Utah: Records Release Escalates Charges of Gov’t Corruption

SALT LAKE CITY, January 6 – New evidence signals for the first time that prominent members of Utah Governor Jon Huntsman’s Department of Commerce may be directly involved in illegal, and sometimes criminal activities.

On Monday January 5, Utah County businessman and talk radio host C. Rick Koerber announced that he will begin releasing to the public a mountain of evidence implicating several government employees and officers.  The evidence is in the form of secret audio recordings, photographs, recordings of telephone conversations and printed documents authored by Utah officials.  Beginning Friday January 9, 2008 Koerber has announced his plan to publish in a series information releases including web links to audio files and .pdf documents.

“Given the current climate and the behavior of these people I just decided that it wasn’t worth letting things continue with business as usual,” said Koerber. “I think its best for everyone if the truth was revealed and everyone can see how things are done by some of Utah’s top ranking bureaucrats.  A few key individuals seem to enjoy ruining the reputations of sincere, hard working men and women and its costing normal every day citizens their jobs, their retirement, and in some cases their life savings.  I bet not a single one of them has ever created a real job and several of them seem to think they are above the law.”

The evidence being released implicates several Department of Commerce personnel including Utah Securities Division Enforcement Director Michael Hines, Enforcement Analyst Jennifer Korb, Licensing examiner A. Gary Bowen, former Division Director Wayne Klien and former Division of Real Estate officer John Brown.  Among the more then fifty recorded segments and documents in Koerber’s possession government employees are revealed lying, admitting conspiracy, misstating the law, admitting coercion, threatening witnesses, leaking protected information, bragging about excessive power and discretion and in at least one instance possible violations of a federal court rule prohibiting certain disclosures related to a grand jury proceeding.

Koerber is part of a growing number of Utah businessmen turning to State lawmakers and to the courts in an effort to reign in the alleged abuses by appointees, staff and employees in Gov. Huntsman’s Department of Commerce.

Henry S. Brock, a Utah based CPA associated with Americans for Civil Rights, is another local businessmen who is fed up with the Utah Department of Commerce and has created a laundry list of documented abuses on the ACR website where a petition is being circulated to pressure lawmakers to take action.  “Whether you are a doctor, contractor, realtor, or financial advisor, we all have similar concerns,” writes Brock, who uses the recently released State Audit of one division inside the Department to call attention to what he calls widespread abuse.

In what is becoming increasingly discussed nationally, Utah’s state officials, under Gov. Huntsman’s tenure, are now ranked, according to a recent study published by the New York Times, as one of the top 15 most corrupt States in the union.

In December of 2007 lawmakers approved a State audit of the Department’s Division of Securities which uncovered an array of problems including impropriety, internal conflict, coercion, violations of due process, and numerous other failures in its official 43-page report released in July of 2008.

“The audit only uncovered the tip of the iceberg” claims Utah businessman James Claybourn.  “If you read the audit carefully you’ll notice that it only looked at a few cases, and that it also describes the need for much further investigation.”

Claybourn, Brock and Koerber are part of a growing business community increasingly disillusioned by the lack of attention and scrutiny being directed at the widely reported abuses by the Department which operates under the sole elective oversight of Huntsman and his appointee Department of Commerce Director Francine Giani.

Koerber hopes that by announcing the systematic release of the recordings and documents he’s been gathering over the last several years that a more thorough investigation of the Department will be conducted and that the State legislature will not take only small, token efforts at reform.

“Look, the situation in the Department of Commerce is out of control.  They brag about being able to break the law, about ruining people’s lives and they regularly demonize small businessmen who are supposed to be treated as innocent until proven guilty,” extols Koerber.  “In today’s financial climate bureaucrats should not be freely spreading lies and acting like they are above the law, forgetting that small businessmen and women are citizens deserving of equal protection under the law.  It’s just plain wrong.”

In fact, the Department has had to drop fraud charges and issue public apologies in the past for erroneously accusing businessmen of fraud and misconduct using punitive premature media, for example its March 30, 2007 release related to Gary W. Teran and Carl A. Page of First Western Advisors.

