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March 1, 2002

Host: Michael Grant
Topic: "The Journalists' Roundtable"
In-Studio Guests:
Robbie Sherwood, reporter for the Arizona Republic;
Howard Fischer with Capitol Media Services;
Barrett Marson with The East Valley Tribune.

>> Michael: IT'S FRIDAY, MARCH 1, 2002. IN THE HEADLINES THIS WEEK, THE STATE SENATE HAS PASSED A BUDGET BILL THAT ERASES THE DEFICIT AND PRESERVES MOST PAY RAISES, BUT ITS FUTURE IN THE HOUSE IS LESS CERTAIN.

>>> A NEW STUDY SHOWS THE COST OF PRESCRIPTION DRUGS IN ARIZONA VARIES WIDELY, BUT SOME SEE IT AS A POLITICAL FOOTBALL.

>>> AND SPEAKING OF FOOTBALL, THE CITY OF MESA FACES A MONDAY DEADLINE TO SHOW HOW IT WILL BE ABLE TO PAY FOR THE ARIZONA CARDINALS' NEW STADIUM.

>>> GOOD EVENING. I'M MICHAEL GRANT. THIS IS THE JOURNALISTS' ROUNDTABLE. JOINING ME TO DISCUSS THESE AND OTHER STORIES ARE ROBBIE SHERWOOD, LEGISLATIVE REPORTER FOR "THE ARIZONA REPUBLIC"; HOWARD FISCHER WITH "CAPITOL MEDIA SERVICES"; AND BARRETT MARSON WITH "THE EAST VALLEY TRIBUNE."

>>> IT'S BEEN ANOTHER BATTLE OF THE BUDGET WEEK AT THE STATE'S CAPITOL. ON THURSDAY, THE STATE SENATE PASSED ITS VERSION OF A BUDGET BILL THAT WILL GET RID OF THE RED INK WHILE PRESERVING MOST OF THE EMPLOYEE PAY RAISES. ROBBIE, WHAT DO YOU THINK ITS CHANCES ARE OF MAKING IT THROUGH THE HOUSE?

>> Robbie: WELL, IN THIS FORMAT, PROBABLY NOT REAL GOOD. THE HOUSE IS STILL VERY UNCOMFORTABLE. ALTHOUGH THIS BUDGET LOOKS LIKE A LOT LIKE THE ONE THEY SENT OVER NOW, AFTER A LOT OF WRANGLING, A LOT OF THE CUTS AND FUND SWEEPS ARE SIMILAR TO WHAT THE HOUSE PASSED OVER. THEY JUST STILL CANNOT STOMACH THE IDEA OF A PAY RAISE. IT ONLY COSTS, YOU KNOW, SOMETHING LIKE $5 MILLION IN 2002, BUT IT EXTRAPOLATES OUT TO $95 MILLION OVER ITS COURSE IN THE NEXT YEAR, AND NEXT YEAR IS WHEN WE ARE FACING A BILLION DOLLAR BUDGET DEFICIT, AND THEY ARE DIGGING IN OVER THAT ISSUE. THEY ARE SAYING IF WE DO THIS, WE'LL HAVE TO LAY OFF BETWEEN 2300 TO 2500 STATE EMPLOYEES, AND THAT'LL BE ON THE HEADS OF THE DEMOCRATS, NOT THEM, IF THIS GETS THROUGH.

>> Michael: BUT, DOESN'T THE SENATE OR READ HERE, I GUESS, PRIMARILY, THE DEMOCRATS, HAVE THE UPPER HAND IN THIS THING FROM A NEGOTIATING STANDPOINT AT LEAST, BECAUSE THE PAY RAISE IS IN LAW? YOU CAN DO NOTHING AND IT WILL TAKE EFFECT.

>>Robbie: THAT'S A CARD THEY CAN PLAY. THE DELAY CARD IS SOMETHING YOU'VE SEEN, THAT'S WHY WE'VE BEEN SITTING HERE TALKING ABOUT NOTHING BUT THE BUDGET FOR TWO WEEKS. THEY HAVEN'T ALLOWED ANYTHING ELSE TO HAPPEN, AND THAT APRIL 1st DEADLINE IS SOMETHING THAT THEY CAN USE. THE WAY THAT THE PREGAME TALK, THE NEGOTIATIONS, IT LOOKS LIKE THEY'RE GOING TO LAST A LONG TIME, SO --

>> Howard: IT GOES A STEP BEYOND THAT. IT EVEN MEANS IF THE LEGISLATURE PASSES SOME SCALED-BACK PROPOSAL THAT THE GOVERNOR DOESN'T LIKE, IF SHE VETOES THAT, WE'RE BACK TO THE ORIGINAL 5%. THEY ARE REALLY IN THE CATBIRD'S SEAT BECAUSE OF THE 5% IN LAW. THIS IS A PROPOSAL THAT THE SENATE PUT OUT AND IT DOESN'T REALLY PLEASE ANYONE. IT SAYS ANYBODY MAKING UNDER $55,000 A YEAR, YOU'LL GET 5% WITH A MINIMUM $1500 FLOOR. FROM 55 TO 82-2 YOU'LL GET 3-1/2%. ANYTHING OVER 82-2, YOU GET NOTHING.

>>Robbie: YOU GET AN APOLOGY.

>>Howard: EXACTLY.

>> Michael: AND A SWEATER. DON'T FORGET THE SWEATER.

