Friday, November 03, 2006

Press Release on Gifford's Land Deal

For Immediate Release
November 2, 2006

Contact: R.T. Gregg
(520) 887-2984
Media Ignores Key Facts in Coverage of Giffords' Land Deal


As expected, the Graf campaign’s exposure of a land-lease deal involving Gabrielle Giffords and the City of Tucson has hit a nerve. What we didn’t expect was that the Arizona Daily Star would be unable to honor its duty to the public and base its coverage on the facts instead of its editorial board’s allegiance to Gabrielle Giffords.

In its article about the Graf for Congress ad (Graf Ad Attacks Giffords Land Deal, 11/1), the Daily Star chose to ignore critical facts about the land-lease arrangement, a deal that has taxpayers holding the bag while the Giffords family ultimately reaps millions in profit.

Here are the facts conveniently overlooked by the Daily Star:

According to the Articles of Organization, Gabrielle Giffords is a manager of Giffords Management Group, which operates El Campo Rentals, along with a partner. As a manager she had executive power of the lease deal even though her signature was not required. (According to the Tucson Citizen, Giffords’ campaign office contacted the Arizona Secretary of State’s office yesterday asking it to remove Giffords name as manager from the Articles of Organization, calling it “erroneous”).
The Articles of Organization document also shows that the Gabrielle D. Giffords Exempt Trust is a member of the Giffords Management Group.
The taxpayers of Tucson footed the bill to clean up the 3.3-acre property at the same time they were paying nearly a million dollars to rent the property. Typically the property owner, in this case Giffords Management Group, would have cleaned up the property first, at its own expense.
The property absolutely had serious environmental concerns, as attested to by the Phase I Environmental Site Assessment. These environmental concerns were addressed and cleaned up by the City and the EPA before the final environmental assessment which, as expected, would show no environmental contamination because it had already been cleaned up!
Public records document the presence of two leaking underground storage tanks on the property. This record is available for all to see at the ADEQ web site at this URL: http://www.azdeq.gov/databases/lustsearch.html (Type in facility ID # 0-009809 and Leak ID # 5290.01 and hit search). This record confirms the presence of the storage tanks on the property and confirms they were cleaned up. In addition, the ADEQ has a file 600 pages thick detailing all the work that had to be done on the property.
The Daily Star also chose to omit in its article findings of the Phase I Environmental Assessment which detailed additional environmental concerns including heavily oil-contaminated soil and asphalt, asbestos, and three sub-surface hydraulic lift reservoirs. Once again, the City of Tucson and the EPA saved the day by cleaning up the site.
Once the demolition of all structures on the site was completed, a final environmental study verified there was no longer any contamination at that time. For the Daily Star to report there was never contamination on the property is at best incorrect and misleading.

Since the Arizona Daily Star has been unable or unwilling to review the facts of this case in an unbiased manner, here is a summary of what public records document. There was environmental contamination on acreage owned by the Giffords Management Group (in part). Gabrielle Giffords was then and is now part of the shell corporation that is party to this deal. The taxpayers paid a million dollars to rent property that wasn’t environmentally safe yet, per federal guidelines. The property was leased as part of the city’s plans to develop Rio Nuevo and yet the lot is not even part of Rio Nuevo. The deal was signed in 2000 and yet six years later continues to sit vacant. Gabrielle Giffords’ shell corporation continues to collect the rent paid for by taxpayers who are getting no value whatsoever in return for their investment.

Gabrielle Giffords has boasted she came home to Arizona to run the family business and now she’s running from it. As the head of the company, it’s only logical to assume she knew about the land-lease deal and knew there were environmental problems on the property. She also had to be aware the taxpayers were going to foot the bill for the clean-up.

Anyone running for office should expect and even welcome public scrutiny. Taxpayers have the right to know how their tax dollars are spent. Gabrielle Giffords simply cannot have it both ways. She can’t tell the taxpayers she’s on their side and then want to keep us in the dark about how our tax-dollars are being spent when she is benefiting.

More details and documentation about Giffords' questionable property deal is available at www.giffordssweetdeal.com.

13 comments:

h@x0r said...

The Graf campaign really nailed Giffords on this one. The website they put up has ALL of the documentation on this and more. Giffords is squirming and even had to call the Secretary of State's office to alter some of the documents that the Graf campaign obtained. She's either lying about her non-involvement with her companies' questionable lease deal with the city or she's been lying all along about her business acumen in running the companies for 10 years and lying on her resume. Either way she's a liar. So, the Giffords campaign must have decided that it was easier to take the hit for fibbing on her resume, her campaign website, in her TV ads, and her campaign appearances about her role in the El Campo/Giffords Management companies. Admitting that she lined her pockets with nearly 1 million dollars in taxpayer money while the government cleaned up her company's environmental mess at taxpayer expense would be far worse.

