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Seattle Times reporters Percy Allen, Jim Brunner and Danny O'Neil are filing updates from the courthouse throughout the day.

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June 20, 2008 11:14 PM

Ceis: No conflict of interest in Gorton's work with city, possible ownership group

Posted by Percy Allen

Seattle Deputy Mayor Tim Ceis and Seattle attorney Paul Lawrence met with the media after Friday's trial adjourned. Here's the complete Q&A from the press conference.

Tim Ceis: Good afternoon. I want to start off by saying from the city's perspective we're very pleased about how the case has been going. We were hopeful we would wrap up the testimony today, but we have to come back on Thursday so we'll be here. And I believe Thursday is closing arguments. But we're very, very pleased with how the case has gone as of today. And we're looking forward a good conclusion. So with that, Paul and I will take any questions about what went on today.

Question: Do you agree with Sen. (Slade) Gorton's assessment that failing to win a KeyArena renovation undercuts your specific performance argument?

Paul Lawrence: No. Absolutely not. Our position is that the specific performance case is decided based on the terms of the contract. Whether the Seattle Sonics are a unique tenant and whether they bring benefits to the city over and beyond the rent that are hard to measure. That’s the specific performance case and it has nothing to do with what Sen. Gorton said.

Q: Do you know what Sen. Gorton based that assessment on in his e-mail?

Lawrence: You’ll have to ask Sen. Gorton.

Q: Does the city have unclean hands in bringing this lawsuit to try and enforce specific performance?
Lawrence: Absolutely not. I think what you saw in the testimony today was testimony from Wally Walker, who was a member of the ’79 championship team, a longtime Seattle resident (who) is active in the community and with the basketball team. He as a citizen wanted to keep the Sonics here and worked toward that effort. I think there’s been a lot of argument by the council trying to put two and three together to make four, but it doesn’t add up because there’s simply no evidence of any sort of plan as they look at it. I think if you look at the document that they point to so often, you’ll see that it clearly does not involve the city. It anticipates the city being a participant later on in an effort to keep the Sonics in Seattle, but there’s nothing to suggest that plan involved the city at it’s inception. And of course, this all happened after Clay Bennett announced very clearly his intent to leave Seattle for Oklahoma City.

Q: But didn’t it happen after the city hired Slade Gorton as its attorney?

Lawrence: No. It didn’t happen. As it came up today in the testimony, it dates back to July 2006, which is before K&L Gates was approached. Sen. Gorton prior to being retained by the city, was independently looking to find a solution. And as you heard today, what he was working on originally was a Bellevue arena, which was not in the interest of the City of Seattle as a solution for the Sonics.

Q: If you had a do-over and you were giving advice, would you advise them not to use the “Poison Well” quote on the cover of their PowerPoint?

Lawrence: I think that if Mr. McGavick who wrote that (he) would have to address that to his own attorneys. Again, the city had nothing to do with that, so it’s not our place to say what he should or shouldn’t have said.

Q: What would you have done?

Lawrence: I don’t give advice to him. He never asked me for advice. And again, we were not engaged in that effort to try to convince a prospective owner to come to Seattle and act to provide an alternative to the team leaving.

Q: When was it that Sen. Gorton was retained by the city?

Lawrence: K&L Gates was retained I believe the day that the arbitration – a couple of days after the arbitration was filed. I remember being called in on a Friday and working all weekend to get a complaint filed on Monday. And the arbitration date was the 19th, which I believe was a Wednesday.

Q: What is Gates' history with the City of Seattle as far as representing various other litigations?

Ceis: We don’t have an ongoing retainer with them on litigation issues. They act for us on various capacities on counsels, and in some cases on legal matters. But it’s on a case by case basis.

Q: You said K&L Gates was retained shortly after the arbitration was filed. In that meeting at Mr. Walker’s house that involved Mr. Ballmer and Mr. Gorton was in October. So who was Gorton representing when he was at Mr. Walker’s house talking about the PowerPoint presentation?