>> Howard: WELL, THAT SWEATER COULD BE IMPORTANT, AT LEAST MAYBE IT COULD HAVE AN ASU LETTER OR SOMETHING. THE UNIVERSITIES ARE REALLY TICKED OFF. THEY ARE SUFFERING WHAT THEY CALL A BRAIN DRAIN. ASU HAS 600 PEOPLE ON THE GENERAL FUND WHO ARE OVER THAT LEVEL; U OF A HAS 800 PEOPLE. THESE ARE THE VERY PEOPLE WHO BRING IN THE RESEARCH DOLLARS, THESE ARE THE PEOPLE WHO ATTRACT THE GRADUATE STUDENTS. THESE ARE THE PEOPLE WHO ALSO ARE BEING SOUGHT BY OTHER UNIVERSITIES. AND TO THE EXTENT YOU SAY WE DON'T LIKE YOU, WE DON'T THINK ENOUGH OF YOU TO GIVE YOU A RAISE ALONG WITH EVERYONE ELSE, THAT BECOMES REAL PROBLEMATIC.

>> Robbie: THREE QUARTERS OF THE PEOPLE IN THIS POOL ARE UNIVERSITY EMPLOYEES.

>> Michael: GIVE ME A BROAD OUTLINE, ROBBIE. I MEAN, MOST OF THIS $200 MILLION REALLY IS BEING MADE UP NOT BY BUDGET CUTS, BECAUSE WE'RE SO DELAYED, BUT WITH FUND SWEEPS AND OTHER THINGS, RIGHT?

>> Robbie: BUDGET CUTS, THAT YOU WOULD IMAGINE IS NOT POSSIBLE AT THIS POINT IN THE FISCAL YEAR, SO WHAT THEY'VE DONE, THEY ARE SWEEPING UP LOOSE CHANGE FROM A VARIETY OF DIFFERENT AREAS. PROBABLY THE BIGGEST BITE THAT THEY GOT IS FROM SCHOOL CONSTRUCTION MONEY OR UPKEEP MONEY. THIS IS MONEY THAT THE SCHOOL FACILITIES BOARD HAS BEEN ALLOCATED THIS YEAR BUT CAN'T POSSIBLY SPEND. THEY CAN'T BUILD SCHOOLS FAST ENOUGH. THE QUESTION IS -- AND THEY SAID, SURE TAKE IT IN 2002, WE CAN'T USE IT. THE QUESTION IS, WILL THEY NEED IT IN 2003, THERE IS A LOT OF DEBATE ABOUT THAT. IF THEY DON'T NEED IT, THEN IT BECOMES A SUSTAINABLE CUT, IT'S A MOVE THEY CAN REPEAT TO THE TUNE OF MAYBE $60 MILLION DOLLARS NEXT YEAR, AND IT WILL HELP THEM OUT. IF THE SCHOOLS NEED THAT MONEY, THEN YOU'VE GOT PROBLEMS. THEY SPARED THE HERITAGE FUND, BUT THEY ONLY SPARED IT BECAUSE THEY NEED AN OPTION NEXT YEAR.

>> Michael: THEY WANT TO WHACK IT NEXT YEAR.

>> Robbie: YEAH, THEY'RE STILL IN TROUBLE. THE STATE LAKES IMPROVEMENT FUND, THEY TOOK $5 MILLION, TOOK $10 MILLION FROM THE TOBACCO EDUCATION FUND. THEY NICKEL AND DIMED IT PRETTY GOOD IN A LOT OF DIFFERENT WAYS. THERE WAS A PRETTY CONTROVERSIAL PIECE THAT THE HOUSE SENT OVER FOR THE MENTAL HEALTH FUNDING. ABOUT TWO YEARS AGO, THE LEGISLATURE APPROVED $50 MILLION FOR COMMUNITY HOUSING FOR MENTAL PATIENTS, THE SERIOUSLY MENTALLY ILL. IT WAS PAID OUT IN THREE INSTALLMENTS. THE HOUSE WOULD HAVE TAKEN THE ENTIRE THIRD INSTALLMENT OF THAT $19 MILLION AT A TIME WHEN THERE IS A WAITING LIST OF A THOUSAND PEOPLE FOR THIS HOUSING. THE SENATE PLAN ONLY TAKES $9 OF THAT AND LEAVES $10 MILLION. WE'VE STILL GOT A PROBLEM. LIKE I SAY, THERE'S A LOT OF PEOPLE WAITING FOR THIS HOUSING.

>> Howard: AND THAT BECOMES A CRUCIAL ISSUE BECAUSE THAT CASE COMES -- STEMS FROM A LAWSUIT FILED AGAINST STATE GOING BACK TO 1980 ABOUT WHAT CARE WE PROVIDE TO PEOPLE. WE'VE DEINSTITUTIONALIZED FOLKS, WE'VE GOTTEN FOLKS OUT OF THE STATE HOSPITAL, AND THEN WE SAY WE'LL TAKE CARE OF THEM, AND NOW WE'RE NOT PROVIDING THE FUNDING TO SETTLE THAT CASE. THE SAME THING WITH THE SCHOOL STUFF. SOME OF THE MONEY BEING TAKEN IS SCHOOL CONSTRUCTION, BUT SOME OF IT IS THIS BUILDING RENEWAL FUND TO KEEP THE SCHOOLS FROM FALLING APART, AND IT'S VERY HARD BECAUSE WE'RE PUTTING OURSELVES IN VIOLATION OF SETTLING THAT LAWSUIT.

>> Robbie: IT'S NOT AN ISSUE RIGHT THIS SECOND BECAUSE THE STATE IS SPENDING A LOT OF MONEY TO BRING SCHOOLS UP TO STANDARD. IT'S ANOTHER PART OF THE SCHOOL FACILITIES BOARD, BUT ONCE THEY DO -- IN 2003, EVERY SCHOOL SHOULD BE A LIVABLE SITUATION -- THEY ARE GOING TO NEED THAT MONEY TO KEEP IT THAT WAY. AND THEY ARE AFRAID THAT A LOT OF IT IS NOT GOING TO BE THERE, AND THE MOMENT THAT THEY ASK FOR IT AND IT'S NOT THERE IS THE MOMENT THAT WE GET DRAGGED BACK INTO COURT.

