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

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
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