Owen "Buz" Mills "fraudulently" deceived his former business partner in a lucrative cell-phone tower deal, the Florida Court of Appeals ruled back in 2002.
The court ruling didn't mean much to Arizonans back then. But now that Mills is running for governor, his political foes have dug it up to help push the idea that Mills isn't to be trusted.
A local political insider who says he's not connected to any other candidates' campaign provided New Times with a link to an online article published last week about the lawsuit between Mills and his former partner.
The parties settled the suit in 2003.
Yet the appellate court ruling paints a clear picture of a savvy businessman who tried to take advantage of his junior partner's naivet'e. The Florida justices refer repeatedly to Mills' actions as a type of fraud.
Mills, the owner of a weapons-training facility in Paulden, made a fortune in the cell-phone tower business back in the 1990s. He's pumped millions of dollars of his own money into TV ads that have helped spread the political newcomers' name across the state. Polls show he's a real contender.
Back in 1995, records show, Mills and his neighbor, John Mortellite, went into business together building cell-phone towers to sell to cell-phone companies. Mills sunk $900,000 into the venture, called OPM-USA, and Mortellite put in $100,000.
Run out of Mills' garage at first, the company soon took off big-time and caught the attention of a company called American Tower, L.P., which offered to buy OPM for $96 million. Mills liked the sound of that, but he didn't want to pay Mortellite his fair, 10-percent share, according to court documents.
While Mills negotiated with the head of American Tower, James Eisenstein, he sent his partner on multiple vacations. According to the 2002 ruling:
In fact, when Mr. Mortellite returned from vacation on August 2, 1997, Mr. Mills immediately advised him to take another two-week vacation. Mr. Mills so advised Mr. Mortellite without a word about the American Tower purchase offer. When Mr. Mortellite returned from that vacation on August 16, 1997, Mr. Mills, again without a word about American Tower, told him to take another week of vacation.By a letter dated August 19, 1997, American Tower offered to purchase OPM for $96 million. On August 21, 1997, Mr. Mills made a counteroffer of $105 million. At some point during that time, Mr. Mills informed Mr. Eisenstein that he had a ten percent shareholder to buy out. When Mr. Eisenstein asked Mr. Mills how he proposed to do that, Mr. Mills responded, "Don't worry. He has no idea what this is worth."
On August 23, 1997, when Mr. Mortellite returned from his final week of vacation, Mr. Mills informed him that things were not working out. He therefore terminated Mr. Mortellite from his OPM post. Mr. Mills indicated he would buy out Mr. Mortellite's ten percent interest in OPM in accord with the terms of the General Share Purchase Agreement. At that time, Mr. Mortellite was still completely unaware of American Tower's offer to purchase OPM.
About a week later, Mills offered Mortellite a check for $1.5 million, based on the false premise that the company was worth only $15 million, records state. Not knowing any better, Mortellite took the check and signed over his 10-percent stake to Mills.
Mills soon sold the company and "managed to keep an additional $9 million of
profit out of Mr. Mortellite's pocket," one of the Florida justices wrote.
After the justices made their ruling, a trial court in 2003 awarded Mortellite $4.7 million in damages. The trial court records state, (as reprinted by the Web site linked above), that Mills ultimately was paid $45.47 million by American Tower after OPM's debts were subtracted out.
Later in 2003, however, Florida's 12th Judicial Circuit Court dismissed Mortellite's lawsuit entirely following a settlement with Mills.
Mortellite could not be reached by New Times.
Mills downplays the case.
"It's not news that a successful businessman gets sued," he says. Asked specifically about the justices' statements that Mills had fraudulently deceived Mortellite, Mills would only point to the fact that the lawsuit was ultimately vacated.
Mills did, however, deny that he ever told Eisenstein that his partner "had no idea" what the deal with American Tower was worth.
"That came from a deposition that Eisenstein gave in which he said that I said that," Mills says.
(We couldn't track down Eisenstein for this article, either -- but we'll give it another shot this week).
We'll be honest: Being a victim of this kind of fraud wouldn't be so awful.
But this case shows that Mills, though he portrays himself as a political outsider, might make a disturbingly typical politician.