Lawrence: Mr. Gorton represented himself. When we were retained, we indicated to the city that prior to that date Sen. Gorton and Gerry Johnson had been working to find a perspective ownership and alternative solutions to losing the team. That was disclosed to the city and it was reflected in the retention agreement with K&L Gates that there was this work being done Sen. Gorton and Gerry Johnson ongoing at the time we were retained on the litigation.

Q. Johnson is working on this case, right?

Lawrence: No you’re not familiar. There are two Johnsons. The attorney Jeff Johnson is a litigation attorney who is working on this case. Attorney Gerry Johnson does not do litigation.

Q. In hindsight, knowing that Mr. Gorton was trying to keep long-term basketball here, was he the best choice for counsel?

A. Ceis: As Paul said the representation agreement, they disclosed the work that Sen. Gorton and Gerry Johnson were doing and the city didn't see any conflict in that work. They were pursuing long-term tenants for the KeyArena, basketball, that was what they were working on. That was our interest, too, is to have short-term and long-term tenancy of the National Basketball Association in KeyArena. So there were no conflicts there.

And given Sen. Gorton's long history in professional sports in this city going back to the Pilots and bringing Major League Baseball back to Seattle, helping to save the Seahawks in Seattle, it was an obvious choice to have for us to have him on board.

Q. Didn't Mr. Griffin acknowledge on the stand that the only one able to inflict bleeding or the pain on the owners that would cause them to call would be the city?

Lawrence: What Mr. Griffin stated that in terms of legal action, that they city would be the entity enforcing its lease, which is it’s legal right to do. It says in the lease that either party, in this case it’s the city, has the right to specifically enforce the lease. The city has made that clear going back to July of 2006, well before anything that was discussed in the courtroom today, that they would specially enforce this lease against Clay Bennett or any other owner because that's what their bargained for and the city wants the full benefit of its bargain. The city's decision to enforce this lease was announced to Mr. Bennett Day One when he purchased the team in July 2006, long before any events you heard about today.

Q. Wally Walker kept saying he was not a consultant with the city until January or February. 2008 yet Bennett's lawyer kept referring to and the judge accepted a letter where he acknowledged that in Sept. 19, 2007 he was a consultant. That never got resolved in today’s trial.

Lawrence: I think that's a pretty simple explanation. He signed the letter at the end of January or February, but the letter reflected that he had been providing advice as he testified with respect to the economics and the NBA process with respect to the approval of a renovated KeyArena going back to September.

Q. To follow up, you said there was no conflict in hiring Slade Gorton because he wanted a long-term team and you guys wanted to take care of the current problem, but doesn't that cut directly to their case that there is conflict. The only way he saw to get a long-term team was to bring the city’s pressure to (them). So it’s a direct conflict it seems like.

Ceis: They disclosed they were doing that work. They didn't give us any details about it. We were not engaged in that work. All we were engaged with in K&L Gates was on the litigation. The work that Sen. Gorton was going in terms of talking to (prospective) owners was something we were not involved in.

Q. Were you worried about a perception of there being a conflict of interest?

Ceis: Again our interest was ensuring that we had a tenant in KeyArena and we wanted basketball as a tenant. So again, we saw no conflict.

Q. (Inaudible)

Lawrence: The people who worked on the litigation for the city for K&L Gates had nothing to do and were not aware of the PowerPoint. I think as it came out today Sen. Gorton and Gerry Johnson in connection with the matters they told the city about that they were acting on separately were the K&L Gates people involved with the PowerPoint.

Q. When did the K&L Gates people aware of PowerPoint presentation?

Lawrence:. Mr. Gorton and Mr. Johnson were aware of it at some point around the meeting time.

Q. And when were you made aware of it?

Lawrence: I can't remember when it came out in terms of a discovery request from the… it came out in the discovery request direct either Mr. Griffin or Mr. Walker or Mr. Stanton, I can't remember.

