Yep, I’m talking about the Mountain Water lawsuit, where the City of Missoula thinks it’s going to sue the Carlyle Group and get a water company that’s possibly worth $120 million for the paltry sum of $60 million or so.
Yes, idiocy does still reign in the Treasure State, and Missoula’s mayor John Engen is leading the charge. But of course he needs help with that, and most of that help is in the form of hot shot lawyers from Spokane and Minneapolis as well as some can-do-no-wrong bankers in New York.
Before we get into it I’ll point out that The Missoulian’s Keilla Szpaller did much of the ground work necessary for me to write this piece with her article profiling Mayor John Engen’s Mountain Water consulting team.
So who is this team? Buckle in and get that puke bucket close – you’re about to find out!
Roy Koegen of Koegen Edwards (aka Perkins Cole)
In 2005, Koegen had a firm named Perkins Cole and was working on Spokane’s River Park Square. The whole idea was to revive an ailing business district and Koegen seemed just the man for the job, mainly because of some loopholes he’d written into the tax code in 2001 that stipulated how arena bonds were sold.
At first he was wary, warning Spokane that the development deal they were about to embark on was just too costly. The plan as it was would give most of the profits from the development to the developers, the Parking Development Authority being a major one, something that would disqualify the bonds the city was issuing from being tax-exempt.
It was for this reason – that the city was going to lose out because the bonds would be taxed – that he withdrew his support for the plan by stepping down as bond counsel. However, he was still working with the Parking Development Authority on the deal for some reason.
His policies and procedures cost the taxpayers of Spokane a pretty penny, as a 5-year investigation by Camas Magazine discovered. At the time it turned into a huge mess and Koegen was sued by the City of Spokane and his firm closed up shop.
In the end the deal fell through and Koegen was sued by the city. One of the main contentions was transparency, with the idea that Koegen didn’t tell all of the financial risks involved to his client. When it was all said and done Koegen was found innocent because he’d been working with city officials each step of the way, creating that transparency they wanted. Unfortunately Koegen did have some serious ethics violations leveled against him.
That didn’t really matter, though. He warned people, but only at the top, and when it was determined that profits were more important than the public good, the deal was initially approved.
No one in Spokane knew what was going on because the Spokesman-Review newspaper was owned by the same family that was set to profit from a new mall going in downtown by the river. Reporters were told to keep their mouths shut.
Koegen settled his lawsuit out of court as it was the most “cost-effective” thing for him to do. The cost-effectiveness of the city was never a concern.
One of the main problems you’ll find with Koegan and his involvement in the Mountain Water deal is that he won’t get paid unless the deal goes through. Estimates of fees for people like Koegan are currently at $4 million, but we all know that’s baloney and that the taxpayers of Missoula will be stuck with a lot more than that when this is all over.
To ease the concerns of Missoulians that are aware of his shady practices, this might not be worth much. After all, Koegen said the best way for the city to ensure it’s not taken advantage of in the deals to hire a third-party.
That third-party was hired, and is none other than Perkins Cole, Koegne’s old firm. Luckily for them they’ll be paid by the hour regardless if a sale is completed or not. In other words, it’s in their best interests to drag this sale out as long as they can, and into as many billable-hours as possible.
Good luck, Missoula – you’ll need it.
Roger Wood of Moelis and Company
That’s the thing with Moelis, they’re a publicly-traded company and have got to keep that stock price up, especially after the stellar opening the Moelis and Company IPO had in April. We’re talking about the bottom line here, so any piddly concerns Missoulians – whoever the hell they are – will have to take a backseat to our shareholders.
Montana has a long history of being screwed by bankers in New York – anyone researching the Panic of 1907 or the Montana banking crisis of the 1920s can tell you that! Unfortunately, I don’t think Engen is one to study the past, looking for mistakes he can avoid to save the people of Montana unneeded anguish. In fact, I’m willing to bet a lot of these city government folks are going to be profiting just as much as firms like Moelis.
Roger Wood came to the attention of Mayor Engen when the city was going over the Montana Public Power Authority issue. He was the guy who figured out that Mountain Water is paying Park Water Co. in California $2 million a year. Stellar reporting capabilities – was he also the first to figure out what a balance sheet is?
Wood’s experience comes from more than 25 years of screwing people for firms like JP Morgan, Citigroup, and Rothschild. I guess he must have decided to sell out after getting that history degree from University College. Missoula will pay the price.
Dave MacGillivray of Springsted
You see, in June Springsted acquired the Waters Consulting Group, a Dallas-based company that focused on public sector executive recruitment.
What the hell does that mean? It means they find the “most talented, experienced, and qualified candidates” when you need to hire people. That’s great, but when I hear the word acquisition I think of large amounts of cash going out the door and even larger amounts of debts piling up.
Sringsted just bought a recruitment firm and I’m sure it cost a pretty penny. I can’t find anything on it, probably because they don’t have to report it – I don’t know.
I do know that I have an uneasy feeling about this firm, and how close they’re “working for” Missoula.
Brentt Ramharter of Missoula
The nice thing about Ramharter is that he knows the books. Since 1997 Missoula has been awarded the Certificate of Achievement for Excellence in Financial Reporting every single year.
I’m not sure what his role in all this is, but it shows how people really close to city government are set to profit if this deal goes through.
The deal stipulates that none of them will get paid until the deal goes through, ensuring they’ll sell out their mother to make sure this deal goes through.
I have no idea what some of those firms charge an hour, but I’m betting it’s around $300 an hour. So let’s say they worked for 8 hours a day for 1 week. The city would owe them $96,000.
I’m sorry, but do you know anyone making $96,000 for a week’s worth of work? I don’t myself, and I just can’t help but think for these people money is the most important thing.
Are you telling me people like Koeler and the others are going to turn down that $96,000 if they think the deal isn’t in the best interests of Missoula? These people don’t live here – besides Ramhartter – and I know they don’t give a fuck about you or your water or what kind of taxes you pay now or would like to pay in 5 years. They care about themselves and their money and they’ll do everything short of killing you to get that.
If those firms were getting $300 an hour and sent a bill for a month’s work of work to Missoula you’d pay $384,000…just for one month!
What could Missoula do with that money? This is what it comes down to, using that money now for things we need while still getting great water at a decent price from a company that fixes its infrastructure.
I don’t think Missoula will be able to say any of those things should this deal go through.