>> Howard: LET ME GO HALF STEP BEYOND THAT. THIS IS NONREVERTING MONEY. IT'S NOT A QUESTION OF TELLING THE SCHOOLS WHEN YOU NEED IT, IT'LL BE THERE. THE SCHOOLS ARE SUPPOSED TO BE GETTING THAT AND BANKING IT, SO WHEN THEY DO NEED A NEW ROOF, THEY DO NEED SOMETHING ELSE, THEY ARE SUPPOSED TO HAVE THE MONEY THERE, BUT THEY ARE NOT GETTING THE FIRST PAYMENT.

>> Michael: ALL RIGHT. SO WHAT HAPPENS NEXT WEEK IN THE HOUSE?

>> Howard: WELL, THE HOUSE WILL OFFICIALLY GET THE SENATE PROPOSAL. THEY WILL, AS ROBBIE SUGGESTED, REJECT IT, AND THEN WE GO INTO CONFERENCE. NOW, WE KNOW THAT THE GOVERNOR IS GOING TO COME BACK AND STILL INSIST THERE WILL BE NO PAY RAISE, BUT EVEN PEOPLE LIKE CAROLYN ALLEN, THE HOUSE MAJORITY LEADER, AND JIM WEIERS IS SAYING SOMETHING HAS GOT TO BE IN HERE, IF NOT FOR THIS FISCAL YEAR, THE MONEY FOR NEXT YEAR. MY GUESS IS THEY COME BACK WITH A PAY HIKE THAT KICKS IT RIGHT BE BEFORE THE END OF THE FISCAL YEAR, PERHAPS JUNE 29th, AND PERHAPS SOMETHING AT 2-1/2% WITH A LOWER FLOOR. NOW WE'RE BACK TO THE SITUATION WITH THE SENATE DEMOCRATS.

>> Michael: THE Ds SEEMED PRETTY RESOLUTE THAT THEY ARE NOT --

>> Howard: THAT REALLY BECOMES THE KEY. AT WHAT POINT DO THE DEMS SAY WE'RE LOOKING BAD. AT WHAT POINT DO YOU TAKE WHAT YOU CAN GET AND GO WITH IT, AND WHAT POINT DO YOU SAY WE'RE JUST GOING TO STICK HERE AND GET THE 5% ANYWAY, AND MAYBE THE BAD PRESS THAT GOES WITH THAT.

>> Robbie: ONE POLITICAL SCENARIO ON THIS THING, NOT ALL OF THE DEMOCRATS VOTED FOR THE BUDGET, FOR A VARIETY OF INDIVIDUAL REASONS, THREE OR FOUR OF THEM DIDN'T DO IT. POLITICALLY THEY MAY END UP HAVING TO GIVE UP ON THE RAISE, AND THEY'LL HAVE CURRENCY AND SAY WE FOUGHT THE GOOD FIGHT FOR THE RAISE AND THESE BIG JERKS TOOK IT AWAY FROM YOU, VOTE FOR US. WHAT WILL HAPPEN IS A MAYBE FEW DEMOCRATS WILL PEEL OFF AND VOTE WITH THE REPUBLICANS IN THE SENATE TO APPROVE HOWEVER THEY REMAKE THE BUDGET AND THAT MIGHT BE THE END OF THIS THING.

>> Michael: BARRETT, ONE OF THE OTHER -- NOW GOING TO THE '03 BUDGET WHICH LOOMS IN THE WINGS, ONE OF THE OTHER THINGS THAT HAPPENED THIS WEEK IS THIS CLASS ACTION SUIT ON DIVIDENDS FROM THE 1980s HAS BEEN LOOMING LIKE AN 800 POUND OR PERHAPS AN $800 MILLION GORILLA, AND IT LOOKS LIKE IT IS A GIANT SHOE THAT IS GOING TO DROP. "THE TRIBUNE" HAS TAKEN A LOOK AT WHETHER OR NOT THE RECORDS ARE THERE TO TRACK THE TAXPAYERS. CAN THEY FIND OUT WHO THEY NEED TO PAY THE MONEY TO?

>> Barrett: ONE WAY OR ANOTHER THEY ARE GOING TO FIND OUT BECAUSE THE IRS CAN HELP OUT. DOR AT ONE POINT SAID THEY HAD MISPLACED OR POSSIBLY LOST SOME OF THE RECORDS, BUT AMAZINGLY THEY FOUND THOSE TAPES THAT WILL ALLOW THEM TO FIND AT LEAST MOST OF THE 600,000 OR SO PEOPLE THAT WROTE FROM $300 MILLION TO $600 MILLION.

>> Michael: GOVERNOR GOING TO -- I UNDERSTAND SHE'S PLANNING ON CUTTING LOOSE HER PLAN FOR '03, MIDDLE OF NEXT WEEK. SHE'S NOW GOT TO FACTOR AT LEAST SOME PORTION OF THAT INTO THE BUDGET '03 SITUATION?

>> Robbie: I THINK IT'S A PRETTY SAFE GUESS. MOST PEOPLE BELIEVE THIS IS A SITUATION NOT TO BE DEALT WITH MOSTLY BEYOND 2004 BECAUSE OF THE LOGISTICS OF FINDING THESE PEOPLE AND CUTTING THE CHECKS. BUT THERE IS A PRETTY GOOD BELIEF OR PRETTY STRONG BELIEF THAT AT LEAST PART OF IT IS GOING TO HAVE TO BE STARTING TO BE PAID IN 2003 WHEN WE REALLY HAVE A BUDGET PROBLEM. I THINK THE GOVERNOR'S PLAN AND HOUSE PLAN WILL INCORPORATE $50 MILLION TO $80 MILLION CUSHION OR DEAL WITH IT.

