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Document of the Week

	3/7/2004

How a publishing heiress went after an uncooperative mayor

IN THE SPRING OF 2000, River Park Square mall developer Betsy Cowles was trying to quell a public relations crisis. The parking garage she had arranged to sell for a hugely inflated price as part of the mall's redevelopment plan was suddenly running deeply in the red. Now she was demanding the city keep its "pledge" to "loan" city parking meter money to the struggling garage, even though Cowles had personally testified in 1997 that it was highly unlikely these funds (otherwise dedicated to fix the city's crumbling streets) would ever have to be tapped.

But a new and rebellious city council majority was balking on the loans. They were also pointing fingers at Cowles and her political allies for the staggering losses at the garage. Under the leadership of Mayor John Talbott, a special counsel hired by the new council majority would soon file a lawsuit alleging a conspiracy between Cowles companies and unnamed public officials to divert public funds for private use.

As chairman of the board of Cowles Publishing, which owns The Spokesman-Review and KHQ-TV, Betsy Cowles was clearly in a position to influence her family's news coverage. (See "Breaking the News"). Documents produced in discovery in the RPS securities fraud trial show that during the crisis unfolding in 2000, Cowles went even further to try to influence public opinion and Spokane politics. She enlisted a politically savvy public affairs consultant, John Giese, to try to make sure John Talbott was defeated in the fall 2000 election.

Giese had an impressive political resume when he chose to leave government to become a public affairs consultant in 1988. Currently a Seattle-based, senior vice president with the public relations giant Rockey Hill and Knowlton, Giese learned the political ropes as a special assistant to former Washington Governor John Spellman and chief of staff to former Washington Congressman Rod Chandler.

River Park Square is one of Rockey's accounts, and Giese became a principal advisor to Betsy Cowles. The discovery documents show his work intensified after Camas Magazine published the "Secret Deal" articles raising new questions about how much Cowles profited on the sale of the RPS garage to a nonprofit corporation set up by Cowles lawyers.

"I assume you saw the good editorial in yesterday's paper [the Spokesman-Review] about the garage," he wrote to his Spokane-based colleague Jennifer West on June 20, 2000. "Given that editorial, the text of our last press release re the Camas articles and the size of the profit, I am getting nervous with releasing the numbers on the garage construction. I don't see any way to spin it without taking a significant hit and probably putting some life back into our opponents' efforts and activities."

Giese clearly understood that River Park Square wasn't just a business problem but was tied to a larger civic and political battle that his client was caught up in.

Any doubt about that was removed a week later in an email Giese received from Cowles herself.

"John," she asked in a June 26th email, "are you available this Friday morning to talk more about the political/fall election side of all this. Stacey [S-R publisher Stacey Cowles, Betsy's brother] wants to sit in on that conversation... We both have your overview. Can you narrow that down and work up a more specific proposal for what you think we ought to do? We also need a timeline so we know how quickly we need to move. I think you can assume our goal is to be sure Talbott is not re-elected and that we probably need to be more behind the scenes than up in front."

One of the strategies that emerged with Giese's guidance was to exploit Steve Eugster's declining popularity.

"Reminding folks that the others [Talbott and council members Cherie Rodgers and Steve Corker] are following Eugster ties them to his negatives," he wrote West in an August 27, 2000 email, "which is also my intent."

The email to West shows that Giese was the primary drafter of newspaper ads Cowles was running to influence public opinion on the garage impasse.

Talbott lost to John Powers in the 2000 election. Mayor John Powers immediately dropped the conspiracy charges in the city's lawsuit.

Giese's help extended beyond Spokane. In April 2001 Giese reported to Cowles that a major article favorable toward RPS and downtown Spokane had just been published in the Puget Sound Business Journal.

"But we shouldn't take too much credit for it," he advised, "and let it appear to be more independent."

THE END

For purchasers and Gold subscribers: to download the June 26, 2000 Cowles-Giese memo, click here.

Articles are researched, written and edited by the Camas staff: Tim Connor, Larry Shook and Judy Laddon.