Tuesday, September 18, 2007

State Audit Reveals Ogden Administration Improprieties

Auditor finds Boss Godfrey's Ogden Community Foundation routinely and wilfully violated its own bylaws

By Curmudgeon

A couple of interesting items in today's Standard-Examiner.

First is the article by Scott Schwebke, heading the Top of Utah section. Here's headline: Agency –– government or private? Ogden Community Foundation won’t have to return funds; still under scrutiny

Here are the opening graphs:
OGDEN — The city has made a “good faith effort” to comply with the terms of a $900,000 grant awarded in 2002 to purchase the former American Can Co. complex and won’t have to repay the funds, according to a state audit released Monday. The audit was conducted at the request of state Rep. Neil Hansen, D-Ogden, and other individuals. They questioned whether it was proper for the Ogden Redevelopment Agency to use a $900,000 state grant to purchase the American Can Co. complex to house a high-tech center.
That was, of course, good news for the Godfrey administration and [in my view] good news for Ogden. But the good news for Godfrey ends right there, and the rest of the story and the state audit cannot have pleased him. From the story:
The office of the state auditor determined the Ogden Community Foundation, which acquired the complex in 2006 from the city’s RDA, has deviated significantly from its original articles of incorporation. As a result, there are inconsistencies as to whether the foundation is part of city government or a private organization, the six-page audit says.

The foundation’s original incorporation papers, which say board members are to be selected from a list of approved candidates appointed by Ogden’s mayor, require that the organization be included in the city’s financial statements because it’s considered a “government entity,” the audit says. However, the foundation has deviated from that practice and chooses new board members on its own without making selections based on a list from the mayor, says the audit.
And...
The audit also questioned the city’s decision to withhold information from individuals who submitted public record requests regarding the Ogden Community Foundation. “We believe that public officials have a responsibility to provide for open government,” the audit says. “In this situation, the city allowed the property to be sold into private hands where it no longer controlled the flow of information. While the city may have complied with the letter of the law, it certainly did not comply with the spirit of the law, which includes providing citizens with answers to their questions about the use of their tax dollars.”

The audit recommends that the city work with the foundation to amend the organization’s articles of incorporation to clarify its operating procedures and tax status. The foundation should also comply with state public records law if it is determined by legal counsel that the organization is a governmental entity, says the audit.

Godfrey said the foundation’s bylaws have been amended to demonstrate that the organization is separate from the city and shouldn’t be part of its financial reporting..
So, let's reduce that to basics:

(a) the Ogden City Foundation began life as a public body which, as such, was required to include its activities in the city's annual financial report.

(b)For some unexplained reason, however, it operated instead and in violation of its own founding by-laws, as if it were a private not a public entity, and it refused therefor to makes its records of its activities [which involved the transfer of public property to private entities] public when asked.

(c) The Mayor now says the by-laws have been changed to make the Foundation an exclusively private entity apparently so that it it can keep from having to explain its activities to the public.

(d) The state auditor finds such behavior on the part of the Godfrey administration to be, at the least, unethical, if not illegal.

Next, there is an interesting editorial on the newly announced crime-control steps, and their relation to the campaign. The editorial notes that crime control is shaping up to be a major issue for both mayoral candidates. It implies [faintly, but the implication is there] that Mayor Godfrey's --- who seems to have been asleep at the switch regarding gang violence in Ogden for seven long years until he realized his re-election was in jeopardy --- sudden interest in the topic is to no small extent campaign-motivated. Which raises of course this question: how long will his interest in controlling gang violence survive the closing of the polls on election day this November?

Additional reader comments are invited, of course.

Update 9/18/07 12:16 p.m. MT: For the benefit of our detail-oriented readers, we've obtained and uploaded to our storage site a full-text pdf version of the above State Auditor's Report, which can be viewed here.

28 comments:

Anonymous said...

Curm:

Good synopsis. That was my read of the article as well. I thought it was interesting that the "good news" part of it seemed to predominate over the "bad news". Odd editorial judgment, IMHO.

Curm did not mention it, but this was my favorite passage:

Mayor Matthew Godfrey said Monday the foundation never appointed members from a list provided by him. “It was always the foundation board’s decision,” he said.

So, you never followed the bylaws in the first place, and you expect to receive some sort of medal for that from the auditors?

Anonymous said...

This is typical of Godfrey's MO.

Ignore the rules, even your own, operate off the top of your head, ignore the people, dish out sweet heart deals to your friends, distort the truthwhen it suits you, fire those who question your actions, and do what ever you damn well please regardless of the law.

Yep, that's our little mayor all right!

Anonymous said...