The Department has been gaining a growing number of critics that extends beyond the business community.  Over the last year, several government insiders, including at least one former Executive Director and one former Division of Securities Director, have suggested that a “changing of the guard” is urgently needed along with several substantial reforms.

The Utah legislature has also begun addressing the reported impropriety, however, several prominent Utahans, are concerned that the gravity of the situation is not being fully appreciated by lawmakers.

“The bills [being proposed] are grossly inadequate and do not go far enough to protect the constitutional and civil rights of all licensees under the Department of Commerce, including the Division of Occupational and Professional Licensing, the Division of Real Estate, and the Division of Securities,” says Brock.  “Regulators are not above the law, and are accountable for their acts in relation to the public trust reposed in them…the Legislative Auditor’s Official Report said that employees within the agency themselves fear to speak-up due to reprisals, and the licensees are certainly fearful of retribution; hence, an unwillingness to speak out on legislation such as this. I have no doubt there may be reprisals against me for speaking up.”

One disturbing example of such reprisals involves State Representative Carl Wimmer who began looking into potential abuses by Huntsman’s Department in 2007.  After learning of Wimmer’s inquiry, then Securities Division Director Wayne Klein fired off an email to State Attorney General Mark Shurtleff suggesting that Wimmer should not be trusted and that his efforts be downplayed because he was an investor in one of the companies being investigated by Klien.  Wimmer, however turned out not to be an investor in any company being investigated by the Division.

“A government bureaucrat, trying to sabotage a State legislator to protect his territory- this is exactly what they do.” said Koerber.  “If you accuse them of wrong doing they line up a row of supposed victims of fraud-never mind that the story of fraud might be entirely made up by the regulators-and suggest that by attacking the government you are somehow harming or being insensitive to potential victims.”

In one of the audio recordings yet to be released by Koerber, Klien can be heard justifying his division’s targeting of Koerber himself because of statements made about Klein on Koerber’s his talk radio program and because of legislative scrutiny being brought on the Department by Rep. Wimmer and his colleague Rep. Jim Bird, pressure which Klein seems to attribute to Koerber.

–Partial Transcript-

Within a month of the announcement of last year’s audit and amidst a storm of controversy Klein resigned from his position as Securities Director.  But in commentary released after the release of the official audit, Audit Manager Tim Osterstock immediately preempted any suggestion that Klein’s resignation would solve the problem.  “It’s not just a director, it’s an organization,” Osterstock said.

One Department of Commerce insider, who requested to remain unnamed for fear of reprisal, confided about the Department and actions taken by Executive Director Francine Giani, “You have no idea how crazy this place is.  Its all about territory, power and egos.  Once the audit came out Francine put on a happy face but things around here got put on lock down. Quite frankly, so long as Francine and people like Michael Hines have free reign, I would hate to be a business owner in Utah.”

Regarding Koerber’s January 5th announcement that these recordings will be released to the public, this same insider remarked, “This is extraordinary evidence, I hope it starts to get the kind of attention it deserves.”

Huntsman who has been Utah Governor since 2004, appointed Giani to her present position in 2005, and has remained silent since the scandal started brewing in 2007.  Several businessmen, lawmakers, citizens organizations and government insiders now appear committed to making sure his Department doesn’t escape legitimate scrutiny and reform.

[Note: C. Rick Koerber is the Founder and President of FreeCapitalist Enterprises, LLC  that parent company in charge of operations for FreeCapitalist Daily]

Related Content on the Web:

• January 05, 2009 – FranklinSquires Press Release
• Audit blasts state securities division
• Utah’s securities chief is resigning under cloud
• Francine’s Domain – Scandal Brewing in Utah State Government
• Rogue Agency Arrests Utah Mom
• Audit: Corruption, Failure and Incompetence in Utah Government
• Open Letter to the Legislature
• Division of Securities Apology Regarding Teran and Page

Superheroes? Carl Wimmer and Friends

UTAH COUNTY, UT | 4 April 2008 | The Salt Lake Tribune’s least credible columnist, Paul Rolly, has recently demonstrated how scared and inept the democratic party loyalists are when conservatives get organized in Utah. Absent any credible criticism of Carl Wimmer (R – Herriman), Ken Sumsion (R-American Fork), Chris Herrod (R-Provo), Keith Grover (R-Provo) and Steve Sandstrom (R-Orem) Rolly decided to make a political argument by sarcastic metaphor, but like most liberals – he doesn’t quite come to grips with the power of action over rhetoric.

