Saturday, November 21, 2009

ONGOING COVERAGE: RIVER PARK SQUARE DEVELOPMENT

RPS lawyer cleared of conflict of interest

Swinton was within bar association rules, investigator says

Jim Camden
Staff writer
April 24, 2008

An attorney for the owners of River Park Square did not violate bar association rules against conflicts of interests when he represented the mall and the company that publishes The Spokesman-Review, an investigator for the Washignton State Bar Association said.

Randy Beitel, the senior disciplinary counsel for the bar association, said he was dismissing the complaint by independent journalist Tim Connor against Duane Swinton, saying the attorney was following the directions of one client, Cowles Co., which own both businesses.

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"Mr. Swinton's duty of loyalty ran to that one client, Cowles," Beitel wrote in a letter to Connor explaining the bar's decision. If there were competing interests that had to be balanced between the mall and the newspaper, "those were issues for Betsy Cowles and Stacey Cowles and their staff to resolve."

Swinton said he hadn't seen the ruling, but when he was told of the result he said he was glad.

"I'm grateful that the bar association found that I didn't act unethically," he said.

In releasing the letter, Connor called the decision "deeply flawed" and said he plans to appeal it. He still thinks Swinton had a conflict of interest that was raised in a review of the newspaper's coverage of River Park Square by the Washington News Council in 2007.

In his letter, however, Beitel noted that the news council's report drew a distinction between conflicts of interests for journalists and for lawyers.

"Lawyers' conflicts of interest … derive from lawyers' duties to clients, whereas journalistic conflicts of interest derive from journalists' duties to the reading public," Beitel said. There was no conflict for Swinton because "throughout the whole project he was representing only one client – Cowles Co."

Swinton is The Spokesman-Review's attorney for legal matters that include libel as well as access to public records and open government, a position he's held for more than two decades. He no longer handles legal questions for the newspaper regarding River Park Square.

He also is a legal adviser to Cowles development companies, which began making plans to redevelop River Park Square in downtown Spokane in the mid-1990s.

The mall redevelopment project eventually involved a complicated partnership between the newspaper's parent company, then known as Cowles Publishing Co., and the city of Spokane. It included a federally backed loan and a parking garage purchased with money from bonds sold by a private foundation and overseen by an agency established by the city. It involved complicated repayment schedules for both the loan and the garage bonds, and a pledge to loan money from the city's parking meter revenues to help pay off bonds if garage revenues weren't enough.

Supporters said the mall renovation was needed to reverse the decline of downtown; opponents said the deal was designed to benefit Cowles development companies more than the city. A majority of the Spokane City Council approved the deal in 1997, but political opposition shifted the balance of the City Council to being against it by 2000.

After the garage opened, its revenue projections proved wildly over-estimated. The city refused to loan money from its parking meter fund, and the former partners wound up in court. Eventually investors who bought garage bonds filed a federal lawsuit for securities fraud naming the city, the development companies and practically every law firm or adviser connected with the project. That case never went to trial, however, because the city bought back the bonds, then settled with many of its former partners and advisers to cover some of those costs. But the city continues to pay off the remaining costs of settling with bondholders.

Connor, who has written extensively about River Park Square for an online magazine called Camas, claimed in his bar association complaint that Swinton should not have been the attorney for the newspaper, which had reporters covering the development, at the same time he was helping the mall development company keep some information about the deal confidential.

Beitel disagreed. In dismissing the claim, he said Swinton worked for the Cowles Co., which is owned by members of the Cowles family, and represented different entities that were "wholly owned by the Cowles family interests."

The parent company of the newspaper and the mall development company were "two different facets of the same entity." Even when Swinton was representing the mall's former manager, Bob Robideaux, Cowles was Swinton's client, Beitel said.

In announcing his disappointment about the dismissal, Connor called the bar association's ethical codes "a bit gnarly."

Swinton disagreed. Although he'd never faced a complaint before, he said the rules "are what they are. … They're written, and the bar looks at what's written."