Old and new mayors have both accepted tainted contributions

Tuesday , March 18, 2014 - 10:24 AM

Dan Schroeder

As Ogden transitions from the old city administration to the new, many of us are wondering what will change and what will stay the same.

The Ogden Ethics Project would like to see plenty of changes: more open government; more accountability in the handling of taxpayer dollars; and more fairness in dealing with citizens, employees, and businesses.

Based on my dealings with Mayor-elect Mike Caldwell in his previous position with the county, I'm optimistic about Ogden's government becoming more open and transparent. Perhaps we'll no longer have to endure bureaucratic red tape and long, drawn-out appeals over access to government information.

At the same time, there is also reason for pessimism. The most notable red flag so far is Caldwell's acceptance of $3,000 in last-minute "campaign" contributions from businesses controlled by Gadi Leshem.

I put "campaign" in quotes, because Caldwell received these contributions on Nov. 9, the day after the election. The money couldn't have been used in the campaign, and of course it wasn't disclosed to voters before Election Day.

Caldwell can save it for a possible reelection campaign in 2015, or he can spend it in countless other ways, with no enforceable restrictions. (A city ordinance passed in 2009 does nominally prohibit personal use of campaign funds, but the wording of the prohibition is ambiguous and its enforcement is left to the city attorney, who reports to the mayor.)

The Leshem contributions evoke memories of 2007, when Leshem personally donated $10,000 to Mayor Godfrey's "campaign" a few days after the election was over. In total, Godfrey reported a surplus of $83,890 in his campaign account a month after the election. Under the ordinance in effect at that time, there were no restrictions on the use of those funds and Godfrey needn't even disclose how he has used them.

It's hard to think of a legitimate purpose for a "campaign" contribution made to a winning candidate, after the election is over, when the candidate has no campaign debts to pay off.

But the problems with Leshem's contributions aren't limited to the timing. Of all the people who might make contributions to the mayor of Ogden, Leshem is the most suspect.

In 2007, the city was secretly facilitating Leshem's acquisition of 38 residential properties in the River Project area. The administration bought options on the properties and then transferred these options to Leshem, seeking the required approval of the city council only retroactively (and after the election). The city had already done Leshem another big favor by rezoning the property that he sold to Walmart, not even making him file a rezone petition.

Since 2007, the city has done Leshem even more favors. Instead of holding him to his promise to help fund the Ogden River restoration, the city scraped together enough taxpayer dollars to cover the entire $6 million restoration cost. This project has greatly increased the value of Leshem's adjacent properties.

Meanwhile, in 2010 the city tore down the abandoned homes on Leshem's properties at taxpayer expense. The city now has liens on the property, which Leshem disputes. Perhaps he feels his $3,000 will go further if spent on a "campaign" contribution than if it were applied directly to the liens.

In short, nobody has received more favors from the Ogden city administration in recent years than Gadi Leshem.

Maybe his $10,000 contribution to Mayor Godfrey helped facilitate these favors and maybe it didn't, but it certainly creates the appearance of a quid pro quo. By the same token, his $3,000 contribution to Caldwell creates at least the appearance that he expects favors in return.

When we questioned Caldwell about accepting the $3,000, he said he did so because he didn't want to send the message that he was unwilling to work with Leshem. As a result, he is sending the message to everyone else in Ogden that you can't "work with" someone in this town unless money changes hands.

Finally, let's not forget that in November 2006 Leshem was charged with felony insurance fraud, in connection with the operations of another of his companies. The charges were dropped only when Leshem agreed, in June 2008, to pay a $6.3 million civil settlement.

Although that incident had nothing directly to do with Leshem's Ogden real estate dealings, it's remarkable that any politician would openly accept money from such a person.

Though it's far too early to reach a verdict on the ethics of the our incoming mayor, it's already clear that a mere change in administration won't lessen the need for ethical scrutiny.

Dan Schroeder is director of the Ogden Ethics Project. Its website is www.ogdenethics.org.

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