Whenever a self-proclaimed libertarian takes the side of government over its citizens, you can bet that something sinister is underway.   I can’t think of a more appropriate way to describe Tom Grover’s recent attempt of political opinionating in his piece, “Rep. Carl Wimmer scandal isn’t about Rick Koerber, it’s about the integrity of our justice system.”  Mr. Grover essentially argues three points, 1) that Wimmer has betrayed the interests of justice and should resign for “intimidating” regulators, 2) that lawmakers should learn a lesson and steer clear of similar conduct, and 3) that Utahans should let regulators like Francine Giani alone while they do ‘their job.’

The short sighted and pious platitudes of Mr. Grover, a self-proclaimed Utah libertarian, demonstrate an alarming trend, exerting a surprisingly Herculean pressure, in modern politics.  Namely, in our current era, posturing and hasty generalizations serve as a regular substitutes for critical thinking and rational conclusions.  In this case, Mr. Grover’s brain-off, mouth open response to the so-called “Carl Wimmer Scandal” should be seen by citizens for precisely what it is—short sighted, and dangerously naïve.

The critical matter at issue in this story, and similarly at issue in our contemporary political culture, is one that ‘posture first, think later’ politicos like Tom keep missing.  The greatest threat to the individual liberty of free citizens does NOT come from private citizens (regardless of what they stand accused), it comes directly from government.

All contemporary issues notwithstanding the greatest danger facing free citizens today is unaccountable, overzealous, and unchecked government.  Very often, this threat takes the form of little known bureaucracy and even less known bureaucrats who freely trample the rights of citizens with little to no scrutiny or accountability.

Something that seems to escape the sporadic mental awareness of pundits like Grover, when contemplating political realities, is that business owners and entrepreneurs are citizens too.  Of course, someone who self-identifies as a libertarian knows this in theory, but in practice, folks like Tom seem to have trouble venturing beyond their own presumptions to see just exactly what their ideas mean when translated into the real world.

Take one simple example, where Mr. Grover remarks,

“If Mr. Koerber is a victim, he can prove it in court.  Evidence obtained against him illegally or coercively will be excluded.  Other abuses can be addressed in civil court.  Incidentally, Mr. Koerber was indicted after U.S. Attorney for Utah Bret Tolman conducted his own separate investigation.”

Here, Mr. Grover clearly and openly suggests that the right thing is for government to be allowed to do whatever it wants, and if it oversteps or does wrong, then those who are “victimized” can seek to have their day in civil court.  How dumb does this idea suggest citizens are?  Since when was this the position of a libertarian?  How is this an idea rooted in justice, a concept Mr. Grover seems to approve of, at least rhetorically?  You see, to the brain-off crowd, it might not be clear, but to the rest of us—we can see exactly what the consequences are of these not-so-libertarian ideas advanced by Mr. Grover. To illustrate, look at one simple quote from Mr. Grover’s story.  It contains only four sentences, but they speak volumes about what’s really being advocated.

#1 – “If Mr. Koerber is a victim, he can prove it in court.”

While the distinction will serve little purpose to most, it is worth noting that I’ve never claimed to be a “victim.”  What I have claimed is that the government has been engaged in wrongdoing, in illegal behavior, and in abusive violations of its citizens’ individual, civil rights.

>>>See “Federal Indictment Doesn’t Discourage Rick Koerber from Lashing Out at State Investigators,” by Fields Moseley (KUTV, Utah Channel 2 News)
>>>See “Rick Koerber Responds to Indictment,” by Franklin Squires (Official Company Website)

Besides the impact on my family and me, the actions of bureaucrat Giani and her colleagues have cost hundreds of Utahans their honest, well paying jobs.  In addition, the State action she oversaw has played a direct role in Utah citizens losing hundreds of millions of dollars.  So, if you’re going to choose to see ‘victims’ in this context, don’t forget to take a full measure.

Now, getting to the point more directly, let us think through what Mr. Grover is also suggesting.  Anyone aggrieved by suspected corruption, abuse, or malfeasance on the part of government officials, employees, or agents should just calm down, wait until the damage is fully done and then seek their day in court.  This would be like a citizen never being able to call the police when a crime is in progress, instead having as the only remedy, waiting until the commission of a crime is all over and then sue the criminals in civil court.

Of course, the implication of Mr. Grover’s idea is absurd when applied in such a common context (such as police officers and typical criminals), but when Mr. Grover applies it to government regulators and small business owners, the same idea passes for legitimate opinion.  Never mind that such a day in court is not permitted, in most circumstances, without first having to obtain permission from the government–to bring suit against a government agency.  Never mind that paying for such a day in court is, at a minimum, a several hundred thousand dollar venture (a sum much more difficult to muster after the government has had its way to begin with.)  Oh, and never mind that some damage and some wrongs committed cannot be undone by winning a victory in civil court (even if that victory includes a large money settlement).

