Trial By Media (Part I)

Deborah Vasquez recently gave a television reporter the transcripts of a tape recording made during an undercover investigation by the Arizona Attorney General's Office.

Vasquez had quit her position as secretary to first assistant attorney general Rob Carey in a hotly contested dispute last May. Since then, she has been determined in her efforts to nail Carey and his close friend, Attorney General Grant Woods, for a wide variety of purported wrongdoing. William Lajeunesse, from Channel 3, suspected the juicy documents were probably stolen, but what Vasquez told him about the attorney general's sting was even more remarkable.

Lajeunesse says Vasquez claimed the undercover sting was aborted because its target was a friend of Woods.

Vasquez has circulated dirt about Woods and Carey to anyone who would listen.

She took her allegations about Carey to his political rival, Maricopa County Attorney Richard Romley, who instituted a grand jury investigation, and to the media.

This week, Romley squeezed a settlement out of the Attorney General's Office in regard to minor bookkeeping problems in a small office trust account.

The momentum for the settlement was made possible by the unending flow of scare stories Vasquez marketed to the press, including her tale of an undercover operation supposedly queered because the attorney general was friends with the target of the investigation.

In the sting that Vasquez recounted for Lajeunesse, state prosecutors sent a woman with a wire into a doctor's office, where she posed as a topless dancer. The woman's cover story was that she had slipped on spilled beer at a nightclub, injuring a knee and a wrist. The attorney general undertook the charade because a former patient of the doctor had come forward with serious charges.

The attorney general's undercover agent gathered suggestive, though not damning, audio tapes of Dr. Mark Goldberg's conversations.

The doctor and the "dancer" waltzed around the notion of committing workers' compensation fraud and raised the possibility that the two of them might rendezvous outside his medical office for drinks. The doctor and the "dancer" made a date.

But before the two could meet at a bar, the sting was called off.
"Vasquez told me the reason the investigation never went anywhere is because Grant [Woods] and Dr. Goldberg are neighbors, friends," says Lajeunesse.

When the reporter checked out this serious charge, he discovered third-party correspondence that proved Goldberg had been tipped to the sting by the bragging of the patient who had originally complained to the attorney general.

The complainant had boasted to friends of the doctor that law enforcement agents had the doctor under surveillance.

The investigation was terminated because Goldberg knew a sting was under way and broke off contact.

"I was satisfied after reviewing the transcripts and talking to the Attorney General's Office that they did not have enough for a criminal indictment," says Lajeunesse, a law school graduate.

Because the operation's cover had been blown, the attorney general referred the matter to the state medical board for disciplinary review.

In reality, Mark Goldberg is neither a friend nor a neighbor of Attorney General Grant Woods. The Woods family pediatrician, however, has a similar name: He is Dr. Arthur Goldberg.

When Deborah Vasquez quit the Attorney General's Office at the end of May 1995, she had many such "stories" to peddle about her former employers. At this late date, nearly a year after Vasquez first talked to the press about the "scandal" at the Attorney General's Office, not a single other Arizona reporter has proven as diligent as William Lajeunesse in checking out her titillating but often baseless claims.

An unquestioning press has repeated Vasquez's charges against the attorney general and his men as fast as Vasquez could level them.

County Attorney Richard Romley has used her allegations to haul witnesses before a grand jury in an effort to indict his political rival, Woods' second-in-command, Rob Carey.

Vasquez's dust devils swirled in newspapers at the very time that journalists were ignoring a far more important story: Romley's malfeasance in the investigation of Project SLIM, Governor Fife Symington's plan to streamline the state bureaucracy.

Romley's halfhearted probe of multimillion-dollar bid-rigging at Project SLIM avoided and ignored incriminating evidence and cleared the governor, his staff and his accountants of any wrongdoing.

Under Rob Carey's direction, the Attorney General's Office opened a second examination of the multimillion-dollar SLIM contracts. This time, prosecutors documented the largest case of white-collar fraud ever perpetrated on state government and Arizona taxpayers.

The very week that Carey and his lawyers announced that they had recovered nearly $800,000 in fines from the governor's accountants and deputy chief of staff for their role in the bid-rigging, Romley held a press conference to declare his intention to investigate Carey, based on Vasquez's scattershot accusations.

And the press bit, playing allegations of two-bit wrongdoing by Carey as though they were every bit as important as the multimillion-dollar bid-rigging Romley had ignored.

The county attorney could never have attempted such a bold, vindictive move if the press had not provided continuous protective cover, printing Vasquez's undocumented and often imaginary allegations without a trace of skepticism, treating her as a credible witness when there were many indications she was not.