For example, Rolly whimsically claims that the GOP is out to “rescue its superheroes” because of a flier recently distributed for an event designed to support the “Fab Five” state legislators. Funny thing is that Rolly has no argument to back up why a normal, organized fund-raising & event is a rescue attempt. Perhaps it’s a victory rally? Of course, Rolly doesn’t see it that way, because like many in his camp he’s still too busy gloating over the Utah vouchers issue to see much of anything. In fact, Rolly’s only substantive remark in his entire essay is that “All five dutifully followed leadership’s admonition to vote for vouchers…”

The facts are however, as they say, stubborn things. They are especially difficult for Attila like bullies who call it a job to poke rhetorical fun at good men who serve their community.

Fact #1 – Vouchers.

Rolly argues that the GOP leadership is supporting these five legislators because they “dutifully” followed orders this past session. Funny thing is that three of the five campaigned in support of vouchers long before receiving any orders from anyone. Sometimes Democrats forget that to hold office you don’t actually have to wait for a leader to call you up and tell you your position.

Fact #2 – Stand-Out Legislation

Rolly glosses over all of the legislative details with a blanket accusation that none of these five elected representatives had any “stand-out legislation.” The first error in Mr. Rolly’s argument is t o think that Utahans, especially Republicans, send freshman legislatures into office solely for the purpose of writing new laws.

I think it is a serious surprise to most liberals to actually try and imagine a government whose effectiveness isn’t measured in the number of new laws passed. Additionally, Rolly ignores records like Wimmer’s where fully half of his “introduced bills” were proposed amendments to existing laws, on such important subjects such as child abuse, environmental crimes, toughening prosecution on those who hurt children, etc. Other legislation sponsored by this freshman group included immigration reform, the rights of adopted children, and the reform of certain outdated criminal codes. Of course, this isn’t “stand-out” to Rolly because it left out global warming.

It is quite obvious that Rolly doesn’t count on educated Utahans to simply hop on the Internet and take 15 minutes to view the actual records of these freshman legislator’s – which records speak for themselves (with or without the support of leadership).

Fact #3 – Republican Challengers

It is true that four of the five candidates mentioned are being challenged by members of their own party, however it is far too early to tell how serious the challenges are. The state and county conventions will play their role, and the newly elected delegates will get to decide if any of the challenges are serious enough to merit a primary election. The irony is that Rolly lumps Wimmer into the same analysis (Wimmer is the Mr. T of the group Paul, just to answer your question) – when he is not even opposed by a Republican. Wimmer, as Rollly notes, is opposed by a “former” Republican who is now running as a democrat. Small details, I’m sure, for Mr. Rolly. Think about this for a minute, Dave Hogue was in the state legislature for ten years as a Republican and has now come out of the closet as a democrat (which most of us already knew by the way.) Stubborn facts.

Rolly’s “ad hominem” humor is no substitute for “brain-on” activity. Thank goodness he writes for the Tribune, or else some voters who are actually affected by the decisions of these legislators might have been confused.

It does take a superhero these days to stand up against the politics of liberalism, socialism, and do-gooders who think that the reason a man or women is elected to office is to continue the plunder of previous legislatures. Rolly also ignores important events that are actually working to root out government abuse, waste, and corruption here in Utah, events that would not be happening without the support of men like these. For example, it will be interesting to see what tongue in cheek quarterbacking Rolly offers when the legislative audit of the Utah Department of Commerce comes out if it tarnishes the reputations of his fellow travelers such as Francine Giani, Wayne Klein, and Thad LeVar. But, we’ll leave that for a future day.