It’s curious to me, how someone like Mr. Grover, evidently now attending law school (just what the world needs is another brain-off lawyer) can claim to love liberty while his own ideas self-evidently loathe the idea.  Would Mr. Grover, I wonder, hold the same ideas if it was him or his family that was being deprived of liberty without trial, being slandered and defamed by government employees working outside the law; or, if it was his livelihood being destroyed by someone like Francine Giani who actually has no legal qualifications whatsoever and yet holds virtually unchecked bureaucratic autonomy to shut down any small business or entrepreneur she whimsically sees fit?

Now, lest the reader think that by disagreeing with my characterization of Ms. Giani and her powers, you’ve escaped the logic of my conclusion – remember – Mr. Grover’s idea is that, no matter what has happened, no matter what wrong has been or might have been perpetuated by the government, the real remedy is to seek redress in civil court, after the fact.  Government officials, I guess in Mr. Grover’s views, are immune from criminal prosecution for wrongdoing–so long as the accusations originate from private citizens.

Note: This is of course, unless a free citizen, with no complaints or charges filed and no formal accusations made of any kind, and under no arrest, has contacted the government official in question and requested legitimate assistance in getting fair treatment from a government agency.  In this case, and this case only, it appears, Mr. Grover supports added scrutiny and accountability

Unfortunately, many of his readers will not easily see the obvious evil in his kind of juvenile pontificating.  Suggesting that a citizen’s only right consists of enduring abuse by the government only later hoping for a victory in civil court, is a political philosophy shared by the likes of Saddam, Chavez, Stalin, Mussolini, and in the Founder’s day, King George.

“#2 – Evidence obtained against him illegally or coercively will be excluded.”

It’s obvious that Mr. Gover hasn’t thought this one through.  First, you have to ask, who is it that will exclude such evidence?  You see, Ms. Giani has large, virtually unchecked latitude in bringing sanctions, administrative orders, etc., without any outside interference.

Second, the independent legislative audit (which I understand is probably too much reading, being over forty printed pages, to be expected of someone like Mr. Grover and his political likenesses who also pass sweeping legislation without so much as reading it) concluded that Ms. Giani’s department used illegally obtained evidence to exert extrajudicial pressure and coercion on small business owners.

Third, Mr. Grover seems to either forget or be unaware that grand juriess are enabled in almost all circumstances to hear and consider almost any such evidence in order to obtain an indictment.

Finally, the point being missed here is that the sum of my complaints against the government—and to the point of Mr. Grover’s essay, of Mr. Wimmer’s complaints against Giani—has not been that they have obtained evidence illegally (though they have) or that they’ve attempted coercion (though they have) but, the most substantive complaint has always been that the government is using extra-legal, and extra-judicial means of exacting punishment without any due process of the law and without regard to the rights of the citizens involved.

“#3 – Other abuses can be addressed in civil court.”

This is always the argument of the brain-off crowd when seeking to excuse their own cowardice.  But, just how is it that a reputation can be regained in court?  How is it that a company destroyed unjustly by government bureaucrats, (that before hand had an excellent reputation, had paid all its bills, and had earned substantial assets in excess of liabilities) can be restored through civil court?

How is it that personal relationships destroyed by the lies and misinformation of the government and its agents can magically be remedied or repaired in civil court, after the fact?  You see, the underlying idea behind Mr. Grover’s argument is that all wrongs boil down to money; money, of course, that can be repaid to any supposed victim if a civil jury decides in your favor.  At the same time, people making this kind of argument are the first to point out, in their stiff-necked and boastful dignity, that money is not what life is all about.  If only Mr. Grover and his equivalents were as interested in measuring the real costs of tyranny in the currency of personal liberty.

“#4 – Incidentally, Mr. Koerber was indicted after U.S. Attorney for Utah Bret Tolman conducted his own separate investigation.”

I started out by warning that Mr. Grover’s ideas are dangerous and naïve.  I did so in the interest of those who might be tempted to believe him.  Here is a perfect example of how such danger and naivety plays out.  It is absolutely clear that Mr. Tolman’s office did not conduct it’s “own separate investigation.”  While language to that effect has been thrown around, the clear evidence is quite the opposite.  At the press conference, held by Mr. Tolman (a federal official), he invited Ms. Giani (a state official) to speak to the media about her involvement.  During her remarks she claimed ultimate credit and victory for the federal indictment and even thanked the Utah governor for sticking behind her.   Mr. Tolman remarked that the investigation had started by a referral from Ms. Giani and would continue to be carried out in partnership with the Utah Department of Commerce.  Yes, it can be argued, that the federal government employed an IRS agent and an FBI agent to interview and gather evidence.  However, the theory behind the charges in the indictment, and the supporting evidence so far detailed by the government, shows unmistakably that it was the State of Utah’s investigation that drove this case to federal indictment.

One last thing about this whole, “incidentally” remark by Mr. Grover.  Does it matter?  Does it even matter if the person who is the subject of such an investigation is guilty (which I am not, by the way)?  Meaning, have we reached a point in society where misdeeds, abuse, and even criminal conduct by government officials and agents is tolerable and/or excused so long as some other agency “ratifies” the action by bringing charges?  Or, to put the matter even more simply, Mr. Grover is suggesting that from this point forward in America, all the misdeeds and corruption on the part of government should be excused so long as they are going after a legitimate target.