The cost of such dilettante journalism has been incalculable.
Romley's staff has roamed the entire state of Arizona, expanding in unimaginable fashion upon Vasquez's flimsy allegations. In fact, Romley was still dragooning witnesses before his grand jury, hoping to find something, anything, that could be pinned upon Carey, when a settlement was announced this week.

In the settlement negotiated with Romley, the Attorney General's Office agreed to repay just over $30,000--including nearly $7,000 in interest and penalties--in trust funds allegedly mismanaged during a four-year period.

The agreement will see $12,000 set aside for minority scholarships; $17,000 reimbursed to the attorney general's Event Fund; and $4,000 paid to cover the expenses of Romley's investigation.

After nearly a year of Romley's top people rooting through the Attorney General's Office, at the same time the auditor general was also crawling all over Woods and Carey, the results are paltry.

Not a penny in taxpayer funds was wasted by the Attorney General's Office, and no evidence of Woods or Carey benefiting individually was uncovered; in fact, neither prosecutor will have to pay back any cash personally.

The worst that can be said is that they were not very diligent recordkeepers for funds that they had gone out and raised themselves.

While the $7,500 yearly average of "wrongdoing" out of the $54 million the Attorney General's Office handles annually might seem to a reasonable person to be a minuscule level of accounting irregularity, it was enough to put Carey's head on the chopping block.

Although Carey admitted no wrongdoing, his resignation was demanded by Romley and expected at press time.

So the Attorney General's Office has been needlessly crippled. Carey's public career has been unfairly vaporized. No significant wrongdoing has been shown.

Yet not a single editorial writer has asked of Mr. Romley: Have you no sense of decency?

When Deborah Vasquez quit her job at the Attorney General's Office, her exit strategy included a plan to destroy Rob Carey and Grant Woods.

As she packed up the personal items from her desk, she told a colleague that she would have her revenge against Carey.

"She kept saying to me as she got her things together that this was not the end of it," secretary Sherri Van Horsen recalls, "that he was going to pay. That she was gonna make him regret this.

"And as I walked her out to her car, she said something to the effect that she was going to embarrass him in front of his friends and family."

Vasquez fled the AG's Office after she was chastised by Carey for handling the kidnaping of a 5-year-old multiple amputee without informing anyone else at the office. Before handing in her resignation, however, Vasquez said she sought advice from Governor Fife Symington's staff. She wanted help finding a job, and she wanted someone to listen to her grievances against Carey.

Vasquez talked to the governor's staff just 48hours after Carey had recommended to Woods that Symington's top lieutenants be prosecuted for their roles in the Project SLIM scandal. The governor's staff knew full well that the investigation was coming to a head.

As Carey and his prosecutors tightened the noose on Symington and his bid-rigging cronies, fate handed the governor's staff a knife with which to cut the rope.

Vasquez said she was promptly hustled off toSymington's ally, County Attorney Richard Romley.

The heart of Vasquez's allegations concerned a trust fund in the Attorney General's Office that had been maintained by Carey.

Beginning in 1992, donations for the fund were solicited from large corporations and major law firms throughout the state. The monies paid for border conference seminars, staff luncheons, employee appreciation awards and civic affairs not included in the Legislature's annual appropriation of tax funds to the office.

At the end of May, Vasquez gave a statement to Romley regarding funding abuses allegedly committed by Carey. After referring her charges to the auditor general for investigation, the prosecutor sat on the case.

Like Symington, Romley knew the terrible judgment of the attorney general's investigation of Project SLIM was about to be announced. The explosion of that announcement would at least embarrass both officials. Symington's closest associates would be implicated in bid-rigging, and Romley's SLIM investigati>>>>>on would be shown as either incompetent or a whitewash.

With Deborah Vasquez, however, the county attorney could fight back; he had a hand grenade and would decide when to pull the pin.

Vasquez's statement was quickly leaked to the Mesa Tribune's Mark Flatten, who ran with the story on June 8 under the headline: "AG Misused Money, Former Aide Claims."

Beginning a pattern that would continue for nine months--until Carey's career was zipped into a body bag--Flatten's story would combine wild distortions and half-truths with good, old-fashioned journalism.

The tone of the media reports was captured in the opening paragraph of Flatten's account.

"A former administrative assistant to Attorney General Grant Woods' chief aide has accused his office of dipping into a Martin Luther King luncheon fund to bankroll an office retreat that included beer and a karaoke machine."

