July 13, 2009
Host: Ted Simons
- Arizona Republic Glendale reporter Rebekah Sanders provides an update on the Phoenix Coyotes bankruptcy case and ongoing ownership issues.
- Rebekah Sanders - Arizona Republic
Ted Simons: Lawyers involved in the Phoenix Coyotes' bankruptcy case were back in court today. Judge Redfield Baum turned down a request by Coyotes' owner Jerry Moyes to depose members of a group trying to buy the team and keep it in Glendale. That group is lead by Chicago White Sox owner Jerry Reinsdorf. Here to help us sort through this entire story is Rebekah Sanders, Glendale reporter for "The Arizona Republic." Good to have you here.
Rebekah Sanders: Thank you.
Ted Simons: There's so many elements. Let's start with the basics. The Coyotes are in bankruptcy court and we have an auction when? August --
Rebekah Sanders: August 5th is when judge Baum will decide whether the Reinsdorf offer is the best or whether he'll open it up to outside bidders who could move the team outside of Glendale.
Ted Simons: And the deadline for bids, it's still a ways away?
Rebekah Sanders: July 24th. Just around the corner.
Ted Simons: What would be the acceptable offer? As far as you can tell, I mean, we've got the Canadian guys well over $200 million and Reinsdorf at $148 million. Acceptable to whom?
Rebekah Sanders: There's so many different parties here. Glendale says that the best offer will be one that keeps the team in Glendale because there's so many -- so much taxpayer money going into the team to build the arena, and all the money that's involved. But others are saying, well, it makes more sense to move the team to Canada or a place where fans are pumped about hockey.
Ted Simons: The gentleman that wants to move it to Canada, who is he and how did he get involved in all of this?
Rebekah Sanders: He's co-C.E.O. of the research in motion, the blackberry maker and trying to get into the NHL for quite some time.
Ted Simons: And he's offering well over $200 million for the team and Jerry Moyes is saying, I think I'll take it.
Rebekah Sanders: Right, Jerry Moyes is in support of his bid, even though it would move the team to Canada. For one thing, Moyes stands to gain more from this offer than from Reinsdorf.
Ted Simons: They're against this particular transaction, why?
Rebekah Sanders: They see the investment by Glendale and the Coyotes as an important thing to protect. If a team can just declare bankruptcy and move, if the owner wants to, then other teams in the NHL could do. But other sports leagues are looking at this and pretty concerned.
Ted Simons: This seems like a relatively important case in terms of professional sports and municipalities and such. And if the judge were to go with the Canadian team, would we see an appeals process that would see major league with the NHL?
Rebekah Sanders: They've all spoken up to say we support the NHL. There needs to be due process and league rules should stand.
Ted Simons: I know there's another group, some Connecticut-based research firm nosing around. Is Reinsdorf the big offer on the table right now?
Rebekah Sanders: It is. The other one just popped up recently and even the NHL has said it may not come to fruition.
Ted Simons: What happens to the Coyotes' league with Glendale?
Rebekah Sanders: Glendale put $180 million out there to build the arena. So they're fighting hard to keep the team there so they can get back the revenue that would pay that debt off. And so the question is whether they will give up concessions or money to help the next owner be profitable at the arena. Glendale says they won't, but there's a lot of question if Reinsdorf will accept that.
Ted Simons: For the Reinsdorf deal to work, I would imagine it would have to be a long lease again. You don't want to bind it and -- buying it and then moving in another two or three years.
Rebekah Sanders: Some have speculated whether Reinsdorf will cut a deal, to say if we're not profitable enough in two to three years, we have the option of getting out and moving. That happened in Nashville with the Predators. But Glendale and the NHL say no way. We're not going to allow that. It's the same old case over again in a few years.
Ted Simons: I know that Glendale is keeping their talks regarding the team secret. Why is that?
Rebekah Sanders: They say they don't want anyone else at the negotiating table. They need to have as much privacy as possible to get the best deal. Essentially for the taxpayers of Glendale.
Ted Simons: And the Goldwater Institute is saying, wait a minute, the taxpayers may be on the hook if the deal is not so good.
Rebekah Sanders: Right, and this should be as open as possible so the public can judge whether they approve of the deal-making going on.
