Did Diocese’s Auctioneer Mislead Bankruptcy Judge?

Gallup Independent
October 14, 2015

http://gallupindependent.com/

When U.S. Bankruptcy Judge David T. Thuma made his decision not to invalidate the Diocese of Gallup’s property auction in Albuquerque after the public and media were barred from attending, Thuma said he based his decision partly on the written declarations of the auctioneer and one of the diocesan attorneys.

But were those declarations true?

On Oct. 6, the evening before Thuma held a hearing for diocesan attorneys to explain why the public and media were excluded, auctioneer Todd Good, the CEO and president of Accelerated Marketing Group, submitted a five page declaration to the court, signed under the penalty of perjury, stating that it was, and had been, Good’s custom and practice not to admit non-bidders to his property auctions in the past 33 years.

“This is because non-bidders do not increase bid prices,” Good stated in his declaration. “Rather, they have the potential to distract legitimate potential buyers, disrupt the auction, or chill bidding.”

Susan Boswell, the lead bankruptcy attorney for the Diocese of Gallup, also filed a written declaration under the penalty of perjury in support of Good’s actions.

“He informed me that this was his usual policy and procedure for the numerous court-ordered and bankruptcy auctions he had conducted in the past,” Boswell wrote of Good.

Public event

However, Arizona media reports about the Diocese of Tucson’s property auction challenge Good and Boswell’s statements to the court. In 2005, Boswell was also the lead bankruptcy attorney for the Tucson Diocese. As with the Diocese of Gallup bankruptcy case, Good was hired along with George H. “Hank” Amos III, CEO and president of Tucson Realty & Trust Co., to publicize and conduct a property auction for the Diocese of Tucson.

According to Tucson media reports, non-bidders, such as the press, were welcomed into the diocese auction.

A KOLD News 13 television news report, which is still posted online, was aired the day of the auction, May 21, 2005. The news story includes a photo of Good conducting the auction at his podium, which features a sign with Good’s company logo. The news report also includes quotes from three bidders the television reporter interviewed at the auction.

The next day the Arizona Daily Star featured a Sunday front page story about the event, complete with a news photograph focused on one man with his hand raised up to make a bid, sitting among rows of bidders. Reporter Carol Ann Alaimo, who confirmed in an email that she attended the auction, described in her article a festive scene with “merry strains of fiddle music and frenzied shouts of bidders.”

Alaimo also kept a running tally of the winning bids during the auction.

“An unofficial tally compiled by the Arizona Daily Star shows Saturday’s winning bids totaled at least $2.4 million,” she wrote. “That does not include a trio of sealed bids that could raise another million or more.”

Stephanie Innes was the Tucson newspaper’s religion reporter in 2005.

“We did not have a problem getting a reporter or photographer into the auction and it was clear from the start that this was a public event,” Innes said in an email Oct. 8. “I remember that we didn’t have to go to any particular extra effort to get in either, I worked with the diocese spokesman and he was fine with us going.”

First Amendment concerns

A third media report from Phoenix indicates Good allowed the press to attend a property auction in Mesa, Arizona. In an online news article dated March 17, 2008, a reporter for the Arizona Republic covered a property auction that attracted more than 400 people interested in bidding on 14 condominiums.

The article features a news photo of a family from Mesa sitting among rows of potential buyers, waiting for the auction to begin. In addition to interviewing three property buyers, the reporter also interviewed Good at the conclusion of the auction.

Contrary to these media reports, diocesan attorney Lori Winkelman reiterated Good’s declaration statements in comments she made to Thuma in court Oct. 7. Winkelman told the judge it was Good’s “customary practice” to never allow any non-bidder into his auctions.

“And it is his customary practice,” Winkelman said. “Mr. Good has been doing this over 30 years, he’s conducted thousands of sales. It is his practice to only admit qualified bidders. The reason for that is not nefarious or selective in anyway, it is simply that the goal is to maximize the recovery, and having anybody there who is not there to participate in the sale could potentially harm the recovery.”

Based on the media reports from Tucson and Phoenix, the Gallup Independent has written a letter of complaint to Thuma about the truthfulness of Good’s statements in his declaration. Although contacted by email Tuesday, Good, Boswell and Winkelman did not respond to requests for comment.

Susan Boe, executive director of the New Mexico Foundation for Open Government, has been following media reports about the Diocese of Gallup’s property auction.

“Although the Gallup Diocese is not a public body, its bankruptcy is a matter of public concern, and all proceedings, including auctions, need to be conducted before the public,” Boe said in an email Tuesday. “The exclusion of the press from the auction raises significant First Amendment concerns, especially when journalists reportedly were allowed to attend earlier auction sales conducted by the same auctioneer and law firm. Secrecy always raises questions about fairness and insider dealing.”