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


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by Free Market Duck

10 Reasons Why Idaho Governor Kempthorne Should NOT Be Confirmed As Secretary of The Interior
(May 12, 2006)

Are we simply replacing the ethics of the Jack Abramoff scandal with the ethics of the Boise Watergate scandal?

The recently released book, Boise's Watergate: University Place & All The Governor's Men, reveals how Governor Kempthorne actively participated in the $136 million University Place fiasco.

 So far, it’s apparently more important to Senator Mary Landrieu (D-LA) to put a “hold” on Governor Kempthorne’s confirmation as Secretary of the Interior and try to make a billion dollar oil deal with President Bush and Congress than to question candidate Kempthorne’s past ethics in Idaho.

Washington, DC – Governor Dirk Kempthorne is applying for the job of Secretary of the Interior, a Cabinet position at the White House, in which he would manage more than 507 million acres of national parks, rangeland, and refuges (one-fifth of the United States), more than 600 dams for water to 31 million Westerners, irrigation for 60% of the crops grown in the U.S., 1,265 endangered species, 68% of the nation’s oil and gas reserves, 1.76 billion acres of the sea bottom on the Outer Continental Shelf where there are 7,300 active oil and gas leases on 42 million acres, the Bureau of Indian Affairs that oversees the federal government’s trusts and treaties with 562 Indian tribes, and millions of acres of federal mining lands.  The Department of the Interior employs over 70,600 workers with a $16 billion budget.

   While the left Liberals do not question either the legality or economic feasibility of an Economic Czar attempting to manage America’s vast public resources, much like Mussolini’s economic fascism in Italy during WW II, they only concern themselves with WHO gets to be Big Brother based on the erroneous assumption that there exists such an animal as a “good” socialist vs. a “bad” socialist.  If the U.S. Senate will simply confirm a “good” socialist, i.e., one who scores 9 on a scale of 1-10, with 10 being the best tree-hugger in the forest, then the Liberals in the Sierra Club and Conservation League will be thrilled to death.  The GOP, on the other hand, simply wants an Economic Czar who will provide special interest treatment for Big Business to outlaw their competition.  Neither the Liberals nor the GOP question the moral-epistemological premises of creating a 1984-style Big Brother who reigns as The Minister of U.S. Natural Resources.

   Setting aside the Libertarian question of whether the function of the Secretary of the Interior amounts to economic fascism, i.e. the government controlling the means of production rather than private enterprise controlling the means of production in a true free market, this is a huge responsibility for one person to manage, even with (or especially because of) tons of lower levels of management.  In fact, it is not only economically impossible, it will encourage all kinds of special interest legislation, favoritism, and therefore government corruption.  And this is exactly what we now have in the Department of the Interior:  the unfolding Jack Abramoff scandal which purports to eventually involve Secretary of the Interior Gale Norton, former Assistant Secretary Steven Griles, already-convicted Jack Abramoff, Michael Scanlon, Tony Rudy, resigned House Majority Leader Tom Delay, some 270 U.S. Congressmen and women, and even a Mob murder in one of Abramoff’s Florida deals involving gambling ships.

   Since it is doubtful that the U.S. Senate’s confirmation committee will ask any important questions regarding candidate Kempthorne’s past ethics as Governor of Idaho (even though Senators Dianne Feinstein (D-CA), Mary Landrieu (D-LA), and Harry Reid (D-NV) all received a copy of the recently released book, Boise’s Watergate: University Place & All The Governor's Men and the source material for that book), I have compiled what I think are among the ten most important questions of egregious ethical misconduct by Mr. Kempthorne during just his past term as Governor.  Although Kempthorne may or may not have violated the law, the question is one of morality, precisely because that's what’s wrong with the current management at the Department of the Interior.  Ethics -- not how to make new billion dollar deals with Kempthorne as new management instead of with Jack Abramoff, Gale Norton, and Steven Griles as old management -- is the crux of the problem at the Department of the Interior.

   Therefore, leaving out minor ethical questions such as why Kempthorne bounced a couple of checks for $76 to his hair dresser or spent $X hundred dollars on chocolates using his campaign credit card, the top 10 Reasons to NOT confirm Governor Kempthorne as Secretary of the Interior, in increasing order of ethical and dollar deficit magnitude, are:

Problem # 1.  In 2003 – 2004 Governor Kempthorne received campaign donations exceeding the $5,000 limit per individual or corporation.  Contributions totaling over $50,000 were received from companies such as FMC, Hewlett-Packard, and others while Kempthorne claimed the donations were for Governor expenses, not campaign contributions.  This loophole was finally closed in 2005 with legislation introduced by Secretary of State Ben Ysursa and Attorney General Lawrence Wasden.

Ethical question:  Kempthorne knowingly bent the campaign contribution rules.

