By Amy Silverman
By Olivia LaVecchia
By Monica Alonzo and Stephen Lemons
By Chris Parker
By Michael Lacey
By Weston Phippen
"Rimsza said, 'What do we need?'" Johnston recalls. "I told him, 'We need money. I need $1 million to do the talent and $500,000 to get it going.'"
Johnston says everybody reviewed the lineup of entertainers and understood how much it would cost.
On July 7, Rimsza and the rest of the city council approved the $500,000 loan to the Citizens for Community Celebration to pay for entertainers and production expenses.
"When the committee got the money, they gave me the authority to make offers," Johnston says.
But Johnson had been cutting deals before the loan was approved.
He sent On Cue Systems a $10,000 deposit check from the CCC bank account (which hadn't been formally recognized by the city) on June 18. Four days later, Johnston secured a $115,000 agreement with Gin Blossoms' manager, Wally Versen. Johnston and Woods forwarded a $10,000 check from the CCC bank account on June 22 to Versen's management company, Titan Music, as a deposit.
Versen's role in the event soon expanded. On July 28, Versen signed a $25,000 contract with Woods and Johnston to supervise, organize and coordinate contracts, contract riders, artist payments, accommodations and ground transportation on behalf of the CCC.
Versen was now working both sides of the table -- managing the Gin Blossoms while also representing the CCC in contract negotiations with bands.
Together, Versen's bands had contracts with the CCC worth $140,000 at the same time he was under a $25,000 CCC contract to represent CCC's interests. The CCC steering committee did not review the contract with Versen until September 1, more than a month after it was signed by Woods and Johnston. By that time, CCC records indicate, Versen had agreed to a $5,000 reduction in his contract, to $20,000.
Versen's dual roles caught Phoenix parks department office of special events director Irene Stillwell by surprise. Stillwell's office directly oversees CCC's operations. She says Versen's role with the bands was not discussed when he was introduced during a CCC steering committee meeting.
"The group was told this was a very experienced person . . . and that he might be useful to the committee," she says. Versen's role as agent for the Gin Blossoms and other bands was not discussed, she says.
"None of that was mentioned," Stillwell says.
Versen says his duties to the CCC and the bands do not pose a conflict of interest. The contracts with the bands he represents were negotiated and completed months ago, he says. Most of the work with the CCC now involves solving logistical details such as getting hotel rooms and making sure artists have what they want onstage and backstage. (See Sidebar.)
"It's like different things," he says.
Woods agrees, stating that Versen's experience should help the acts perform smoothly New Year's Eve.
"I don't think this presents any sort of conflict because of his role with some of the bands," Woods says.
At the same time Versen's contract was being finalized, Johnston, Woods and city parks officials hammered out final details of contracts with nearly two dozen individual artists. Woods signed off on the contracts that already had been signed by the artists.
At this point, two conflicting stories emerge.
Johnston says he believed the contracts were approved, so he mailed them on the way out of town to North Carolina.
City officials and Woods have a different story.
"We looked at all the contracts while they were still in-house and we agreed to them," says Diane DeSantis, who was hired by the parks department to serve as a liaison with the Citizens for Community Celebrations.
But DeSantis and her boss, Michael Whiting, were very concerned about the acts' costs. She says they asked Johnston when the deals would be consummated.
"He said, 'When the [deposit] checks accompany the contracts,'" DeSantis says.
Since the checks weren't ready, DeSantis says the city believed it had a few more days to scrutinize the budget. DeSantis, Whiting, Woods and public-relations specialist Jim Gath met and concluded the budget for entertainment was too high.
Gath and DeSantis prepared a memo for Woods outlining significant problems facing the event.
The eight-point memo concluded that it was necessary to "re-think & re-structure the entire event" by slashing the city's exposure in half, to less than $1.3 million. At the same time, it was necessary for the city and CCC to "still deliver an event that is a huge celebration."
The memo concluded on a vague, yet optimistic note: "We have a plan."
The first step of the plan required calling Johnston, who by this time was in Raleigh, North Carolina, and telling him the city wanted to make some changes. Suddenly, the city, which was supposed to be taking a back-seat role in the event, was front and center.
"I said, 'Charles, we need to cancel a few acts. We don't think we can crack this nut. Please don't send the contracts,'" DeSantis says.
It was too late.
DeSantis says Johnston sent the contracts without the checks, "which we understood by him wasn't going to happen."