Idaho's Weekly Journal of Local & National Commentary Week 2815


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by Free Market Duck

University Place perps agree to not sue themselves…Pay each other $8.3 million…
Cryptic Partners remains as possible ‘fall guy’ - Part II
(April 3, 2006)

 “Steve Semingson always thought he could work Boise.  But he had no idea the legal beagles in town – especially the boys at Givens Pursley – would sell Boise and Idaho down the river.  The University deal turned out to be a bigger pot of gold than Semingson ever imagined.  Thanks to Ken Pursley and his partner Ed Miller, Semingson hit the jackpot in Boise.” – Deepest Throat, anonymous source

Whew, what a coincidence.  Just in time for Gov Kempthorne’s confirmation hearings before the U.S. Senate for Secretary of the Interior.  Is he guilty or not guilty?

Federal criminal investigation by US Attorney from Portland, Oregon continues.  At this point, neither US Attorney Allan Garten or Idaho state prosecutor Bill Thompson will “exonerate” Kempthorne (or ANY participants) from federal criminal activities.

Are Idaho perps closing ranks, throwing Cryptic Partners to the litigious wolves?

Is Idaho Statesman newspaper whitewashing the University Place fiasco for Gov K’s upcoming confirmation hearings and for itself since the Statesman failed to disclose one of their reporter’s possible conflicts of interest, i.e. “dating” Idaho State Bar President Debora Kristensen who is a law partner at the very law firm, Givens Pursley, that the reporter was investigating in the University Place scandal?

Boise, ID – So where are we now?

   The participants in Boise’s Watergate are running scared.  There are so many individuals involved in this huge financial mess that, two years ago, all the alleged crooks, many of whom sat on multiple U of I and/or U of Idaho Foundation boards and committees or participated as local branches of government or law firms or private developers started pointing fingers and blaming each other.

     None of the parties could come to an agreement on who should take the blame or who should pay back the UI or the UIF.  A federal criminal investigation was underway.  Cryptic Partners had walked away with over $28 million from the University Place fiasco.  The Boise lawyers had pocketed over $1.6 million in questionable legal fees after simultaneously representing both Cryptic Partners and its adversary the UIF.  Backdated nolo conflicto letters had been sent out by the lawyers.  The UIF, in Oct 2003, had already written off $15.6 million in the failed University Place project.  This write-off was not part of the $28 million owed to the U of I and other Trust Funds.  None of the $136 million in ISBA bonds passed by the state legislature and signed off by the Governor in 7 days flat could reimburse the alleged “excessive,” illegally-obtained, interim (i.e. obtained with no authority) pre-development costs incurred by Cryptic Partners.  And even after all the participants discovered that the $136 million in “permanent” funds rushed through the legislature to replace AND COVER UP BEFORE AN END OF YEAR AUDIT would provide ZERO reimbursement for the $21 million in illegal interim financing incurred to date, they ran out and illegally borrowed another $5.7 million - $6.2 million against UIF endowment funds to drive the debt up to $28 million, all as part of a phony baloney “Reconciliation Agreement” worth about $18 million by the Boise lawyers for Cryptic Partners.  Never before in Idaho had such a humongous scam occurred by so many powerful and leading government, educational, and legal officials.

   How were all the perps going to pay back the money without admitting guilt? 

   One clever method was for the perps to shift the burden back to the taxpayers.  How?  The UIF started selling off undeveloped parcels of the University Place land to another public education institution, Idaho State University (ISU).  But wait a minute.  ISU money is obtained from the taxpayers.  So, that’s tantamount to taxing the people to purchase UIF and, indirectly, U of I, property which was originally obtained by private donations AND taxpayer money.  This is just a simple legerdemain to fool the taxpayers.  One does not recoup or pay off a debt to taxpayers by selling public education land from one public institution to another public institution.  That’s like the City of Boise buying a parcel of land with $1 million of taxpayer money from the City of Boise Account ABC and selling the same land to itself with $1 million of taxpayer money from the City of Boise Account XYZ.  And then claiming that the City of Boise has paid down its debt on the land?  What a joke.  The perps simply used taxpayer money from one source to pay off previous taxpayer debt from another source while they walked away with millions of dollars.