Think about this.  This kind of “ends justify the means” argument is the same argument advanced by every tyrant in history.  Hitler, Stalin, and today’s Kim Jong-il, Castro, and Chavez all justify the ugliness and brutality of their methods by holding up their supposedly righteous goals.  Remember, they all think they are “good guys” using government to “promote the greater good.”  While it may not be obvious to Mr. Grover and those of his political ilk, this is the same behavior for which he is offering an outright apology/defense.

I can’t help but wonder if and when other liberty loving citizens will get sick enough about this kind of wickedness being disguised as reasoned political opinion that folks like Mr. Grover might actually have to start answering for such embarrassing and disgustingly vulgar expressions.  Wouldn’t it be interesting if someone like Mr. Grover was actually expected to defend the implications of his political ideas?

Now, let’s bring this whole thing to the central point.  You see, no one has to defend me or my supposed business dealings, in order to defend the role played by Carl Wimmer in this whole affair.  Rep. Wimmer did not seek to have Ms. Giani fired because she was investigating me – this is a red herring – thrown out by the lazy and insincere.  Carl’s insistence that she be fired was based upon her behavior, her disregard for the law, her ineffective leadership (remember her appointee Wayne Klein resigned to soften the potential blow to Ms. Giani and her department when the results of the audit were released) and her abusive tactics.

It should be noted that it was not my case alone that brought Carl to this position and it was not my case alone that led to the audit.

For my case, it now looks like the allegations will be settled in a courtroom.  However, honest and concerned citizens should be asking why Ms. Giani’s behavior continually gets a pass by lawmakers, by the Governor, and even by the media.  Why hasn’t a single source in the established media started asking questions of Ms. Giani?   Remember, it was not me, my case, or Carl Wimmer who documented the grievous miscarriages of justice being carried out by Ms. Giani’s department.  Completely independent of my case, it was audit manager Tim Osterstock, Audit Supervisor Susan Verhoef and the leadership of the legislature that uncovered this disturbing pattern.  Everything I’ve released to the public (including audio tapes clearly documenting criminal and felonious behavior by Ms. Giani’s staff) has been in addition to the audit’s published findings.  Yet, the government has not sought to hold Ms. Giani and her minions accountable to any substantial degree.  No criminal investigation or civil investigation have been launched and the media continues to ignore this reality.  What is the purpose of conducting such audits of government agencies if the findings are just getting swept under the rug?

Ms. Giani, thanks to Mr. Grover and other lazy-minded pontificators and pseudo journalists, continues to hide her abuse and incompetence by stoking the flames of my case while playing the victim herself of Wimmer, and Shurtleff and who knows who else.

I find it mildly hilarious that when it was revealed in the media this past week that one of her own employees retaliated against Mr .Wimmer, a duly elected lawmaker, for asking around about allegations of the Department’s alleged abuse (her employee–a paid bureaucrat—sent an email to Utah Attorney General Mark Shurtleff lying about Wimmer’s motives and the nature of his relationship with me) that nothing more is said about it, but Wimmer is still painted as the bad guy, doing his friend a favor.  Since when were elected Representatives made off limits when a private citizen elect to exercise their constitutional right to petition their government for redress?

I’ll admit Francine makes a better poster child for victimhood than I do.  Her entire demeanor and public posture is that of a person being unfairly criticized and she is just out for vindication.  Never mind that several lawmakers (though not many courageous enough to speak out now in this climate) have done the same thing as Wimmer.  Never mind that she has been directly implicated in the wrongdoing discovered by the performance audit.  Never mind that her employees (even ones she has publicly defended) can easily be demonstrated to have been engaged in malicious behavior.  She’s building nothing, and she’s standing for no principle–but how dare an elected Representative ask the Governors to hold one of his appointees accountable.

Ironically, those in government who fancy themselves defenders of freedom haven’t shown themselves brave enough to actually hold her to the same standard as the rest of  Utah’s private citizens.  Have we forgotten that government employees are first and foremost citizens like the rest of us?  This whole situation reminds me of the Utah judge not long ago who was recorded, saying in her courtroom to a citizen addressing the court, “you and I are not equal, I am a judge.”

When Mr. Grover suggests that Rep. Wimmer betrayed the interests of justice and should resign for intimidating regulators, he ignores the undisputed fact that the now public legislative audit is sufficient grounds for anyone, including an individual legislator, to make such demands–regardless of my case.

In addition, to suggest that lawmakers should learn a lesson and steer clear of conduct similar to Wimmer’s is to suggest that executive branch employees and bureaucrats should not have to fear the check and balance oversight rightly provided by the legislature.  Never mind that the legislature has statutory authority to do just that.  I wonder, if left to Mr. Grover, who should be in charge of holding folks like Ms. Giani accountable.  Oh, yea, the courts–civilly, after the fact.  How just.