Turns out, there's another interesting piece in the SE today --- Charlie Trentelman's Wasatch Rambler column. It's a piece in praise of dissidents, and the useful and necessary role they play in democracies. He's particularly looking, this time, at dissidents who run for office unsuccessfully. And why it's so important that they run.

Trentelman notes that dissidents also "especially at first, tend to fail. Causing change is hard, so this column is a salute to those who tried in the primary election we just had. There were lots of them. They knew they would probably lose, but they ran anyway. By doing so, they did good service for democracy."

He writes of his friend, Dennis Howland, who began grumbling " early this year when veterans were cheated out of a nursing home in Weber County. Dennis is a Marine and active veteran. As he looked at the wreckage of that cause, he said butts needed kicking." So he decided to run for an at-large Council seat in order better to be able to kick a few. He got stomped on but good. [615 votes] As Trentelman notes, "the two winners split ten times that."

Howland was frustrated by his run for office, in part because when he tried to discuss his ideas for running Ogden better than it has been run, he found that most voters "just asked him about gondolas and Mayor Matthew Godfrey."

OK, he has a point. There are more things that might be, should be discussed in this campaign than the Mayor and gondolas obsession. Many more. But, on the other hand, sometimes an issue --- a single issue --- becomes a symbolic one, a kind of electoral short-hand for other, broader issues. It's at least worth considering that the gondola matter has become just such a symbolic issue in Ogden, standing for much more substantive matters... matters that in fact go right to the heart of what Mr. Howland wanted to talk about with voters.

Two examples: the gondola matter stands I think as short hand for this more substantive matter: should city officials commit to projects and proposals without having first done the research necessary to see if those proposals are in fact feasible and can be justified on the evidence? It's a question involving effective governance, not just "gondola good/gondola not good."

Second example: should the Ogden's mayor [whoever he or she might be] be committed as matters of principle to open government and [in so far as is possible] full disclosure? Given the recently revealed e-mails in which Administration officials conspired with UTA to find a way to keep secret from the Council the fact that the Administration had commissioned yet another gondola study, coupled with today's lead story in the Top of Utah section, it seems the Administration's answer is "no." And so the gondola has become, again, a kind of shorthand symbol for this issue... a fundamental one involving Ogden governance. Or the various candidate's governing styles, I guess we could put it. As I recall, that was one of the substantive matters Mr. Howland wanted to talk to voters about.

So, I agree, we have much more to discuss this election round than simply "gondola good/ gondola not good." But it is also true that the gondola issue has come to involve in the eyes of a not inconsiderable number of voters, it seems, much broader questions about city governance. I'm not sure, then, that the voters who frustrated Mr. Howland by wanting to talk about the gondola and the mayor were as narrow in their interests as he believes.

Trentelman's column, which is as usual well worth the reading, can be found here.

Anonymous said...

So is this a rogue foundation?
How does the administration account to the taxpayer for the 3 million dollars that have been given to this private foundation?

Anonymous said...

I haven't had time to study the State Auditor's Report in detail but from first glance it has not been done in depth since the auditor performing the audit refused to issue a statement on the internal control of the Ogden Community Foundation.

It makes me think it is another political ploy to try to make me go away with my questions on the Ogden Community Foundation

Some pertinent facts that cannot be ignored even by the State Auditor's man:

No. 1 - The Internal Revenue Service issued a ruling on the status of the Ogden Community Foundation as a 501(c)(3) non-profit and has it qualified as a PUBLIC CHARITY until December 31, 2007 when the tax status will be reviewed again.

No. 2 - Changing the By-laws in August, 2007 does not change the fact that the Ogden Community Foundation sold the American Can property in January, 2007 to Jon Peddie, Blain Johnson and others operating as AmCam Properties, LLC while it was classified as a public charity.

No. 3 - John Patterson steadfastly refused since January to give me any information on the Foundation even though by law he is the Registered Agent and must furnish information to the public when it is requested.

So Patterson finally sent me a 2006 form 990 tax return sometime in July or August after it was filed with an extension. The return he sent is incomplete and incorrect.

It shows $3 million plus in donations on the first page but the donor page which lists donors is blank.

I will be back when I print out a copy and have time to analyze it in depth.

This nonsense is beginning to irritate me.

Anonymous said...

Lemme see if I understand:

On the use of the state grant, the city violated the letter of the agreement, but that's ok because they were still within its spirit.

On the compliance with GRAMA, the city violated the spirit of the law, but that's ok because they were still within its letter.

And just as the mayor can retroactively waive competitive bidding requirements, it's fine for the Ogden Community Foundation to retroactively amend its articles of incorporation.

Does that about sum it up?

Anonymous said...

Dan:

Nice catch!

