University Place and All The Governor's
Deep Throat II
Chapter 11 - UIF fires Cryptic Partners for $18
“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
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:
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
must oversee the management of the University Place development, not Cryptic
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)
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?
An official “firing” – or
changing of the guard – must be accompanied by official-looking legal
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:
$2.5 million up front payment to Cryptic Partners,
$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
$5 million to construct the physical structure under the Idaho Water
monthly parking fees, and
$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:
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
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:
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
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
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
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.
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