Think this one through.  The bureaucrats in this present case work for the executive branch of Utah government.  Their boss is ultimately, Utah Governor Jon Huntsman, Jr.  He has demonstrated, directly and indirectly no interest and/or ability to oversee the abuses documented in the audit.  He’s actually never publicly expressed an opinion on the audit, its findings, or the consequences of such abusive behavior being carried by his branch of government, under his watch.  Does no one in the Utah media even have a curiosity about this major blunder?

What Mr. Grover is suggesting is that the legislature, even in the actions of its individual members, has no place putting pressure (even as a check against abuse) on the executive branch of government.  He tries to make the argument that Rep. Wimmer was simply trying to protect “one of his cronies” but the argument is laughable to anyone interested in the facts.  Consider the following.

1) Carl never tried to interfere with the investigation itself.

2) In addition to the performance audit, several other legislators were interested in the very same outcome, and that had nothing to do with me or the investigation of my companies.

3) The pressure he exerted by simply asking questions initially brought a Giani subordinate, the now resigned Director Wayne Klein, to admit that he was choosing his course of action against me—not based upon the facts or the law—but in his own words, because “[I had] legislators out there trying to cut [their] powers.”   Heaven forbid a legislator seeking to limit the power of a bureaucrat.  For this alone Wimmer should be hung, I’m sure.

3) Perhaps most importantly, after several years, Ms. Giani was unsuccessful in bringing any action against me civilly or criminally.  Don’t forget, her chief investigator in my case and the head of enforcement for the investigation, just one month prior to Ms. Giani turning the case over to the Feds, suggested to me, to her and to the AGs office that there “was no evidence” sufficient to bring charges of any wrong doing against me.  Any interested party can hear one of his several statements, in his own voice, concluding as much.

Has there been any news coverage of this?  If there was evidence that I should have been charged by the State of Utah, why did Ms. Giani neglect to produce the evidence when asked by the Utah Attorney General’s office in November / December of 2007?

In his piece, Mr. Grover writes,

“This is about more than Rep. Wimmer and Rick Koerber.  It’s about the integrity of our justice system. Each of us counts on blind justice to protect us. What kind of state do you want to live in? One where accusations of fraud are adjudicated on the merits in court?”

Agreed, Mr. Grover, it is about more than Carl Wimmer or Rick Koerber.  Agreed, it is about the integrity of our justice system.  Agreed, that Utahans should be asking themselves what kind of state they want to live in.  Agreed, that accusations of fraud should be adjudicated on the merits in court.  Have you considered reading the audit results of the Utah Division of Securities?  What would the audit results show, heaven forbid, if the legislature undertook an audit of all divisions in the Department of Commerce?

After five years, why didn’t the state of Utah bring any single action against me in any court?  Because of Wimmer and the Attorney General?  The facts are not on the side of those who glibly make this suggestion.  Ask Ms. Giani why she didn’t bring any evidence to the Utah Attorney General’s office suggesting wrongdoing.  Why didn’t she bring administrative actions (she could do that by statute without involving the Attorney General’s office)?  Why didn’t she ask a county or district prosecutor to bring such charges?  She’s done that in other cases.  Shouldn’t the questions, at least, be asked?

Even if there were reasons to bring charges against me, and none were brought, how is this a greater threat to the “integrity of the Justice System” than lying officials, or bureaucrats over-stepping the law and committing criminal violations thereof in pursuit of their case?

There used to be a time in America (between approximately 1776 and about 1930) that the basic philosophy of our justice system was “its better to let a potentially guilty man go free than to convict innocent men by overzealous government.”  Instead, today, the philosophy being advocated by Mr. Grover is that somehow I am a greater threat to justice than rogue government.  This is beyond reason.  It is insanity.

To argue that Utahans should let regulators like Francine Giani alone while they do ‘their job’ is to suggest that citizens should not have elected representatives at all (at least not Representatives who can take their interests into account in all matter of government.)

If Carl Wimmer was wrong to “represent” the interests of fairness and justice “for all citizens” in Utah and it is indeed the right thing to let government (Francine Giani or anyone else) escape accountability for their actions except after the fact – and perhaps then only in civil court – America has died.

Long after my case is over, come what may, Mr. Libertarian, we will still be dealing with a Department of Commerce that has only become emboldened since having their conduct publicly exposed, with little or no consequence, including:  1-Misleading the public, 2-Misstating the law to citizens, 3-Arbitrary enforcement of the law, 4-Conflicts of interest, 5-Document fraud, 6-Contempt or lack of respect for court rulings pertaining to innocent parties, 7-Coercive settlement tactics,  8-Knowingly making false statements during official proceedings, 9-Failure to remain impartial, and 10-Ongoing problems after the resignation of former Director Wayne Klein.”

You point the finger at people like Representative Wimmer, but the truth of the matter Tom, is that you are the one posturing for government—not its citizens. While not everyone sees it, those who are awake and thinking, do in fact see the consequence of your ideas, and they are disgusting, repugnant, and indicative of something far more sinister than the object of your story.  The intellectual laziness, quickness to judge, and slowness to see past the whim-of-the-day media spin evidenced by your piece is something much more to be feared than a legislator asking for a bureaucrats head.