The truth of the matter is Rolly is simply trying to stoke the flames of some internal conflict with the Republican party, but as appropriate, the Republicans are best left to solving their own problems. In the end we can all be thankful that the “Superheroes” and the “A-Team” showed up this past legislative session because the alternative would likely have been some version of Mr. Rolly staring as Pinky’s “Brain” devising some new diabolical plot to take over the world. That, is certainly, frightening.

As for me, I’ll side with Representative Wimmer and his superhero colleagues, thank you.

Reference(s):

Date: Friday April 4, 2008
Source: Salt Lake Tribune – Paul Rolly: GOP Out to Rescue its Superheroes
Author: Paul Rolly
MRFC Principles:

Is It Immoral to Use Food Crops for Fuel?

ALPINE, UT |31 March 2008| The recent surge in production of bio-fuels (fuel derived from food crops such as corn, soy, and sugarcane) both in the U.S. and around the world has sparked a debate about whether such production should be promoted or even permitted. Aside from arguments about the energy efficiency of bio-fuels, the latest criticisms have arisen from the recent rise in prices of staple foods, such as the corn used to make tortillas in Mexico. Far away from the corn fields in Iowa, yet linked by the global economy, some have expressed anger over the rapid increase in cost of a commodity they purchase daily for their sustenance. In many third-world countries, citizens have been shielded from the full effects of these cost increases through government price controls and subsidies – but these programs are straining to maintain the illusion of cheap food in the midst of a worldwide jump in food prices. Ironically, in many industrialized nations, governments have been pressured to use tax dollars to “stimulate” the production of bio-fuels through grants for bio-fuel factories, infrastructure, and subsidies for farmers – with the intent of reducing our dependence on petroleum fuels.

Key Points:

• Increased use of food crops for fuel production has reduced the amount sold for human consumption, resulting in price increases (supply & demand).
• Where bio-fuels have been more profitable than selling crops for food, some farmers have chosen to sell their crops to the fuel producers.
• Government price controls on food commodities have limited the profit possible to farmers, incentivizing them to seek other markets for their product.
• Government subsidies for bio-fuel production have distorted the economic value of food crops by creating an artificial demand (using tax dollars to stimulate production in the place of buyer dollars, which would demonstrate true demand).
• Acute shortages of subsidized bread, which is sold at less than one U.S. cent a loaf, have caused hours-long lines and violence at some sites in poor neighborhoods in Egypt in recent weeks.
• The supply of subsidized bread has been decreasing. Many people in Egypt believe subsidized bakeries sell some of their flour on the black market rather than make bread.
• Egypt has long been one of the top importers of U.S. wheat, but its U.S. purchases have been falling as it searches for cheaper sellers on the world market, where prices have tripled in the last 10 months.
• Some have criticized the use of food crops for fuel as “uncaring” and an example of “lopsided priorities”, due to the effect it has had on food prices, making it more difficult for poorer people to purchase basic foodstuffs.

Commentary

Not surprisingly, those who are suffering the consequences of government manipulation of the free market are the first to cry for the government to manipulate it further. This mentality believes that all costs are determined by the power of huge corporations, greedy middlemen, and government regulators – thus creating the illusion that the economy is simply a constant struggle between greedy businessmen and “the public” (represented by government protectors), waging price wars, with both sides continually seeking the upper hand. This illusion, during times of economic hardship, leads to the cry for government to be given greater powers to control commerce and trade, and to set “fair” prices.

What is not seen or heard in this debate is the fact that in a free exchange, the price of the product is decided mutually by the buyer and seller. Absent force, neither party can demand the other buy or sell the product – they must mutually agree. Thus, a general rise in the price of a commodity would indicate that someone is willing to pay more for it, and is doing so. Attempts to manipulate such an exchange through force will always result in its collapse, for the buyer will refuse to sell (reducing the amount of product available) and the seller will refuse to buy (creating a surplus in product available). These forces cannot be changed by government edict, and those who clamor for the force of government to be exercised to impose their opinions on what should be sold for what purpose and for how much will reap the consequences of history – shortages, recession, and general economic collapse.

