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February 21, 2009 in City
Ormsby nominated to be U.S. attorney for East Side
Critics cite role in River Park Square controversy
Michael C. Ormsby, who won a political office when he was 18 and has spent ensuing years in public service positions, has been nominated to be the next U.S. attorney for Eastern Washington.
The office of U.S. Sen. Patty Murray, D-Wash., confirmed Friday that Ormsby’s name had been formally forwarded to the White House, where President Barack Obama would make the appointment.
After review by the Office of White House Counsel, Ormsby would undergo an FBI background investigation and the nomination would be subject to confirmation by the Senate.
If confirmed, he would be the chief federal law enforcement officer for Eastern Washington – one of 90 such U.S. attorney positions that the president will fill.
“I have long been interested in public service in this community,” said the 52-year-old bond and municipal law attorney, who was elected to the Spokane School Board as an 18-year-old undergraduate at Gonzaga University. He got his law degree in 1981 from the university’s School of Law.
“I would personally be very honored to be considered for that, but I’ve heard nothing from anyone in the White House about anything,” said Ormsby, a senior member of K&L Gates, an international law firm.
“This is an exciting time in this country,” the Spokane native and longtime Democratic activist said.
“I think any opportunity that any of us would have to serve this president and to serve in the Department of Justice, I would very carefully want to consider that,” he said.
Ormsby’s nomination drew a sharp response Friday from critics of his role as an attorney in the River Park Square controversy.
Tim Connor, a former investigative journalist and longtime critic of the mall project, said Ormsby was a “central figure in the fraudulent RPS garage transaction” and was cited in an IRS report detailing tax-exempt securities violations.
“For him to be considered as U.S. attorney for the Eastern District of Washington makes about as much sense as Bernie Madoff being considered for Treasury secretary,” Connor said. Madoff, a New York investment broker, is under indictment for alleged securities fraud.
Ormsby’s nomination also drew praise from the current U.S. attorney, Jim McDevitt, appointed by President George W. Bush.
“He’s a good lawyer, he’s ethical and he’s hard-working,” McDevitt said of Ormsby, whom he’s known for more than 20 years and once worked with at the same firm. “He would be an outstanding successor.”
Ormsby served on the board of directors of Spokane Public Schools from 1975 until 1983.
Since then, he developed a lengthy list of professional and civic activities: He has been president of the Spokane County Bar Association and served on boards for Eastern Washington University, Spokane Valley Chamber of Commerce, the Inland Northwest Foundation and the Spokane Regional Chamber of Commerce.
Ormsby also was one of the attorneys involved in developing the public-private partnership that led to the River Park Square renovation in the 1990s and a series of lawsuits earlier this decade.
He served as the attorney for the Spokane Downtown Foundation, which was set up by the mall’s developer to sell some $31.5 million worth of bonds backed by parking revenues of an expanded River Park Square garage. Ormsby’s firm, then known as Preston Gates & Ellis, supplied a letter included in the prospectus to investors that the bonds qualified for certain tax breaks under IRS rules; the IRS later ruled the bonds did not qualify for tax-exempt status because of the way the mall deal was structured.
The firm eventually paid some $1.4 million in penalties and taxes assessed by the IRS as part of a settlement with the city of Spokane over the garage litigation. Ormsby and another of the firm’s attorneys who signed the letter in the prospectus were investigated by the IRS Office of Professional Responsibility, which sought to determine whether they performed due diligence on the deal. The firm and the IRS reached an undisclosed settlement that involved changes in the way future bond sales are reviewed.
After the garage was expanded but before it was purchased by the downtown foundation, a dispute arose between the Cowles development companies that owned the mall and one of its key tenants, AMC Theatres. The development companies are subsidiaries or affiliates of the parent company of The Spokesman-Review.
When the theater chain threatened to pull out, Ormsby suggested the development companies lower the sale price of the garage. Instead, the developers offered to cover any lost revenue if the chain didn’t open, but only if the foundation and the public board that would operate the garage would keep that offer secret.
The foundation and the board agreed, AMC eventually reached an agreement with Cowles development companies and the garage was purchased for $26 million. Critics have said Ormsby should have told the foundation it should not buy the garage at a price they contend was inflated by an unusual form of appraisal and instead demanded the price come down or the deal be dropped.