Anonymous said...

ya Dan, that's the way it works down the rabbit hole, get used to it.

Anonymous said...

Seems like the main point you guys are missing is that the $900,000 was not used in violation of state/contractual stipulations. In fact, the mayor played his hand to make the high tech center a reality, but it didn't work. I know that the company I work for was asked to move there, who knows how many more. Fact is, it was an uncertain proposition two years ago and nobody would take the chance. Those who think the mayor did whatever he wanted from the start are misinformed.

Anonymous said...

die hard, I think you need to re-read the language of the audit. The language is that the OCF made a "good faith effort to comply" with the stipulations of the contract. If the OCF had used the money in accordance with the contractual stipulations the audit would not have concluded that he "made a good faith effort to comply." The audit would have simply concluded that he complied with the stipulations. Fact that the mayor tried really hard to use the money as the contract required doesn't mean that he ended up doing so.

Anonymous said...

Die hard, this hardly appears to be any thing near comprehensive. Kind of reminds me of the study done with numbers furnished by the administration for the gondola.
Although Riverside foundation is mentioned, the've omitted the fact that they never were a legal charitable foundation, in other words this was not a very comprehensive adit of anything but the story of the Ogden Community foundation. This can property has been wrought with various fraudulent dealings from the get go.
State and federal grant money was channeled thru the city to a fraudulently called charitable foundation, then returned to the city(bogus administration foundation) and sold for less than 1/2 of the money that had been funneled into it.
What, you say? Two million federal grant money, $900,000 state money, all improvements,four million dollar parking structure and four milliom historic tax credits.
All the while anybody trying to unravel just what was going on had to play some shell game with the city and rda, two bogus foundations and no authority overseeing any of it.
The abstract of the property show numerous transfers, all in the same week at the end of December 06. This is before any new boardmembers had been appoint, in an effort at legitimacy, spring of 07. In plain English, the board at the time of the transfers was lying little matty,patterson, harmer and guess who, councilman safsten.
Since all these transactions were fraudulently conducted under the guise of public charity, an IRS auditer would or should hold all parties liable for income, on all moneies funnelled thru and to these foundations, including the sale to peddie.
Furthermore, any party involved in this can fiasco should be subject to full disclosure of all benefactors. This has all been and still to this day is public money.
Where in the hell are the authorities when the are truely needed?

Anonymous said...

What is/was Blain Johnsons roll in this can building horseshit?

Anonymous said...

Die Hard:

You wrote: Seems like the main point you guys are missing is that the $900,000 was not used in violation of state/contractual stipulations. In fact, the mayor played his hand to make the high tech center a reality, but it didn't work. I know that the company I work for was asked to move there, who knows how many more.

You're assuming a degree of agreement here at WCF that, generally, does not exist. I've argued all along that, provided the Mayor made a good faith effort to comply with the original intentions of the grant [which both outside auditors who looked at it agreed that he did], then in my view his redirecting the money as he did to achieve some of intentions for which the grant was made was acceptable, and that Ogden, under those circumstances, should not have to pay the money back

There has been some criticism of the way in which the state granted the money in first place, on insufficient foundation, etc. Those criticisms may be valid. I don't know. But they don't bear on the mayor's actions once the grant was made.

The Ogden City Foundation matter, however, is quite another thing. A foundation whose board consisted nearly exclusively of Godfrey administration members and a council member, that excluded the Chair of the Council [whose presence on the Board the by laws required], that met on occasion in in City hall, that listed the Mayor's office as it mailing address, that was required to report its money matters in the city's annual accounting, claiming [as the Mayor claimed] that it was not a public body but a private one, and that therefor its records were not subject to press scrutiny or GRAMA requests suggests serious ethical lapses on the Mayor's part, at the very least. Which is what the auditor's report concluded.

And it is not at all un-reasonable, seems to me, for voters, reporters, and just general ordinary folk to ask the obvious question: If the Mayor was willing to violate the by laws of the Foundation from the start, if he was willing to pretend it was a private entity not a public one [when clearly it was] in order to shield its doings from public scrutiny.... as it seems he was... what was going on that he was willing to takes such steps to keep from public view?

His answer to that question so far has been "nothing." If that's so, why all the tap dancing and rule breaking and ethical stretching to keep the Foundation's doings from public view, then?

Given all that, his "nothing" answer is not credible.

Anonymous said...

Its a good thing Hansen didn't win for mayor. Now the coruption can "keep on trukin".

Anonymous said...

Helmet:

There is another candidate in the race besides the Mayor, Helmet.