>> Barrett: ABSOLUTELY. THE GOVERNOR INDICATED THAT -- THE GOVERNOR'S OFFICE INDICATED THAT THEY WOULD PUT IN A SUBSTANTIAL AMOUNT OF MONEY FOR THIS LAWSUIT.

>> Michael: INTERESTINGLY ENOUGH, BARRETT, IF THE BULLET HAD BEEN BITTEN A COUPLE OF YEARS AGO, IT OBVIOUSLY WOULD HAVE BEEN EASIER TO ABSORB THAN IT IS.

>> Barrett: WELL, IF THIS HAD NEVER GONE TO COURT, IF THEY WOULD HAVE JUST SETTLED WITH THE ONE TAXPAYER, IT WOULD HAVE BEEN A LOT EASIER.

>> Michael: THAT'S AN EXCELLENT POINT.

>> Barrett: BUT THEY TOOK THE GAMBLE AND IT WAS A LONG SHOT, THAT MS. LUDWIG WOULD WIN, BUT THEY LOST.

>> Howard: THAT WAS THE INTERESTING THING, BECAUSE UP UNTIL THIS POINT, THE COURTS IN ARIZONA HAD NEVER RECOGNIZED THE ABILITY TO FILE A CLASS ACTION LAWSUIT ON INCOME TAXES. THE ASSUMPTION WAS EACH AND EVERY TAX FILER HAD TO FILE HIS OR HER OWN CLAIM AND GO THROUGH THE ADMINISTRATIVE PROCEDURES. AS SO AS MUCH AS EVERYONE WOULD LIKE TO BLAME THE ATTORNEY GENERAL'S OFFICE FOR PURSUING THIS, IN FACT MARK KILLIAN WHO IS DIRECTOR OF THE DEPARTMENT OF REVENUE SAID I WAS THE ONE WHO TOLD THE ATTORNEY GENERAL THAT WE WERE BOUND TO WIN. LAST AUGUST 30th WHEN THE SUPREME COURT CAME DOWN AND SAID YOU CAN DO CLASS ACTION, I THINK THAT, YOU KNOW, MARK KILLIAN JUST SAT THERE PROBABLY JUST OUGHT OF BREATH BECAUSE HE SAID HOW COULD THIS HAVE HAPPENED?

>> Robbie: THEY DID WIN AT EVERY STEP OF THE WAY UNTIL THE LAST ONE.

>> Michael: HOWIE, I'M NOT QUITE SURE I UNDERSTAND WHAT HELD UP TEMPORARILY THIS WEEK SOME PROPOSITION 301-RELATED SCHOOL MONEY. WHAT WAS GOING ON THERE?

>> Howard: WELL, VOTERS APPROVED PROP 301 MONEY IN NOVEMBER OF 2000. THAT'S GOING TO GENERATE $450 MILLION FOR EDUCATION, MOST FOR K-12. BACK IN 1980, VOTERS APPROVED A CAP ON SCHOOL EXPENDITURES. IT HASN'T BEEN A PROBLEM UNTIL NOW. NOBODY CONSIDERED WHEN THEY PUT PROP 301 ON THE BALLOT THAT THEY NEEDED TO ADJUST THE CAP FOR ALL THE NEW REVENUES COMING IN. THEY DID HAVE SOMETHING IN LAW THAT SAID BY NOVEMBER 1st, THE SCHOOL SUPERINTENDENT IS SUPPOSED TO REPORT TO THE LEGISLATURE THAT WE'RE UP AGAINST THE CAP. WELL, JAIME MOLERA FOR ONE REASON OR ANOTHER, AND HE'S FINALLY ACCEPTED RESPONSIBILITY, DIDN'T GET TO IT ESSENTIALLY UNTIL THIS PAST WEEK. AND WHEN HE GOT TO THEM, FIRST HE SAID OH, WE'RE $100 MILLION UNDER THE CAP. THEN HE SAID IF YOU COUNT LAST YEAR'S CARRY-FORWARD, WE'RE $122 MILLION OVER THE CAP AND IF YOU DON'T ACT BY FRIDAY, TODAY, THE SCHOOLS CAN'T SPEND THE MONEY, WHICH MEANS EVERY DISTRICT WILL HAVE TO CUT BACK PROPORTIONALLY TO THE TUNE OF $150 A STUDENT. WELL, THE LAWMAKERS WEREN'T HAPPY WITH THE DELAY; THEY WEREN'T HAPPY WITH HIS EXPLANATION. SCOTT BUNGAARD SAID HE WAS HOLDING THE BILL TO HELP PRESERVE IT. HE WAS THROWING A LITTLE BIT OF A FIT. ESSENTIALLY WHAT HAPPENED IS FINALLY YESTERDAY THEY FINALLY CLEARED IT OUT.

>> Michael: ROBBIE, LAST QUESTION, THE REGULAR SESSION, OBVIOUSLY HAS GROUND TO A HALT FOR A COUPLE OF WEEKS OR SO. ASSUMING WE GET PAST THIS, WE'VE GOT TO GET PAST IT AT SOME POINT IN TIME, WHAT HAS THIS DONE TO REGULAR SESSION BUSINESS, TIMING, '03 BUDGET, THOSE KINDS OF THINGS?

>> Robbie: I THINK IT'S THROWN A HUGE WRENCH IN THE GEARS TO COP A CLICHE, BECAUSE THERE WILL BE BILLS ON THE RUNWAY THAT HADN'T GOTTEN THROUGH THE PROCESS. THERE IS NOT ENOUGH TIME FOR THEM TO GET THROUGH. SO THERE WILL BE A HUGE AMOUNT OF DEAD LEGISLATION THAT HAD NOTHING TO DO WITH THE MERITS, IT JUST WON'T BE ABLE TO GET TO THE FINISH LINE. THESE ARE THINGS THAT PEOPLE ARE PROBABLY COUNTING ON TO SAY, LOOK AT THIS BILL I SPONSORED, WHEN THEY WERE RUNNING FOR REELECTION. IT WOULD HURT THEM.

