October 26, 2011
Host: Ted Simons
Andrew Thomas Ethics Hearing
- Facing possible disbarment, former Maricopa County Attorney Andrew Thomas took the stand to testify in his ethics hearing. Arizona Republic reporters Yvonne Wingett Sanchez and Michael Kiefer provide an update on the hearing.
- Yvonne Wingett Sanchez - Arizona Republic reporter,Michael Kiefer - Arizona Republic reporter
, ethics hearing
Ted Simons: Good evening, and welcome to "Horizon." I'm Ted Simons. Facing the possibility of disbarment over accusations of ethical misconduct, former Maricopa County Attorney Andrew Thomas took the stand today to testify in his ethics hearing. Joining me to talk about the hearing are "Arizona Republic" reporters Yvonne Wingett-Sanchez and Michael Kiefer. Both reporters have been closely following the case. Good to have you here. Okay, Thomas takes the stand, first appearance in this whole affair. Correct? What’d he say?
Yvonne Wingett Sanchez: First appearance. He didn't want to draw attention to himself apparently once the thing began in early September, September 12th, with the opening statements. And so he chose according to his attorneys, not to attend until he was actually called to testify.
Ted Simons: So what did he say?
Michael Kiefer: It was testy. We in our first story we wrote we called him taciturn. He was really being aggressively followed down by the independent bar counsel, asking him very pointed questions about the events that led him there, particularly having to do with filing charges against sitting judge and filing a civil racketeering suit against several judges, the board of supervisors, and other officials.
Ted Simons: Describe the scene. And compare this to maybe some previous testimony.
Yvonne Wingett Sanchez: Sure. There was a lot of media there today. I think everyone was really excited to hear what he was going to say. He really hasn't talked about this bar investigation in depth since he came out in December of last year denouncing it, calling it a political witch hunt, with his wife by his side. He made no apologies for any of his actions.
Ted Simons: I was going to say, correct me if I'm wrong, but it sounds like from your reporting unrepentant, showing no remorse, no regret, defiant, if you will?
Michael Kiefer: There's a sense from both Andrew Thomas and Lisa Aubuchon that they were on a righteous course rooting out corruption. And they still stick to that, they still stick to that principle, that there were crimes being committed that there was a conspiracy going on and never really never waived from that.
Ted Simons: Did he struggle at times to explain the conspiracy, or explain exactly who took the bribe and what is a bribe?
Michael Kiefer: The bribe was a difficult question, because as we saw him talk today, he said he had charged Judge Gary Donahoe, who was presiding criminal judge, with being an accessory to a bribe, having to do with bringing another attorney to be hired to handle court matters. And that's different from what he said at the time. Because I recall at the time during a press conference he literally turned to me during the press conference and said, “Help me with this” to explain what the bribery was. I couldn't. I had no idea.
Yvonne Wingett Sanchez: He couldn't explain it to independent bar counsel today either when he was asked “Where's the bribe?” He couldn't point to it.
Michael Kiefer: In one of the issues here, did he file those charges to stop a court hearing that Judge Donahoe was going to have that very afternoon? And at the time, we had the impression, the reporters had the impression that that is exactly what was going on. Today he said that in fact he was inviting the media to attend the hearing that afternoon.
Ted Simons: I remember having Andrew Thomas on this program saying -- regarding the Rico suit saying, “Just wait. When you get the information, when you see the evidence, just wait.” Is there any indication that there is evidence of really any kind of that the judge took a bribe?
Yvonne Wingett Sanchez: In their minds, yes. In their minds, Donahoe was protecting his boss, Barbara Mundell, he was protecting Don Stapley from prosecution, he was getting a new court tower, he was being allowed to keep his title as presiding criminal judge, and in their mind that amounted to a crime.
Ted Simons: In their mind it sounds as if they believe everyone, virtually everyone with some level of authority and power in county government was in on this in some way. Is that still his position?
Michael Kiefer: I believe it is. And it has been a question all along, when Sheila Polk talked before, she said quite pointy, even if you prove these things, it's -- even if you prove everything you set out to prove, there's no evidence that crimes actually took place.