In a real sense, what is being demanded by those who condemn the use of food crops for bio-fuel, is that each individual farmer should not be allowed to sell the fruits of his labor for the best price he can ask. He should be constrained to use his crops only for the benefit of those determined to be “in need” – by selling it only for food use and only at a price that is deemed “fair” by those who are demanding it from him. Such a policy can only be implemented through force, and has only one possible outcome. Eventually, the farmer will cease to produce when it is no longer profitable for him to do so under the coercive terms of the “public good” – and when that happens, there will be no food to buy at any price, no matter how great the need.

In the case of food crops and bio-fuels, both sides of the equation have been manipulated by tyrants – those who wish to control the direction of the fuel industry, and those who wish to mandate the value of a simple food product. Both distortions have aggravated what might have a been a simpler development in our modern economy. When men are free to exchange, temporary disruptions like those created by the invention of bio-fuels are quickly adjusted to, and self-interested people are quick to fill the needs and desires of others, for a profit. And that motivation, whether you revile it or not, is truly what fuels the economic activity of every person on the planet.

Action Steps

1. Read “Capitalism and Freedom” by Milton Friedman (available in the F.C. Primer).
2. Ask a local farmer what determines the sale price and use of the crops he produces.
3. Research the recent trends in the commodity markets – do you know the cost of the sources of your food?
4. Email your congressman and ask his/her opinion about the U.S. Farm Bill.
5. Read “The Law” by Frederic Bastiat – How does the concept of “legal plunder” apply to the issues of production, free exchange, government subsidies, price controls, and other economic manipulation?

MRFC Principles: (6, 7, 8, 9, 11)

Resources
Indian minister attacks biofuels
BBC – March 26, 2008
http://news.bbc.co.uk/2/hi/south_asia/7315308.stm

Egypt tries to tackle deadly bread crisis. CNN – March 4, 2008
http://www.cnn.com/2008/WORLD/africa/03/24/egypt.bread.riot.ap/index.html?eref=rss_world

Francine’s Domain: Scandal Brewing in Utah Government

ALPINE, UT | 14 February 2008 | In Utah right now there is a scandal brewing. The scandal penetrates the highest reaches of the Utah government. The question is, “Where will the buck stop?” as the evidence rolls out that an entire section of Government is in need of a major overhaul.Steven Oberbeck of the Salt Lake Tribune, quoting Chuck Newton of the Financial Planning Association of Utah, reported yesterday that there have been enough “shocking actions” in recent years that he believes its highly likely that “some government officials may eventually be criminally prosecuted.” Mr. Oberbeck’s report in the Salt Lake Tribune touches just the tip of the iceberg. The Department of Commerce is ultimately under the direction of Utah Governor Jon Huntsman, Jr. (R) – a politically ambitious McCain backer who has little tolerance for scandal given the import of this year’s election and his political future. Huntsman is the one who appointed the highly controversial Francine Giani as the State’s Executive Director over the Department. Ms. Giani is not an attorney, has no legal background and did not have any substantial experience in executive level positions. Yet, she currently holds Utah’s highest regulatory position over business activities in the State.Since Ms. Giani’s appointment, the Department of Commerce has been the subject of a surprising degree of scrutiny. Many legislative leaders on both sides of the political isle have expressed “disgust” at how the Department’s activities have been and are being carried out by Giani and her associates. One legislator, Utah Representative Jim Bird (R-West Jordan) recently uncovered an alarming complaint.

“Ms. Giani allegedly was made aware of illegal activities taking place within the division and responded by telling employees that she didn’t care if the actions of the division were legal or not – but that employees were to perform the jobs without question.”

Some Utahans are hoping that the current controversy will allow the public to clearly separate “lip-service giving do-gooders” in government positions from authentic leaders who care about civil liberties, small business and simple concepts such as fairness. At the core of this issue the question is, “How far up the chain does the corruption go?” In recent years the State has behaved with little concern for small business owners who find themselves entangled in the Department of Commerce’s web of scandal and corruption. One of the State’s highest elected officials recently commented:

“Francine Giani is the single greatest threat to small business and personal liberty in the State of Utah.”