If you liked this post, try these...

• February 14, 2008 -- Francine’s Domain – Scandal Brewing in Utah Government
• December 6, 2009 -- Is Rick Koerber really the “Utahn of the Year?”
• June 25, 2009 -- Rick Koerber answers, “Is Rep. Carl Wimmer My Friend?”
• April 10, 2008 -- Carl Wimmer & Friends: Superheroes?
• July 19, 2010 -- Guess what I got from the Governor.

UTAH COUNTY, UT | 4 April 2008 | The Salt Lake Tribune’s least credible columnist, Paul Rolly, has recently demonstrated how scared and inept the democratic party loyalists are when conservatives get organized in Utah. Absent any credible criticism of Carl Wimmer (R – Herriman), Ken Sumsion (R-American Fork), Chris Herrod (R-Provo), Keith Grover (R-Provo) and Steve Sandstrom (R-Orem) Rolly decided to make a political argument by sarcastic metaphor, but like most liberals – he doesn’t quite come to grips with the power of action over rhetoric.

For example, Rolly whimsically claims that the GOP is out to “rescue its superheroes” because of a flier recently distributed for an event designed to support the “Fab Five” state legislators. Funny thing is that Rolly has no argument to back up why a normal, organized fund-raising event is a rescue attempt. Could Rolly imagine that the event might be instead, a victory rally?

Of course, Rolly doesn’t see it any other way, because like many in his camp he’s still too busy gloating over the Utah vouchers issue to see much of anything. In fact, Rolly’s only substantive remark in his entire essay is that “All five dutifully followed leadership’s admonition to vote for vouchers…”

The facts are however, as they say, stubborn things. They are especially difficult for Attila like bullies who call it a job to poke rhetorical fun at good men who serve their community.

Fact #1 – Vouchers.

Rolly argues that the GOP leadership is supporting these five legislators because they “dutifully” followed orders this past session. Funny thing is that three of the five campaigned in support of vouchers long before receiving any orders from anyone. Sometimes Democrats forget that to hold office you don’t actually have to wait for a leader to call you up and tell you your position.

Fact #2 – Stand-Out Legislation

Rolly glosses over all of the legislative details with a blanket accusation that none of these five elected representatives had any “stand-out legislation.” The first error in Mr. Rolly’s argument is t o think that Utahans, especially Republicans, send freshman legislatures into office solely for the purpose of writing new laws.

I think it is a serious surprise to most liberals to actually try and imagine a government whose effectiveness isn’t measured in the number of new laws passed. Additionally, Rolly ignores records like Wimmer’s where fully half of his “introduced bills” were proposed amendments to existing laws, on such important subjects such as child abuse, environmental crimes, toughening prosecution on those who hurt children, etc.

Other legislation sponsored by this freshman group included immigration reform, the rights of adopted children, and the reform of certain outdated criminal codes. Of course, this isn’t “stand-out” to Rolly because it left out global warming.

It is quite obvious that Rolly doesn’t count on educated Utahans to simply hop on the Internet and take 15 minutes to view the actual records of these freshman legislator’s – which records speak for themselves (with or without the support of leadership).

Fact #3 – Republican Challengers

It is true that four of the five candidates mentioned are being challenged by members of their own party, however it is far too early to tell how serious the challenges are. The state and county conventions will play their role, and the newly elected delegates will get to decide if any of the challenges are serious enough to merit a primary election. The irony is that Rolly lumps Wimmer into the same analysis (Wimmer is the Mr. T of the group Paul, just to answer your question) – when he is not even opposed by a Republican. Wimmer, as Rollly notes, is opposed by a “former” Republican who is now running as a democrat. Small details, I’m sure, for Mr. Rolly.

Think about this for a minute, Dave Hogue was in the state legislature for ten years as a Republican and has now come out of the closet as a democrat (which most of us already knew by the way.) Stubborn facts.

Rolly’s “ad hominem” humor is no substitute for “brain-on” activity. Thank goodness he writes for the Tribune, or else some voters who are actually affected by the decisions of these legislators might have been confused.

It does take a superhero these days to stand up against the politics of liberalism, socialism, and do-gooders who think that the reason a man or women is elected to office is to continue the plunder of previous legislatures. Rolly also ignores important events that are actually working to root out government abuse, waste, and corruption here in Utah, events that would not be happening without the support of men like these. For example, it will be interesting to see what tongue in cheek quarterbacking Rolly offers when the legislative audit of the Utah Department of Commerce comes out if it tarnishes the reputations of his fellow travelers such as Francine Giani, Wayne Klein, and Thad LeVar. But, we’ll leave that for a future day.

The truth of the matter is Rolly is simply trying to stoke the flames of some internal conflict with the Republican party, but as appropriate, the Republicans are best left to solving their own problems. In the end we can all be thankful that the “Superheroes” and the “A-Team” showed up this past legislative session because the alternative would likely have been some version of Mr. Rolly staring as Pinky’s “Brain” devising some new diabolical plot to take over the world. That is certainly frightening.