Ted Simons: I asked Michael, I want to ask you as well, did it seem like he struggled did it seem like he was having a hard time explaining his theories?
Yvonne Wingett Sanchez: Yeah there were points where he had a hard time showing in the document, in the complaint where does it say there was a bribe? Where does it say it was conspiracy? How do votes by the board of supervisors amount to conspiracy? How does the hiring of Thom Irvin to work on the court tower project, how is that criminal?
Ted Simons: Right. Go ahead.
Michael Kiefer: It became testy at times from both sides. The judge would step in and say, that's not the question you were asked, or he would tell the independent bar counsel, you're being argumentative. At one point he said that. So it got testy.
Ted Simons: The idea, again, from your reporting, I thought I heard him maybe throw Rick Romley under the nearest transportation device, saying something about be careful of Don Stapley or something along those lines. Lisa Aubuchon, it seemed like he may have looked for the nearest bus station for her as well. Was he throwing folks under the bus here?
Michael Kiefer: I don't know exactly. What he said was that Rick Romley warned me about Don Stapley, saying he has --
Yvonne Wingett Sanchez: He has a developer's mentality. He promised that implied he played fast and loose. Romley will say I never told him that. But he -- and he was trying to make it a distinction between him personally, his role as county attorney, Lisa Aubuchon, and the agency.
Michael Kiefer: The office, right. And he referred a few times to Lisa Aubuchon's MACE unit.
Ted Simons: Had he ever done that before?
Michael Kiefer: I'd never heard that before.
Ted Simons: Interesting. Let's -- before we get to Aubuchon, how did -- can you tell how this is going over with the panel? Is there any indication at all? Any facial reactions, any Perry Mason type look at the jury box business?
Michael Kiefer: No. The only time I saw facial reaction was actually last week during the Rachel Alexander testimony when the bar counsel read into the record some things that had been published on her website talking about what a sham the proceedings were, and at that point you could see the panelists' faces, that was the first time they'd heard it, and that didn't go over well.
Ted Simons: Lisa Aubuchon's testimony, can you talk about that? Let us know, were there any surprises there? Again, she did not seem like she had any remorse, any regret. Any problems at all.
Yvonne Wingett Sanchez: She said I have no remorse, I wouldn't do anything differently. She was very confident, very self-assured. I thought she came off, you know, she came off pretty well. She's one tough cookie.
Michael Kiefer: She did very well. I remember there was one point where everybody smiled where she finished the bar counsel's sentence.
Ted Simons: Interesting.
Michael Kiefer: He was struggling for words and she finished the question for him.
Ted Simons: Okay. Again, with Lisa Aubuchon, is this -- is there any indication how this is going over? Again, the panel has to decide whether or not these people committed such malfeasance they should not be attorneys anymore. Which is serious business, and yet it's a pretty strong case presented so far.
Yvonne Wingett Sanchez: You can tell the panel can tell he's into it. He's looking over at the witnesses, he has his hand on his chin, he's looking -- and there's times when O'Neil does the same thing. You can't really tell what he's thinking, though he has asked quite a few questions. You can't tell which way these guys are going to go.
Michael Kiefer: No, but there's another element too, in that if Thomas and Aubuchon truly believe what they were doing, if they were acting in good faith, part of the question is, did they knowingly commit certain acts?
Ted Simons: And another question, where does Sheriff Joe Arpaio fit into all this? I know some of his MACE deputies testified. How does he if it into all this?
Michael Kiefer: He doesn't recall.
Ted Simons: Besides not recalling.
Yvonne Wingett Sanchez: He -- Thomas, Aubuchon, others have put him in the middle of key conversations, the decision to file a RICO suit, the decision to charge Donahoe, but his detectives, their testimony was really very interesting. What strikes me is that along the way the detectives from MCAO and MCSO had the feeling that something just wasn't quite right. It was bizarro world. Things were running backwards. You had a prosecutor who was bringing draft indictments before investigations even began. Had you her -- Lisa Aubuchon asking detectives to swear to charges that they knew nothing about. She was running the show. And these detectives felt very uncomfortable with it. One of them even went to internal affairs to complain. He was threatened that he would be charged with insubordination if he didn't do what he was told to do. These people, I don't know if they snuck records out of the office, but they took records with them, kept them in their gun safe, locked them away in case they ever needed to pull them out down the road. And that's what happened. They're using them now, they've testified they've used them for the federal grand jury investigation, that is still ongoing as of today according to the U.S. attorney's office.