Ted Simons: So another aspect is the Goldwater Institute filing suit against the city?
Rebekah Sanders: Correct.
Ted Simons: And that comes up when?
Rebekah Sanders: July 20th is when the judge will rule whether Glendale needs to open up the books.
Ted Simons: The city council over in Glendale said they would open the books before a council vote.
Rebekah Sanders: Correct, so that the residents of Glendale can see what the proposed deal is and give feedback to the councilmembers.
Ted Simons: How much -- you referred to this earlier, but again, how important is it for the city of Glendale to keep a hockey team that, let's face it, is a little below the radar in terms of professional sports and hasn't don't well on the ice and has a devoted but small group of followers? Why is it important to Glendale to keep the team?
Rebekah Sanders: They say they would have $5 million in damages if the team left. Even though the Coyotes were not a winning team, they were still bringing thousands of fans down to the shopping and restaurant area. Spending money in the city. That was helping, again, to pay off that debt. And so if the anchor tenant of that arena leaves, then it will be hard to bring in the money they need.
Ted Simons: And you're talking about Westgate there, which is already having trouble.
Rebekah Sanders: Right, the economy has hit it hard, definitely, and the development is not as far along as it was expected to be, but still, the arena made that whole place just boom.
Ted Simons: What are you reading from the bankruptcy judge right now? Does it seem as though -- you tell me -- impressions? Does it seem like he wants to keep the team in Glendale?
Rebekah Sanders: He's a judge, it's hard to tell. It's so hard to tell. He really plays both sides, really grills the lawyers and it's hard to know which side he'll rule on.
Ted Simons: You got an offer for 200 and some million dollars and one 100 and some odd million, it should seem obvious.
Rebekah Sanders: But the question is who the creditors are. One argument is that Jerry Moyes and others should not really get any money from a -- from the bankruptcy court because it was their investment. They lost it. They're not entitled to anymore. But Moyes obviously is trying to fight that.
Ted Simons: So basically, he and other parts of ownership, including Wayne Gretzky. I guess what the city, the NHL is saying, we don't want those guys to make too much money off what is a bankrupt enterprise.
Rebekah Sanders: They're saying they're not entitled, and the better solution is to keep the team in Glendale and if Jerry Moyes had been able to find a bidder or had supported Reinsdorf, then they would have been on the same page.
Ted Simons: Is there -- and kind of a little opinion here, but is there a consensus of opinion as to why the Coyotes have never really made it in Phoenix, to the point where the team is now bankrupt?
Rebekah Sanders: Consensus, no.
Ted Simons: Yeah.
Rebekah Sanders: Everybody has their own theory. Some blame the change of location. That it went to the west valley instead of staying downtown. Others, especially in Canada, say hockey will never work in the desert. There's so many theories and others say it just needs better management. Get someone in there who is really the face of the Coyotes promoting them over town.
Ted Simons: And to get that better management, the city and NHL need to see the books and that's a fight, as far as Gretzky and Moyes together, correct?
Rebekah Sanders: But according to SHUMway, he met and let's find a way to make the team profitable, but it never came to a conclusion and then they put it into bankruptcy.
Ted Simons: Last question. NHL runs the Coyotes.
Rebekah Sanders: Correct.
Ted Simons: Let's say the NHL appeals and the process takes so long, will the NHL run the franchise until the appeal process runs out?
Rebekah Sanders: That's what it looks like. In all likelihood, the team will be here for another season because it's so late in the game and the NHL will be essentially putting the money into the team to keep it going.
Ted Simons: Complicated case, isn't it?
Rebekah Sanders: Very.
Ted Simons: And so many different angles and it's like the second period of a hockey game. Not even close.
Rebekah Sanders: Pretty much.
Ted Simons: Thanks for clearing stuff up for us.
Rebekah Sanders: Thank you.
- Arizona Attorney General Terry Goddard reviews the current cases at the A.G.’s office, including a major case to be unveiled Monday.
