project counsel for the UIF, also represented UIF's adversary Cryptic Partners.
  • UIF Board Member Roy Eiguren was a partner of Ed Miller’s firm, which represented UIF's adversary Cryptic Partners.

What kind of hanky-panky occurred in the “Reconciliation Agreement?”  For some mysterious reason, when asked to rework the details of the Agreement, Cryptic Partners and Roy Eiguren kept arriving at $5.7 million as a cash requirement from the UIF.  No matter how many times the perps argued and reworked the details, they always ended up needing exactly $5.7 million in cash.

The investigative Prince Report says on page 167:

 “…this total amount  ($5.7 million ) did not change and apparently for good reason -- this was the amount Civic Partners needed to show sufficient equity in its Civic Plaza housing transaction (subsidized by $18 million in federal funds). The UIF’s total exposure would climb to $28 million with this obligation to Civic Partners.

    Despite the appearance that the UIF seemed to cater to Civic Partners’ wishes, both parties reportedly walked away unhappy.  Ed Miller and Frank Lee, the attorneys drafting the agreement, agreed.  Maybe they were tough negotiations and maybe Civic Partners had more leverage.  But it is hard to ignore that Civic Partners needed at least $5.7 million to close its housing project and the UIF agreed to exactly that amount.

    Moreover, the UIF ended up paying a substantial amount for rights to parcel 1.  Ignoring the parking and infrastructure contribution, the UIF paid Civic Partners a total of $4 million (including the $2,060,000 relocation costs) plus $1.9 million was paid to Ada County for the present value of the ground rent. The question thus becomes whether the IWC condominium site is worth $5.9 million when the UIF paid only $1.9 million for the Rite-Aid Parcel across the street. The ISBA could not support paying $5.9 million for parcel 1.”  (Emphasis added.)

   Lest the reader think that the problems encountered in Boise’s Watergate fiasco were simply the result of sloppy management or accidents by Cryptic Partners, law firm Givens Pursley, and all the other perps, allow me to drop this bombshell on you:

   In the course of writing Boise’s Watergate, I received an email and several long distance phone calls from Iowa ex-legislator Ron Nutt (R-Sioux City).  Somebody had anonymously downloaded, copied, and mailed to Representative Nutt Chapter 3 – Cryptic Partners.  Rep. Nutt immediately recognized that Cryptic Partners, my pseudonym for Civic Partners, was the very same Civic Partners who he suspected of scamming the citizens of Sioux City, Iowa, in a $35 million Theatre/Hotel Complex fiasco.

(...more...available now at online bookstore)

      back to top...

 

               Home • Up • About us • Contact • Glossary • Links


freemarketduck.com   all contents copyrighted ©1994-2014   Free Market Duck tm   all rights reserved