In commemoration of City Weekly's 40th anniversary, we are digging into our archives to celebrate. Each week, we FLASHBACK to a story or column from our past in honor of four decades of local alt-journalism. Whether the names and issues are familiar or new, we are grateful to have this unique newspaper to contain them all.
Title: Deedee Breaks Her Silence
Author: Lynn Packer
Date: Aug. 4, 1993
Deedee Corradini as Spin Doctor. Within minutes after she reached an out-of-court settlement with the Bonneville Pacific trustee it was Corradini herself, not her attorney and not her press secretary, giving interviews to television and newspaper reporters. Her one-year silence on the topic was broken. The ink had hardly dried on the letter outlining the settlement (it was signed at about 4:30 p.m. Thursday) and she granted an interview to KTVX which broke the story at 5:30: "Salt Lake Mayor Deedee Corradini will not be named as a defendant in the multi-million dollar Bonneville Pacific lawsuit."
The spin she wanted on the story came through clearly as she repeated the same one-liners in one interview after another. "It will be devastating for us financially," she explained to KUTV's Rod Decker who reported the settlement will cost her and her husband, Yan Ross, more than $700,000. "It's been a very painful year for me and my family," was one of the soundbites picked by KSL News. "We will be forced to sell our home to help meet these obligations," she's said over and over.
For the first time since Private Eye Weekly launched a series of stories about Corradini's involvement in Bonneville Pacific, Corradini granted this paper an interview. Friday morning, after the dust was settling on her announcement of the day before, Corradini offered some answers to questions about the settlement itself, still declining to talk about broader, Bonneville Pacific issues.
Corradini greeted this reporter outside her office on the third floor of the historic City and County Building on Washington Square. It was on this same floor I had first met and interviewed Corradini in 1971 or 1972. Now, instead of dropped, cellotex ceilings, the rooms have been restored to their turn-of-the-century appearance with green walls, high ceilings and oak woodwork.
"You know what, Lynn, is hard?" she asked. "If I hadn't been mayor I would have been a footnote in this whole thing. I have taken the brunt of this whole thing," Corradini said, continuing a theme she established at her press conference in June of last year.
She is especially critical of Private Eye Weekly. "You have painted a very negative picture of my role and it's false," she said. "You don't even talk about any of the other principals to speak of. It's mayor, mayor, mayor, mayor. You ask anybody on the street, 'Name three people involved in Bonneville Pacific?' And what will they say? I am the only one they know," she said. However, when invited, the mayor declined to point out any specific examples of erroneous or slanted coverage, stating instead that she preferred to be a "statesman."
"What about the journalistic tenet that public officials have a higher degree of accountability or should they not?" she was asked. "Why don't you talk about some of the others who are much closer to this thing that I am," she replied, ignoring the fact that none other is an elected official; a position that the press has a duty and obligation to scrutinize.
The mayor is correct about getting the lion's share of coverage. Private Eye Weekly has focused on the mayor's role more than those of other principals such as John Dunlop, Robert Wood, Ray Hixson and Wynn Johnson, despite never coming across any evidence Corradini played a role in masterminding the fraud. "I know what my role was, and I was not involved in all this stuff," she said.
One attorney involved in Bonneville-related litigation, however, said Corradini has not received particularly harsh treatment by the Salt Lake press. Had she been mayor in many other cities, he said, "the press would have torn her to shreds ... here in Salt Lake City she's had an easy ride."
The Settlement Numbers
Corradini is giving up $713,000-plus in settling out-of-court with the Bonneville Pacific trustee. She gave reporters a handout called "Corradini Settlement." Her numbers break down like this: $158,000 for the loan on the couple's Park City condominium, $65,000 on another long-term loan, $69,000 for travel reimbursements, $255,000 (a figure she already paid last December on a loan on her home and not directly a part of this settlement), $166,000 for what she calls "other matters" and one third of the stock she owns in First Professional Bank of Salt Lake City, whose value is not yet determined.
ProBank, as it's called, is for sale and the stock value will depend on the sale price. Corradini acknowledged being the largest single shareholder; Yan Ross is also a shareholder and chairman of the board.
Corradini says she owed the $292,000 on the loans and travel reimbursement and had intended to pay it anyway, lawsuit or not. So the unplanned, out-of-pocket cost of the settlement was $166,000. KTVX reported "that's the total amount she says she must come up with to make this lawsuit go away."
