Wednesday, June 10, 2009

Roundhouse Roundup: Yellin' and Screamin'

A version of this was published in The Santa Fe New Mexican
June 11, 2009

Last week, reporters and others were barred from a court deposition of a witness in the Vanderbilt whistle-blower/alleged pay-to-play case.

According to court papers filed this week, the press missed out on some excitement, or at least something you don’t normally encounter at court proceedings involving complex financial matters: “Yelling and screaming” by lawyers.

But while that might sound like fun for a jaded reporter, the 71-year-old woman with serious health problems who was the subject of the deposition surely made an understatement when she described the situation as “stressful.”

A little background: The lawsuit in question was filed by Frank Foy, former investment officer for the state Educational Retirement Board. Foy claims the ERB was pressured by Dave Contarino, former chief of staff and campaign manager for Gov. Bill Richardson, into making a $40 million investment with Vanderbilt Capital Advisors, a Chicago firm. The ERB lost all the money in the Vanderbilt investment. At the same time, the State Investment Council lost $50 million with the company.

Vanderbilt and its employees contributed $15,000 to Richardson’s presidential campaign. And it was revealed after the suit was filed that the politically connected Marc Correra, son of a Richardson adviser and contributor, made $2 million in finder’s fees for the Vanderbilt deals.

Defendants in the case include Vanderbilt, Contarino, ERB Chairman Bruce Malott (whose accounting firm did the books for the Richardson campaign and now is doing the same for Lt. Gov. Diane Denish’s gubernatorial campaign) and SIC director Gary Bland.

All have vehemently denied wrongdoing.

Pauline “Polly” Turner, a former University of New Mexico professor, was one of two ERB members to vote against the Vanderbilt deal. In January, she told The Associated Press that she did not think the board had been properly educated on the investment instrument known as “collateralized debt obligations,” which was being used by Vanderbilt. She also said the board moved too quickly to approve the deal.

Reasonable limits: Turner, who resigned from the ERB last year because of health reasons, was subjected to what she said was a 10-hour deposition last week.

In her letter to state District Judge Stephen Pfeffer, Turner described her health condition.

“I am 71 years old. I had lung cancer in 2002, which resulted in the removal of 2/5 of my right lung,” she wrote. “I am now in the ‘end stage’ of chronic obstructive pulmonary disease (COPD), which manifests itself in emphysema and chronic bronchitis. I require oxygen 24/7, and am not able to talk continuously for much more than 3 hours. I use a bi-pap machine at night and for a minimum of one hour in the day in order to pump air into my lungs. In addition, I have been treated for high blood pressure for about 20 years. Finally my husband is in his 90s and is legally blind due to macular degeneration.”

Turner wrote, “My purpose in writing to you is to respectfully request that you impose reasonable limits on the remainder of this deposition in order to protect my health. …”

Then she went on describe why unlimited depositions could be bad for her health.

“As I am sure you can imagine, this experience has been very stressful for me with 15 attorneys in the room and others connected remotely. It is especially stressful when these attorneys are yelling and screaming at each other. …”

She asked that the depositions be limited to one more session — of only three hours. Turner requested that to take place Wednesday or today, but that didn’t happen.

Those familiar with the case won’t have a hard time imagining the yelling and screaming by the lawyers involved.

A February news conference called by Foy’s lawyer, Victor Marshall, at an Albuquerque senior-citizen center turned into a raucous shouting match when two defendant lawyers — Marty Esquivel, who represents Malott, and Sam Bregman, who represents Malott’s accounting firm Meyners and Co. — showed up uninvited.

Pfeffer has scheduled a hearing on Turner’s request June 19. I wonder how many voices will be raised there.