By Ray Stern
By New Times
By Amy Silverman
By Stephen Lemons
By Stephen Lemons
By Monica Alonzo
By Chris Parker
By New Times
The purpose of a law enforcement sting is to put a buxom topless dancer on the lap of a sex-starved man to see if he'll get an erection.
State Senator Leo Corbet went bull-goose tumescent when the state Attorney General's Office did the nasty hula in front of his lusting heart in 1987. Corbet behaved as poorly and as foolishly as any man in an advanced state of arousal.
Even so, Leo Corbet, horndog, refused to break the law. In fact, Corbet insisted that the deal go down legally. And that is the only reason he was not prosecuted by Attorney General Bob Corbin, a man who had every reason to loathe the very idea of Leo Corbet.
Now, almost four years after the incident, the details--or at least the incriminating details--have been leaked to the press, and Corbet has been smeared from here to hell and back on the eve of the election.
Instead of sex, Attorney General Corbin wiggled $3 million in Teamster pension funds in front of the destitute Corbet. That kind of cash would make Saint Paul blink; Leo Corbet went pie eyed. And there was such unseemly conduct . . . though you must decide for yourself whose behavior was more scandalous: Senator Corbet, Attorney General Corbin or the media.
On October 25 the front page of the Arizona Republic screamed: "Sen. Corbet discussed kickbacks to Teamsters for land-deal loan."
The expose played out under a grainy photo from a cheap surveillance camera hidden in a ventilation duct. The fuzzy print all but convicted Corbet, who was shown meeting with con man Howard Woodall and undercover police detective John Berentz.
The article sketched a deal wherein undercover agents posed as men with connections to the Teamsters pension fund. In return for an $18 million loan from the union, Corbet was expected to pay approximately $3 million in "points or whatever you wanna call it."
"Whatever you wanna call it" amounted to an illegal kickback for the agents putting the deal together.
Although the attorney general admitted in print that he did not have anything worth prosecuting, Leo Corbet looked terrible.
The section of the Republic's story devoted to Corbet's response hardly helped the senator's position.
"I kept telling him [Woodall] that it had to be through a mortgage broker," which, Corbet said, would have made the whole procedure legal.
He [Corbet] agreed that his insistence on proper procedures isn't reflected in the transcripts, wrote the reporters.
So, the average person reads the newspaper, which has quoted from hundreds of pages of secretly taped transcripts of Leo Corbet setting up this loan through a Teamster pension fund. And the only part of the conversation that wasn't tape recorded, coincidentally, happens to be the part where Corbet insisted on a legal deal?
That's the best you can come up with, Leo?
In fact, the transcripts do show that Leo Corbet, finally, insisted that the deal be done legally, through a mortgage company. Corbet agreed to pay a very high percentage on the loan as long as it was done through normal channels.
"If we can go out of escrow with me paying you 15 percent, that's the mortgage company--if I can do that out of escrow then I got no problem with any bullshit," said Corbet in the transcripts.
The Teamsters could take whatever profit they wanted, but it would be aboveboard and not under the table.
That section of the transcript never made it into the Republic; in fact, the morning paper had Corbet confessing that no such transcript existed.
When Corbet's quote was read to Republic reporter Ed Foster, he responded, "Are you reading from the transcript? . . . Okay, I hate to put you off, but let me ask that you call Rich [Robertson] because Rich is much more familiar with the transcripts than I am. . . . I hate to do that, but I really can't answer the question, to tell you the truth."
Robertson was familiar with the quote but unmoved by its content.
"The thing about it is you've got to take this whole thing altogether. It really doesn't make it legal at all going through a mortgage broker. The idea was for the funds to go back to the individual lenders, the Teamster guys. All it was was a scheme to launder the money back to those people and make it legal."
That may indeed have been Woodall and Berentz's game plan, but Corbet wasn't buying into it, according to authorities who reviewed the relevant part of the taped conversations.
Real estate attorneys explained how a mortgage company acts as a deterrent to fraud.
Parties to a real estate contract can instruct the escrow agent to disburse the monies basically any way desired. It is against the law, however, to take a commission unless you are a licensed real estate broker, which Woodall and Berentz were not. More to the point, if you have a fiduciary responsibility to the pension fund as a Teamster union official who authorizes loans, the escrow agreement creates a paper trail that would put you in prison for taking a kickback.
"The combination of escrow and mortgage company keeps everything on the up and up," said one attorney, who requested anonymity.
While Robertson can dismiss the demand for a mortgage company and an escrow as nothing more than "a scheme to launder the money," that is certainly not the reaction undercover detective Berentz had.