As for me, I’ll side with Representative Wimmer and his superhero colleagues, thank you.

If you liked this post, try these...

• June 29, 2009 -- Brain-Off, Mouth Open: Tom Grover Misses the Point
• July 19, 2010 -- Guess what I got from the Governor.
• December 6, 2009 -- Is Rick Koerber really the “Utahn of the Year?”
• November 3, 2009 -- Koerbers Divorce
• April 8, 2009 -- Rick Koerber Indicted? Schmucks, Grand Juries, & the Trials Ahead.

By C. Rick Koerber
February 14, 2008

In Utah right now there is a scandal brewing. The scandal penetrates the highest reaches of the Utah government. The question is, “Where will the buck stop?” as the evidence rolls out that an entire section of Government is in need of a major overhaul. Steven Oberbeck of the Salt Lake Tribune, quoting Chuck Newton of the Financial Planning Association of Utah, reported yesterday that there have been enough “shocking actions” in recent years that he believes its highly likely that “some government officials may eventually be criminally prosecuted.” Mr. Oberbeck’s report in the Salt Lake Tribune touches just the tip of the iceberg.

The Department of Commerce is ultimately under the direction of Utah Governor Jon Huntsman, Jr. (R) – a politically ambitious McCain backer who has little tolerance for scandal given the import of this year’s election and his political future. Huntsman is the one who appointed the highly controversial Francine Giani as the State’s Executive Director over the Department several years ago. Ms. Giani is not an attorney, has no legal background and did not have any substantial experience in executive level positions, yet she currently holds Utah’s highest regulatory position over all business activities in the State.

Since Ms. Giani’s appointment, the Department of Commerce has been the subject of a surprising degree of scrutiny. Many legislative leaders on both sides of the political isle have expressed “disgust” at how the Department’s activities have been and are being carried out by Giani and her associates. One legislator, Utah Representative Jim Bird (R-West Jordan) recently uncovered an alarming complaint.

“Ms. Giani allegedly was made aware of illegal activities taking place within the division and responded by telling employees that she didn’t care if the actions of the division were legal or not – but that employees were to perform the jobs without question.”

Some Utahans are hoping that the current controversy will allow the public to clearly separate “lip-service giving do-gooders” in government positions from authentic leaders who care about citizen’s individual rights, civil liberties, small business and simple concepts such as fairness. At the core of this issue the question is, “How far up the chain does the corruption go?” In recent years the State has behaved with little concern for small business owners who find themselves entangled in the Department of Commerce’s web of scandal and corruption. One of the State’s highest elected officials recently commented:

“Francine Giani is the single greatest threat to small business and personal liberty in the State of Utah.”

It’s easy to give lip service to the idea that small businesses are “too heavily regulated” but when corrupt and over zealous regulators systematically engage in the type of behavior now being uncovered in Utah, it’s time for change at the highest levels. For the small businessman, the lifeblood of the local economy, abusive behavior by regulators can be a matter of life or death for their businesses – which means a loss of jobs for Utahns at a time of huge economic uncertainty.

As news of the present scandal spreads, residents are anxiously awaiting the Governor’s response to the Giani controversy.  Sources suggest the Governor feels conflicted given that he and Giani are reportedly “good friends.” Over forty years ago former Fed Chairman Alan Greenspan warned,

“The world of [regulation] is reminiscent of Alice’s Wonderland: everything seemingly is, yet apparently isn’t, simultaneously…It is a world in which the law is so vague that businessmen have no way of knowing whether specific actions will be declared illegal until they hear the judge’s verdict – after the fact.” (Greenspan, Alan. Later Chairman of the Federal Reserve. Paper given at the Antitrust Seminar of the National Association of Business Economists, Cleveland, September 25, 1961.)

Quiet whisperings have become all too common in Salt Lake City among government employees, elected officials, and community leaders about this rogue agency stealthily persecuting small businesses. Over the last 12-15 months Ms. Giani’s commissars in the State’s Division of Securities have come under the most serious scrutiny. Allegations of corruption, incompetence, mismanagement and “too many unfair prosecutions“under a cloud of controversy are growing relentlessly frequent and more substantial. Last week, apparently in an effort quell the unraveling of her department – Giani reportedly pressured Securities Director Wayne Klein to resign.

“They obviously haven’t told me the results of the audit but I’ve heard words like [the division is in] ‘disarray’ and the ‘deeper we [the auditors] go, the deeper we need to go,’ “ (Representative Bird testimony last week during the Utah Legislature’s meeting of the House Business and Labor Committee.)

Klein’s resignation, however, is not likely to insulate Ms. Giani (or several other employees involved in this mismanagement such as Securities Enforcement head Mr. Michael Hines who is also suspected of official wrongdoing in the Department) from the political and legal fallout yet to come.  Apparently hoping this will all blow over quickly, Ms. Giani has tried to appear disconnected recently asserting, absurdly, of Klein;

“He has been a good director, and in terms of his background in the securities industry, there is no one better.”