The local papers, who have all endorsed her, might as well be on her campaign as they try to spin this scandal back into a hit on Randy Graf. All of the newspapers articles that have appeared on this issue have been terribly researched if they were researched at all. The Graf campaign did all of the investigation and placed all of the documentation on the www.giffordssweetdeal.com website for all to see. Further, they laid it all out in a lengthy document describing just what happened. From the looks of what the local papers have written about it, they didn't even look at any of it and simply picked up the phone and called Giffords' campaign manager and they ran with his false explanation of things. Very biased coverage and very poor reporting. Heck, the Star even reported that there was never any contamination at the site because they only looked at the final site assessment provided to them by Giffords' people. They ignored or never even looked at the assessments that showed the contamination and falsely reported there never was any at the site.

Graf busted Giffords on this one. It's too bad the local papers can't rise above their obvious bias and provide the fair reporting that they should provide.

Amanda-S said...

Throughout the campaign Gabrielle Giffords has been widely proclaiming that she returned to Tucson to run the family business. She said her father's health prevented him from running the business.

Then in 1997, she was listed as a manager in the Articles of Organization of the Giffords Management Group.

It is clear that the intent was for Ms. Giffords to actively participate in the management of the company. Her denial that she was a manager contradicts all that she has told the voters throughout the campaign, and it contradicts Corporation Commssion records.

As a manager, Ms. Giffords had the authority to approve the lease with the City. Indeed, she had the LEGAL RESPONSIBILITY to know what her company was doing and the fiduciary responsibility to look after the company's assets.

The recent statements of Ms. Giffords' campaign, claiming that she knew nothing about and had no part in, the lease of the subject property with the City are simply not credible. Such statements contradict Ms. Giffords' volume of previous claims to being an astute businesswoman running the family business for her sick father. However, what is really pathetic is that, when it is revealed that she was involved in a questionable real estate deal, Gabrielle Giffords claims she had nothing to do with the family business and points to her sick father and her mother as the responsible parties!

For Gabrielle Giffords to now deny that she knew anything about the lease is to admit that she was malfeasant in her duties as a manager of Giffords Management Group.

So, which is it? Was Gabrielle Giffords the astute businesswoman running the family business for her sick father or was Gabrielle Giffords a malfeasant manager who knew nothing of the company's questionable business dealings?

As to the issue of the environmental state of the leased property, the records do show that there was environmental contamination in the form of leaking underground storage tanks and heavily oil stained soil and asphalt as well as other serious environmental concerns. It is beyond all doubt that this property could not be used without extensive work and environmental study.

As it turned out, the cleanup and environmental studies of the site took from 2000 until late 2005 and were performed by the City of Tucson with assistance by the Environmental Protection Agency in the form of two EPA Brownfield Grants.

It is noteworthy that the El Campo property was considered to be a Brownfield by the EPA in order to qualify for the two grants. The EPA defines a Brownfield as "real property, the expansion, redevelopment, or reuse of which may be complicated by the presence or potential presence of a hazardous substance, pollutant, or contaminant".

But what is really astounding is that the El Campo deal required the City to pay nearly a million dollars rent for the property, while they were cleaning it up!

Regarding Ms. Giffords financial interest in the lease deal, the Articles of Organization list the Gabrielle D. Giffords Exempt Trust as an owner of the company. On its face, it would be absurd to claim that such a trust does not benefit Gabrielle Giffords.

So, we are being asked to believe that Ms. Giffords came back to Tucson to save the family business, but she was not a manager of Giffords Management Group and knew nothing of the lease deal with the City.

We are being asked to believe that the leased property had no serious environmental problems and that there was nothing wrong with the City paying a million dollars in rent while it performed a cleanup and extensive environmental assessment of the property.

And we are being asked to believe that the Gabrielle D. Giffords Exempt Trust does not benefit Gabrielle Giffords.

While Gabrielle Giffords claims to be against tax breaks for the wealthy, she is the beneficiary of the Gabrielle D.Giffords Exempt Trust. And just what section of the Internal Revenue Code is this trust exempt from? An acountant told me that such exempt trusts are generally used by the wealthy to avoid paying inheritance taxes.

So much for Ms. Giffords plan to work to "end the special tax discounts that Congress and the Bush Administration have given to the wealthiest Americans and corporations"

sirocco said...

Except the website _doesn't_ include all of the information. For example, it intentionally leaves off the signatures on the lease agreement (Gabby's isn't among them).

It also fails to note the LUST report it displays has a code indicating it was closed with minimal or no leagage found.

As for her involvement, El Campo Property Management is NOT the same as El Campo Tires, Inc. (which is on her resume). The latter is the business which Gabby did take over and run. The former was always in the hands of her father and his partner, Al Roughton. There is no discrepancy there.

It's worth noting the city had an entire year (clause 2b) to assess the property and terminate the lease agreement. They chose not to do so. Apparently they didn't find any flaws to be excessive.