Leaving an easily traced paper trail through a legal mortgage company was not what the undercover cop had in mind. He wanted Corbet to commit to passing the 15 percent under the table. When Corbet proposed the mortgage company route for the entire transaction, detective Berentz quickly tried to derail the idea.
"Well, what I thought is we'll--what we'll do is put the--put the package in as we initially talked about without the increase [15 percent], right?" responded undercover detective Berentz.
Corbet's final word on the loan was that it had to proceed through a mortgage company. Leo Corbet served in the state Senate from 1970 to 1982, the last two terms as Senate president. His legislative pay in that twelve-year period averaged $7,500 a year. In 1982 the Republican leadership persuaded Corbet to offer himself as the GOP's candidate for governor. Following a disastrous campaign, Corbet was a candidate for the poorhouse.
A powerful politician who wasn't greasy enough to line up a second career when he had real clout, Corbet found himself hustling real estate in 1987, five years after he'd left public life. Just because Corbet was broke and competing with several thousand bored housewives around the state who also had real estate licenses is no reason to feel sorry for the guy. But it does help you understand the sort of ring-a-ding-ding torment Corbet went through when the attorney general's undercover boys said, "Leo, baby, we're going to make you a millionaire. Several times over. Oh, by the way, would you mind signing this little ol' document?"
Sign a document? Hell, Leo Corbet went cash simple; he'd have signed a pool contract, bought encyclopedias sold door-to-door, converted to Buddhism, danced the Watusi. It didn't matter. Leo Corbet was going to be a millionaire.
"Lotta people walk around saying, `Well, I'm not greedy. I'm not greedy.'
"Well, bullshit. I am greedy," admitted Corbet on the tapes. "But I am not stupid at the same time . . . ," a matter of some debate.
That was on February 20, 1987. Within 24 hours, by the meeting on February 21, Corbet had come to his senses.
In the winter of '87, the attorney general had opened up a storefront operation with con man Howard Woodall, a notorious scam artist recently out of prison. The authorities put the word out that Woodall had Teamster money to lend. It came with strings attached, in the form of kickbacks.
In a recent interview, Corbet said that going into the first meeting he had no idea about Woodall's background or that the pension fund required kickbacks.
What Corbet did have was a golden investment opportunity and a credit background that frightened conventional loan sources like banks.
Corbet knew about a parcel of land in the boom town of Laughlin, Nevada, that fronted on the Colorado River. Zoned for gambling casinos, that dirt was appraised at over $20 million. The elderly owner wanted cash, however, not a ten-year note. In return for cash, the owner would drop the price to $13 million.
Con man Woodall and undercover cop Berentz said that based upon a $21 million appraisal, the Teamsters could loan around $18 million. With $13 million going to the landowner, $5 million would be split among Woodall, Berentz, Corbet, and the Teamsters in fees and points. (Nowhere is there a call for a "kickback.") What's more, the Teamsters would carry the loan for five years. In that amount of time, Corbet expected the land to double in value as the Vegas casinos moved into Laughlin.
Corbet could hardly believe his ears. Not only would he make a multimillion-dollar commission on the front side of the deal, he might get to make a bigger killing on the back side.
Woodall and Berentz had even more to offer. Every time Corbet came down to earth, one or the other would attempt to seduce him further. At one point, the cop tried to convince Corbet to think in terms of building his own casino.
Berentz: "You'd do the first loan to get the property and then put a package together for your hotel-casino. We'll go back and resubmit it [to the Teamsters]. You know, you got five years to get that ready, consolidate the loans themselves, rework the whole thing and you're in like Flynn . . . so what we need to do is if you wanna do the casino . . . get your master plan put together and we can go in and redo it."
Corbet: "Well, I . . . "
Berentz: "We'll call it LEO'S PLACE."
Corbet: "No. Screw that."
Woodall and Berentz did more than just keep visions of sugarplums dancing in Corbet's head. Whenever Corbet moved in a direction that would keep the deal kosher, one or the other took Corbet by the hand and led him to Donkey Island. For example, at one point, Corbet wanted to run the deal past an attorney who would clearly have insisted upon the straight and narrow:
Corbet: "It's just that this guy I trust with anything I've got. He's former president of the State Bar and he's an experienced son of a bitch . . . "
Woodall: "I don't know whether it would be best or not, but I could find a friendly lawyer--what they know, they've made a lot of loans in Nevada, if that would help any, but maybe this guy'd be best."
Banks legally charge points on real estate transactions. If your credit isn't strong enough for a bank, alternative financiers charge you a lot more for their money. The Teamsters were free to demand a premium for a loan. Whatever was charged, however, had to go to the pension fund. Agents, like Teamster officers who approved the loan, could not put cash fees or kickbacks into their own pockets.