This suggestion--that a party-hearty attorney general was abusing a fund meant to provide minority scholarships--became the popular image of the Vasquez allegations throughout the ensuing coverage. That slant was solidified early on when the Arizona Republic's Pulitzer Prize-winning editorial cartoonist, Steve Benson, depicted the retreat as "Woods' Kegger."

The charge was untrue. No scholarship money had been misappropriated. And there were many reasons to question whether Vasquez was a reliable source for such damaging allegations--reasons the Valley press simply ignored.

Tellingly, reporters never questioned Vasquez's version of how and why she left the Attorney General's Office.

Recapping why Vasquez was unemployed, Flatten explained that she had gotten into trouble at the Attorney General's Office for personally handling a hostage situation.

In his first article, Flatten wrote that Vasquez had taken a note about the abduction of Anna Ott to Carey, while he was in a closed-door meeting with Woods and other top staff to decide whether to pursue Symington's associates in the SLIM case.

Flatten quoted Vasquez as saying the prosecutor "just glared at me like I was totally stupid for interrupting the meeting, and he threw that message down and just looked at me and never stopped."

Which isn't what happened.
In the ensuing months, Vasquez would give two other explanations for her actions in the Anna Ott abduction.

Yet, in the ten months since Vasquez departed the Attorney General's Office, there has not been a single article in the Arizona press reporting on her wildly diverging accounts of her own behavior during the hostage crisis.

This inconsistency, and the failure to report on it, is important.
The Anna Ott abduction is what provided Vasquez such a sympathetic posture from which to launch her allegations against Careyand Woods. As the heroine who saved a 5-year-old tot whose legs and arms had been amputated, Vasquez was above reproach. And the tale of her rescue of the child from drug-abusing kidnapers guaranteed that readers who otherwise might have turned the page would pay attention to small suspected abuses of an internal account in the Attorney General's Office.

The refusal of journalists to look squarely at Vasquez's truthfulness in regard to the kidnaping has proved critical to the humiliation of Carey and Woods.

Much of what Vasquez alleged about the misuse of the AG's trust fund was initially difficult to verify, because witnesses had been summoned into the secrecy of Romley's grand jury (though the truth is that few reporters even bothered to try checking Vasquez's story). There were numerous leaks meant to incriminate Carey in the fund dispute, but a reporter seeking independent corroboration of the attorney general's claims of innocence would have been stymied. The County Attorney's Office was not likely to leak testimony favorable to Woods or Carey, and grand jury witnesses are generally prohibited from repeating their confidential testimony.

Because of this secrecy, Vasquez's version of the kidnaping, which was not part of Romley's investigation of the attorney general's fund, should have served as the first litmus test of her credibility.

Had reporters checked, they would have been astounded at the sheer variety of stories Vasquez offered to explain her actions on May 16, 1995, the day when she, acting entirely on her own, resolved the kidnaping of Anna Ott.

After Flatten wrote his first article, Vasquez changed her story, contending she had not informed Carey about the kidnaping until the situation was resolved.

At that time, Vasquez said the note she had taken in to Carey during the SLIM meeting dealt with another matter entirely, and because her boss had been brusque, she was afraid to interrupt the SLIM meeting a second time. According to Vasquez, Carey was tied up in the SLIM meeting all day and unavailable for consultation.

So when the Oakland police called her about the Ott kidnaping, she said, she had no choice but to handle it herself.

Even this second attempt by Vasquez to correct the record is a distortion.
Nine witnesses who were either in the SLIM meeting or working alongside Vasquez said in interviews for this story that Carey and the others took repeated breaks throughout the day, including a lengthy lunch in which Carey and other supervisors were available to the staff.

For whatever reason, Deborah Vasquez, a mere secretary, simply refused to let anyone know that she was involved in a high-stakes attempt to rescue a kidnap victim.

The criminal prosecutors in the Attorney General's Office and their licensed investigators approach a kidnaping as an extremely volatile situation requiring judgment, not good intentions.

Any cowboy with a badge could have pulled the kidnapers over, resulting in a 5year-old hostage, who was incapable of fleeing, caught in a crossfire.

John D. MacDonald, the director of Intergovernmental Affairs for the office of the attorney general, sits in an office across from where Vasquez was working. On May 16, he was at his desk and not part of the Project SLIM conference. He was available to help.

"Plus, the investigative division is right down the hall," says MacDonald. Many of them are former police officers.

"The first thing I'd have done, the only thing I'd have done, was give it to them."

Nor is this explanation 20-20 hindsight. It was office policy that such cases be routed to the criminal division.