Problem # 2.  Governor Kempthorne first passed a developer’s discount Bill to lower property taxes for developers, borrowed money from Tamarack developers to buy 14 acres near multi-million dollar Tamarack Resort, and then paid $19.00 per year in property taxes for 14 acres after reclassifying his property from a high of $250,000 down to $1,000 while other land owners in the same county paid thousands per year in property taxes.

Ethical question:  Kempthorne used his position of power as Governor to obtain valuable property and avoid property taxes.  This was tantamount to Pay for Play.

Problem # 3.  Governor Kempthorne vetoed a Bill in 2005 to dump the special developer’s discount for property taxes after holding onto the Bill until the last minute and then claimed that signing the Bill would be too late to help anybody.

Ethical question:  Kempthorne, when faced with a mandate to correct a wrong, chose to fraudulently continue the wrong for his own self-aggrandizement.

Problem # 4.  In 2006, Governor Kempthorne introduced a Bill into the state legislature to EXTEND his developer’s discount for property taxes for 5 more years until 2010.  The Gov’s Bill failed and the legislature passed another Bill to dump the developer’s discount altogether which Kempthorne finally signed AFTER President Bush nominated him for Secretary of the Interior.

Ethical question:  To add moral insult to injury, Kempthorne proposed to extend his preferential property tax treatment for five more years.  No remorse here.

Problem # 5.  When Idaho Housing & Finance Authority (IHFA) Director Gerald Hunter refused to authorize tax-exempt bonds for Cryptic Partners to build Civic Plaza in downtown Boise in the now-failed University Place fiasco, Givens Pursley lawyer Ken McClure (son of former Idaho U.S. Senator Jim McClure who also worked at Givens Pursley law firm) allegedly obtained political pressure from Governor Kempthorne and Chief of Staff Phil Reberger to “convince” Hunter to sign off on the bonds for client Cryptic Partners.  (Source:  previous director of IHFA.)  Without this political pressure from the Governor’s Office, Cryptic Partners would never have received their 10% ($3 million) from the $29 - $35 million sale of bonds by the Boise City Ada County Housing Authority, the members of which are appointed by the Ada County Commissioners who participated in the University Place Scandal.  Now Cryptic Partners could pay Givens Pursley the $500,000 in back legal fees they owed and continue to even bigger and better scams:  the $136 million University Place fiasco, signed, sealed, and delivered by ex Gov Kempthorne..

Ethical question:  Kempthorne created the Boise Watergate fiasco by wielding his power of Office to “encourage” the IHFA to sign off for a questionable developer, Cryptic Partners of California, to receive start-up money which allowed the development company to pay off the Boise Watergate law firm which then escalated into the $136 million University Place fiasco which Kempthorne fully supported and actively participated in.

Problem # 6.  In the University Place fiasco, Governor Kempthorne helped ram a $136 million ISBA bond issue through the state legislature in 7 days flat – a near impossibility in any other state – to REPLACE and COVER UP (according to emails in the $1 million investigative Prince Report) the previously expended $21 million in illegal financing before an end of year audit and get even more money for the participants’ speculative real estate development.  Ironically, ISBA Director Wayne Meuleman allowed ZERO reimbursement of the $136 million to the U of I Foundation because the pre-development costs were considered “excessive.”  This did not stop the perps, however, from illegally “borrowing” another $6 million from U of I Foundation endowment funds to drive the illegal interim financing from $21 million to $28 million, the $6 million coming from a ridiculous $18 million “Reconciliation Agreement” between the Boise Lawyers (now charged by the Idaho State Bar Association and awaiting trial) and the UIF.  A federal criminal investigation by Portland, Oregon’s US Attorney for white collar crime continues.

Ethical question:  Kempthorne and House Speaker Bruce Newcomb aggressively used the power of their positions to ram the $136 million in ISBA bonds through the legislature specifically to beat the end of fiscal year audit deadline of June 30 so the perps could replace and cover up their illegal interim financing for University Place.  Power tends to corrupt and absolute power corrupts absolutely.  This is no different, from an ethical point of view, than what happened in the Jack Abramoff scandal at the Bureau of Indian Affairs in the Dept of the Interior.

Problem # 7.  “Weighted, W-E-I-G-H-T-E-D,” is how Governor Kempthorne described his alleged rigging of the Idaho Water Center’s bidding process at University Place with a secret 27% “co-location” factor (source, Idaho Statesman).  “It looks like they may have cooked the factor (co-location) to make it come out on top,” said Idaho Senate Pro Tem Bob Geddes to the Statesman newspaper.

Ethical question:  Kempthorne’s unethical actions ensured the perps got their tax-exempt tenant to occupy University Place so they could continue their questionably illegal development.

Problem # 8.  Governor Kempthorne’s Chief of Staff, Phil Reberger, sat on multiple agencies and boards which allowed him to approve the activities in Boise’s Watergate, specifically the University Place fiasco.

