Mess around, you'll end up in Dutch, boy
Here's a little lawyer dirt for your Friday: A couple of Washington State bond lawyers have gotten themselves in trouble with the IRS professional ethics officers in connection with some allegedly shoddy tax work that they did on a municipal bond deal up in Spokane that turned into a real scandal. The lawyers, Michael Ormsby and David Thompson, work in the Spokane and Seattle offices of K&L Gates -- formerly Preston Gates -- the same firm whose Portland office has a lock on the municipal bond work for the City of Portland and many other governmental units around the Beaver State. (Via TaxProf Blog.)
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Comments (3)
Jack,
What exactly were the consequences to these folks. Did they pay back the public for the money lost, did they lose their license to practice law and issue more bonds. How is this going to protect the public from this type of thing.
Posted by swimmer | December 7, 2007 5:28 AM
Ok so if I understand it all the IRS felt that the two lawyers should have done a better job of looking into the analysis of whoever it was that said the parking garage was going to make money. Is that right Jack? And the two attorneys "settled" the allegations by agreeing to have their future work reviewed by someone else in their firm in order to make sure that it's done better in the future. Right?
And some people feel that someone was paid off as part of all this mess but who that was that did the paying off and who got the money doesn't seem to be laid out any where. Anyone have more information on this?
Greg C
Posted by Greg C | December 7, 2007 3:30 PM
There are several corollaries between the Spokane parking garage and The Strand parking garage at RiverPlace where taxpayers have paid 50% to 100% more for 100 spaces than the Portland average.
The PDC has also devised a non-profit to own the 100 spaces. They devised a process where the $6.5M needed is borrowed money-bonds, even though similar number of spaces 2 years ago was costing $2.5M to $3M. Did the toxic site cleanup under the 100 spaces really cost an additional $4M to $3.5M to justify the $6.5M? Where is the full accounting, bills for that charge? Did Walsh Construction fairly account for those charges? Why did the PDC need to form a non-profit to own, run the 100 space public parking garage? Why couldn't it have been under the present public owned parking garages entity of CoP?
Like Spokane the parking revenue hasn't even come close to paying even the interest on the bonds. PDC devised a payment plan that requires no paydown-just a ballon payment after 30 years. Will anyone at PDC or any of us be around to insure the final payment? With PDC staff changing every day, they can't even remember or find two year old budgets of URAs. There is no interest on the loan to the non-profit, which happens to be directed by Mrs. Craig Berkman and other officers. Will someone ask PDC to furnish the accounting spread sheets for the parking and examine the money flow and lack of?
Did the local Preston Gates have any part in this deal? I'm sure the local media will investigate.
Who benefited?-Homer Williams, Dike Dames and Mr. Onder; they sold the parking spaces for more than market value. In fact the real market value, 1 year after completion is only $4.588M while Homer and Co got the $6.5M. Why, if the sale price was $6.5M did Mult. Co. establish the rmv at $4.588M???
Is there corruption, lacking oversight, paybacks, back scratching here? Will it be only us to be the judge, or will the IRS investigate, or the City Attorney, Oregon's Attorney General. or the FBI?
Will I be harmed for asking these questions and making these comments?
Posted by Lee | December 7, 2007 9:18 PM