However, even if we accept everything verbatim, where's the issue? All that does paperwork does is track a legal land deal pushed by the city as part of the Rio Nuevo project. The city proposed the deal, pushed it, and signed off on it.

It's hard to get "busted" for something which wasn't illegal, and which by all indications one wasn't actively involved in.

Marco Alatorre said...

Sirocco,

Actually, I do have facts that indicate that Gabby was part of the lease deal. The fact that she was a manager of Giffords Management Group means that she had a legal and fiduciary responsibility to know what her company was doing. She is on record with the Corporation Commission as being a manager of Giffords Management Group.

It is simply not credible to claim that she would not have been a part of discussions relating to negotiation of the lease. She WAS a manager after all!

It doesn't matter who signed the lease. Usually a company will designate a signatory who is authorized to sign for the company by the management.

A manager is legally responsible for the actions of the company!

No, LUST files are created when a leaking underground storage tank is found.

And no, the code associated with the file means that it CURRENTLY has no or minimal contamination, not that it never had contamination. That is to be expected because the site cannot be closed until the cleanup has been done.

The presence of ANY leaking is considered to be environmental contamination. Its presence requires that an extensive and expensive Phase II Environmental Assessment be done, paid for by the taxpayers.

The important issue here is that Gabrielle Giffords was the manager of a company that was the beneficiary of a "sweetheart deal" with the City of Tucson.

The taxpayers have a right to know that Gabrielle Giffords was a part of the fleecing of the taxpayers for nearly a million dollars in rent while the City cleaned up private property at taxpayers' expense.

The taxpayers have a right to know that the taxpayers are now obligated to continue paying perhaps 13 million dollars for a two to three acre empty lot.

The voters have a right to know that Gabrielle Giffords record shows that she will NOT look out for the citizens she hopes to represent and, in fact, her record shows that she has taken advantage of and profited from the very taxpayers that she hopes to represent.

And you say there is no issue?

sirocco said...

Amanda S.,

You are mistaken. Giffords was an active manager and president of El Campo Tires Inc., the actual business.

She was listed as a manager of, but never actively participated in, the property management portion. This was always handled by her father and Al Roughton.

Having said all that. lets examine the lease.

The lease was pushed and promoted by the city. It was a legal lease. One of the terms of the lease (article 2b) was the city had a full year to assess the property and terminate the agreement if they desired.

Apparently, whatever they found wasn't major in their eyes, as they did not chose to exercise that option.

Further, it was the city's choice to evict the two tenents on the property (Circle K and Goodyear) who, between them, were paying close to the full value of the yearly lease rate.

All this might have worked fine if, as originally planned, the city had found a developer to place a grocery onthe property (and it may yet). However, the failure to do so is the city's responsibility, not that of the land owners.

If you think the city made a bad deal, then by all means be upset about it. However, it's a deal the city wanted, proposed and pushed for. Accepting the deal (or not) was a straight business decision.

As for the trus, it certainly does not currently benefit Gabrielle. It may in the future. As it currently stands, it is adminsitered by her parents, who (to my understanding) have right to use the money as they see fit. They could withdraw it for medical expenses, they could pull it out for a big trip to Vegas.

The point being that it _may_ benefit her at some unknown date in the future, it certainly does _not_ do so now.

Heck, at some undefined date in the future you, Amanda, _may_ win the lottery. By your reasoning, you could be castigated for not donating more money to charities now based on your potential future benefits.

sirocco said...

Marco,

I bow to your knowledge of LUST documentation then. Mine is based purely upon some internet ressearch last night. You clearly have more understanding of them than I do.

I have no problem whatsoever with the taxpayrs knowing about the deal. I agree entirely they should know about where $13 million of their money is going to go, and they should be well aware of the fact that lot the city leased has yet to be developed.

Any they should ask questions. I am absoutely with you.

Where you lose me is where you try to make this seem underhanded. Every issue you note was known to the city. The city did the assessment, it was aware of these matters. It's not like the city signed the agreement, and then had this all sprung on them as a surprise.

A clause within the contract (2b) gave the city an entire year to terminate the lease if they felt they needed to do so after receiving the assessment. The city chose not to execute the clause.

I agree - it's wasteful for the city to be paying money for an empty lot. Of course, it wasn't empty until the city chose to evict the two businesses using it (and from whom most or all of the value of the yearly lease payments was being collected). Any failure to develop the lot is entirely the city's responsibility.

Amanda-S said...

I am sorry to keep contradicting you Sirocco, but you are completely wrong about the Circle K. The Circle K was closed in 1996 when ADOT condemned a strip of land along I-10. The City had nothing to do with the termination of the lease. The City did not evict the Circle K.

Interestingly however, there were a number of leaking underground storage tanks removed from the former Circle K in 1997.

