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Tom Horne Failed to Disclose Bankruptcy on Official Form a Month After 2002 Arizona Republic Story About It

Sunday's Arizona Republic story about Tom Horne wasn't the first time the candidate for Attorney General has been asked about a decades-old bankuptcy and government sanction.

As Horne reminded us today, Republic reporter Pat Kossan wrote an article in 2002 about his failed business venture from long ago, which resulted in his being banned for life from securities trading by the Securities and Exchange Commission.

But here's the part no one's reported yet:

More than a month after chatting with Kossan about his 1970 bankruptcy for the article, published on October 3, 2002, Horne filed an annual report for his law firm that failed to disclose the bankruptcy.

In the Repub article, (published online Sunday, in print on Monday), reporter Casey Newton found that Horne didn't disclose the bankruptcy in annual reports from 1997 to 2000.

Horne claimed to Newton that he simply forgot to list the bankruptcy "because it was 40 years ago."

We talked to Horne this morning and got the same excuse from him: He just didn't remember that old thing.

But Jason Rose, the local PR guy who represents Horne's competitor for the Republican primary this August, former Maricopa County Attorney Andrew Thomas, stated in a news release today that the Republic could have mentioned the 2002 annual report, as well.

After we called Rose and told him that Kossan's story was published on October 3, 2002, Rose pointed out -- happily -- that Horne's 2002 annual report was filed November 14, 2002.

In other words, the "I forgot" excuse doesn't work in this case.

We put in another call to Horne this afternoon, asking his campaign staff how he could remember the bankruptcy in October 2002, then forget it a month later when filling out official forms for the Arizona Corporation Commission. We'll let you know if we hear back.

Horne claims that Rose tipped off Newton about the 1970 bankruptcy and SEC sanction and that Newton then researched the corporation reports on his own. Newton didn't know about Kossan's 2002 article until Horne showed it to him, says Horne.

That article, pulled up on the Republic's paid archives, reports that Jay Blanchard, Horne's opponent in 2002 for the Schools Superintendent seat, planned to spread the decades-old dirt in 150,000 mailed brochures.

From Kossan's article:

"People have played fast and loose with our money and we're left financially devastated," said Blanchard, referring to recent accounting scandals by billion-dollar corporations.

A 1973 finding by the SEC shows Horne was sanctioned for submitting a false report, not keeping accurate and current books, and not having enough capital to complete purchase and sell orders for clients.

The company went bankrupt and Horne was "barred from association with any broker, dealer, investment adviser or registered investment company."

Horne said he can't recall how many of his clients lost money or how much they lost.

"I don't remember enough to answer," Horne said. "I blocked a lot of it."

Horne's memory had further hiccups this morning, when asked by New Times whether he had ever disclosed the 1970 bankruptcy in any official form, ever.

"I don't remember," he says.

Uh-huh. Guess we'll have to wait to find out. We'll also be interested to see if further details surface (Rose has his shovel out, we're pretty sure) about what kind of scam Horne pulled back in the 1970s to get banned from the securities game for life.

Merely reminding the public about Horne's past didn't help Blanchard -- he lost to Horne, who's been serving as the state's schools chief since.

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But Thomas, meantime, plans to make more hay with the issue by filing a complaint with the state Attorney General's Office about Horne's failure to disclose the bankruptcy on corporate forms.

Hard to tell if any of this will affect Horne's chances -- he is still right to point out that Thomas has his own legal problems.


On a side-note, we noticed this morning that Horne's campaign Web site is using a picture of Thomas we took for this blog. Though we love that shot, (taken during a shamefully untruthful news conference back in March), we've asked the campaign to remove it.

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