>> Barrett: THE LAST THING THEY WANT TO DO IS SPEND TIME AT THE LEGISLATURE WHEN SHE THEY NEED TO BE SPENDING TIME CAMPAIGNING.

>> Michael: THAT'S TRUE.

>>> Michael: A SETTLEMENT HAS BEEN REACHED WITH ARTHUR ANDERSEN IN THE BAPTIST FOUNDATION CASE. THAT'S A BIG DEVELOPMENT.

>> Howard: THIS IS A MAJOR DEVELOPMENT. THIS IS THE LARGEST EVER RESTITUTION CASE IN THE HISTORY OF THE STATE. YOU MAY REMEMBER, BAPTIST FOUNDATION WAS OFF SELLING SECURE INVESTMENTS, TO ELDERLY PEOPLE WHO WERE CHURCH MEMBERS, SAYING "LOOK, WE ARE VERY SECURE, WE'VE GOT MONEY GOING OUT, WE'VE GOT MONEY COMING IN, A BIG FIVE ACCOUNTING FIRM HAS AUDITED OUR BOOKS," AND PEOPLE PUT IN THE MONEY. WELL, COME TO FIND OUT ESSENTIALLY BFA WAS RUNNING A PONZI SCHEME. THEY WERE BRINGING IN NEW MONEY TO PAY OFF OLD INVESTORS, AND ARTHUR ANDERSEN GOT INVOLVED BECAUSE THEY WERE AUDITING BOOKS AND GAVE THEM A CLEAN BILL OF HEALTH. NOBODY AT ANDERSEN SEEMED TO BE ABLE TO RECOGNIZE WHAT WAS GOING ON HERE, THEY HAD -- IT WAS VERY MUCH LIKE ENRON. THEY HAD SUBSIDIARIES AND OFF-THE-BOOKS TRANSACTIONS. WELL, BFA WENT BANKRUPT IN 1999. THERE IS NO MONEY TO BE HAD THERE FROM THEIR OFFICERS. SOME OF THEM ARE UNDER CRIMINAL INDICTMENT. THERE IS A FEW ASSETS. WHERE DO YOU GO? YOU ARE AFTER THE DEEP POCKET, AND THE DEEP POCKET IS ANDERSON. TODAY, SEVERAL DAYS BEFORE -- WHEN THE FIRST CASE WAS SUPPOSED TO GO TO TRIAL, ANDERSON CAME IN AND SAID, HERE'S THE DEAL, WE'LL GIVE YOU $217 MILLION, AND YOU PUT THAT INTO THE POT, ALONG WITH $21 MILLION FROM JENNINGS STROUSS SALMON, THE LAWYERS, AND $49 MILLION THAT HAS BEEN DISTRIBUTED FROM THE ASSETS AND $220 MILLION OF THE BFA ASSETS, WHAT'S LEFT, ALL OF A SUDDEN, EVEN AFTER YOU DEDUCT THE LEGAL FEES, YOU'RE UP TO $471 MILLION. THE LOSSES WERE $570 MILLION AND PEOPLE SAY WAIT A SECOND, THAT'S NOT THE WHOLE THING, BUT THE RECORD IS, IN MOST CASES OF SECURITIES FRAUD AND BANKRUPTCY, YOU'LL LUCKY TO GET 10 CENTS ON THE DOLLAR.

>> Robbie: THERE IS A COUPLE GOOD REASONS WHY THIS IS A REAL GOOD DEAL. THIS IS 83 CENTS ON THE DOLLAR FOR THESE PEOPLE. IT'S AMAZING THAT THEY ARE GETTING THAT MUCH OF THEIR MONEY BACK. AND, YOU KNOW, ARTHUR ANDERSEN HAS OTHER PROBLEMS, BIGGER PROBLEMS. THEY ARE NECK DEEP IN THIS ENRON THING, AND THERE'S A POTENTIAL PAYOUT FROM THEM OF $700 MILLION TO THE ENRON FOLKS. THEY NEED TO TAKE WHAT THEY CAN GET NOW WHILE THEY CAN.

>> Howard: AND THAT BECOMES A VERY CRUCIAL ISSUE. AGAIN, TRYING TO CHOOSE A JURY MONDAY. TRY TO FIND A JUROR WHO DOES NOT KNOW THAT ANDERSEN WAS THE ACCOUNTING FIRM FOR ENRON. DO ALL OF THE VOIR DIRE YOU WANT, YOU MAY HAVE A PROBLEM GETTING A JURY POOL. SO FROM ANDERSEN'S PERSPECTIVE, IT WAS GOOD TO GET THIS THING SETTLED. FROM THE STATE'S PERSPECTIVE, THEY ARE WORRIED ABOUT A BIG SETTLEMENT WITH ENRON AND PERHAPS EVEN BANKRUPTCY. SO THE WAY THIS DEAL IS STRUCTURED --

>> Michael: TAKE THE MONEY AND RUN.

>> Howard: NOT ONLY TAKE IT AND RUN, ANDERSEN WILL PUT THAT MONEY INTO AN ESCROW ACCOUNT THAT EVEN IF ANDERSEN DECLARES BANKRUPTCY, THIS $217 MILLION WILL BE PROTECTED AND CANNOT BE TAKEN OVER AS PART OF THE BANKRUPTCY.

>> Michael: ANY INDICATION WHEN ACTUAL CHECKS MIGHT BE GOING OUT TO INVESTORS?