Ted Simons: And I want to wrap it up with that federal grand jury investigation. How much of what has been said so far do you think is going to be big stuff or substantive stuff to this investigation?
Michael Kiefer: I think that's really hard to tell. We have heard a lot of this information before, I think we're seeing more detail now. We have seen FBI agents at this hearing, at least Aubuchon's merit commission hearing, which took place some months ago. It's hard to say how much is going to if it in. But the story is consistent.
Ted Simons: All right. You guys are doing a great job covering this. We thank you so much for joining us tonight on "Horizon." Thank you.
Yvonne Wingett Sanchez: Thank you.
Michael Kiefer: Thank you, Ted.
- Arizona Republic real estate reporter Catherine Reagor explains how a new federal mortgage relief plan could help more Arizona borrowers refinance their upside-down home loans.
Keywords: federal mortgage relief plan
- Catherine Reagor - Real Estate Reporter,Arizona Republic
Ted Simons: This week President Obama announced plans to help more borrowers refinance their upside down home loans. Here to talk about that is Catherine Reagor, she's a real estate reporter for "The Arizona Republic." It's always good to have you on. We finally got you on for some pretty encouraging news.
Catherine Reagor: Yes. I had heard rumors and speculation about this, and this is not the loan modification, this is the refinancing, where people who have done pretty much everything right, they just owe more than their house is worth because of all the foreclosures and short sales and drop in home sales and they're going to be able to refinance. They're lifting the cap.
Ted Simons: The cap was, if it was 125% of home value.
Catherine Reagor: That meant you had to be just 25% under water. And our home values have dropped 65%. So that doesn't help a lot of people.
Ted Simons: This is the home affordable refinancing program updated after it is already been updated once before.
Catherine Reagor: Called HARP. And they use that acronym, but it's called HARP. At first it was 105%. And then it went to 125%, but since 2009 when they announced it home prices have dropped more. So they are lifting the cap. Your 200% underwater, which some people are, and you qualify, Fannie Mae and Freddie Mac loan, which --
Ted Simons: That's a requirement; it has to be backed by Fannie and Freddie?
Catherine Reagor: Yes. And most conforming loans are. If you have a jumbo loan, no. The limit for a Fannie Mae and Freddie Mac loan in metro Phoenix has never been more than 500,000. If your mortgage is 500,000 you're likely not. But people get confused because Bank of America is their lender. They could have made your loan and you could be sending them your payments, but it is backed by Fannie Mae and Freddie Mac and you can go to making homeaffordable.gov and figure that out.
Ted Simons: You find out you're qualified, you say, hey, what exactly do you get? What happens? How does it work?
Catherine Reagor: We don't have all the details yet, but they say December. That's soon, and that's quick. They already have the program in place. Taxpayers, the government owns Fannie Mae and Freddie Mac, so this is something they should easily be able to administer through HUD and treasury. Essentially you don't have to get an appraisal, because that's a cost you usually have to pay for a refinancing, and they've streamlined the process, and also they're going to try to make it competitive with different lenders because they're cutting the fees for lenders. And these are mostly conforming loans. These are loans where people are paying. These are loans lenders should want to refinance and keep.
Ted Simons: I want to ask you about that. The lenders are going to have to cooperate here, are they going to cooperate here? The president says if they don't cooperate, this makes for competition for those who want to come in. That's a nice theory, it is going to work?
