7/23/2008

By TIM UNRUH

Salina Journal

CLAY CENTER -- No criminal charges will be filed by the Kansas Attorney General's Office regarding a September 2006 land sale in Clay County.

But the actions of Clay County Commissioner Mike Spicer were questioned in a Tuesday letter from Deputy Attorney General Richard Guinn.

He wrote that Spicer's alleged contact with those bidding on the sale of land "to discourage them from going forward with their bids, appears highly irregular and improper."

But "based upon what is known at this time, no criminal charges will be brought against any of the Clay County commissioners in the purchase and later sale," the letter reads.

"In our review of this situation, it appears the official misconduct statute was not violated," said Attorney General's Office spokeswoman Ashley Anstaett. The commissioners' actions were "not necessarily illegal or criminal," she said.

With the investigation complete, Clay County Attorney Rick James said he is awaiting the official report from Kansas Bureau of Investigation Agent Ron Hagen.

Hagen could not be reached Tuesday.

Since he alerted the attorney general in October 2006, James said he's had the option of hiring a special prosecutor to conduct a separate probe into the sale of 12 acres of land to the lowest bidder.

"The attorney general makes decisions about whether or not to prosecute based on limited resources. They've got an entire state to worry about. A special prosecutor would have to worry about nothing except this," James said.

Commissioners Spicer and Jerry Mayo were pleased, but not surprised, by the Tuesday letter.

"It's what we expected, that he'd find we didn't do anything wrong," Spicer said.

Mayo said he felt the three commissioners acted properly.

"If presented with the same situation ... under that same circumstance, I would do it the same today," he said. "I think we've been substantiated, that we didn't do anything improper or wrong."

Commissioner David Thurlow said Tuesday, "It's time to put it to rest as far as I'm concerned. We have dealt with this thing. We felt like we didn't do anything wrong. We felt that way from the beginning."

James alerted the attorney general's office because he was concerned about the county's sale of 12 acres for $1,200 to a Topeka development company when there were three higher bids.

The 12-acre parcel was part of 49 acres of land the county purchased in October of 2005, for $245,000, to attract the Manhattan Area Technical College, which was researching a possible move to Clay Center.

Commissioners wanted 12 acres, but the owner would sell only the entire 49 acre tract. Commissioners sold 37 of the 49 acres to Buddie Salsbury, Topeka, who was then president of Enterprise Venture Corp. Salsbury had plans to develop housing on the site.

Salsbury told commissioners he needed the extra acreage to make his housing development financially viable. Commissioners advertised the remaining 12 acres for sale.

Commissioners received four bids in August 2006. The highest, $66,000, was from Clay Center physician Stanley Hatesohl. Salsbury submitted the lowest bid, $1,200.

But the three highest bidders withdrew. Hatesohl told the Salina Journal, for a July 14, 2007 story, that he intended to buy the property and build houses, but he withdrew his bid after a visit from then County Commission Chairman Spicer.

Hatesohl explained the conversation in a July 14, 2007 Journal story:

"He ( Spicer ) basically said, 'The county wants this ground developed as soon as possible, and if you aren't able to do that, we'd like for you to pull your bid so (Salsbury) could develop it.' "

After reflection, Hatesohl said Tuesday that his comment last fall was "a little strong," and that Spicer implied that he should pull his bid.

"He asked me to visit with Buddie, which I did. Buddie said if I bought the land, I would be responsible for a percentage of the legal fees to set up the Tax Increment Financing program as a way to fund the development costs. I told him I didn't think he could legally do that. He said he would sue me if he needed to, to recover those expenses," Hatesohl said Tuesday. "After visiting with my wife, we decided that wasn't something we wanted to get involved in."

In retrospect, he said, "It's unfortunate that the county allowed this piece of property to be sold at such an undervalued price. I think they should have reopened the thing to new bids."

To date no houses have been built on the property.

The attorney general's letter states: "Spicer allegedly contacted every bidder except (Enterprise Venture Corp.) and strongly encouraged them to drop out of the bidding process or face protracted litigation." That claim was denied by Spicer.

The letter continues: "Those same bidders claimed they heeded the advice of Commissioner Spicer and withdrew their bids. EVC ended up with the remaining twelve acres for substantially less money than offered by the three other bids."

Guinn added in the letter that "it appears very likely that EVC had reached an understanding when they purchased the first 37 acres that they would be able to purchase the remaining 12 acres at its original value."

Spicer said three of the bids were verbally withdrawn and that he called the bidders from the commissioners' room in the courthouse, while in the presence of the other two commissioners, Mayo and Thurlow.

"I did make the calls. We had to have (the bid withdrawals) in writing," Spicer said. "There's still a lot of misunderstanding and confusion that I was trying to coerce and make those people withdraw. They withdrew themselves."

Spicer said the commissioners "were acting under the advice of the county attorney."

James remembers it differently. He said he and Kansas Association of Counties attorney Judy Moler "warned the commissioners not to do this. I followed it with a letter that was printed in the Clay Center Dispatch."

James said he alerted the attorney general's office because he feared that county commissioners had violated state laws on land speculation and bidding procedures.

The attorney general's office letter reads that in reaching the decision not to file charges, "it could not be determined what, if any, benefit was gained by any of the commissioners as a result of the purchase or sale of the 49 acres of land." The county made a net profit of $6,000, according to the letter.

"They could find no evidence that anyone personally profited, which is what we normally associate with bid rigging," James said. "As I said all along, I think the actions of the commissioners were improper."

Commissioner Mayo said Tuesday he holds no grudges against James.

"I feel like he's doing what he feels he has to do. I think his time could be spent a lot wiser, doing other activities. I think the attorney general proves my point," Mayo said. "But (James is) the judge of his time and resources."

n Reporter Tim Unruh can be reached at 822-1419 or by e-mail at tunruh@salina.com.