“The world of [regulation] is reminiscent of Alice’s Wonderland: everything seemingly is, yet apparently isn’t, simultaneously…It is a world in which the law is so vague that businessmen have no way of knowing whether specific actions will be declared illegal until they hear the judge’s verdict – after the fact.” (Greenspan, Alan. Later Chairman of the Federal Reserve. Paper given at the Antitrust Seminar of the National Association of Business Economists, Cleveland, September 25, 1961.)

Quiet whisperings have become all too common in Salt Lake City among government employees, elected officials, and community leaders about this rogue agency stealthily persecuting small businesses. Over the last 12-15 months Ms. Giani’s commissars in the State’s Division of Securities have come under the most serious scrutiny.Allegations of corruption, incompetence, mismanagement and “too many unfair prosecutions“under a cloud of controversy are growing relentlessly frequent and more substantial. Last week, apparently in an effort quell the unraveling of her department – Giani reportedly pressured Securities Director Wayne Klein to resign

“They obviously haven’t told me the results of the audit but I’ve heard words like [the division is in] ‘disarray’ and the ‘deeper we [the auditors] go, the deeper we need to go,’ “ (Representative Bird testimony last week during the Utah Legislature’s meeting of the House Business and Labor Committee.)

Klein’s resignation, however, is not likely to insulate Ms. Giani (or several other employees involved in this mismanagement such as Securities Enforcement head Mr. Michael Hines who is also suspected of official wrongdoing in the Department) from the political and legal fallout yet to come. Apparently hoping this will all blow over quickly, Ms. Giani has tried to appear disconnected recently asserting, absurdly, of Klein;

“He has been a good director, and in terms of his background in the securities industry, there is no one better.”

Utahns can only hope Ms. Giani is simply posturing here. Wayne Klein is not only personally vindictive but has a fairly well known reputation in the legal community from his previous positions both in the Utah Attorney General’s office as well as with the State of Idaho for being a loose cannon, an unjust prosector, and having contempt for legal restrictions on his own activities. It makes one wonder, in light of all the information that is now coming out, how Mr. Klein was appointed with the approval of the Governor and the legislature in the first place. According to Ms. Giani’s recent statements to the press, Klein is precisely is the “type” of regulator she strives to appoint in her department. Yet, Klein is quite simply a commissar (listen to the Free Capitalist radio broadcast archives from August 31, 2007 for elaboration). Specifically, he has increasingly become an embarrassment to government and legal professionals. He and his staff routinely fail to demonstrate even basic familiarity with the A-B-C’s of securities law. Reportedly, his own agenda is more important than the letter of the law and he is known to stammer and hesitate when trying to describe even the most basic federal standards for simple concepts such as what constitutes an accredited investor.One of Klein’s former government employers recently remarked that he, and a number of other government officials are not surprised at the recent discoveries about Klein and Giani’s philosophy of government.

“Mr. Klein is the worst kind of loose cannon. He’s often going after someone who’s offended him, regardless of the law. He’s really only effective if someone with very strong supervisory skills watches his every move and Francine is not that capable.”

Securities attorneys in Utah should not only be alarmed and offended at Ms. Giani’s defense of Klein, especially given his track record, but extremely diligent in working to ensure that there is serious reform in the Department. With Ms. Giani still at the helm she’ll likely just pick another “Wayne Klein” to run the Division. As reported by a notable Salt Lake City attorney recently,

“It has become common practice in Utah for knowledgeable, reputable, and highly educated attorneys to have to grovel to Giani, Klein (and their heretofore behind the scenes bulldog Mr. Michael Hines, Director of Enforcement in the Division of Securities). None of whom have shown much if any appreciation for the details of the law. It’s embarrassing.”

