One For The Books

Or how schoolchildren got gypped and nobody cared until it was an election year

"We did nothing improper or illegal," said Westcor spokesman Jack Rasor. "We are extremely surprised that a lawsuit has been filed at this late date. We will comment further when we've had more time to review the complaint."

There were other curious matters in this lawsuit. Had the state developed new information or was the attorney general suing whistle-blower Shaw for information that only Shaw had provided? Even the $9 million figure in the suit, representing triple damages, was based upon Shaw's argument that the rigged auction cost the schoolchildren a minimum of $3 million because Pensus had been prepared to bid that much more had the proceeding been on the up and up.

When contacted about the lawsuit, Alison J. Butterfield, chief counsel for the Attorney General's Antitrust Division, basically took this position: Who put you through to my office?

"Well, as you know, I am constrained from discussing anything outside the public record," she said. "I don't know how I can say anything. There is no record except for this complaint."

Actually, as you know, Ms. Butterfield, there is almost three years of paperwork in addition to the complaint.

One of the more interesting documents, signed by state Land Department Commissioner Hassell, is the twelve-page administrative order issued September 18, 1987.

Hassell's directive is in response to Representative Reid Ewing's petition to set aside the auction because of bid rigging, undervalued appraisals and rampant irregularities.

Hassell threw Ewing out of his office, saying things like: "The Arizona courts have considered the elements necessary to show outstanding under an `affected' person test. In City of Scottsdale v. McDowell Mountain Irrigation and Drainage District, 107 Ariz. 117, 4893, p2d 532 (1971), the court considered a taxpayer suit under the quo warranto statute, A.R.S. & 45-1552, and found that plaintiff lacked standing to sue under a statute allowing action only by `any person affected thereby' . . . ."

Now the average person reading that sort of gobbledygook has got to ask, "Huh? You mean to tell me that's how forest rangers talk?"

Well, of course not. That's how lawyers talk. In this instance, the lawyers advising, drafting and representing Jean Hassell were Melinda Garrahan and Susan Harris.

At the time, both of these women were employed by the Attorney General's Office.

In the September 18, 1987, directive, the attorney general and the state Land Commission could find no bid rigging: "Finally, the Commissioner finds Shaw's statement that Rasor offered part of the state land to Shaw in exchange for Shaw's not bidding not credible . . . ."

Once Representative Ewing had been chased from the playing field, the attorney general filed a request with the courts asking for attorney's fees. In these papers the attorney general dismissed Ewing's allegations of bid rigging as "harassment, groundless and not made in good faith."

Two years later, the same allegations based on the same information are worth a $9 million lawsuit. What changed in those two years?

However perplexing the attorney general's lawsuit, there are some benefits.

When Charles Keating's savings-and- loan empire collapsed, he ended up in bankruptcy court and in front of Congress. Grand juries around the country began investigations. About the only prosecutor in America not making a case against the Arizona-based Keating is our own Attorney General Bob Corbin. The recipient of $50,000 in campaign donations from Keating, Corbin pocketed this cash in an election year in which he faced no opposition. The attorney general's friends like to tell the story that Corbin's position is that he will return his contributions from Keating when Mother Teresa returns hers. Supporters of Corbin who fretted about the attorney general's reputation for white-collar prosecution will be heartened by the Westcor/Pensus lawsuit.

And there is even a bigger plus than the enhancement of Corbin's reputation as the new election campaign for attorney general commences.

Mr. Corbin has observed that in the Paleolithic environment that is Arizona real estate, a man like Richard Shaw gums up the works. Although he calls himself a developer, Richard Shaw has spent the last three years acting like Crusader Rabbit. He even thinks that professors of ethics are somehow germane. Consider, too, the name of Shaw's firm, Pensus. Their corporate logo is Rodin's sculpture of The Thinker. According to Irv Shulman, Shaw's secretary, the name "Pensus" is the Latin past participle meaning "to weigh or to ponder." Let's be frank. In an environment where you find a firm called Westcor, an Anglo-Saxon corruption of the phrase "to eat Bambi," pondering thinkers screw up deals.

In 1987, keeping the state's deal with Westcor intact was the goal. Deputy Commissioner Glendon E. Collins emphasized that if a deal this big fell apart, who would bid on future land sales?

"If we're going to sell, we have got to be able to deliver," said Collins.
Two years later, the real estate market has collapsed and no one is making deals with the state or anyone else. And now Bob Corbin has serious campaign opposition for his job. Maybe there is even new information.

"We don't have new evidence," said Collins. "I don't know what Corbin has."

The attorney general farmed out the lawsuit to Los Angeles attorney J. Michael Hennigan. Perhaps he could shed some light on the possibility of new developments.

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