Plugged Into Power Outsider Talbott Hooks Up With Big Business Ally

As a candidate, John Talbott honed the image of an independent thinker and voice of the citizens, an outsider not compromised by big business and big money.

As Spokane’s mayor, he grumbles about a shadow government that he says runs the city and frustrates his efforts to bring change.

“If people elect a mayor, they don’t want him run by the behind-the-scenes power brokers like they have for years,” the retired Air Force colonel said recently.

But Talbott himself is closely tied to one of downtown’s most successful homegrown businesses.

His links to Metropolitan Mortgage and Securities started a few months before his election in November 1997 and have continued during his first year in office.

Current or former Metropolitan employees ran Talbott’s campaign and work in his City Hall office, produce his call-in cable television program and serve as trusted advisers.

Talbott and Metropolitan President C. Paul Sandifur say there is nothing unusual about their relationship.

“Many of my concerns and theirs coincide,” Talbott says. “There is no sinister connection between me and Metropolitan Mortgage.”

Like the mayor, Sandifur speaks of empowering neighborhood groups and citizens and complains city officials focus too much on downtown interests.

But Sandifur also makes no secret that he’d like to see his company’s own visions and projects fare better at City Hall.

Sandifur is especially frustrated that the city hasn’t responded more favorably to his proposals to put a convention center expansion or a state office building on his 88-acre Summit property along the north bank of the Spokane River west of Monroe Street.

Some people say the relationship between the mayor and Metropolitan is uncomfortably close.

“Every council candidate has to find some kind of financial backer,” Councilman Jeff Colliton says. “But their continued involvement after the campaign is unacceptable. The heavy hitters should back out and let the mayor serve.”

Headquartered in a towering building on First Avenue, Metropolitan is the parent company of nine corporations with $1.1 billion in assets and annual revenues of more than $150 million. It employs 600 people in Spokane.

Metropolitan’s business includes everything from buying mortgages to selling insurance to purchasing lottery winnings to buying real estate.

The company is known as a generous civic donor, contributing to about 190 community groups in the last year alone.

Now it’s become the strongest link in a network of political advisers supporting Talbott and working to transform city government. The group is likely to produce candidates for three City Council positions this fall, with the potential to shake up City Hall.

The network includes:

Erik Skaggs, a close Talbott adviser and Metropolitan employee who jump-started the company’s political involvement 18 months ago. During some months last year, the only number Talbott dialed from his office telephone more often than Skaggs’ office was his own home.

Hope Findley, who left a job at Metropolitan to become Talbott’s assistant. She called Metropolitan almost daily from her City Hall telephone during the past four months.

Garret Daggett, who was given a leave of absence from Metropolitan’s Government and Community Relations Department to work as Talbott’s full-time campaign manager. Daggett left Metropolitan late last year.

Karen Keese and Kevin Daymont. Metropolitan employees by day, they produce the mayor’s weekly call-in cable TV show after work and on lunch hours.

Eileen DeArmon, another close Talbott adviser who has monitored the River Park Square downtown redevelopment project for three years. Although she lives more than an hour away near Lind, Wash., DeArmon attends most City Council meetings. She once worked for the Seattle-based Sabey Corp., which owned NorthTown Mall, and is now paid by “development interests” she would not identify.

John Stone, a Spokane-based developer who leads a group called the Coalition for Good Roads and Good Government. The coalition is a strong backer of Talbott’s push for an independent auditor to track the city’s finances.

In addition, Metropolitan has donated to several citizen groups, including Stone’s coalition, that support the mayor’s issues. Their causes include electing council members by district, fighting the proposed Lincoln Street bridge and hiring an auditor.

The groups come together under the umbrella of the Spokane Policy Research Council, created, says Skaggs, to harness the energy that grew out of Talbott’s mayoral campaign.

“I get help everywhere I can, from every source I can,” Talbott says.

`They’re everywhere’

Metropolitan’s role in city government became dramatically more visible 18 months ago when Sandifur hired Skaggs as the director of Metropolitan’s Government and Community Relations Department.

Skaggs’ political resume includes tenures with state Sens. Jim West and John Moyer, and U.S. Rep. George Nethercutt. Skaggs lost a race for the City Council in 1993, when he was 28.

He was looking for work in 1997 when he knocked on Sandifur’s door with a proposal to help Metropolitan accomplish its goals and reshape public policy.

His timing was perfect.

“Paul thought we needed a change in the city, and now was the time,” Skaggs says.

The mayoral election was under way. Early polls showed Talbott at the back of a crowd that included former Mayor Sheri Barnard, state Rep. Duane Sommers and incumbent Jack Geraghty.

Skaggs introduced Talbott to Sandifur, who was prepared to give the candidate about 10 minutes of his time. They ended up talking for two hours.

“We share the same philosophy, but I don’t march with him in lockstep,” Sandifur says. “I was worried how he would turn out, but I think he has integrity. I like that.”

With Skaggs’ help, and a $30,000 anti-Geraghty push by David Sabey and his Sabey Corp., Talbott narrowly won the election.

“Sabey got more credit for that campaign than he should have,” Skaggs says.