This perspective was never reported in the press.
On September 13, four months after the Ott rescue, Vasquez changed her story a third time during a hearing on whether she would receive unemployment benefits.

Last week, she repeated this new, third version of the kidnap rescue.
Vasquez now claims that she did not act on her own, but sought direction from the top. Vasquez said she asked the advice of the head of the attorney general's criminal division, Michael Cudahy, and he gave her the direction to proceed on May 16.

Cudahy, on the record, denied any such meeting ever occurred, let alone that he had advised such a reckless course of action.

Vasquez will tell you that all the attorney general was actually concerned about was milking the kidnaping for publicity.

MacDonald, who talked to both Carey and Woods when they first learned about the abduction, says just the opposite is true.

"The last thing they wanted was publicity," says MacDonald. "That couple was armed and considered dangerous. What if a cop had been shot? What if the child had been injured? Here was the attorney general with a secretary conducting an investigation.

"Woods and Carey weren't angry, they were incredulous."

Though it pulled on one's heartstrings, the Anna Ott kidnaping was merely the 'Oh my God' background thread from which the other charges in Flatten's first story unspooled.

There were two substantive allegations in Flatten's article that would haunt the ensuing news coverage for months.

The first charge: Rob Carey obstructed a Department of Justice investigation by brazenly withholding, according to Flatten, a "secret cache of files" from an FBI investigation of Grant Woods' father.

The records supposedly involved Joe Woods, a local builder, and Good Samaritan Hospital. The files were stored in a locked filing cabinet of Carey's and discovered by Vasquez.

The second charge was that scholarship funds had been diverted from the Martin Luther King Jr. luncheon to pay for the attorney general's besotted retreat.

Both accusations were wide of the mark.
The first charge was made public after Vasquez told the County Attorney's Office she had discovered a key to Carey's personal filing cabinet when the prosecutor was out of the office. Opening those files, she found folders marked "Joe Woods."

To avoid the appearance of snooping, Vasquez explained that she'd only intended to make sure that the files in that particular cabinet were properly ordered.

This explanation shocked her co-workers.
Reached in Chicago, Michelle DeCosta had vivid memories of what she found when she replaced Vasquez.

"The most basic files weren't there, internal memos, court orders. Nothing. It was all just stuffed inside credenzas and boxes," recalls DeCosta. "From May until September, 90 percent of my time was devoted to creating files out of that mess."

Vasquez stuck with her explanation that she only wanted to create order when she opened Carey's files.

When Vasquez unlocked her boss's personal filing cabinet and saw the label "Joe Woods" on folders, by her own admission, she instantly slammed the drawer shut without looking inside them. Vasquez said she did not examine the folders because she was afraid Carey might return and see what she was doing.

Although she never learned the contents of the files labeled "Joe Woods," Vasquez nonetheless told the County Attorney's Office that there had been a conspiracy to withhold those records from the Department of Justice.

In fact, the folders in Carey's personal filing cabinet stemmed from a civil-court case in which Carey represented Grant Woods' father when Carey was still in private practice. The case was resolved before Grant Woods took public office.

The files had nothing whatsoever to do with the FBI probe, an investigation that, in any case, found no wrongdoing by Woods or his father.

You might think that Vasquez's own admission in her statement to Romley--that she had not seen the contents of the Joe Woods files--would have given pause to a journalist. It did not.

Flatten explained that, substantiated or not, if it was in her statement, it was newsworthy.

Flatten's story went on at great length about the mysterious files and then allowed Carey a one-sentence denial of impropriety.

The second charge of consequence in Flatten's article--that minority scholarship monies were diverted for boozy parties--was no less alarming and just as misleading as the "secret cache of files" allegation.

The funds in question underwrote the costs of an annual luncheon in Tucson that Woods first organized when the state of Arizona refused to recognize Martin Luther King Jr. with a holiday.

The Attorney General's Office urged business leaders to fund a meal at which minority students would sit down with lawyers, listen toa guest speaker and honor the memory of Dr. King.

Carey maintains--and there are fund-raising letters as well as witnesses to support the contention--that the monies raised were earmarked for the attorney general's trust fund, which included, but was not limited to, supporting the MLK luncheon.

Others disagree, claiming donations should have been limited to the civil rights affair.

Judge Cecil Patterson, a former assistant at the Attorney General's Office and the driving force behind the luncheon, always believed the King funds should have been inviolate.

"Carey and I disagreed about how those funds should have been treated," says Patterson.

But Patterson worked for Carey, who had set up the Event Fund which held the King money and numerous other sources of fund raising.