- Terry Goddard, Arizona Attorney General
Ted Simons: Good evening and welcome to "Horizon." I'm Ted Simons. Arizona senator Jon Kyl voiced his concerns today in opening comments on the senate judiciary committee's confirmation hearing for Supreme Court nominee Sonia Sotomayor. Kyl said that Sotomayor "appears to believe that her role is not constrained to objectively decide who wins based on the weight of the law, but who, in her opinion, should win." Kyl also said Sotomayor's decisions could be influenced by her gender and Hispanic heritage. An Arizonan confirmed today as director of the Federal Highway Administration. Victor Mendez was formerly the head of the Arizona department of transportation. Mendez has been acting director since January. State senate Republicans apparently discussing the budget in closed meetings. The lawmakers met for about 35 minutes in a caucus open to the public. After that they continued talks behind closed doors. The Arizona attorney general and the drug enforcement administration announced a big prescription drug bust today. It involved a doctor from Mohave County. I'll talk to Attorney General Terry Goddard about the bust, but first, some comments from a news conference today.
Elizabeth W. Kempshall: The investigation of why Albert Yeh grew from a lead by the tactical diversion squad by the Kingman police department and Mohave Area General Narcotics Enforcement team, better known as M.A.G.N.E.T. Durring this investigation, undercover operations revealed that Dr. Yeh would provide controlled substance prescriptions without a medical evaluation or even a medical history being taken. After meeting with the doctor for only 58 seconds, one of the undercover agents received a prescription for controlled substances. Another undercover agent received two prescriptions for Percocet only two weeks apart for a total of 240 pills. Think about it. That's 17 Percocets per day for 14 days.
Ted Simons: Here now to talk about that drug bust and other issues is Arizona Attorney General Terry Goddard. Good to see you again.
Terry Goddard: Good evening.
Ted Simons: Holy moley. What got the investigation started?
Terry Goddard: With the traffic stop in Kingman and heads up police work that ended up becoming, as the special agent Kempshall said, the first cast of this squad. a multiagency antidrug program going to target this kind of doctor malpractice.
Ted Simons: The doctor, what's his history in Arizona? Licensed MD?
Terry Goddard: He's licensed in Arizona and Nevada, he had a practice in both states and we're charging the portion of that practice that dispensed drugs and defrauded the state ACESS program, in our opinion, our allegations over a period of four years.
Ted Simons: We want to get to those frauds charges. Was the doctor acting alone?
Terry Goddard: It was a small practice. He had one medical associate who did, in fact, issue prescriptions also, which were repeats. To the best of our knowledge, his associate was also charged, never licensed in Arizona in anyway.
Ted Simons: And this is basically a local allegation here? Not talking about things shipped around the country?
Terry Goddard: Interesting question. The volume just on one day's practice a week in Mohave county was so large that we do, in fact, have prescriptions issued by the doctor that were filled in Phoenix and Tucson and many parts of the state and we found one in Ohio. So it's possible that other states were involved.
Ted Simons: How long has he been allegedly doing this?
Terry Goddard: Four to five years, that we're aware of and we allege in the statement.
Ted Simons: And the drugs?
Terry Goddard: Percocet and Vicodin. Very potent, done with no examination or cursory examinations of the patients. To the best of our knowledge, the doctor never got up from his desk. You're in pain? Yes. And he gave them the maximum prescription.
Ted Simons: He was working pretty fast --
Terry Goddard: He made our common concept of time absolutely -- he was able to stretch a hour, let's put it that way. 188 patient consults in a period of six hours. In 380 minutes, had billing 70hours to ACCESS of medical consultation
Ted Simons: Where are the warning signs and where is the patient saying I think something funny is going on? How come this went on for five years?
Terry Goddard: I think that's a good question and one we have to get to the bottom of because the doctor was clearly a major mis-doer, but there may have been others. Probably are, around the state. Because we know right now, especially many young people, the number one drug of choice are prescription pain killers. And it's grown dramatically in the past few years. So the availability of these drug, especially to teenagers is something that we're concerned about.
Ted Simons: Are you saying there were some underaged folks involved?
Terry Goddard: No, no, but we believe when drugs are made so available, they're either going to be re-sold on the street as part of the illegal trade in prescription drugs or lay around the house and be available to young people who don't know what they're getting into.
Ted Simons: You referred to charges involving fraud here. Talk to us about that.
