THE DISPUTE OVER whether Paul Allen must disclose the profit that his football team makes at publicly subsidized Seahawks Stadium is pitting one state agency>"/>
THE DISPUTE OVER whether Paul Allen must disclose the profit that his football team makes at publicly subsidized Seahawks Stadium is pitting one state agency against three others. Ultimately, officials said last week, if taxpayers are to find out how much their "partner" (as Allen calls himself) truly rakes in at their stadium, the state might have to sue one of its own entities, the Public Stadium Authority, to force Allen to comply.
The Olympia standoff has left Gov. Gary Locke speechlesshe won't commentand made Allen something of a spectator to his own trial, jumping in when he can gum up the process. Last week, almost four months after the state attorney general's office concluded that the disclosure requirement "should extend to the team," Allen got around to notifying the state that he has "undertaken to prepare" a response and seeks more time. He also is likely to go to court if the state decides to rewrite his stadium lease. If this were a football game, all the players would be tackling each other while Allen, for the moment at least, slips untouched down the sidelines.
State Attorney General Christine Gregoire, state Treasurer Michael Murphy, and state Auditor Brian Sonntag agree that the law requires Allen to file a stadium profit-and-loss statement for his Seattle Seahawks NFL team, in addition to the statement he has agreed to file for his stadium management group, First & Goal. As a middleman between the state and the team, F&G effectively shields disclosure of Seahawks finances. Allen claims F&G and the Seahawks are separate corporations, even though chair Allen and president Bob Whitsitt run both. Microsoft co-founder Allen doesn't want to reveal his team's profits to the public, providing an extraordinary look inside a privately held professional football franchise, any more than he wanted to reveal his true financial involvement in the $430 million stadium, which will ultimately cost $1 billion with interest and add-ons. He was able to pay most of his $130 million portion without dipping into his own pocket, relying on seat-licensing and a $63 million loan from the NFL (see "After Further Review," Feb. 12).
The Public Stadium Authority, which oversees Allen's stadium operations, is siding with the billionaire and so far has refused to accept the position of Gregoire, the state's top legal officer. The stadium authority is relying on a legal interpretation by its own counsel that prompted some critics to laugh out loud. According to the law that created the stadium, the lease "must require the team affiliate to publicly disclose, on an annual basis, an audited profit and loss financial statement." Team affiliate is defined as "a professional football team that will use the stadium and exhibition center, and any affiliate of the team designated by the team."
WITH CLINTON-LIKE parsing, the stadium authority's attorney concluded last year that "the word 'and' can mean either 'and' or 'or,' depending upon the context within which it is used." In his mind, he said, "and" means "or." Thus F&G, not the Seahawks, had to report profit and loss. In February, Deputy Attorney General David Walsh said "and" means "and," period, and suggested that his fellow state officials should redo the lease to compel team disclosure. The stadium authority so far has balked, giving rise in the AG's office to talk of suing the stadium authority. To some, the stadium authority's stance is another indication of a state agency that's gotten cozy with its contractor. The stadium authority shares offices in the same Occidental Avenue South building as First & Goal, a short stroll from the Pioneer Square stadium, and phone callers to the stadium authority have to wait through a series of instructions about Seahawks tickets, suite sales, booking dates, and marketing before the public agency can be reached. To further blur the lines: A phone call to the Seahawks for comments on this article was referred to F&G, which had already been called and did not respond. Gov. Gary Locke, who promised "a watchdog, not a lapdog" when he appointed the seven members of the stadium authority board in 1997, last week refused to state a position on the interagency battle. He worked behind the scenes as both King County executive and governor to help Allen push the stadium deal to a narrowly successful public vote six years ago.
ALLEN COULD ESCAPE full disclosure this year due in part to the stadium authority's process. First & Goal is required to file its first profit-loss report at the end of June (the stadium opened last year), and the hassles over the Seahawks likely won't be settled by then. The stadium board waited until late March to make a decision on the AG's rulingand then decided to study it further. On April 1, it asked First & Goal for a "reasoned and researched response" to Walsh's opinion and said it would consider F&G's own response at its next meeting. Allen's attorneys said they'd take it under consideration. Last Monday, one of Allen's law firms, Foster Pepper & Shefelman, notified the stadium authority that a response was in the works but said they'd need possibly four weeks and asked the board to delay consideration of the issue.
The board complied, removing disclosure from last week's meeting agenda. The topic so far has not been rescheduled. However, the stadium authority could be softening its stance. "The board may ultimately decide to follow the AG's informal advisory opinion," says Ann Kawasaki Romero, the authority's director. Because the AG's opinion differs from the advice of the board's counsel, she says, the board is simply "being diligent in their review."
But the stadium authority has also hired another law firm, Preston Gates & Ellis, to review the state's opinion. That review, too, is still in the works.