A Salt Lake City councilman said Monday he will request an investigation of a rumor that some council members struck a deal with a local bank for a $23 million bonding package - a story he calls "a malicious, slanderous lie."
"I am going to request the (Salt Lake City) Redevelopment Agency call a special session to have a special investigation to find who started this malicious and slanderous lie," said Council Chairman W.M. "Willie" Stoler.Meanwhile, the councilman who publicized the rumor that some council members agreed to give Zions First National Bank the bonding deal, worth $40,000 in fees, retreated only slightly from assertions the story is true.
"A deal may not have been cut," said Councilman Tom Godfrey, "but it was discussed."
At a council meeting last Thursday where council members convened as the RDA board, Godfrey said he heard rumors that "some kind of deal was cut" ensuring Zions would win a $23 million Block 57 bonding package.
Block 57, bordered by State and Main streets and First and Second South streets, is the subject of city redevelopment efforts. Bonding would go toward purchasing land on the block and financing public infrastructure.
Zions was named in a 1984 resolution as financial consultant for Block 57 financing, but no contract was signed with the banker. Last week the RDA voted 4-2 to sign a contract with the bank without rebidding the deal.
Godfrey said the contract should have been rebid after five years to clear the air, particularly because of the rumor that he aired Thursday, provoking angry denials from Stoler and Councilwoman Florence Bittner.
"Everything I've ever learned about ethics in government says that anytime something looks a little shady, then you have to do something to rectify it," Godfrey said.
Godfrey implicated no one in the rumor, saying only that one or more council members were named in the story. But later, Stoler and Bittner, denying the rumors, said they did meet with Zions officials, but no deal was made.
Stoler said he "bumped into" a Zions vice president in a grocery store parking lot while Bittner said she had a phone conversation with another. Both denied a deal was discussed.
"There was no deal ever struck, there was no conversation; I have never had a conversation with anyone about a bonding company on Block 57. It was an absolute lie," Stoler said.
Additionally, Kent Michie, a vice president with Zions, said although he did have a "chance meeting" with Stoler, no discussion of Block 57 occurred.
Stoler said he will ask RDA staff members to conduct an "interrogation" to find out the source of the rumor. "Mr. Godfrey has had to hear it from someone and I want to know who," he said.
Godfrey, refusing to elaborate on the content of the rumor or its origin, said his sources are impeccable and there is more to the rumor to justify his revealing it publicly.
"I have enough information to feel that it was more than just a rumor and if it was more than a rumor then better to act early on . . . before other things might occur," he said.
Godfrey denied his decision to unveil the rumor was politically motivated, although Stoler said Godfrey had ulterior motives.
"It sounds to me from what I can gather this is the beginning of the mudslinging promised by threats from the mayor (Palmer DePaulis) to intervene in this fall's election," Stoler said.