Terry Goddard: It's a double case. There's the illegal, we believe, administration of controlled substances, pain killers and then the second part is the clear defrauding of the ACCESS system. Billing for consultations that never happened. During that approximately two-minute average visit that the patients had, he would bill the state for at least three procedures, which if he actually performed, would have taken him 20 minutes or more.
Ted Simons: And what kind of total money here?
Terry Goddard: Approximately $3.5 million.
Ted Simons: And that's -- that's in Arizona?
Terry Goddard: $2.4 million is Arizona, the rest is to Nevada, a similar system of state insured, federally insured health coverage.
Ted Simons: What kind of punishment are we looking at here?
Terry Goddard: If convicted -- and I want to emphasize it's charges that have been brought. He's not been convicted of anything. If convicted, there's about 12 years per count and he's charged with 12 counts.
Ted Simons: Have you seen --
Terry Goddard: 14 counts.
Ted Simons: Have you seen something similar to this? How common?
Terry Goddard: The charges are not common. This is an important case for a number of reasons. The volume. Second, it's the first case to be brought by this multidisciplinary diversionary squad and there will be more in the pipeline. Jointly with our office, the D.E.A. and the department of public safety and it's an important step forward and a message to the medical community that they need to be much more careful about prescribing. Pain killers play an important role in normal circumstances, but this overuse of highly addicted drugs is not going to be tolerated.
Ted Simons: I know you're going back to Washington for a variety of reasons, border issues among them. Money laundering. You've been back there quite a few times on this. Are they paying attention yet?
Terry Goddard: I think. So this trip is to talk to the department of treasury officials who are changing the rules about what is considered a financial instrument. Right now the money cards -- I think I showed you one before. We would think of them as gift cards.
Ted Simons: Uh-huh.
Terry Goddard: These are not considered monetary instruments. So if you go overseas or to Mexico, there could be a million dollars on this card, and our border officials would never know. We have to change the rules to make these stored value cards considered monetary instruments.
Ted Simons: What are the reasons so far for not changing the rules?
Terry Goddard: I can't come up with any good ones. The financial investigative group has called for this to be regulated for years. I'm sure there's pushback from financial institutions but that's not a good reason to provide uninhibited flow of funds into the cartels and making movement across the border much more difficult and transparent. One of the things we're going to talk to the treasury about, to make sure that if I or anyone else has one of these cards that they can be read by the people at the border.
Ted Simons: You're going to try to get support on the foreclosure crisis.
Terry Goddard: It's an accelerating picture and tragic one. Last week in Tucson, this week in Phoenix, groups either involved in systematic conspiracies to defraud the lending companies and would-be purchasers. This week it was a group that claimed to be H.U.D. certified and charging homeowners a high price for doing -- simply passing the buck. Essentially making a phone call that that homeowner could have made and charging them almost $2,000 for the privilege. That's outrageous.
Ted Simons: And the other was complicated down in Tucson. Relatively.
Terry Goddard: More involved, brought in would-be investors to buy houses. Basically conned a loan company. Usually five or six at a time to people not really qualified for those loans and then got lower income folks, or people with bad credit to come in and rent to own, and the deal was that they would be able to own the property at the end of the day. Out of 270 clients, only one actually qualified to buy the property.
Ted Simons: Anyone they found, they targeted on this deal?
Terry Goddard: They did. And unfortunately, part of the financial meltdown we're suffering from today was because of con artists like this.
Ted Simons: As foreclosures -- they're tending -- they're stabilizing a little bit, I guess. Are the scams stabilizing?
Terry Goddard: No. I talked to the A.G. in Nevada today and they've got over 100 cases they're pursuing. We have about half that number and it's growing. So the landscape, unfortunately, where more and more people are desperate, facing foreclosure, unfortunately, they're ready marks for these con markets and if I can take a moment, to say, if you're facing foreclosure, there are H.U.D. approved -- the first call you should make is to them. And the next call is to the lending agency, because they're the ones motivated to try and keep you in your home.
Ted Simons: And when you make a call, no one is asking for money.
Terry Goddard: No one is asking for a fee up front and the common denominator of the scams are they want sometimes exorbitant fees upfront. Sometimes it's the last money that people have that could be used to keep them in their house.
Ted Simons: Good information. Thanks for joining us, we appreciate it. Please visit our website if you would like to see that interview again or find out about upcoming shows.