What evidence is there the $223,000 in loans were really loans and not income disguised as loans? The mayor said she has them "documented" as proof she intended to pay them back. What, though, about the fact several loans and notes related to Bonneville Pacific were never intended to be paid back? What about Bonneville CEO Robert Wood saying that some advances of the type which he, Corradini and others received as loans were to be "forgiven" at some point. "Well, I'm not going to comment on what Robert may or may not have said," she replied. Will she show her loan documents to the media? "No."
Corradini's breakdown of numbers may have been academic. "You know, she can calculate it any way she wants to," said a spokesman.
Auditors for the trustee added up all of the gain they could document Corradini got from Bonneville Pacific and came up with a $1.7 million estimate. Instead of demanding it all negotiators said "show me what you have, let's settle." Ross and Corradini put their assets on the table and the Trustee got most of it. "Anytime you do a deal like that you leave something on the table," says the spokesman. "She's giving up almost all her non-exempt net worth."
Corradini said she would not acknowledge or comment on the $1.7 million figure or anything above and beyond the loans. She also declined to describe the tone of the negotiations or to reveal precisely what she and her husband would have been accused of had they been named in the suit. The trustee's office also declined to say what would have been in the suit.
"In a settlement of a suit there is no implication of liability," Corradini said. That's true. People settle some suits simply because it's cheaper to give in than fight, even if they did nothing wrong.
"I'd rather have the money go to the creditors than to the lawyers and that's where it was going to go," she said. "If you consider the fact we've spent approximately $65,000 or $70,000 personally in legal fees this last year alone and you look at a case that could go on for three to five years, we would have paid much, much more than the $166,000 in legal fees (than settlement costs). It is extracting a very painful price for us, but we felt it was the right thing to do to get it behind us."
The mayor says she never understood how Bonneville Pacific made so much money and could afford to be so generous to her. "If I could do it over again I probably would have asked a lot more questions," she said.
What then about the perception "you were standing there with your eyes closed but your hand out?" "No, I'm not that kind of person," she responded.
But didn't hundreds of thousands of dollars go through your hands? "If you're talking about some of the money when Bonneville Pacific first went public, that was all disclosed, there was not in my opinion anything wrong with anything like that."
Private Eye Weekly then asked "The Big Picture" question: Isn't today's pain merely balancing yesterday's greed? Wasn't she giving back far less than she took?
Q: The trustee just came after the money involved with Bonneville Pacific. Someone looking at the big picture could say Corradini got more than $700,000 just from selling Bonneville Pacific stock, she also got loans, she got trips, now she has to give less than that back. What's the big deal? Where's the pain?"
A: Lynn, you're not a very sensitive person as a human being if you don't know that what I've been through has been painful. You can't go through something like this and ... the suffering has been incredible. I've been pretty stoic about it and I've done a good job as mayor. Financially, this is devastating to us."
Press Scrutiny: "I never would have run..."
Mayor Corradini says her awareness, years ago, of the existence of intense press scrutiny is proof she didn't know Bonneville Pacific was a scam. "I've been around politics and politicians and public officials for years," she said, "starting with Rampton and Wayne Owens.
"I knew what scrutiny public officials undergo, so if I had ever done what others have implied I might have done, I never would have run for mayor in the first place."
Private Eye Weekly asked about her submission to scrutiny. She laughed, scoffingly, when the question was asked. But tears welled up in her eyes when she answered:
Q: There is that scrutiny. But you've taken the tact that you're not going to answer a lot of questions, you're not going to submit yourself to the scrutiny, you're not providing documents. If the scrutiny is there why don't you submit yourself to that scrutiny: provide your tax returns, provide the documents I've talked about this morning [her loan documents]; answer specific questions so people will have the information to make a decision."
A: Well, I have lawyers involved here whose advice I have to take. I said what I had to say a year ago. I stand by what I said. I still think everything is going to come out just fine. Quite frankly I've become philosophical about it. I think in our lives we all have painful times, losing a loved one or a child. I've been through hell this last year, personally and my family, and yet I've taken it as a growth experience."
Criminal Tax Investigation
Corradini's most emphatic responses involved questions about the ongoing criminal investigation into Bonneville Pacific. Part of the probe involves alleged criminal tax fraud. Corradini is certain she not only faces no criminal tax liabilities but no civil tax liability as well. "I've never had any concern that we had any tax liability to begin with," she said, sweeping any potential for tax-related issues aside. (Two previous Private Eye Weekly articles dealt with Corradini's potential tax problems.)
She declined to say whether there's been a secret settlement of any tax problems similar to her public settlement of the trustee's civil case. "I'm not going to talk about that," she said.
Q: So, if, in a few months, someone walked into this office and handed you an indictment for criminal tax fraud, that would just blow you off your chair?"
A: I am not going to be indicted."
Q: You know that for a fact?"