The transcripts are full of vague references. Was it a kickback (illegal) or was it points (legal)? Who were "they"? Did "they" refer to the fund or to the individual officers?
Woodall: "If they make a $20 million loan they want us to give them a couple million dollars . . . everything's negotiable."
Berentz: "We've put some through that are unbelievable."
Woodall: " . . . They've got plenty of money, it's just a matter of us working out what we wanna do and the sweeter the pie is for them the better deal we can make. And they're not bashful at all . . . "
Corbet: "We're in it at something like $13.8 million. If we can borrow $16 million on that--'cause it's got a $21 million appraisal on it, then we can pay those other guys their points that they want or whatever the hell it is, but you're looking at, really, something that makes some sense to do if, on the back side you don't have to pay anything for five years . . . "
Berentz: " . . . We're here, as we said earlier, to make some money . . . The points, or whatever you wanna call them, take care of everybody . . . "
Corbet: "If that money is as good as any other money and it's legal, that's great. Y'know, it looks great."
Although Woodall and Berentz were shy to come right out and say "kickbacks," the "points or whatever you wanna call it" degenerates into a gray area that Corbet should have clarified or rebelled against.
Instead of focusing on just exactly what it was that Woodall and Berentz proposed, Corbet was obsessed with negative publicity from the newspapers. Not publicity about kickbacks, but publicity about any Corbet deal linked to the Teamsters.
Corbet went on to explain his bitter relationship with the Arizona Republic and a graphic confrontation that occurred with the publisher during Corbet's race against incumbent governor Bruce Babbitt.
Corbet: "He's [Pat Murphy] a turd of the worst kind. . . . I called Babbitt a liar one time and he [Murphy] says, `Leo, you really think he's [Babbitt] a liar?' `You're goddamn right he's [Babbitt] a liar,' I said.
"`You know, your problem, Pat, is that if you caught him [Babbitt] in the shower playing with himself, you'd say it's his soap and his prick, he can wash it as fast as he wants to.'"
Having regaled his fellow developers with the bad blood that existed between him and the dailies, Corbet went on to explain how worried he was about being linked to the Teamsters.
Corbet: " . . . You know how those [reporters] are. [Inaudible] say about me borrowin' some money from the Teamsters union no matter how squeaky clean the son of a bitch is in Arizona, you're dead . . . so couple things:
"One, is there a possibility [of doing] it through a corporation, another corporate shell or something like that?"
By this point, Leo Corbet was a desperate man. Teamster pension money is a legitimate source of funding--Fife Symington's Mercado, for example, is underwritten with the union's pension fund.
But all Corbet saw were headlines linking him with Jimmy Hoffa, Jackie Presser, and Allen Dorfman.
As Corbet struggled to conceal his involvement, Woodall and Berentz were only too willing to help. The detective drafted a letter of application for the loan and Corbet signed a friend's name, promising to alert his pal later.
For the sake of millions of dollars, Corbet behaved like a fool and betrayed himself.
Within 24 hours, Corbet would insist that the deal be handled through a mortgage company, but the damage was done.
Although the attorney general could find no laws that were broken, neither could Corbet erase the rash words uttered into a hidden microphone.
For twelve years, Leo Corbet helped kill bills designed to expand the ever increasing powers of Attorney General Bob Corbin, who already ran the largest law staff west of the Mississippi. Whenever Corbin's right hand Steve Twist drafted legislation that forgot about civil liberties, it was always Leo Corbet who shelved the bills. The dailies used their editorial pages to blast away at Leo Corbet's presumption. In 1987, out of office and a private citizen, Leo Corbet fell into the arms of the attorney general without ever realizing it.
Today, almost four years later, Leo Corbet is running for re-election to the Senate, where he is expected to bid for the presidency of that body. Earlier this year he did the impolitic and endorsed Steve Twist's opponent in the Republican primary to pick a successor to Attorney General Bob Corbin.
Corbet's run-in with Corbin, the media and whoever else chose the election hour to leak this tale shows at least this much: It's one thing to succumb temporarily to temptation. It's something else to orchestrate the table dance and, when the party's over, share the boozy pictures with your friends in the press.
You must decide for yourself whose behavior was more scandalous: Senator Corbet, Attorney General Corbin or the media.
In fact, the transcripts do show that Leo Corbet insisted that the deal be done legally, through a mortgage company. Every time Corbet came down to earth, Woodall or the detective would attempt to seduce him further.
"If that money is as good as any other money and it's legal, that's great. Y'know, it looks great.