Utahns can only hope Ms. Giani is simply posturing here. Wayne Klein is not only personally vindictive but has a fairly well known reputation in the legal community from his previous positions both in the Utah Attorney General’s office as well as with the State of Idaho for being a loose cannon, an unjust prosecutor, and having contempt for legal restrictions on his own activities. It makes one wonder, in light of all the information that is now coming out, how Mr. Klein was appointed with the approval of the Governor and the legislature in the first place. According to Ms. Giani’s recent statements to the press, Klein is precisely is the “type” of regulator she strives to appoint in her department. Yet, Klein is quite simply a commissar (listen to the Free Capitalist radio broadcast archives from August 31, 2007 for elaboration). Specifically, he has increasingly become an embarrassment to government and legal professionals. He and his staff routinely fail to demonstrate even basic familiarity with the A-B-C’s of securities law. Reportedly, his own agenda is more important than the letter of the law and he is known to stammer and hesitate when trying to describe even the most basic federal standards for simple concepts such as what constitutes an accredited investor.One of Klein’s former government employers recently remarked that he, and a number of other government officials are not surprised at the recent discoveries about Klein and Giani’s philosophy of government.

“Mr. Klein is the worst kind of loose cannon. He’s often going after someone who’s offended him, regardless of the law. He’s really only effective if someone with very strong supervisory skills watches his every move and Francine is not that capable.”

Securities attorneys in Utah should not only be alarmed and offended at Ms. Giani’s defense of Klein, especially given his track record, but extremely diligent in working to ensure that there is serious reform in the Department. With Ms. Giani still at the helm she’ll likely just pick another “Wayne Klein” to run the Division. As reported by a notable Salt Lake City attorney recently,

“It has become common practice in Utah for knowledgeable, reputable, and highly educated attorneys to have to grovel to Giani, Klein (and their heretofore behind the scenes bulldog Mr. Michael Hines, Director of Enforcement in the Division of Securities). None of whom have shown much if any appreciation for the details of the law. It’s embarrassing.”

In 2007 a group of private citizens and business owners, fed up with the egregious behavior of an entire section of state government, began a private investigation on their own to look into the State’s activities. So far, the investigation has uncovered a remarkable cache of written documents and audio recording. The evidence includes recordings and transcripts of private meetings, official and unofficial conferences, lunch meetings, early morning meetings (as early as 6:30am at the home of one resident) and late night investigative activities (with government workers showing up to the homes of some “witnesses” as late as 10:00pm). The mounting evidence shows a disturbing pattern of Giani, Klein, and Hines each engaging in deception, incompetence, misstatement of the law, and abuse of the legal processes. Perhaps even more telling, the evidence is beginning to show a growing rift in the Department of Commerce between those public servants who want to carry out the legitimate duties of the Department and those like Hines who reportedly remarked recently that he hopes to retire by “writing a book” about one of the cases he’s currently investigating. The Salt Lake Tribune recently reported that it is precisely this internal rift between real public servants and self-serving bureaucrats that brought about the legislative audit working to uncover the details of this brewing scandal.

“After hearing from several division staff members who expressed concerns about how the agency was being run, Rep. Jim Bird, R-West Jordan, late last year requested that the Legislative Auditor General’s Office audit the division.”

This kind of situation makes for a very unfriendly business environment and is embarrassing to everyone in government. With a formal audit underway, it appears Ms. Giani is simply buying herself time to try and get out from under the explosive details now coming to light. Consider a few embarrassing examples of the work being conducted by Ms. Cruella and her henchmen.

1. Wrongful Accusation of Criminal Behavior against Utah Citizens.
2. Misuse of the Courts and Legal Process.
3. Lying to Government Officials.
4. General Incompetence when it comes to explaining rudiments of the law.
5. Defaming Members of the Legislature who scrutinize the Department.
6. Punishing Citizens with Evidence Against the Department for their Political Activity.
7. Demanding “prior restraints” on Utah Citizens’ free speech, in an attempt to silence criticism of the Department’s methods in public or in the courts.
8. Government employees lying to the public in order to “create” causes for investigation.
9. Disseminating confidential information obtained during investigations to private sector colleagues to enrich their business efforts.
10. Offering jobs and/or job referrals to witnesses who are willing to lie or distort the truth to defend the Department.

This kind of behavior is precisely what Ronald Reagan warned America about as early as 1964 when he deplored:

“It is time we realized that socialism can come without overt seizure of property or nationalization of private business. It matters little that you hold the title to your property or business if government can dictate policy and procedure and holds life and death power over your business. The machinery of this power already exists. Lowell Mason, former anti-trust law enforcer for the Federal Trade Commission, has written “American business is being harassed, bled and even blackjacked under a preposterous crazy quilt system of laws.” There are so many that the government literally can find some charge to bring against any concern it chooses to prosecute.” (Reagan, Ronald, A Time for Choosing, Speech given October 27, 1964)

Legislation has recently passed the Utah House of Representatives that would rein in the powers of the division and its director in an effort to secure more just handling of the Department’s responsibilities. However, as reported on FreeCapitalist Radio Monday February 12, 2008 this attempt to “rein in” the powers of Ms. Giani and her flying monkeys is being received about as well as the “Wicked Witch of the West” receiving Dorothy and her ruby slippers.