Q. Can you explain how a bulk of Wally Walker e-mails arrived on Monday?

Lawrence: You'll have to probably address that to Mr. Walker's attorney. As best as I understand it, Mr. Walker in response to his attorney's request, went back and checked and apparently he had not checked his "sent" mail files until a couple of days ago. So Mr. Walker's attorney, trying to make sure the production was complete, went back asked Mr. Walker if he had checked X, Y, Z files and apparently the "sent" mail file had not been checked.

Q. Paul you say you’ve shown that apparently no link between the city and this group’s effort to harm Bennett’s group at all. What is the need for Mr. Ceis’ testimony Thursday?

Lawrence: To make the point that he made here and I was talking about, that at the time of the retention of K&L Gates by the city that it was disclosed to the city that Sen. Gorton and Gerry Johnson had previously and were on a ongoing basis had a continuing effort to try to find a prospective owner. And to establish that Mr. Ceis and no one at the city had an awareness of the PowerPoint presentation.

Q. The last substantive talks you had with Clay Bennett was the settlement offer that they presented to you February?

Ceis: The last discussions I had with Mr. Bennett's representatives were in New York City in October.

Q: Could there be any talks between now and Thursday?

Ceis: The last conversation I had with Mr. Bennett’s representatives were in October in New York. So right now we’re in trial.

Q. What was the outcome of that meeting and what type of information you took back from the NBA.

Ceis: We went back to see the NBA about KeyArena. To discuss the renovation of KeyArena with them. We showed them the design and cost estimates for it. So it was to put KeyArena back on the table as a venue for basketball, to keep basketball in Seattle.

Q. Did they reach any conclusions about your presentation and was it viable?

Ceis: Well as you can tell we are in a continuing process right now on that. So you can reach your own conclusion on the outcome of that meeting.

Q. Mr. Ceis your testimony to Judge Pechman will be the city has clean hands?

Ceis: I’ll leave that to my counsel.

Lawrence: I think saying anything more, you'll have to come back for part, whatever it is, VI on Thursday morning to hear.

Q. Mr. Lawrence can you address the situation in the morning session. You were talking to Wally Walker and the word "appeal" caused a great stir.

Lawrence: I think it only caused a stir because with all due respect to you guys, you probably haven't covered too many trials. From Day One, in front of Judge (Marsha) Pechman she recognized that this case very likely could go up on appeal. For each party to preserve their rights on appeal, there’s some very technical things you need to do in terms to objections to evidence that if you don't make (them) you waive your rights. And not simply because a judge has ruled once on a piece of evidence, if you don't have continuing objection or make the objection on a continuing basis to that line of evidence, then you may lose your rights to appeal. My job, among other things, is to make sure the record is complete and in the case that there is an appeal, whether it’s the PBC appealing or the Sonics appealing or both sides appealing. Part of my job to do it right is to make sure the record is correct.

Q. Deputy Mayor Ceis, did you have dinner with Clay Bennett and call KeyArena one of the finest basketball arenas in the country?

Ceis: Yes I remember that comment to Mr. Bennett. Yes. I was referring to a fan survey that was done in about 1998 where the fans around the NBA said KeyArena was the best place to watch basketball in the country.

Q. So there’s no basis whatsoever for Sen. Gorton suggest that the failure to win the renovation … (hurts the city's case)?

Lawrence: We don't believe that it has anything to do with the case. You have heard PBC make the argument "why bother? there's no point." And I don't like to speculate as to what Sen. Gorton was thinking about. But that argument is being made by PBC and if there had been a funding proposal approved, PBC wouldn't be making that argument. Regardless, we don't think that's relevant, but we've heard PBC make that argument during the trial.

Q. Over the next five days, what will you do?

Lawrence: Catching up on my sleep. But principally there are two things we are going to be focused on. One we have to prepare for the court, proposed findings of fact and conclusions of law, which is essentially looking through the evidence that's been presented and putting them in a form of finding that are facts that have been supported by the testimony to date. Setting forth our legal arguments in the form of conclusions of law that we hope the court will adopt and probably more than that, focusing on drafting our closing argument for Thursday before the judge.

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July 2008

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Trial coverage from | Hope (still) springs in Seattle