Indeed, Leonard must deal not only with the loss of, reportedly, millions of dollars, but, also, the violation of the trust he placed in people.
It's a terrible thing.
And you need a surreal score-card to keep track of the players.
LC's attorney in this matter was a principal in a controversial scheme a few years back, to build a giant Oz theme park in Kansas. Citizens there formed a group, TOTO, an acronym for Taxpayers Opposed To Oz, and sued the U.S. government over the deal which collapsed in October 2001.
http://www.desotoexplorer.com/section/s ... story/3665
Further detail is to be found in this June 2000 item from the Kansas business journal, Ingram's:
http://www.ingramsonline.com/archive/00 ... unebtl.htm
Between The Lines
Smoke and Mirrors
By Jack Cashill
To clear a place for me to sit, Philip Klein picks up a life-size
gorilla suit off the couch and throws it in a pile in the corner. I
place my Coke alongside a miniaturized circus tent, and we begin to
talk. About Oz.
As manager of the world's largest magic shop, Klein can detect a sleight
of hand from the cheap seats. Sleight of hand is what he sees in the
proposed Oz theme park. And the cheap seats is where he sits -- a musty
office, shrouded in the inevitable faux wood paneling, amidst absurdly
deep piles of news clippings and circus paraphernalia, about as far from
the centers of Johnson County power as a non-homeless person can be.
Klein is slight, good natured, over-eager, and stunningly boyish for a
guy of forty. On an 83 degree day he wears rumpled corduroys and a
flannel shirt that should have been given to the blind about 15 washes
ago. If Klein's presence is not enough to nettle the self-important, his
voice surely must. The good Lord has blessed Klein with the most
annoying pipes in North America. When excited, which is always, Klein
sounds as if he's talking through a toilet paper roll. On radio talk
shows, where sound is the only medium, the voice lasers in like a one
pronged fork against the listener's inner blackboard.
Despite his modest resources, Klein has taken it upon himself to sue the
Kansas Development Finance Authority (KDFA) for failure under public
disclosure law to grant access to key Oz documents. To accomplish this
Klein has hired attorney Jeff Carey, a pleasant young guy who helps
filter some of the more entertaining screech out of Klein's accusations.
He never quite succeeds.
In a rough paraphrase of Winston Churchill, very rough, Klein calls the
proposed $771 million Oz theme park, "a scam within a scam within a
scam." The question he and Carey both pose is where is the money coming
from. They draw diagrams from one cut-out securities company to another
with detours through the Cayman Islands, and despite their best efforts,
they still can not come up with a satisfactory answer.
At first blush, one thinks Klein delusional. The developer, Hollywood
entertainment lawyer Robert Kory, is a major player, one who has secured
the blessing of the Kansas state legislature and much of the Johnson
County power elite for a Disney World scale project on 9,000-plus acres
of prime public land in Johnson County. As to Klein, he is just some
unknown clown. (Literally. He graduated from Ringling Brothers Clown
College.) Still, Klein does know a good deal about illusion, and when he
pulls back the Oz curtain, one gets a better view of the would be wizard
behind it.
A one time Transcendental Meditation honcho, Kory first surfaced in the
Kansas City area in 1989 as part of the Sandstone Entertainment Group.
In 1991, he joined up with former Lieutenant Governor Dave Owen and
restaurateur Gus Fasone to launch a 550 acre, OZ-oriented theme park in
western KCK. Projected cost $150-$300 million.
1991 must have been a busy year for a lawyer in Kory's position. While
guiding one set of partners on the road to Oz, he was cleaning up after
the other set back in KCK. The Sandstone Entertainment Group
reported losses of $600,000 that year and filed for Chapter 11
protection. Wyandotte County auditor Bob Brown asked to see the
financial records in June of 1991, but as of January 1992, "They were
still not forthcoming." If it takes one magician to spot another, Klein
marvels at Kory's ability to keep his audience in suspense.
At the same time, the Sandstone group was also mismanaging Memorial Hall
in KCK and were soon enough evicted from the premises. Kory acknowledged
problems but blamed his partners. Said Kory,
"I was not allowed to set the quality."
At about the same time Sandstone was in free fall, Kory and friends
managed to secure $450,000 in public money from KCK and the Board of
Public Utilities for a feasibility study for Oz. In February of 1993,
they received $100,000 more. Just a few months after the second grant,
the group had to remove partner Dave Owen from the project when he was
convicted of federal income tax fraud. Bummer.
In 1995, the $550,000 became an issue in the KCK Mayor's race. A mailer
was sent around the county accusing the Oz group of "thievery," claiming
that the money had been spent for a KCK steakhouse. What gave this
unfounded claim legs, as The Star reported, was that "no audit of the Oz
company finances or accounting of the grant funds has ever been made
public." Before Kory could pull this rabbit out of his hat, the FBI was
brought in to investigate.
Kory's partner in both Sandstone and Oz, Gus Fasone, claimed that the
money to remodel his "Oz-themed country western music bar and grill"
came not from the $550,000 grant but from a $300,000 Small Business
Administration (SBA) loan. One might wonder why the SBA would risk so
much public money on so bizarre a decorating scheme, but the agency did
substantiate Fasone's claim. And the FBI dropped its investigation.
After a few years of meandering, when even the politicos in KCK had
wearied of his act, Kory polished up his magic show and took it on the
road. In 1998, he somehow managed to convince the U.S. Army, the General
Service Administration, the Kansas Department of Health and Environment,
the Kansas Development Finance Authority, and the Kansas legislature to
give him first crack at the nearly 15 square mile patch of prime
suburban real estate once occupied by the Sunflower Ammunition plant.
This, the legislature did by enabling the KDFA to authorize some $250
million in STAR bonds.
A slow motion look at this most astonishing of tricks might be in order.
Here's this cryptic character from LA, Kory, with so little visible
money he makes Miles Prentice look like Donald Trump. He has no
experience in developing theme parks and a dubious track record in
developing anything. He proposes to create a park that must somehow
capture twice the annual attendance of Worlds of Fun and Oceans of Fun
combined to prosper. And for as little as $30 million in clean up costs,
without any competitive bidding, he's awarded a Lenexa-sized chunk of
real estate with an estimated street value of nearly $1.5 billion. David
Copperfield, jump back.
To be fair, the Kansas House finally sensed that maybe this wasn't such
a great deal after all and threatened to repeal the $250 million bond
authorization. But before a final vote could be taken, the 119,000 voter
strong Kansas AFL-CIO weighed in and changed the thinking of some 18
legislators overnight. The measure promptly crashed.
Philip Klein does not accuse Kory and associates of illegality. What he
sees instead is the most epic and intricate public-private cluster
backscratch in recent history. With the legislature neutered, it is now
left to super citizens like Klein to figure out who's scratching whom
and how much it's going to cost Kansas taxpayers before the blood
finally runs dry.
In the meantime, the backscratchers will read flattering editorials
about themselves, give each other awards, snicker at Klein and others
like him, and think of new ways to risk public money on their own
private interests -- before Oz, as Klein predicts, eventually goes up in
smoke.
The views expressed in this column are the writer's own and do not
necessarily reflect those of Ingram's Magazine.
***
May there be more answers than question marks, soon!
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