Ethical question:  how is it possible that Governor Kempthorne did not know what his Chief of Staff was doing for four years?  If Kempthorne claims he did know, then he is guilty of collusion with all the perps in the University Place scandal.  If Kempthorne claims he did not know, then he is guilty of mismanaging his Office just like current Secretary of Interior Gale Norton who allowed her assistant Steven Griles and Jack Abramoff to run all over and make million dollar deals for themselves.  Boise’s Watergate may have raked in more dollars per perp than the Jack Abramoff scandal.

Problem # 9.  Kempthorne's $30 million rigged choice of local Idaho management team for GARVEE Highway Plan called "Connecting Idaho" after 9 out of 9 senior engineers at Idaho’s Dept of Transportation voted for NY company.  "Connecting Idaho" costs now discovered to be "incomplete" and have escalated from $3 billion initial guesstimate to nearly $10 billion and rising.

Ethical question:  After slamming vetoes on at least eight consecutive Bills and calling all Bills coming before him “veto fodder” when the Idaho legislature’s Transportation Committee voted NO in 2005 for the Governor’s $3 billion GARVEE Highway Plan, Kempthorne and House Speaker Bruce Newcomb “encouraged” the Committee to change their mind and vote YES, which they did.  Then, adding a mysterious $30 million for management fees to his $3 billion Highway Plan in 2006, Kempthorne’s hand-picked Transportation Committee overruled 9 out of 9 senior engineers TWICE to choose local yokels WGI/CH2M Hill as the management team -- TWICE because the Fed Highway Admininstration forced a re-vote after Kempthorne’s team violated fed rules in choosing their local vendor.

Problem #10.  $3 billion GARVEE Highway indebtedness for Idaho, not put on November ballot for vote of the people as required by Article VIII, Sect 1, of the Idaho Constitution.

Ethical question:  Kempthorne’s $3 billion GARVEE Highway Plan is being foisted upon the citizens of Idaho without the constitutional requirement (Art. 8, Sect 1) of a majority vote of the voters in November.  How?  Kempthorne and his cronies claim that lower level statutes such as IRS Rulings and other laws somehow trump the Idaho Constitution.  Continual unethical interpretations of the successive levels of law such as Idaho’s illegal Judicial Confirmation, fake lease-purchase arrangements through dummy corporations, closed door meetings, and conflict of interest in simultaneous representations of adversarial clients by lawyer-lobbyists hit an all-time high during Kempthorne’s reign as Governor of Idaho.

   Note that the majority of Governor Kempthorne’s questionable ethics in Idaho always revolved around land development activities, from his special “developer’s discount” for absurdly low property taxes to his participation in the “Enron-like implosion” of the U of I’s finances in the $136 million University Place fiasco to his latest and greatest Idaho fiasco: the $3 billion (now nearly $10 billion) GARVEE Highway Robbery that is not on the November ballot as required by Idaho’s Constitution.  If Kempthorne’s GARVEE project follows the results of the University Place fiasco and most PPP’s (public-private partnerships), Idaho will end up with indebtedness 5-10 times the original estimate, a whopping $15 - $30 billion deficit.  This is huge for a state whose population topped out at 1.3 million in 2006.

   In summary, we should note two important factors:  (1) Governor Kempthorne’s ethics in land development has steadily gotten worse, from petty property tax avoidance, to the University Place fiasco in which he received the maximum campaign donation of $5,000 from developer Cryptic Partners (conflict of interest), to his unconstitutional federal GARVEE Highway Plan and (2) the dollar magnitude of his escapades increased from about $1,500 in property tax avoidance to a $136 million University Place scandal to a $3 billion unconstitutional GARVEE Highway Deficit.

  This trend in an escalating lack of ethics and huge increase in deficit spending should be alarming to the Senators on the Energy and Natural Resources Committee which is about to confirm Governor Kempthorne as Secretary of the Interior.  This is the same lack of ethics, fake recusals, and conflicts of interest that characterized both the Boise Watergate scandal and the Jack Abramoff indictments.  The magnitude of Boise’s Watergate is hundreds of millions of dollars; same for the Jack Abramoff schemes at the Department of the Interior.  So far, none of the Senators on the confirmation committee except Senator Ron Wyden (D-OR) have asked Governor Kempthorne about the ethics of the Jack Abramoff scandal.  And Wyden did not inquire about Kempthorne’s past ethics.  Although Sen. Mary Landrieu has since put a “hold” on Kempthorne’s nomination, which now requires a 60% vote to override and resume discussions, it was not for ethical reasons but rather for deal-making to receive billions of dollars in oil royalties for Louisiana.

   If Governor Kempthorne is confirmed as Secretary of the Interior, are we simply replacing the ethics of the Jack Abramoff scandal with the ethics of the Boise Watergate scandal? -- Deep Throat II

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