Catherine Reagor: We heard that before, remember when it was first announce it was the carrot and the stick. It didn't work. The loan modifications did not work. Now, Fannie Mae and Freddie Mac are owned by the government, they can push it through. They have the power, and it's working with the lenders, and again, these are the loans they want. These are the loans people are making payments on. So to get it -- if you otherwise, people are walking away from 7%, 6%, even if you're making 3.9% or 4% on a mortgage right now, if you're a lender, that's a great return on your money. So we'll see. But they have to carry a big stick. The government, the Obama Administration really has to bring that out.
Ted Simons: The idea of course being that once you get this refinanced, once that all is lifted a little bit over your head or your neck, you have the money to go inject into the economy.
Catherine Reagor: Yes. And have you more money to spend because you can save $500 or a thousand a month. The problem is, it's not cutting principle. You're still under water on your mortgage.
Ted Simons: Well, yes.
Catherine Reagor: But right now, if you can't sell anyway, you love your home, or like your home, you're in a good neighborhood, a good school, a good shopping center, close to your job, and you can cut your payment by $500 a month, and it costs you very little? And doesn't take a lot of time? Seems you know--
Ted Simons: You mentioned earlier, a previous government program, previous plans, this particular program, didn't seem to hit a lot of folks in Arizona. This one seems like this could be a bit of a game-changer if everyone cooperates.
Catherine Reagor: Yes. The problem is the big questions, we did a live chat on this, people have rental homes. It has to be your primary house. You have to live there. What is sad is some people couldn't make their mortgage payments so they moved out, and now are renting them. But the Obama Administration is going to have to consider all these factors, because the market has changed so much. If you have a second mortgage, they're kind of blurry on whether you still qualify, but they're going to have to look at that because so many people do.
Ted Simons: Skeptics will say another government program, it's simply not going to work. Are you hearing that?
Catherine Reagor: Yes. And we're hearing -- the money is out there. They didn't spend it on the modifications, the money is there. But this rewards the people who have done everything right, and helps encourage people to stay in their homes instead of walking away because they owe too much. They owe more than their mortgage, and it could be a good thing. It could be a really good thing for Arizona and help slow foreclosures and stabilize home values.
Ted Simons: And no jumbo, you can't have missed more than one payment in the last year?
Catherine Reagor: Yes.
Ted Simons: And if you're upside down, good news for you. Hope there's a Fannie and Freddie in your portfolio as well.
Catherine Reagor: You can check that out. You’ll be surprised. They own most of the loans out there.
Ted Simons: How do you check that out?
Catherine Reagor: Makinghomeaffordable.gov is the federal website, and you can call your lender and figure it out, there are several ways to do it. If you're confused, email me at Catherine.Reagor@arizonarepublic.com and I'll help you.
Ted Simons: It’s good to have you on the show. We got you on for some good news for a change.
Catherine Reagor: Yeah, yes.
Ted Simons: Thank you.
Catherine Reagor: Thanks.
Saving for College
- Dr. April Osborn, Executive Director of the Arizona Commission for Postsecondary Education, talks about the value and affordability of a college education and programs that help families pay for college.
- Dr. April Osborn - Executive Director of the Arizona Commission for Postsecondary Education
| Keywords: Postsecondary Education
, college education
Ted Simons: The cost of higher education is on the rise. So is the amount of debt students are piling up due to college loans. According to a new report from the College Board, tuition and fees at public universities increased 8.3% this year, that's twice the rate of inflation. And students are now leaving college with an average of $22,000 in debt. Here to talk about the cost of a college education and how to pay for it is Dr. April Osborn, Executive Cirector of the Arizona Commission for Post Secondary Education. Good to have you here. Thanks for joining us.
Dr. April Osborn: Nice to be here.
Ted Simons: You're here talking about a section 529 savings plan. What is that?
Dr. April Osborn: I am. Um, in 1998, the federal government recognized that education costs were escalating. And they needed a way for moderate income families to prepare for these expenses. 80% of all financial aid comes from the federal government, but it goes to low-income families. So they set up a tax advantaged way for people to put money aside over time and prepare for those expenses.
Ted Simons: Now, you put the money aside, and you can go to any college of your choice?
Dr. April Osborn: Yes.