>> Howard: YOU COULD THEORETICALLY HAVE SOME CHECKS GOING OUT BY THE END OF THE YEAR. THERE'S SOME THINGS THAT NEED TO HAPPEN. BECAUSE THIS SETTLES FOUR DIFFERENT LAWSUITS -- IT SETTLES THE TRUST ACCOUNT LAWSUITS AGAINST ANDERSEN; IT SETTLES THE CLASS ACTION LAWSUIT AGAINST ANDERSON; IT SETTLES THE CORPORATION COMMISSION'S LAWSUIT AGAINST ANDERSEN FOR SECURITIES SALES; AND SETTLES THE ACCOUNTANCY BOARD ACTIONS AGAINST ANDERSEN BECAUSE OF THE SLOPPY PRACTICES. YOU'VE GOT TO SEND OUT NOTICES TO CLASS MEMBERS, AND THEY WILL HAVE A CHANCE TO OPT OUT. WITHIN 60 DAYS, THEY WILL COME BACK AND TELL THE JUDGE WE'VE SETTLED, AND THEN YOU HAVE SOME PROCEDURES TO TRY TO FIGURE OUT WHO IS OWED MONEY, FINDING THESE PEOPLE, AND THEN PERHAPS GETTING OUT THE FIRST CHECKS BY THE END OF THE YEAR. NOW, NOT ALL OF THIS WILL BE SETTLED THIS YEAR, BECAUSE SOME OF THE ASSETS, THAT $220 MILLION, IS IN LAND, AND IN FACT, YOU DON'T WANT TO SELL LAND GIVEN THE WAY THE MARKET IS NOW. YOU MAY BE BETTER OFF HOLDING OUT.

>> Michael: ATTORNEY GENERAL JANET NAPOLITANO IS TALKING ABOUT DRUG PRICES AGAIN, ROBBIE. WHY DO SOME SEE THAT AS A POLITICAL ISSUE?

>> Howard: ARE WE TALKING LEGAL OR ILLEGAL DRUGS HERE?

>> Robbie: WELL, BECAUSE THERE IS A LEGITIMATE QUESTION, WHY DOES THE ATTORNEY GENERAL CARE ABOUT PRESCRIPTION DRUG PRICES. SHE LOOKED INTO IT LAST YEAR AND THERE'S NO RACKETEERING OR ANYTHING TO DO WITH THAT. IT TURNS OUT SHE DID A SURVEY AND YOU CAN GET ONE PRESCRIPTION, IT MIGHT COST YOU $20 IN ONE PART OF TOWN AND $5 IN ANOTHER AND IT CERTAINLY COSTS A LOT LESS IN MEXICO, THANKS FOR THE INFO. WHAT BUGS PEOPLE ABOUT THIS, PARTICULARLY PEOPLE RUNNING AGAINST JANET NAPOLITANO FOR GOVERNOR, IS THAT SHE CAN CALL A PRESS CONFERENCE AND THE PRESS WILL SHOW ,UP AND THEY'LL PUT HER NAME IN A STORY, AND THEY DON'T HAVE THAT SAME KIND OF PULL, AND THEY THINK THAT, YOU KNOW, SHE'S JUST CALLING PEOPLE AROUND. YOU NOTICE -- HOWIE IS A THEORIST ON THIS AND THAT'S WHY HE DIDN'T MENTION --

>> Howard: LOOK, THE FACT IS, JANET NAPOLITANO CALLS A PRESS CONFERENCE AND THE TV SHOWS UP. LIKE THIS SHOW, I HAVE PEOPLE COME UP TO ME AND SAY, YOU LOOK GOOD ON THE SHOW. THEY DON'T REMEMBER WHAT I SAID. IT'S THE SAME THING. JANET NAPOLITANO GETS 30 SECONDS ON THE EVENING NEWS, YOU'VE BOOSTED HER RATING BY 3 POINTS FOR THE UPCOMING GUBERNATORIAL RACE.

>> Barrett: I ALWAYS REMEMBER WHAT YOU SAY, HOWIE.

>> Howard: WELL, YOU'RE A SICK PUPPY.

>> Michael: I WAS GOING TO SAY, I CAN'T BELIEVE THEY SAY YOU LOOK GOOD, HOWIE.

>> Howard: OW.

>> Michael: I'M SORRY.

>> Howard: THIS IS AN INTERESTING QUESTION. THE FIRST TIME THAT JANET DID THE PRESCRIPTION DRUG PRICE SURVEY, SHE SAID WE HAVE RESPONSIBILITY FOR ANTI-TRUST, AND IN FACT THEY HAD BROUGHT LAWSUITS AGAINST MANUFACTURERS FOR ANTI-TRUST. WE NEEDED TO DO THE SURVEY TO MAKE SURE THERE WAS NO ANTI-TRUST AT THE RETAIL LEVEL. OKAY, WE'VE DETERMINED THAT. HAVING DETERMINED THAT, WHY DO YOU THEN GO BACK, AND AS ROBBIE SAYS, POINT OUT THE OBVIOUS? GUESS WHAT, IT'S CHEAPEST IN MEXICO. THEN YOU GO TO A SAM'S CLUB; IT'S CHEAPER THERE THAN IT IS AT TARGET; IT'S CHEAPER AT TARGET THAN IT IS AT THE MOM AND POP DRUG STORE. WELL, DUH.

>> Barrett: WERE THE RESULTS ANY DIFFERENT THAN LAST YEAR WHEN SHE DID THIS?

>> Howard: THE ONLY DIFFERENCE WAS THAT THE PRICES HAVE ALL GONE UP TWICE AS FAST AS INFLATION, BUT THE RESULTS WERE REALLY NO DIFFERENT.