Anonymous said...

curmudgeon -

The report from tonight's RDA vote indicates that Van Hooser voted the straight Godfrey party line -

to change the RDA rules so that Blain Johnson and Jon Peddie, owners of AmCan Properties, LLC can put a mortgage on the American Can property.

Don't forget that Blain Johnson is a candidate for the Ogden City Council and a board member of the Ogden Community Foundation which sold the two of them the property back in January.

Jeske was the only one who paid any attention to the facts that had been sent to every Council Member prior to today's meeting.

Three Cheers for Dorrene Jeske for paying attention to the facts.

Susie gets an"F" on this trial run.

Anonymous said...

Reports of the Council meeting indicate that Councilmen Brandon Stephenson still doesn't understand who "the people" are.

He says "the people" are the ones who voted for him.. I have news for you, Brandon - you only live in one voting district - you are ignoring all of those in other districts who would not bother to walk across the street to vote for you.

And no one is going to vote for you in the current election - maybe 0ne Vote, yours, so that it won't be a complete "skunk"-

It is a wonder that anyone shows up for any Council meeting since a citizen only gets 3 minutes to voice an opinion AFTER THE VOTE HAS ALREADY BEEN CAST -

It is obvious that the Ogden City Council wants it that way so that no one will show up to a Council meeting to point out the real issues that Ogden residents are upset about.

How come citizens in other Utah towns are given the right to speak without a timer but the Ogden dictatorship will not change the rules to allow it????

Susie, please tell us your position on letting us speak until we get our sentence finished before we vote for you.....

I dare you to come on this Blog and state your position on this issue.

Anonymous said...

Nit Picky:

Since I'm not familiar with the details of what was voted, and what the arguments for and against were, can't comment. Not yet anyway.

Anonymous said...

My question for Susie is -

will she allow citizens to speak before the Council votes, not after the vote is taken as is presently done, and will we be allowed more than 3 minutes to speak?

The present rule is for the convenience of the staff like Bill Cook and others who want a short meeting so they can go home.

There were only 3 persons speaking tonight so I don't see why they could not have been given more than 3 minutes.

Chair Garcia did allow them to speak before the vote on the RDA ordinance was taken after one speaker wearing a little hat insisted on it.

The Council says citizens aren't interested in Ogden City government.

That is far from true but no one wants to come home from work, get food and rush down to a Council meeting almost every Tuesday and be given 3 minutes to speak after the vote has already been taken.

That is a sure way to kill citizen participation.

Anonymous said...

Don't forget to mention another thing that has killed citizen participation which is the attitude of Brandon Stephenson and Rick Safsten in their patronizing tone of voice to a speaker.

They must be very insecure persons to have to use this manner of speaking to constituents.

Susie has her hands full in changing the attitude of these two.

Course, Safsten will be gone but she will have some new ones who have probably been taking lessons from these two on how to show the authority of the office.

Anonymous said...

long time observer:

you sound like you have become a jaded long time Ogden City Council observer.

I know the feeling and I have only just moved to town.

Anonymous said...

I drove past the Junction about 9:00 p.m. tonight and I couldn't believe what has become Ogden's night time image.

There is nothing appealing about it.

Who in their right mind would buy one of the new million dollar condos going up just East of the parking lot. It would be like living within one block of Times Square in New York with all the carnival lights but with no people.

What is happening to the parking lot structure on Kiesel with all the little wooden picture frames like they are going to put in glass windows?

There is nothing left that is appealing in that city block. I wonder how much it will cost to tear it down one day.

For those who consider this progress I recommend a brain scan.

Anonymous said...

curm who else is running for mayor?

Anonymous said...

Helmut:

The two candidates who won a place on the November ballot are Mayor Matthew Godfrey and City Councilwoman Susan Van Hooser. And, please note, sixty percent of the voters in the primary said "no" to a third term for the mayor.

Anonymous said...

Another typical RDA Council meeting last night.

Dorrrene Jeske was the only member who didn't like what she heard and voted NO to another taxpayer giveaway of tax increment of $1.3 million.

Susie better get educated FAST or the voters won't go for her.

Information was sent to every Council member on Monday urging them to vote against the change.

Susie may be a school teacher but she is slow in comphrehension.

Anonymous said...

nit piky,

City Council procedures are under the control of the City Council, not the mayor. If you want the procedures to change, you should pay careful attention to this year's Council races. For instance, next year's Council could consist of:

Garcia
Stephenson
Jeske
Stephens
Petersen
Eccles
Johnson

Under this scenario it's almost certain that Stephenson would be the next Council chair.

Anonymous said...

Dan S:

If your scenario should occurr, I am hitting the trail out of Dodge City. We cant have another four years of wreckless give aways to the cronies.

Anonymous said...

don't make statements you won't backup.

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