Great Plains settlement reversed; BOK must repay City of Tulsa

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UPDATED 2011/10/13 with links to further reaction and my interview with KRMG's Nicole Burgin. Just remember, though, BatesLine had the story first, thanks to an email from an alert reader.

This post is worthy of a flashing light, a flaming skull, and 72-point type. Tulsa's taxpayers get our $7 million back.

The Supreme Court of Oklahoma has thrown out the Great Plains Airlines settlement by a 5-4 vote with three of the four dissenters concurring in part. From the decision (emphasis added):

ΒΆ26 In the present matter, the settlement was not based on a contract, but rather under the equitable theory of unjust enrichment to the City of Tulsa. The City of Tulsa, at all times, presented the settlement issues to the District Court of Tulsa County. The Judgments Against Municipalities Act does not apply. Therefore, the sinking funds requirement also does not apply. However, since we find the unjust enrichment claim to be unviable and the Statute of Limitations would bar the unjust enrichment claim against the City, we remand the instant matter back to the District Court of Tulsa County to direct the repayment of the settlement funds from BOK back to the City of Tulsa.

See my July 2, 2008, column, The Great Plains Ripoff, for background.

The Supreme Court ruling, sadly, lets Kathy Taylor off the hook for triple damages payable to the taxpayers who brought the Qui Tam suit over the Great Plains settlement. I'd hope Taylor would feel ashamed of ripping off Tulsa's taxpayers as she did, but I don't expect any remorse. The taxpayers of the City of Tulsa weren't as important to Kathy Taylor as the legal and financial well-being of her cronies.

UPDATE: Here's a link to a more readable version of the Supreme Court decision. Thanks to UTW's Jennie Lloyd for the tip.

MORE REACTION (2011/10/13):

City Councilor John Eagleton called it back in 2008 and in 2010, he cited the Great Plains Settlement as one of eight instances demonstrating Deirdre Dexter's incompetence as City Attorney, in a letter urging Mayor Dewey Bartlett Jr to replace her.

News Talk Radio KRMG's Nicole Burgin spoke to me Wednesday afternoon about the Great Plains settlement. You can listen to the full interview via that link. I discuss what should happen with the money repaid by BOK to the City of Tulsa, what lessons should be learned, and speculate about why the Supreme Court's vote was so close.

(My radio chops are very rusty. Way too many ums and ahs. I probably should have asked for a few minutes to gather my thoughts and mentally shift gears from engineering back to politics before doing the interview.)

The KRMG story has a statement from the City of Tulsa:

"The City of Tulsa and the Tulsa Airports Improvement Trust are currently reviewing the Opinion from the Oklahoma Supreme Court setting aside the settlement between the Bank of Oklahoma and the City and TAIT, and considering their options. The City is pleased the Court recognized the City entered into the settlement in good faith, but the ruling by the Court was a mixed result for the City. The ruling obviously will cause BOK to return to the City the $7.1 million the City paid to BOK under the terms of the settlement. The ruling also makes it clear that the City has no liability to BOK arising out of the Great Plains transaction. However, the settlement the court set aside was global in that it included all of the claims BOK had against both the City and the airport. The result is that although the City has no liability to BOK, BOK can now pursue its previous claim against the airport."

KJRH reports that BOK will be resuming its lawsuit against the Tulsa Airports Improvements Trust:

BOK issued a statement to 2NEWS saying, "The Supreme Court's invalidation of the settlement with the City has freed Bank of Oklahoma to assert its $12.5 million claim against the Airport Trust for not fulfilling its obligation to the bank. While we'd hoped this issue would have been put to rest with the settlement back in 2008, the court's decision now requires that it continue."

Here's an idea: BOK should pursue repayment from the investors in Great Plains Airlines, who stood to profit if the airline had succeeded. Or from the vendors who were paid for goods and services with money GPA borrowed from BOK. Or from the individuals and companies that bought GPA's transferable state tax credits. Of the city officials who -- it is claimed -- promised BOK that city would cover any default. If all of the above had an attack of conscience and each paid a bit, they could raise that money very quickly, I imagine.

KOTV's report includes extensive comments from City Councilor Rick Westcott:


"This loan should never have been made. There's nobody that's on the hook for this," said Tulsa City Councilor Rick Westcott....

"What is important is the Supreme Court has ruled that the City of Tulsa has no liability to the Bank of Oklahoma. And the Bank of Oklahoma has to give taxpayers back $7.1 million."...

And don't start looking for a property tax rebate check in the mail anytime soon. The money will likely go into an account to guard against future lawsuits.

"The $7.1 million could be used to pay off judgments in the future and not have to levy citizen's property taxes to pay for those small judgments," Westcott said.

Fox 23 seems to get a key point wrong in their brief report. (It's quite understandable.) Kathy Taylor did not say the settlement "was illegal and unfair to taxpayers because it was paid with property taxes." She and the City of Tulsa asked the district court to affirm that the settlement to which she agreed was lawful. The court action that she filed included the complaining taxpayers as defendants. Taylor was pursuing this action to protect herself against liability for treble damages as a result of the taxpayers' claim; Taylor did NOT agree with the taxpayers that her agreement to the settlement was unjust. (See sections 11 through 15 of the Supreme Court's decision.)

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I had hoped for some changes with the change of ownership. Today's Tulsa World story on the mayoral election and Kathy Taylor's Great Plains airlines settlement has undermined that hope. One positive change -- the pictures make all of the candidates l... Read More

5 Comments

Bob said:

I would never have believed that five Oklahoma Supreme Court Just-us's would go against one of their plutocratic patrons that placed them in their high office.

Simply amazed.

Further icing on the cake would be a state supreme court ruling that former Mayor Kathy Taylor's BID tax to finance the ONEOK baseball stadium was also illegal.

Would that be asking too much in the way of Devine Intervention?

mark said:

Thanks Michael. I'll sleep better tonight knowing there is still some clarity and justice in Oklahoma.

Beau said:

Wow.

I wonder if BOK profited from the $$ after the city gave it to them?
Interest?

Bob said:

The return of the $7.1 million to the citizens of Tulsa will be a Pyrrhic victory, at best.

Why?

Since Bank of Kaiser controls all the bank accounts of all entities of the city of Tulsa, as well as all the bond underwriting, bond transfer agent, and bond paying agent functions for all entities of the city of Tulsa, the bank can probably make up the $7.1 million with just one juicy street bond issue.

Then, with a new city council as of January, there's the strong likelihood of a re-vote in 2012 on Kaiser River Sales Tax II, and a resultant new, juicy GARVEE bond issue.

None of these financial entanglements are competitively bid, rather for decades the city and Bank of Kaiser have eschewed competitive bidding.

All sole-sourced, no-bid arrangements with King Kaiser's bank.

Kind of fills in the blank as to why King Kaiser shows such interest in controlling the city government of a 3rd tier burg.

The A Team said:

Dewey Bartlett Jr tagged teamed pushing this illegal BOK settlement with his partner in crime, Queen Kathy on the T.I.A.

Let's not give him a pass on this or let him off the hook for trying to put the taxpayers of Tulsa on the hook for this illegal settlement, either.

Especially since he just voted as a member of the GRDA to give the top job at the GRDA to the unqualified, term limited, revolving door, career politician, Dirty Dan Sullivan, as a golden parachute.

About this Entry

This page contains a single entry by Michael Bates published on October 12, 2011 5:27 PM.

Jenks and Owasso voters give higher taxes thumbs-down was the previous entry in this blog.

George Kaiser and tax avoidance is the next entry in this blog.

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