>> Robbie: THIS IS ABOUT THE EASIEST PICKINGS FOR THE NAPOLITANO CRITICS OUT THERE. I GOT A CALL FROM -- OR NO, CONFRONTED BY A SALMON MINION WHO WAS COMPLAINING ABOUT THE SIZE OF A NAPOLITANO PICTURE WHEN WE REPORTED THAT SHE WAS GOING TO ARGUE BEFORE THE SUPREME COURT. THIS IS A STORY THAT RAN B-7. SO YOU KNOW, THEY HAVE PRETTY THIN SKIN ABOUT THIS BUT --

>> Michael: THIS WEEKEND MESA OFFICIALS WILL BE WORKING TO MAKE A MONDAY DEADLINE REGARDING ITS PROPOSALS FOR THE ARIZONA CARDINALS FOOTBALL STADIUM. BARRETT, SORRY ABOUT YOUR COLD. WHAT IS MESA TRYING TO SOLVE?

>> Barrett: I'M A TROOPER.

>> Michael: YOU ARE A TROOPER. YOU AND HOWIE LOOK VERY GOOD ON THIS SHOW. YOU, TOO, ROBBIE.

>> Barrett: MESA HAS A $33 MILLION SHORTFALL TO OVERCOME, AND IT HASN'T BEEN ABLE TO YET. IT'S TALKING TO EVERYBODY, BUT IT HASN'T BEEN ABLE TO SIGN ANY DEALS, IT'S NOT VERY CLOSE TO SIGNING ANY DEALS RIGHT NOW. AND SO THEY ARE GOING TO WORK PROBABLY THROUGH THE WEEKEND, TRY AND COME UP WITH SOMETHING THAT THE TSA WILL LIKE ON TUESDAY WHEN TSA MEETS TO WHITTLE DOWN TWO OR THREE SITES.

>> Michael: EAST VALLEY PARTNERSHIP TRYING TO -- I DON'T KNOW, BANG SOME HEADS THIS MORNING AND NOT BEING ABLE TO BANG VERY MANY HEADS?

>> Barrett: WELL, YOU KNOW, THE PALESTINIANS AND THE ISRAELIS HAVE MORE IN COMMON RIGHT NOW THAN TEMPE AND MESA. THE TWO CITIES DON'T SEE EYE TO EYE ON THE STADIUM THING, AND BOTH ARE BEING INTRANSIGENT, BOTH REFUSE TO MOVE FROM THEIR POSITIONS. SO THERE WAS A MEETING HELD TODAY TO TRY TO GET THEM TO TALK. FORGET SINGING "KUM BA YAH," JUST GET THEM TO SING A FEW BARS OF "99 BOTTLES OF BEER ON THE WALL."

>> Howard: AND THIS IS GOING TO BE REAL INTERESTING, BECAUSE WITH GLENDALE HAVING DROPPED OUT EARLY, WITH THE DOWNTOWN SITE GONE, AND THE 40th STREET SITE GONE, THE CITY OF PHOENIX NOT GOING TO TAKE IT TO THE BALLOT, ALL THAT'S LEFT ON A THEORETICAL BASIS IS TEMPEA/MESA AS THE FRONT RUNNER. IF THESE GUYS CAN'T GET THEIR ACT TOGETHER, ALL WE'RE LEFT WITH IS THE INDIAN RESERVATION SITES.

>> Barrett: AND THE TSA LIKES THE GILA RIVER SITE. THEY'VE ALREADY STARTED DEVELOPING THE HOTELS. THEY HAVE THE GOLF COURSE THERE, AND SO THEY'VE GOT -- THEY ARE MAKING A DESTINATION WITHOUT THE STADIUM.

>> Michael: IS MESA GAMBLING, ESSENTIALLY, THAT THE NFL, AND FOR THAT MATTER, MAYBE THE TSA WILL NEVER BE COMFORTABLE WITH THE STADIUM ON RESERVATION LAND?

>> Barrett: YOU KNOW, THE TSA SAYS THEY CAN PUT 7 OR 800 LAWYERS IN AN OFFICE AND POUND OUT AN AGREEMENT ON THE FOREIGN SOVEREIGNTY ISSUES AND THE INDIAN LAND. THERE ARE ISSUES WITH THAT CONCEPT. THERE ARE PEOPLE WHO HAVE PROBLEMS WITH PUTTING THIS PUBLIC FACILITY ON BASICALLY A NONPUBLIC LAND, AND SO, THAT WILL BE AN ISSUE IN THE COMING WEEKS.

>> Robbie: NOT TO MENTION JURISDICTIONAL STUFF. THE INDIANS DEAL WITH THINGS ON A FEDERAL LEVEL, SO ALL OF A SUDDEN YOU MIGHT BE INJECTING THE FEDERAL GOVERNMENT IN UNTOLD COMPLICATED WAYS.

>> Howard: LET ME TELL YOU, THE OTHER FUNNY PIECE TO THIS, THE STADIUM WAS SOLD TO LEGISLATORS AND VOTERS AS WE'LL BRING IN SALES TAXES, WE'LL HAVE BUSINESSES SURROUNDING IT, LOOK AT HOW WE'LL HELP BRING BACK MONEY TO THE STATE. WAIT A SECOND, IF YOU PUT IT ON THE INDIAN COMMUNITY, THE HOTELS AROUND THERE ARE NOT COLLECTING SALES TAX, NECESSARILY.

>> Barrett: NOT NECESSARILY, BECAUSE IF THE HOTEL IS, SAY, OWNED BY THE RESERVATION, BUT OPERATED BY HILTON, THEY HAVE TO PAY SALES TAX. YOU KNOW, THE SAME KIND OF TAXES AS ANY HOTEL IN PHOENIX OR MESA WOULD PAY. THE ONLY DIFFERENCE IS THE LOCAL TAX RATE, WHICH THE COMMUNITY WOULD SET ITSELF. BUT THEY WOULDN'T PAY THE TSA TAX, FOR INSTANCE, AND THE STATE SALES TAX.

>> Howard:BUT THAT COMES DOWN TO AN OPERATIONAL THING THERE, BECAUSE WE WENT THROUGH THIS WITH THE PAVILIONS. IT OPERATES ON THE SALT RIVER INDIAN RESERVATION, AND THERE'S A LOT OF INTERESTING CASE LAW COMING OUT OF THE 9th CIRCUIT ON THAT WHEN THEY DO AND DON'T HAVE TO PAY SALES TAX.