Metropolitan donated $2,500 to the campaign. Sandifur and his wife, Helen, each kicked in another $500. While others gave more money to Talbott, Metropolitan also donated nearly $1,000 of Skaggs’ work time, and $3,000 of other in-kind contributions, including “get out the vote” calls immediately before the election.

That doesn’t count the leave of absence granted to Daggett so he could work full-time as Talbott’s campaign manager. And Skaggs says he spent a lot of his own time consulting on the campaign.

The Metropolitan connection continued once Talbott was in office.

In July, Talbott hired Hope Findley as his assistant. She earns $32,000 a year in the city post. At Metropolitan she was assistant secretary to the executive vice president and an officer of the company.

Skaggs says he knew Findley was looking for a new job and suggested she apply as the mayor’s assistant.

“I knew whoever was his assistant would have to have tough, tough skin,” Skaggs says.

When the mayor decided to do a weekly television show, he initially asked Bob Zeller, vice chairman of the city-county Cable Advisory Board, to produce the program.

But Zeller was replaced before the first show by Findley, who became the executive producer. Two Metropolitan employees, Kevin Daymont, from information services, and Karen Keese, in Metropolitan’s operations department, were recruited. Both have TV experience.

“I wanted people who understood the business and could give the mayor the best production on a zero budget,” Findley says.

Zeller wasn’t pleased.

“Essentially, I feel that I was concertedly moved aside by several persons close to or inside the mayor’s office who also happen to have, at one time or another, been employed by Metropolitan Mortgage,” Zeller says.

Findley herself noted the extent of Metropolitan’s connection to the mayor’s office in an October e-mail to Keese.

“This must be Metro Home Week,” Findley wrote, “as John received a letter from Mike Barcelo offering his expertise in the bond area to help the city free of charge and Nobu will be meeting with John today. Can’t get away from them, they’re everywhere.”

Barcelo is a former treasurer at Metropolitan. Nobu Hara is assistant vice president of human resources.

Every mayor has advisers

Like Talbott, the two mayors who preceded him in office also relied on outside advisers.

Geraghty, who lost to Talbott in 1997, says he conferred with many people as mayor, especially attorneys Mike Ormsby and Mike Geraghty, his brother.

“I’d bounce ideas off of them,” he says.

Former Mayor Sheri Barnard’s advisers included longtime political activists Jan Polek and Bill First.

Elected in 1989, Barnard was a strong opponent of the garbage incinerator project and hired an attorney as her assistant to provide a second opinion to the city’s legal counsel.

“Most people call you,” she says. “I don’t remember picking up the phone and asking, `What should I do now?’ Those are decisions you make on your own.”

Barnard doesn’t necessarily see a problem with Talbott’s connection to Metropolitan.

“These are people who are helping the mayor, and I don’t think the community should get paranoid about it,” Barnard says.

Geraghty isn’t so sure.

“If Metropolitan wants to extend its influence to city government, that is their right,” he says. “One of the interesting things about this … is that Talbott continually talks about special interests and how the council should be above all that. On the face of it, this seems like he is speaking out of the other side of his mouth if he accepts all this.”

Unlike Talbott, both former mayors say they also conferred regularly with city staff and other council members.

“I relied a lot on Roger Crum, the city manager at that time, and my fellow council members to talk about issues and concerns,” says Barnard. “I tried to make that group of seven a team effort as much as possible.”

Talbott’s relations with most top city officials are strained. He says other council members or staff rarely visit his office to talk over ideas or issues.

Downtown debate

Talbott believes City Hall obsesses on downtown while ignoring the rest of Spokane. Sandifur agrees, saying city officials pay no attention to him or anyone else who doesn’t have an inside track.

He wanted Spokane’s convention center to expand to Metropolitan’s Summit property, but officials seem determined to build across Spokane Falls Boulevard from the current convention center.

“The convention center decision was made long before the process even started,” Sandifur says.

It was a similar story, he says, when Metropolitan proposed constructing a state office building on the Summit property and asked the City Council for help.

“The silence was deafening,” Sandifur says. “They didn’t give us any help at all. I guess we aren’t part of the club or the right family.”

Pupo says the city lobbied the Legislature for the state building. The City Council’s 1996 legislative agenda indicated its support for “efforts of the business community to develop a state office building.”

Sandifur and Talbott say the Cowles family has too much influence on City Hall. They’re particularly angry about the city’s involvement in redeveloping the River Park Square shopping center, which is owned by the family.

Talbott has made no secret of his disdain for the Cowles family and its power. No one denies the family’s downtown influence, with roots going back 107 years. In addition to River Park Square, they own other downtown property, as well as KHQ-TV and The Spokesman-Review.

“The Cowles family is very controlling,” Sandifur says. “That’s not good, and it’s not healthy.”

Other City Council members resent the implication that anyone controls City Hall.

“They think we are in the pocket of some people. It is ridiculous,” Councilwoman Roberta Greene says. “I believe I make my decisions based on the issues.”

“Some people maybe have the perception we are consumed up here with the Cowles. We’re not,” City Manager Bill Pupo says.