In 2007 a group of private citizens and business owners, fed up with the egregious behavior of an entire section of state government, began a private investigation on their own to look into the State’s activities. So far, the investigation has uncovered a remarkable cache of written documents and audio recording. The evidence includes recordings and transcripts of private meetings, official and unofficial conferences, lunch meetings, early morning meetings (as early as 6:30am at the home of one resident) and late night investigative activities (with government workers showing up to the homes of some “witnesses” as late as 10:00pm). The mounting evidence shows a disturbing pattern of Giani, Klein, and Hines each engaging in deception, incompetence, misstatement of the law, and abuse of the legal processes. Perhaps even more telling, the evidence is beginning to show a growing rift in the Department of Commerce between those public servants who want to carry out the legitimate duties of the Department and those like Hines who reportedly remarked recently that he hopes to retire by “writing a book” about one of the cases he’s currently investigating. The Salt Lake Tribune recently reported that it is precisely this internal rift between real public servants and self-serving bureaucrats that brought about the legislative audit working to uncover the details of this brewing scandal.

“After hearing from several division staff members who expressed concerns about how the agency was being run, Rep. Jim Bird, R-West Jordan, late last year requested that the Legislative Auditor General’s Office audit the division.”

This kind of situation makes for a very unfriendly business environment and is embarrassing to everyone in government. With a formal audit underway, it appears Ms. Giani is simply buying herself time to try and get out from under the explosive details now coming to light. Consider a few embarrassing examples of the work being conducted by Ms. Cruella and her henchmen.

1. Wrongful Accusation of Criminal Behavior against Utah Citizens.
2. Misuse of the Courts and Legal Process.
3. Lying to Government Officials.
4. General Incompetence when it comes to explaining rudiments of the law.
5. Defaming Members of the Legislature who scrutinize the Department.
6. Punishing Citizens with Evidence Against the Department for their Political Activity.
7. Demanding “prior restraints” on Utah Citizens’ free speech, in an attempt to silencecriticism of the Department’s methods in public or in the courts.
8. Government employees lying to the public in order to “create” causes for investigation.
9. Disseminating confidential information obtained during investigations to private sector colleagues to enrich their business efforts.
10. Offering jobs and/or job referrals to witnesses who are willing to lie or distort the truth to defend the Department.

This kind of behavior is precisely what Ronald Reagan warned America about as early as 1964 when he deplored:

“It is time we realized that socialism can come without overt seizure of property or nationalization of private business. It matters little that you hold the title to your property or business if government can dictate policy and procedure and holds life and death power over your business. The machinery of this power already exists. Lowell Mason, former anti-trust law enforcer for the Federal Trade Commission, has written “American business is being harassed, bled and even blackjacked under a preposterous crazy quilt system of laws.” There are so many that the government literally can find some charge to bring against any concern it chooses to prosecute.” (Reagan, Ronald, A Time for Choosing, Speech given October 27, 1964)

Legislation has recently passed the Utah House of Representatives that would rein in the powers of the division and its director in an effort to secure more just handling of the Department’s responsibilities. However, as reported on FreeCapitalist Radio Monday February 12, 2008 this attempt to “rein in” the powers of Ms. Giani and her flying monkeys is being received about as well as the “Wicked Witch of the West” receiving Dorothy and her ruby slippers. For example, after Bird’s HB83 passed the Utah House, Giani defender Utah Senator Curt Bramble (R-Provo), apparently in an effort to help Giani and the Governor’s office stall the brewing controversy, strategically stalled the legislation from being considered by the State Senate indefinitely.

Reminiscent of something behind the iron curtain in the 1980s the outgoing commissar Klein remarked to the attorneys of a Utah citizen recently, who was cooperating with State legislators in their attempts to get to the bottom of the abuses going on in the Department that: because of his political activities the Division was “forced” to take tougher action. In a similar case Klein justified:

“Part of the problem is that I’ve been painted in a corner because your client has gone on the radio and publicly accused us of stuff. He’s got legislators out there trying to cut our powers because what we’re doing as if he’s entirely right in what he’s doing and government is unfairly coming after him. So ordinarily we have more flexibility but where I’ve got public attacks coming in saying we’re being accused of being unfair…[interrupted].”