>> Michael: BARRET, STICKING WITH THE GILAS FOR A MOMENT, IS CHANDLER THEIR MUNICIPAL SPONSOR YET OR NOT?

>> Barrett: NOT YET. MARCH 14th IS THE CHANDLER CITY COUNCIL MEETING, AND THEY'LL DISCUSS THIS. IT'S REALLY A NO-LOSE SITUATION FOR CHANDLER. THEY WOULD GET A LOT OF BENEFIT AND THEY WOULDN'T HAVE TO PUT UP A DOLLAR. AND IT'S PRETTY EASY, PLEASE SPONSOR IT, AND THAT'S ALL THEY WOULD HAVE TO DO. I WOULD SUSPECT THAT THIS WILL HAVE BROAD SUPPORT ON THE CITY COUNCIL. THIS IS A JUST A FORMALITY REALLY.

>> Michael: THERE HAD BEEN AN ISSUE A WHILE BACK OF A LIAISE OF SCOTTSDALE, MESA, TEMPE AND MAYBE THE PIMA SITE, WHICH IS VERY NEAR THE 101/202 SITE. IS ANYBODY TALKING ABOUT THAT?

>> Barrett: THERE IS SO MANY THINGS BEING DISCUSSED THAT THEY CANNOT FOCUS ON, SAY, THE MESA SITE, WHICH IS REALLY THE LEADING SITE, WHICH SHOULD BE THE LEADING SITE. THAT'S WHERE THEY HAVE TO GET DOWN TO THEIR BRASS TACKS. SCOTTSDALE IS ACTUALLY WILLING TO PUT UP A LOT OF MONEY.

>> Michael: YEAH, I UNDERSTAND THAT SCOTTSDALE SAID DEFINITIVELY TODAY, LISTEN WE'LL PUT MONEY ON THE TABLE, WE'RE NOT GOING TO TELL YOU HOW MUCH, BUT WE'LL PUT SOME ON THE TABLE.

>> Barrett: ABSOLUTELY, THEY ARE WILLING. IT'S JUST THAT TEMPE AND MESA RIGHT NOW NEED TO COME TOGETHER.

>> Michael: ALL RIGHT. SO WHAT'S BEING DISCUSSED THIS WEEKEND? IS IT HOW MESA SIMPLY PUTS TOGETHER A PROPOSAL BY MONDAY ON HOW THEY WILL DO IT ALONE? OR ARE THERE SERIOUS TALKS GOING ON BETWEEN TEMPE AND MESA?

>> Barrett: IT'S GOING TO BE UP TO MESA TO MAKE PHONE CALLS, OF COURSE, YOU'VE GOT NEIL GIULIANO WHO DESPERATELY WANTS TO KEEP THIS IN TEMPE. HE MAY INITIATE SOME CALLS. HE HAS INITIATED CALLS IN THE PAST. SO HE MAY CONTINUE THAT EFFORT, BUT IT'S REALLY -- MESA IS THE DRIVER HERE. IT'S MESA'S SITE. IT'S MESA'S LAND. THEY HAVE TO BUY INTO THINGS, AND IF THEY DON'T, THEN THAT SITE IS DEAD.

>> Robbie: IS IT TRUE THAT KENO HAWKER HAS NEVER BEEN A BIG STADIUM FAN AND HE'S THE MAYOR?

>> Barrett: WELL, JUST A LITTLE BIT. YOU KNOW, KENO WOULD BE ABOUT AS WELCOME AS JANE HULL WOULD BE AT THE STATE EMPLOYEE PICNIC.

>> Howard: YOU MEAN THE ONE THEY CANCELLED?

>> Barrett: YEAH, EXACTLY.

>> Barrett: KENO IS NOT -- HE DOESN'T TALK MUCH WITH THE CARDINALS. IN FACT, COUNCILMEMBER MIKE WHALEN IS THE ONE DEALING WITH THE CARDINALS.

>> Howard: THERE IS ONE OTHER FACTOR IN HERE, WHICH IS AS I UNDERSTAND THE DEAL WITH THE CARDINALS, IF THEY STAY IN TEMPE, THEY'VE GOT ONE SET OF FINANCES, AND I DON'T KNOW -- I'M TRYING TO FIND OUT HOW IF THEY GO INTO MESA WHERE THAT FITS IN.

>> Barrett: ACTUALLY, THAT MONEY WOULD GO TO MESA NO MATTER WHAT.

>> Michael: ALL RIGHT. PANELISTS, WE'RE OUT OF TIME. THANKS FOR THE STUFF. TO SEE A TRANSCRIPT OF TONIGHT'S SHOW OR TO SHARE YOUR VIEWS OR CONTACT US, PLEASE VISIT THE CHANNEL 8 WEB SITE AT WWW.KAET.ASU.EDU., CLICK ON "HORIZON" ON THE LEFT SIDE OF THE SCREEN, AND THEN YOU CAN FOLLOW THE LINK. "HORIZON" WILL BE PREEMPTED MARCH 4th THROUGH MARCH 19th AS CHANNEL 8 GOES INTO ITS PLEDGE BREAK. HOWEVER, DURING THAT TIME OUR JOURNALIST FRIDAY'S SHOW WILL CONTINUE, SO WE WILL BE BACK NEXT WEEK WITH ANOTHER EDITION OF THE FRIDAY JOURNALISTS' ROUNDTABLE WITH EVERYONE LOOKING GOOD. THANK YOU VERY MUCH FOR JOINING US THIS EVENING. I HOPE YOU HAVE A GREAT WEEKEND. I'M MICHAEL GRANT. GOOD NIGHT.