Gubernatorial candidate Ted Wilson says Salt Lake City is vindicated by the pending settlement of the Select Telephone Technology scandal, while his opponents say the STT affair is a good example of Wilson's bad management.
Wilson, who served as Salt Lake City mayor when STT came under suspicion for misusing a federal grant secured with the city's assistance, said Wednesday he is accountable for the loss of $3.2 million of the $4.5 million federal grant."I was mayor for 10 years and I took my lumps, but I'm accountable on this one," he said. However, he added, "I think it (the settlement) is a vindication for the city."
Wilson has said in the past that federal government involvement in settling the city's case against STT developers is proof the city wasn't alone in being hoodwinked in a sophisticated scheme.
Salt Lake City officials are hopeful the city can keep a $2.5 million out-of-court settlement paid by defendants in a 1986 fraud suit filed by the city against developers of the now-bankrupt STT.
In the suit, the city charges $3.2 million of $4.5 million the city secured in grant money from the U.S. Department of Housing and Urban Development was used illegally by fraudulent STT developers.
A representative from the office of Sen. Jake Garn, R-Utah, said Tuesday HUD agreed to permit the city to keep $2.5 million of settlement money if an agreement between the U.S. Justice Department and defendants in the city's fraud suit is reached.
Independent gubernatorial candidate Merrill Cook said he was pleased the city may recapture some money lost in the scandal, "but let's not forget what went wrong."
Salt Lake City helped STT apply for the grant under HUD's Urban Development Action Grant program. But City Hall under the Wilson administration failed to closely monitor the federal grant money once the city gave it to STT, Cook said.
"That was total mismanagement of a major project," he charged.
STT was supposed to post collateral on the HUD grant in the form of liens on equipment it bought for the company but, as Cook pointed out, no one from the city ever made a point of verifying STT's collateral.
"Salt Lake City neglected its oversight responsibility," Cook said.
"I take full responsibility for the fact we should have checked some records," Wilson said.
Dave Buhler, campaign manager for Gov. Norm Bangerter, acknowledged Wilson accepts responsibility for the scandal, "but I don't see any vindication."
"The issue is who had the responsibility for the management of the grant," Buhler said, pointing the finger at Wilson and saying Wilson's management style at City Hall was "loose."
"I think Salt Lake City is fortunate to have a senator like Sen. Garn who is out there looking out for the city. Mayor Wilson lost the money and Sen. Garn was able to recoup the money," Buhler said.