Ayn Rand also famously warned us of situations like the present scandal brewing in Utah under Ms. Giani’s watch.

“This means that a businessman has no way of knowing in advance whether the action he takes is legal or illegal, whether he is guilty or innocent. It means that a businessman has to live under the threat of a sudden, unpredictable disaster, taking the risk of losing everything he owns or being sentenced to jail, with his career, his reputation, his property, his fortune, the achievement of his whole lifetime left at the mercy of any ambitious young bureaucrat who, for any reason, public or private,may choose to start proceedings against him…It is a form of persecution practiced only in dictatorships and forbidden in every civilized code of law. It is specifically forbidden by the United States Constitution. It is not supposed to exist in the United States and it is not applied to anyone-except to businessmen.”(Rand, Ayn. Capitalism: The Unknown Ideal, pg. 50 – from a speech given at the Ford Hall Forum, Boston, on Dec. 17, 1961)

The official audit of Ms. Giani and her staff is still under way. Potential legal action is reportedly pending against the State from private parties alleging damages in the hundreds of millions. Additional complaints are coming in from victims of the Department’s abusive handling methods including complaints against the Division of Real Estate, Licensing, Securities, and Consumer Protection. Transcripts and audio recordings of Commerce employees lying about Utah businessmen and their activities and other highly problematic behavior on the part of government employees are being delivered to government officials and media outlets. In the mean time, Utah citizens (the real Ma’s & Pa’s Mr. Hines is so fond of talking about while he pursues his agenda) are getting tired of being scammed by the so-called “scam busters.” Some investors have recently been told according to evidence obtained through recorded conversations that (consistent with what has been reported about Giani’s style of administration) if citizens want the State to help them they have to be willing to distort the truth and cooperate with the State’s agenda – independent of the facts involved. One local businessman recently complained,

“For more than two years now the Department of Commerce has been after me. They have come at me from every angle, from the Real Estate division, the Securities Division, Consumer protection etc. Every time, I’ve been able to demonstrate that they have no evidence against me and that I and my associates have done nothing wrong. Yet, the government continues to make horrible allegations, publicly bad mouth me and my colleagues and even accuse me of being a criminal to legislatures, business colleagues, and some of my closest associates. All of this so that Francine Giani, Wayne Klein, and Michael Hines can “look” like they’re doing their job. They’ve got all my clients in an uproar, they’ve told this story about what my business “really is,” all truth be damned, and their efforts have cost dozens of real Utahans their jobs and as essentially bankrupt me and my partners to the tune of millions of dollars. All this and not one charge filed, not one official action taken, and not one person in government responsible. There’s not even a forum where I can defend my case, I simply have to wait until these very powerful men and women are done playing politics with me, my investors, my customers, and my business. Maybe I’ll get an apology like Mr. Teran received from the Department, after they’ve succeeded in destroying my company.”

While the citizens of the State wait for the Governor to weigh in on the issue, thank goodness for good legislators and government leaders who don’t hesitate to reach for the pail of water when the Wicked Witch comes around. On a side note, sources suggest that Ms. Giani may already be preparing for her exit, vying for a position as an investigative journalist (Geraldo watch out!) back at Utah’s local Channel 2, KUTV along side consumer watchdog Bill Gephart. If it’s true, it’s likely that Ms. Giani can serve the people of Utah better there – for certainly there’s a role for consumer watchdogs. If she does return to the media perhaps she’ll feel less burdened, being freed from sticky things like State law, due process, fairness, etc.

Its time for Utahns (including our Governor) to get past the old cliché of Utah being among the “scam” capitals of the world, and start taking a closer look at the corrupt bureaucrats irresponsibly promoting that myth to the detriment of good people in a good state working hard to do many good things. Once again scandal is brewing in Utah. This time it’s the government in need of systematic reform. Perhaps Mitt would accept an invitation to come save the day in Salt Lake City one more time. Stay tuned…