August 18, 1999
An Eyewitness News investigation has uncovered evidence that a few favored insiders may have gotten sweetheart deals at the old Defense Depot in Ogden.
City employees, friends and a few selected businesses bought tens of thousands of dollars worth of merchandise that was never offered to the general public.
News Specialist John Hollenhorst has details.
We'll never know whether taxpayers got badly ripped off, because we don't know how much more money the city could have generated if they'd used a public bidding process.
We're not suggesting that any company or buyer did anything wrong, but the city agency did not follow the usual city auction procedure.
The city is turning the old military depot into a business park. At building 9A, one salvage company official invited us in... and another invited us out.
"YOU HAVE NO RIGHT IN HERE." HOLLENHORST: "WHO OWNS THE BUILDING?"
The city owns it. So we went back with Mike Pavich of the city redevelopment authority. There's a vast storehouse of surplus military equipment, mostly junk, Pavich says.
"MOST OF IT HAS BEEN A BURDEN TO THE CITY. "
Pavich says building 9A was contractually promised to a tenant, so the stuff had to go. Fast.
MIKE PAVICH/DIRECTOR, OGDEN LOCAL REDEVELOPMENT AUTHORITY: "IT WAS NECESSARY TO GET IT OUT OF HERE TO CONTINUE WITH D.D.O. DEVELOPMENT."
The city offered a large block of hundreds of items to only two companies which the city felt were qualified to dispose of so much property.
Bloom Recycling outbid Smith & Edwards and paid $4,200. Some will be resold, some may go to charity, some will go to the landfill.
DOROTHY THYBERG/BLOOM RECYCLING: "I WOULD LOVE TO BE ABLE TO DOUBLE MY MONEY ON SOMETHING, BUT I HIGHLY DOUBT IT."
JOHN HOLLENHORST REPORTING: "BUT THERE WERE SOME ITEMS THAT WERE OF HIGHER VALUE, OR MORE EASILY MARKETABLE, THAT WERE SOLD SEPARATELY. AND IT APPEARS THERE WAS NO TRADITIONAL GOVERNMENT BIDDING PROCESS."
Sales as high as $10,000 were made with no competitive bids.
At least 15 forklifts were sold. Norris Robins of Norris Sheetmetal bought 4 at $750 each, even though he told us he'd expect to pay 4 or 5 times that on the open market.
Robins' son worked in the Depot front office until last week.
Eight forklifts were offered for bid, but again, only to Bloom Recycling and Smith & Edwards. Bloom paid an average of $900 apiece, and promptly turned an impressive profit on one of them.
REPORTER: "SO YOU BOUGHT A FORKLIFT FROM BLOOM?" CHRIS WOODS/CNA PRECISION MACHINING: "WE DID." Q: "HOW MUCH YOU PAY FOR IT?" A: "$5,000. WHICH, UH, WE FEEL IT WAS A GOOD DEAL. AND THEN SHE THREW IN SOME EXTRA STUFF FOR US."
City employee Lynn Brown bought a farm tractor for $2,200. He's still not sure if it will run well enough to justify the price.
LYNN BROWN/CITY EMPLOYEE: "MAYBE IT WAS A CASE OF BEING IN THE RIGHT PLACE AT THE RIGHT TIME, BUT HE TOLD ME THERE WAS A COUPLE, THREE BIDS ON IT. "
But we've learned the other so-called bidders were both Depot employes who were simply asked by a friend of theirs what they'd be willing to pay.
A top city official says he isn't sure if rules were broken, but standard city policies weren't followed.
WAYNE PARKER/OGDEN CITY DIR. OF MANAGEMENT SERVICES: "I THINK IT'S CLEAR THAT WE'RE GOING TO WANT TO TAKE A GOOD HARD LOOK AT THE PROCEDURES THAT ARE FOLLOWED."
But Pavich says standard bidding would have been too slow.
MIKE PAVICH/DIRECTOR, OGDEN LOCAL REDEVELOPMENT AUTHORITY: "AND SO WE SET OUT TO CLEAR THAT BUILDING SO THAT WE COULD MEET THAT SCHEDULE AND STILL ACQUIRE AS MUCH MONEY AS WE THOUGHT WE COULD GET FOR THE PROPERTY."
One disgruntled businessman who's feuding with Pavich says he would have bid tens of thousands of dollars more, if he hadn't been frozen out of the process.
An employee of the Depot told us he believes hundreds of thousands were squandered.
But Pavich says he believes the city got the best deal possible under the circumstances.
