Phoenix LXIV: Will You Still Need Me, Will You Still Read Me, on Thread LXIV?
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11-17-2012, 07:14 AM
Join Date: Jul 2010
The complete failure of fiduciary duty here is approving a contract prior to resolving GF balance and inappropriate fund transfer issues. The city received an audit showing their former City Manager cooked the books in what appears to be a crude (and likely criminal) version of a ponzi scheme. They don't know what their true GF balance is. Might want to get that sorted out before you sign off on any more contracts, particularly one for 1/3 billion dollars in additional liability that was primarily negotiated by that former City Manager. Regardless of whether they are reelected, retiring, etc, the approach in Glendale is rather unique. A competent council would be cleaning up old business. And there is no bigger spill than the fund fraud.
Arm's Length Principal is pretty straight forward. To preserve market value, the buyer and seller have no relationship. If the meetings occurred as Jones describes, it could be an irritation. I'm not familiar with AZ contract/procurement law to know what the regulations are. Maybe there aren't any regulations at all. Either way, it's still pretty great if it turns out that some members of the city council did meet with Jamison. Maybe they should mix in a COI orientation once in a while.
Bundles are probably not as straight forward, if I understand what Jones is trying to say. In this transaction, JIG is a series of LLCs. But none of them have substantial physical assets. The value of JIG is it's ability to assemble contracts. A handful of those contracts would be with Glendale. In those contracts, the ability to assign, and the counterparty ability to prevent an assignment, is where many opportunities reside. I don't know if they are necessarily illegal opportunities or if there are AZ regulations on public contracts in this area. But if you can bundle the contracts together and the city allows the bundle to be freely assigned, then JIG would have liquidity.
The meeting reinforced the plain fact that none of these people are even remotely qualified for their positions and their Leg.Aides must be equally worthless. They do not understand elementary governance concepts, they do not perceive fiscal impacts, and they would all flunk Accounting 101. Scruggs is the only one with even a ballpark idea of what is going on.
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