Is Utah's Francine Giani the "Wicked Witch?"

For example, after Bird’s HB83 passed the Utah House, Giani defender Utah Senator Curt Bramble (R-Provo), apparently in an effort to help Giani and the Governor’s office stall the brewing controversy, strategically stalled the legislation from being considered by the State Senate indefinitely.

Reminiscent of something behind the iron curtain in the 1980s the outgoing commissar Klein remarked to the attorneys of a Utah citizen recently, who was cooperating with State legislators in their attempts to get to the bottom of the abuses going on in the Department that: because of his political activities the Division was “forced” to take tougher action. In a similar case Klein justified:

“Part of the problem is that I’ve been painted in a corner because your client has gone on the radio and publicly accused us of stuff. He’s got legislators out there trying to cut our powers because what we’re doing as if he’s entirely right in what he’s doing and government is unfairly coming after him. So ordinarily we have more flexibility but where I’ve got public attacks coming in saying we’re being accused of being unfair…[interrupted].”

Ayn Rand also famously warned us of situations like the present scandal brewing in Utah under Ms. Giani’s watch.

“This means that a businessman has no way of knowing in advance whether the action he takes is legal or illegal, whether he is guilty or innocent. It means that a businessman has to live under the threat of a sudden, unpredictable disaster, taking the risk of losing everything he owns or being sentenced to jail, with his career, his reputation, his property, his fortune, the achievement of his whole lifetime left at the mercy of any ambitious young bureaucrat who, for any reason, public or private,may choose to start proceedings against him…It is a form of persecution practiced only in dictatorships and forbidden in every civilized code of law. It is specifically forbidden by the United States Constitution. It is not supposed to exist in the United States and it is not applied to anyone-except to businessmen.”(Rand, Ayn. Capitalism: The Unknown Ideal, pg. 50 – from a speech given at the Ford Hall Forum, Boston, on Dec. 17, 1961)

The official audit of Ms. Giani and her staff is still under way. Potential legal action is reportedly pending against the State from private parties alleging damages in the hundreds of millions. Additional complaints are coming in from victims of the Department’s abusive handling methods including complaints against the Division of Real Estate, Licensing, Securities, and Consumer Protection. Transcripts and audio recordings of Commerce employees lying about Utah businessmen and their activities and other highly problematic behavior on the part of government employees are being delivered to government officials and media outlets. In the mean time, Utah citizens (the real Ma’s & Pa’s Mr. Hines is so fond of talking about while he pursues his agenda) are getting tired of being scammed by the so-called “scam busters.” Some investors have recently been told according to evidence obtained through recorded conversations that (consistent with what has been reported about Giani’s style of administration) if citizens want the State to help them they have to be willing to distort the truth and cooperate with the State’s agenda – independent of the facts involved. One local businessman recently complained,

“For more than two years now the Department of Commerce has been after me. They have come at me from every angle, from the Real Estate division, the Securities Division, Consumer protection etc. Every time, I’ve been able to demonstrate that they have no evidence against me and that I and my associates have done nothing wrong. Yet, the government continues to make horrible allegations, publicly bad mouth me and my colleagues and even accuse me of being a criminal to legislatures, business colleagues, and some of my closest associates. All of this so that Francine Giani, Wayne Klein, and Michael Hines can “look” like they’re doing their job. They’ve got all my clients in an uproar, they’ve told this story about what my business “really is,” all truth be damned, and their efforts have cost dozens of real Utahans their jobs and as essentially bankrupt me and my partners to the tune of millions of dollars. All this and not one charge filed, not one official action taken, and not one person in government responsible. There’s not even a forum where I can defend my case, I simply have to wait until these very powerful men and women are done playing politics with me, my investors, my customers, and my business. Maybe I’ll get an apology like Mr. Teran received from the Department, after they’ve succeeded in destroying my company.”

While the citizens of the State wait for the Governor to weigh in on the issue, thank goodness for good legislators and government leaders who don’t hesitate to reach for the pail of water when the Wicked Witch comes around. On a side note, sources suggest that Ms. Giani may already be preparing for her exit, vying for a position as an investigative journalist (Geraldo watch out!) back at Utah’s local Channel 2, KUTV along side consumer watchdog Bill Gephart. If it’s true, it’s likely that Ms. Giani can serve the people of Utah better there – for certainly there’s a role for consumer watchdogs. If she does return to the media perhaps she’ll feel less burdened, being freed from sticky things like State law, due process, fairness, etc. Its time for Utahns (including our Governor) to get past the old cliché of Utah being among the “scam” capitals of the world, and start taking a closer look at the corrupt bureaucrats irresponsibly promoting that myth to the detriment of good people in a good state working hard to do many good things. Once again scandal is brewing in Utah. This time it’s the government in need of systematic reform. Perhaps Mitt would accept an invitation to come save the day in Salt Lake City one more time. Stay tuned…

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