Ted Simons: And --
Dr. April Osborn: Any accredited college.
Ted Simons: Okay. And as far as Arizona's 529 plan, there are other states with their own 529 plans as well?
Dr. April Osborn: There are 49 529 plans.
Ted Simons: Almost everyone's got one.
Dr. April Osborn: Two of them consolidated.
Ted Simons: What differentiates Arizona's plan?
Dr. April Osborn: Well, our plan has one of the largest breadths of choices. We have three different program providers, these are financial institutions that manage the assets we have. We have also $623 million in assets representing about 66,000 students' accounts. That plan, because we have so many choices, allows a family to determine what risk level they want, and what kind of investments they're comfortable with. And we have two C.D.s, we were talking earlier about safety, we have C.D.s offered through the 529 plan that are FDiC ensured. And that's on a lot of people's minds right now. The principle is insured, the interest is not.
Ted Simons: And not all of the 529 plan there are other aspects in the plan that aren't insured as well. The C.D.s are.
Dr. April Osborn: Yes. We have mutual funds in a variety of choices as well.
Ted Simons: Is there a minimum investment required?
Dr. April Osborn: There is, but you can open an account for as little as $15 a month.
Ted Simons: $15 a month? That's a minimum investment?
Dr. April Osborn: Uh-huh.
Ted Simons: And are there income restrictions?
No. There are not income restrictions. So anybody that wants to put money away is allowed to put money away.
Ted Simons: The commission's role in this and in helping families pay for college, talk to us about that.
Dr. April Osborn: Well, the Arizona Commission for Post Secondary Education is the identified agency in the state to deliver student financial assistance. And that includes grants, forgivable loans, and the 529 plan. So that's the core responsibilities of our organization. And we're invested in college access
Ted Simons: Has that work changed here over the past few years?
Dr. April Osborn: Oh my goodness. Yes. Our grants are down 78%, which gives us even more pause to think about the 529 plan. And we're grateful that we have a chance to talk to people about it, because the costs are going up even higher in Arizona than the numbers that you said, because we had such low cost private institutions. They're no longer low cost, they're slightly above average. And our parents are not necessarily informed until maybe the year before college, and they have some challenges.
Ted Simons: More information on these 529 plans, where can people go?
Dr. April Osborn: Go to www.az529.gov
Ted Simons: While we got you here, the president today I believe talked about speeding up a loan repayment program, the payment program based on income. Basically speeding up the process.
Dr. April Osborn: Yes. We were celebrating in my office earlier, this is great news that actually came out yesterday. Several things, first, those that have loans that are nonconsolidated, they're allowing loans that were given by banks, we've just changed from independent loans and federal loans to all loans coming through the federal government, and they're encouraging consolidation, and when students consolidate, they may get as much as a half percentage interest rate reduction.
Ted Simons: Interesting. Correct me if I'm wrong here, debt forgiven after 20 years, if it's a 10% payment per month?
Dr. April Osborn: Yeah. That's the income-based repayment program. And that was instituted like a year ago, and now he's going back and moving the time line up so it goes to 2012. And changing the terms to benefit students. And the way they're being changed is they -- what happens is your discretionary income is figured and then you are expected to pay at least 15% of that discretionary income for 25 years in the original program. And then yesterday he announced it would be 20 years and only 10%. So that allows to you pay a lower amount per month and at the end of 20 years, it's forgiven whatever remains.
Ted Simons: You said in your office there was a big cheer when this was announced.
Dr. April Osborn: It was.
Ted Simons: Why was that?
Dr. April Osborn: Well, we talk to students and we talk to families all the time, and our student loan debt is higher than the national average. We're sitting at about 27,000 per student. $27,000 per student. So we have lots of conversations about loans, and also the consolidation is a great thing, because it's very confusing to students to have three different payees, and often they then end up defaulting or missing a payment, and it costs them more.
Ted Simons: Okay. Once again, that website for the 529 plan --
Dr. April Osborn: www.az529.gov
Ted Simons: Very good. Good to have you on the show. Thanks for joining us.
Dr. April Osborn: Thank you very much.