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Document of the Week

	8/7/2003

City bond counsel gave advice to the Cowles family. "If Talbott knew... it would be a very bad thing."

IT WAS JUST A PHONE CONVERSATION between Janet Gilpatrick and Roy Koegen, nothing too unusual.

The two had been acquaintances for years. He was the most prolific bond lawyer in Eastern Washington. She was the well-known former district aide to House Speaker Tom Foley who had taken a new position in 1999 on the staff of the Rockey company, the statewide public relations firm for River Park Square.

This time, however, Gilpatrick wrote a memo about the August 22, 2000 conversation, addressing it to RPS developer Betsy Cowles and to Gilpatrick's colleagues, Jennifer West and John Giese.

"Wanted me to know," she reported, "that he [Koegen] had spoken with Stacey [Spokesman-Review publisher, Stacey Cowles] and he feels Stacey understood his message: Use the newspaper to investigate what the realities of the falling bond rating will do to this community."

In other words, Koegen was urging the Cowles family (whose real estate companies the city was now suing, and vice-versa) to use their newspaper to influence his client. It was potentially explosive advice and, according to Gilpatrick's memo, Koegen stressed how sensitive the situation was.

"He is very, very concerned that his handprints are not on any of these ideas," she wrote. "And if [then-mayor John] Talbott knew he had any contact with 'the family,' it would be a very bad thing."

August 2000 was the dog days in the battle over River Park Square. Koegen was clearly frustrated because his client, the City of Spokane, was not taking his advice. A new council majority had hired a special counsel to try to get Spokane out of a mess they believed Koegen and city attorney Jim Sloane had gotten them into. A hearing on a proposal to disband the Spokane Parking Public Development Authority (PDA) was set for September. Disbanding the PDA was seen as a way to get around the council's 1997 promise to loan the city's parking meter money to the PDA in order to prop up the ailing River Park Square garage.

In a recent Camas interview, Gilpatrick said she thought it was Koegen who initiated the August 22nd phone call. As the River Park Square controversy heated up, she says, she and Koegen regularly discussed it on the telephone.

Her memo indicates that Koegen not only feared for Spokane's reputation, but his own.

"Roy needs to be concerned with the falling bonds rating and what the bondholders are going to do. There is a huge reputation problem here as you well know. I feel he is really experiencing some pressure now that is reflecting in the business area of his firm. He is quite interested in facilitating some on-going actions that indicate progress in solving this 'stressful situation.' He is hastening to tell me that 90% of his business is now outside of Spokane...and I'm telling him that that's a very smart thing to do. He is the consul [sic] for the entire city council, not just the mayor, he says. He [sic] somewhat in a scramble now.....feels [city councilman Steve] Eugster is trying to tear the city apart."

Gilpatrick's memo is one of several Rockey documents that have come to light in discovery in the RPS securities fraud case indicating that the p.r. firm's role goes beyond public relations for the mall and deeply into the area of political advice for the Cowles family.

"I think it was both," Gilpatrick acknowledged. "At some point it would be hard to draw a line on that."

Gilpatrick is sympathetic with what Koegen was trying to accomplish in 2000.

"There were times," she said, "that he was trying to be thoughtful and broad-based with the impact [of the garage impasse]."

Gilpatrick left the Rockey firm later in 2000 to start her own consulting firm. The next year, under a new mayor whom the Cowles newspaper had endorsed, Koegen was sued by the city. Among other things, the city alleges Koegen failed to disclose "actual or potential" conflicts of interest and failed to fully inform city officials about Spokane's risks in the RPS garage transaction. He is now with the Lukins & Annis firm in Spokane. A fax of the memo was sent earlier this week to Koegen with a request for his comments. He did not respond.

THE END

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