Wednesday, July 30, 2014

Belltower: Helping the competition

From page A4 | April 08, 2013 |

Most of us are staring at blank walls and some of us don’t even have any walls to stare at. Our office is slowly being deconstructed in preparation for the move to our new office on Ray Lawyer Drive. Every day I walk in and see another wall gone. It’s all going to charity. The only thing that’s moving is our computers, phones, some key file cabinets and our desk chairs.

I have been purging files no longer needed. I reduced our old clip files from seven down to three.

One of the thickest files that is going into the recycling bucket is one titled American Traveler Press.

What a scam! What a government boondoggle! The county CAO, Paul McIntosh, and some alleged local Economic Development Corp. run by a former Ma Bell minor executive got together and handed out a $450,000 Community Development Block Grant to a Canadian company. Yes, a Canadian company. Oh, but they were going to set up shop in the El Dorado Hills Business Park and they were a clean industry.

How clean? Nothing messier than publishing.

“We anticipate seeing book and tabloid publishing,” said Steve Long of the Economic Development Corp. in November 1992. “The tabloid would deal with arts and entertainment in El Dorado County, a niche not being currently filled.”

So what are we? Chopped liver? We have had for a couple of decades at that point a weekly entertainment section called Weekend. Duh! Oh, but they will distribute to Amador County and Nevada County.

Of course, McIntosh recommended it to the Board of Supervisors and said he would act on the county’s behalf in all matters “pertaining to the application, including executing or signing of the grant agreement.” The grant included $33,750 for “program administration costs.”

Supervisors Sam Bradley, Ray Nutting, Mark Nielsen, Bill Center and John Upton all voted for it.

McIntosh handed out the grant-loan sometime after the board gave final approval in March 1993 and neglected to get any collateral.

These kinds of wheeler-dealer CAOs have made me suspicious of county CAOs in general. The best county exec was John Fitzpatrick, who was in office when I covered the supervisors in the 1980s. He wasn’t even called a CAO. The board gave him the title of Assistant to the Board. With that title, though, he took over a troubled Planning Department and personally put it back in shape. It was a great Planning Department. They had top flight people staffing their counter, people like the planner in charge of subdivisions. Fitzpatrick had a secretary and that was the entire administrative staff. He put the budget together with Auditor Em MacAnnally.

He was followed by a CAO who had a calculator on the wristband of his watch, and that’s another story.

Within six months of setting up shop as American Traveler Press the two principles bought the Reporter newspaper, hired staff, including one of our former reporters who thought he was going to make more money, and expanded what had been a one-man operation into a full-blown newspaper directly competing with us. Ain’t government grant-loans fun?

Oh, they said they had separate investors. Yeah, sure. A January 1994 audit found they turned over a second deed of trust as collateral on their Amador County property, had not conducted required audits and had not paid the annual 8 percent interest required.

We determined that the Hi-Sierra! magazine and the Reporter newspaper had nearly the identical staff. The percentage worked out to 59 percent. Hi-Sierra! had four advertising consultants and four contributing editors plus a receptionist beyond what the Reporter had.

Besides having a dumb name for a magazine, the Canadian-American duo published all of three magazines and then defaulted on the $450,000 loan in February 1994. The county took them to court to obtain all records and equipment, get a second deed on their Amador County property and be repaid for a $10,000 bounced check they sent the county. Pat Lakey followed the couple from the courthouse to their Amador City house and witnessed them hauling out boxes and taking them straight to the dump. So much for the documents. We later found a second deed already taken out on their house and it wasn’t to the county.

A later grand jury report concluded that nobody was in charge of the loan application and nobody checked to make sure guidelines were being followed.

The former Travelers Press duo of Joyce Williams and Don Stone were reported in November 1994 to be raising money for a community theater in Sutter Creek.

The county found the assets of American Traveler Press were worthless. The magazine’s employees were stiffed on their paychecks. The Reporter lasted until Oct. 25, 2002. Then someone, practically getting the newspaper out of the dumpster, tried to revive it, publishing for six weeks in January  through February 2003.

And that’s how county government helped our competition. The CAO at the time, is like many CAOs — was smart with an ego and a lack of attention to details that meant he was potentially an easy mark for the sophisticated sales person. In this case he fell for a couple of hucksters.

Michael Raffety is editor of the Mountain Democrat. His column appears biweekly. 



Michael Raffety



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