   This creative accounting method, however, did not solve the perps’ humongous monetary or impending legal problems, including federal criminal.  All communications finally broke down in 2004 and everybody jumped on the I’m-going-to-sue-your-ass bandwagon.  So on July 24, 2004, the U of I filed a $7 million lawsuit against Cryptic Partners for over-billing pre-development costs in the University Place fiasco.  In July, Idaho AG Lawrence Wasden sued the UIF board members for $18 million.  On May 6, 2005, the UIF filed a $25 million lawsuit against the above-named two law firms and 4 lawyers for malpractice, breach of fiduciary duty, and gross negligence or reckless tortious conduct.  In May, 2005, the UI and UIF filed a $10 million lawsuit against Great American Insurance Co.  In June 2005, the UI and UIF joined the UIF’s $25 million lawsuit against the Boise lawyers.  On August 18, 2005, Judge Hurlbutt combined the $7 million, $10 million, and $25 million lawsuits into one, set for Jan 2007.

   Why not Jan 2006?  Hey, it’s an election year.  Courthouse officials stated there was no lack of space at the new Courthouse or a backed-up caseload.  It was pure and simply:  a political move to put off the lawsuits during an election year.

   Then, boom, all of a sudden Governor Kempthorne announces that President Bush has nominated him for Secretary of the Interior.  Current Sec of Interior Gale Norton is beginning to attract attention in Washington’s Jack Abramoff scandal since the Bureau of Indian Affairs is in the Department of the Interior.  And, the book Boise’s Wategate has been recently released and is now at all the major dot com bookstores.  It’s even on the shelves at BSU and the Editor-in-Chief of the U of I’s newspaper, The Argonaut, has a hardback copy and lots of source information.  So does the U of I’s Student Body President, Autumn Hansen.  What will they do with this information?  Cover it up or turn into real investigative journalists for the U of I student body?  Or will the U of I admin shut them up?

   So, again, now what?

   The Idaho perps and their lawyers decided to stop squabbling amongst themselves and close ranks since how can all the leading Everybodies Who Are Anybodies in Idaho sue themselves?  Are they throwing Cryptic Partners to the judicial wolves now that the are finished with them?  Looks like it.  And that is exactly what you, dear Reader, just witnessed in last week’s $8.3 million civil settlement agreement absolving all the Idaho participants from the janitor at the U of I to former U of I President Bob Hoover to former U of I VP of Finance and Admin Jerry Wallace and all the Boise lawyers and law firms who ARE the UI and UIF Board Members and a host of other leading governmental officials and leaders in this sordid financial mess.

   In summary, what we see happening is that the multiple lawsuits for $7 million, $10 million, $25 million, and $18 million that were politically set for Jan 2007 to avoid the 2006 elections in Idaho have been quickly settled in three days flat by the Good Ol’ Boys of Boise as they closed ranks rapidly BECAUSE it wouldn’t look good during the U.S. Senate’s confirmation process for Governor Kempthorne to be connected to Boise’s Watergate fiasco.

   Notice that the $8.3 million civil settlement agreement is (1) partially secret in that “the amount contributed by or on behalf of any specific party by the private insurers is confidential and has not been disclosed to the Foundation, the University, the Regents, or the Attorney General,” (why not?) and (2) “The settlement extinguishes all claims that the parties have against each other, but is not an admission of fault or liability by any of its parties.”  Whoop-tee-doo, folks, the participants were encouraged to stop squabbling amongst themselves vis a vis civil liability.


   Notice that the federal criminal investigation by US Attorney from Portland, Oregon, Allan Garten, continues.  At this point, neither US Attorney Allan Garten or Idaho state prosecutor Bill Thompson will “exonerate” Kempthorne (or ANY participants) from federal criminal activities.  So the big question is, will this tactic by the Good Ol’ Boys of Boise work for Governor Kempthorne?  If President Bush was blindsided by Kempthorne, look for Gov K to suddenly show up on national TV to announce, for some arcane reason such as family problems, that he has decided not to accept the nomination for Sec of the Interior.

  Meanwhile, a hardback copy of Boise’s Watergate and source information was sent several weeks ago to Senators on the confirmation Committee, Dianne Feinstein (CA) and Mary Landrieu (LA), as well as to Senator Harry Reid (Senate Minority Leader, NV), by certified mail, return-receipt -- as well as to US Attorney Allan Garten conducting the federal criminal investigation of this ridiculous mess.

   I almost feel sorry for President Bush, jumping out of the Jack Abramoff frying pan and right into the Boise’s Watergate fire.  Then again, who knows what sneakiness lurks in the vapid halls of Congress?  Will they all just make a deal or… ?  Will Boise’s Watergate simply morph into Washington’s latest Watergate?  Only The Shadow Knows for sure… -- Deep Throat II

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