Pupo’s City Hall telephone records show he talks once or twice a week to Betsy Cowles, who is leading the River Park Square redevelopment.

“I don’t think that’s unusual given the scope of this project,” says Pupo, adding he’s often on the phone with developers of other projects as well.

Geraghty, who was mayor when the River Park Square project was first proposed, says he talked with Betsy Cowles every few weeks.

“We didn’t charge into City Hall and make demands,” Betsy Cowles says. “Nobody controls City Hall. If business leaders want to get something done, they have to work through the process. There are no secret meetings.”

The $110 million redevelopment includes a new Nordstrom store, a cinema complex, shops and restaurants. Supporters say it will create hundreds of jobs, increase tax revenues and spark other needed development.

The city helped the developer secure a federal Housing and Urban Development Department loan guarantee to fund part of the project.

Sandifur says downtown plans focusing on retail are rooted in the past.

“I don’t think the present leadership has the vision,” he says. “You can’t be looking in the rearview mirror all the time.”

Sandifur says that by concentrating on comparatively low-paying retail jobs, Spokane is forcing its brightest young minds to look elsewhere for work.

He praises high-technology developments in cities such as San Jose, Calif., and Boise, and even the Spokane Valley. He mentions Metropolitan’s own development, the 91-acre Liberty Lake Center. Businesses that have committed to the center include a luxury RV manufacturer, a medical devices distributor and a medical building.

Talbott and Metropolitan say Spokane’s future is in its neighborhoods.

Metropolitan donated money last year to many community organizations, but especially neighborhood groups. Metropolitan staff also contributed by designing brochures and donating furniture, office equipment and employee time.

The company stepped forward last month to help the Martin Luther King Jr. Family Outreach Center and the Native Project continue youth programs that had lost some of their grant money because of City Hall cutbacks.

Talbott is well-known around the city’s community centers. He first delivered his State of the City speech at the West Central Community Center, before repeating it for the Chamber of Commerce.

Talbott and Sandifur say that while city streets are falling apart and police protection is lagging, staff and public money are being squandered on downtown projects.

Some people, including Betsy Cowles, are concerned about what they see as an effort to play downtown against the neighborhoods.

“We have to get over this `us versus them’ and pitting one group against the other,” she says. “Successful cities have philosophical differences, but they focus on issues and goals.”

Election could bring change

Metropolitan is likely to support candidates for three City Council positions this fall. One seat will be vacant because a term-limit ordinance prohibits Orville Barnes from running again. Jeff Colliton and Roberta Greene are expected to seek re-election.

Voters will also decide a measure to elect council members by district, something Metropolitan thinks could make the council more accountable. The company loaned $6,000 to the group Fair Representation NOW to gather signatures for the initiative.

The Spokane Policy Research Council, supported by Metropolitan, also is likely to produce an initiative that would hire an independent auditor.

And Councilwoman Cherie Rodgers, the only council member who regularly votes with Talbott, is collecting signatures for an initiative requiring a citizen vote before public money is spent on any bridge spanning the Spokane River gorge.

Just two new faces on the seven-member council could go a long way toward changing city government, especially if they align with Talbott and Rodgers.

Four council votes would be enough to fire the city manager, the top city official in Spokane’s weak mayor form of government.

“New blood would bring a new reconnect with the neighborhoods,” Skaggs says. “I think you’ll see a lot of the same themes from 1997 played out again: Are the streets fixed, do we have police protection?”

Councilwoman Phyllis Holmes says she welcomes Metropolitan’s involvement in city government. But she offers a caveat.

“We need Paul Sandifur at the table. My only hope is that in their attempt to further their agenda, they keep the community’s well-being uppermost in their mind,” she says.

“Everyone needs to come through the front door.”

These 2 sidebars appeared with the story:

1. AT A GLANCE Talbott’s ties to Metropolitan Some of the key links between Mayor John Talbott and Metropolitan Mortgage include: C. Paul Sandifur, Metropolitan president, pictured at right, who has donated money and staff time to support Talbott and his issues. Erik Skaggs, a close Talbott adviser who leads Metropolitan’s government and community relations staff.Story/A8 Hope Findley, who left her job at Metropolitan to become Talbott’s assistant at City Hall.

2. HOW THE STORY WAS RESEARCHED How connected is Spokane Mayor John Talbott to Metropolitan Mortgage and Securities? To answer that question, The Spokesman-Review interviewed more than two dozen people and reviewed stacks of public records, including campaign contribution reports, City Hall telephone bills and e-mail for the mayor and his assistant. The newspaper’s requests for e-mail, made to the city attorney’s office on two separate occasions, upset Talbott. After the first request in December, he said the paper should have asked him directly for the records. After a January request for additional e-mail, he called a news conference to say he was being unfairly targeted. He also complained that city officials hadn’t told him about the request. Using the state public records law, the newspaper has obtained the e-mail of many public officials in recent months at both the city and the county. As in Talbott’s case, the requests for such records were made to the agency’s legal staff, rather than the party whose e-mail was sought. That’s because agency attorneys usually collect and review the records before they are released.