And Carey was adamant that the donations be accepted for a variety of purposes.

Tom Augherton, chief of administration for the attorney general, says he witnessed Carey instructing fund raisers to solicit for the Event Fund at large, not just one particular function.

The largest contributor associated with the MLK luncheon is David Wright of the Arizona Bank.

The confusion within the Attorney General's Office is reflected in Wright's checks, which are made out to both the luncheon and the Event Fund.

"I am getting old and can't remember everything," explains Wright. "I am unable to remember discussing surpluses in the Martin Luther King account to be transferred to other purposes within the Attorney General's Office. Had I received that request, I would not have had a problem in supporting other good government activities of the Attorney General's Office."

This disagreement, though petty in scope, armed County Attorney Romley with just enough leverage to launch one of his office's longest and most expensive investigations, a probe whose target was the prosecutor's political rival Rob Carey.

Once Arizona belatedly recognized the MLK holiday, the attorney general continued to sponsor the civil rights luncheon, largely because Tucson itself had no official celebration.

Scholarships for minority students were an afterthought, added one year after the luncheons began. They were a minuscule $1,500 of the overall $15,000 budget for the lunch.

In any case, when Deborah Vasquez raised her questions, the scholarships had already been distributed after the 1995 affair.

Vasquez's allegations notwithstanding, not a single penny in scholarship money was diverted to the attorney general's retreat, an event that provides staff with continuing legal education.

In fact, even a skeptical review of spending from the attorney general's trust fund would conclude only that there had been a short-term shift of a small amount of money from one office event to another. Neither the MLK luncheon nor the minority scholarship program was actually shorted of money.

Carey explained in the earliest articles on the dispute that the 1995 MLK luncheon had a small carry-forward balance on the books. As in each of the previous years, Carey's people would need to go out and raise more funds for the next luncheon and round of scholarships, but that was almost a year down the road.

In the meantime, part of the balance left from the 1995 MLK luncheon--a balance in the trust fund that supported many sideline activities of the AG's Office--was used to pay a pressing past-due bill from the office retreat.

Despite the steady press references to beer and karaoke, that now-notorious attorney general's retreat bore little resemblance to MTV's Spring Break.

All lawyers in Arizona are required to attend classroom sessions on a yearly basis as part of the State Bar's Continuing Legal Education program.

Rather than leave it to his staffers to attend education classes on their own, Woods put together a yearly program that offered accredited classes during a two-day period. Even lunch breaks were taken up with speakers such as Arizona's Supreme Court justices.

The retreat topics included such toe tappers as "Oral Appellate Advocacy: Practical Learning Experience," with judges Frederick J. Martone, Philip G. Espinosa and Jefferson L. Langford sitting on the panel with two assistant attorneys general.

Yes, some beer was consumed in the evening and, for some inexplicable reason relating to lawyer morale, a $250 karaoke machine was used one night.

But when questioned, the manager at the Tucson hotel where the retreat was held remembered the prosecutors as one of the quietest groups she'd ever hosted.

"I went to all the functions," recalls Pam Traficanti, with Ventana Canyon resort. "I know how hard they worked. It was not a kegger. Nobody got rowdy. And they consumed much less alcohol than most groups. On a scale of one to ten, they were barely a two or a three in terms of partying."

And all of the prosecutors who attended wrote out checks to the attorney general's trust fund, the same account that held the MLK luncheon monies. The checks were meant to cover the entire cost of the retreat.

In 1995, however, two things happened that had never occurred before: The MLK luncheon paid for itself and even had a small surplus for the next year; and, for the first time, the AG's retreat showed a slight deficit.

When unanticipated bills from the retreat came in, Carey authorized their payment from the attorney general's trust fund, which contained both the MLK and the retreat monies.

Despite the impression from news accounts that tens of thousands of dollars were thus squandered, a final accounting showed a total in late bills from the retreat of $2,600.

After Flatten's first story, others dribbled out in the Tribune during the next month. No one else in the media paid much attention.

Then, on July 11, a bombshell went off in the Arizona press.
The attorney general announced that Governor Symington's accounting firm, Coopers & Lybrand, now admitted improper contact with the governor's deputy chief of staff, George Leckie, during the process that awarded Coopers a $1.6 million Project SLIM contract. While denying it had violated the law, the giant accounting firm agreed to pay the state a whopping $725,000 to avoid further civil or criminal prosecution. The Big Six accounting firm also agreed to forgo any work for state government for two years. Leckie later agreed to a similar settlement with the attorney general.

The import of the story was enormous.
The press made little effort to explain just how important it was.



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