The ADEQ web site reports five leaking underground storage tanks at the site of the Circle K on 05/09/1997 and took until 11/22/2000 to remediate those tanks.

A sixth leaking underground storage tanks was reported on 05/21/1997 and it has still not been resolved as of today. The ADEQ rates this sixth leak as Priority Level I, which means "Known or probable effects on groundwater (GW) or affects soils to a depth within 30 feet of GW depth"

In a conversation with the engineering firm that performed the Phase II Environmental Site Assessment of the El Campo property, it was revealed that the Phase II Assessment found that there was some groundwater contamination from this sixth leaking underground storage tank from the Circle K. This groundwater contamination remains unresolved.

You can verify the LUST files by typing in the following Leak ID #s 4695.01, 4695.02, 4695.03, 4695.04, 4695.05, and 4695.06 at the ADEQ web site under Tank Programs. The latter # 4695.06 is the tank that has comntaminated groundwater.

This is more evidence of environmental contamination resulting from El Campo property.

The Goodyear lease was only about $50,000 a year and it was the only lease on the property. The property was distressed in that it was classified as an EPA Brownfield and as such could not be realistically sold or used without extensive cleanup and environmental assessment.

The issue here is that Gabrielle Giffords took advantage of the taxpayers when her company made a deal with the City to pay her company nearly a million dollars in rent while the City cleaned up the property. And now the City is paying with taxpayer dollars a rent three times the rent that the property was previously renting for.

Whatever you call such a deal, it certainly shows that Gabrielle Giffords has no problem taking windfall profits from the taxpayers.

Remember, we are talking about someone who wants to represent the taxpayers in Congress. The taxpayers want a representative who will look out for their interests, not plunder the public treasury. We hold such a candidate to a higher level of scrutiny than an ordinary citizen.

The issue isn't whether what Gabrielle Giffords did was legal. The issue is do we want to elect a person to Congress who has excessively profited from the taxpayers and who will continue to profit excessively from the taxpayers until the year 2055?

Sirocco's missing brain matter, inc. said...

Sirocco the Dem shill,

If a Republican had been implicated in this scandal, you would be calling for his head. And you know it.

A Dem? You're go into instant, blatant, and bufoonish defense mode. Go back to Kos, clown.

sirocco said...

Amanda,

Please don't apologize -- if I am wrong, correct me. And concerning the Circle K, it appears I am wrong on the date when it closed.

I've actually been looking for the full, 600-page ADEQ report, and if you could provide me the link, I'd appreciate it.


As for the other matters, you can interpet is as you will. It's hard for me to see how Giffords can be said to "have taken advantage" of the city, when the city was responsible for proposing and pushing the deal.

Further, as I noted and your response fails to address, the city had a full year to terminate the lease if they wished to do so. None of the issues being raised were in anyway a surprise to the city. The assessment was done, all potential issues were made known to the city, and whoever was responsible felt it was worth keeping the lease.

dandy said...

On what date was Ms. Giffords first elected to the legislature? On what date did the original lease to Tucson occur? Were there any wonderful laws passed that perhaps were pushed through by Ms Giffords which benefitted the City of Tucson or the Board of the city of Tucson or some member of the Board? Was there anything that benefitted the principal individual who makes the decisions regarding these leases? NO NOTHING????WELL I"LL BE!

I think the case has been made AGAINST Ms. Giffords, the question remains...who was her cohort? In these equations there is ALWAYS a quid pro quo.. Who is the QUO?

cc burro said...

It is at all unexpected that leaking underground storage tanks were found at the Circle K. Tons of underground storage tanks at gas stations and businesses all over the country have leaked. This is common.

And many properties downtown have gone through the ceiling in perceived value. Do you remember the story last winter about that property downtown that the City sold to developers who were required by their contract to develop it, they didn't develop it and instead sold it within a year for 50% or 100% [I can't remember the exact percentage] more than they paid the City for it, yet the City foolishly didn't enforce its contract? This was a real screw-up on the part of the City.

Regarding the Giffords' lease, I think that you would need to be a real estate expert to judge whether the City real estate staff did not negotiate effectively. Apparently the City really wanted the land and the Giffords did not want to sell it, so they were in a strong negotiating position.

Kralmajales said...

hahahahah you republicans are amazing. There was not a thing illegal about this deal and you all have been feeding at the public trough for years now that you controlled the govt. Look at the so-called "public-private" partnerships downtown where big republican developers get freebie money to start their projects?

Look at the Abramoff scandals?

Hell...if this were true about her (and it isn't) then you should be freaking praising her. This is exactly the kind of under the table dealing that your party CHERISHES.

Oh...and her father is a republican isn't he? Funny you all would go after your own...AGAIN.

cc burro said...

KRALAMAJALES--

Hah-hah-hah re Giffords father being a Republican--the actual owner of the land!!! :)