A: I know that inside myself."
Answering the last question Corradini put a fist to her chest and spoke with the conviction of one who knows for a certainty. "Have you had a communication from the people investigating...?" she was asked. "I'm not going to comment on that," she said before the question was even finished.
Assistant U.S. Attorney Stewart Walz, who heads the federal fraud task force investigating Bonneville Pacific, had no comment on Corradini's assertion. "People can say what they want; I have no control over what people say," he said, declining to confirm or deny. His statement would fit either a scenario that he has told Corradini she has no exposure, or one wherein no decision has yet been reached. Walz cannot control an assertion on an issue that has not yet been decided. Nor can he control a former suspect commenting on a confidential assurance.
Even though grand jury indictments involving Bonneville Pacific may still be months away it is possible, even likely, that Walz has decided there is no evidence or insufficient evidence to prosecute certain targets for income tax evasion or other alleged crimes. Corradini's attorneys have been in contact with the task force and it is possible she's learned the government has no case against her.
Recomp, Inc.
Another thread running through Mayor Corradini's spin message is that she was not an officer or director of Bonneville Pacific Corporation. Most media repeated that fact—and it is true—in their reports last week. "Corradini was never an officer in Bonneville Pacific," said Chris Vanocur in his television report. "Although Ms. Corradini was not an officer of Bonneville Pacific, she was involved as a founder of its parent company," wrote the Salt Lake Tribune.
None of the last week's news accounts pointed out that Corradini was a director of Bonneville Pacific subsidiary Recomp, Inc., a company so corrupt it was paying out hundreds of thousands of dollars involving a contract with a city that doesn't exist: Sybson, New York.
"Well, that is even open to question as to whether I was officially a director," Corradini said. "I was never officially recorded as a director."
Q: Did you believe you were?"
A: I was asked to be a director, I went to a few meetings, I thought I was director but I was never officially recorded as a director."
Corradini said she didn't understand the relevance of the question. "I don't know what your point is, Lynn," she said, "all I can tell you is that I knew nothing about it."
The point, she was told, is that part of her spin is that she is not a Bonneville director but she was a director of a subsidiary which lost money and was closely tied to Bonneville. Further, a lot of former S&L directors are being sued for failing to exercise control and, even if they didn't know what was going on, are being told they should have known.
"I'm not going to talk about my role as director," she responded. "But in general as I look back, do I wish I had done anything differently? I mean I never dreamed this would ever happen because I'd have never run for mayor if I'd ever known what was going to happen."
Corradini has ties to Bonneville Pacific beyond Recomp. Bonneville Pacific's parent, Bonneville Group Inc., was 20 percent owned by Corradini. That's one of the reasons she was given more than $2 million worth of stock when Pacific went public in 1986. Corradini was president of another Bonneville Group spinoff, Bonneville Associates, Inc. There were many other affiliated companies, and the distinctions among them were often blurred. For example Bonneville Group handled payroll for both Bonneville Associates and Bonneville Pacific.
Even though Corradini was not a director of Bonneville Pacific, she was involved in two controversial aspects of Bonneville Pacific's operation. She helped organize and attended some of the trips where Pacific touted its public offerings. And she helped put together Pacific's annual reports, reports which are now under investigation by the federal fraud task force because of laws requiring full and accurate disclosure to shareholders.
"...To get it behind us."
One of the reasons Corradini gave for settling the civil suit was put an end to the litigation and move forward. "We feel good about it just for the peace of mind, just to get this behind us," she said. An end to litigation would also mean an end to household budget-draining legal fees.
The forecast, though, for Corradini and her husband, is not yet clear.
Oregon utility Portland General may yet rain on Corradini's parade. Although no decision has been reached, the company is thinking about adding Corradini's name to a suit it has already filed against Bonneville Pacific and a number of individual defendants. Portland General spokesman Mike Tevlin said, "We've had bigger fish to cast bait after, but we have never said nor are we saying now that we're planning to eliminate her from our sights."
By settling with the trustee, Corradini was able to keep a description of her involvement out of the massive civil complaint the trustee filed this week in federal court. She was spared the embarrassment of the details. But if Portland General adds her to its suit, it would detail some of the same allegations and propel some of the same supporting documents—temporarily buried by the settlement—into the public sphere.
With the settlement Corradini may have suffered the worst of her public exposure to the Bonneville scandal. She may now have most of the controversy behind her. It may be smooth sailing from here on out. "I've done one helluva job as mayor," she says, hoping that the media can now focus on the present and not the past.
On the other hand, the worst may be yet to come. The Bonneville Pacific story has yet to pick up a full head of steam.