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spokanealum on February 21 at 12:34 a.m.
McDevitt did indeed work with Ormsby - at the law firm at which Ormsby was investigated for his work on the Riverpark Square deal on behalf of the developer. McDevitt, in fact, also worked on the Riverpark Square file. (Source: S-R article August 2007).
Thus, a more complete and contextually appropriate description of McDevitt, in attributing the quote of his praise for Ormsby, would include not only McDevitt’s identity as US Attorney but also an attorney who worked on the RPS file at the same law firm and that a WSBA complaint was filed against him because of issues related to the RPS case.
spokanealum on February 21 at 2:21 p.m.
Another “related story” to add to your list:
“RPS files to get review U.S. attorney accepts documents on mall deal, then recuses himself”
Jim Camden
Staff writer
August 21, 2007
and a letter to the editor from Tim Connor September 2008 same issue
spokanealum on February 21 at 2:41 p.m.
The list of related stories is a great help in understanding and clarifies the work Jim Camden has done to provide extensive coverage of the story. It is helpful to read about the number of settlements in the many lawsuits this mess precipitated: that information clarifies that, in fact, few parties were “cleared” in this mess and that, often, the settlements hinged on agreements that conduct such as that which occurred in the RPS case would be prevented - by new statute, new regulation, legal agreement, letters of apology for withholding of documents and violating state law re: FOI, by fines, by financial settlements in the hundreds of thousands and millions, etc. - from ever happening again anywhere, including in Spokane and by the parties involved. It becomes clear that almost no one involved has avoided the inside of a courtroom, even if only to settle. It also becomes clear that the mess - and the sheer hubris that allowed and perpetuated it - placed hardworking reporters with integrity and, often, solid reputations as journalists in an unconscionable bind as professionals, as community members, as neighbors, as citizens, and it is my sincere that their employers (the paper’s owners and their lawyer) - in learning through various roundtables and reviews - have apologized (and continue to apologize) for placing the reputations of their reporters on the line by not protecting those reporters against even the appearance of conflict of interest. Thank you, Jim Camden, for providing the links to past articles, etc., and for your work as a journalist in a situation which never should have occurred.
spokanealum on February 21 at 4:46 p.m.
I just located the “ongoing coverage of RPS” page on the S-R website. Looks great. I also noted that, earlier today here, there was a link in the above “Related Stories” section to a January 2008 article (headline to the effect of “Cowles Co Fights Release of Documents”) that is now posted on the “ongoing coverage” page. That article raises interesting questions, I think, about the larger context for the City’s earlier refusals to release documents requested by Tim Connor through the FOI/Sunshine Laws and the subsequent determination by the State that the City had violated state law and the requirement that the City pay hundreds of thousands of dollars in fines and attorney fees incurred by reporters who attempted to obtain information covered by Sunshine laws. What were all the dynamics that led to that refusal by the City to abide by state law? The reported efforts by the Cowles Co to prevent the release of documents also raise questions about the context which led to widespread concern that the reporters employed by the Cowles Company (at the S-R) had not adequately covered the story as it developed. How could they? I hope the Cowles Co. owners and all advisors and attorneys who seemed to have, in effect, erected some of the barriers to their own employees’ ability to do the jobs they were hired for (the thorough investigation and reporting of any story that has had and continues to have significant consequences for a staggeringly long list of players and the general citizenry itself) have apologized to those reporters. One “worker bee” to all you worker bees at the S-R: you, like employees anywhere, deserved much better from your employers. More gerund to my specific concern as a social justice advocate and social worker who works with poor people: I cannot help but ask if, had you not faced barriers to reporting so thoroughly at the time, Spokane’s poorest citizens might not have had to cope with the fiscal and concrete reality that $1.5 million in Community Development Block Grant funding had been sacrificed to this fiasco. The worker bees, the poor and the taxpayers have not been “cleared” of the burden of this mess. And the likelihood that the domino of burden would fall in those directions seems to me as if it should have been obvious and then assiduously avoided by the people who held the dominoes. Thanks again to Jim Camden and others who created “the ongoing coverage” page and who have persevered in what seems to me any employee’s worst nightmare. Jean Paige Brookbank MSW (spokanealum)