You Get What You Pay For
Financial consultant Richard Daniel has been on the receiving end of more than $30,000 in city contracts the past few years, including the job of selecting a developer to build Denver's controversial eighth municipal golf course at Green Valley Ranch near Denver International Airport.
At the same time, Daniel, who helps the city make business decisions, has been swamped by personal financial mishaps--including a string of lawsuits filed by creditors and a delinquent tax debt to the city itself that went unpaid for four years. His contracts have drawn the wrath of City Auditor Don Mares, who discovered that several of them were awarded during a time when Daniel's company--RMD Financial Corporation--had been dissolved by the Colorado Secretary of State's office. But they just seem to keep on coming. And none of the contracts Daniel has received has been put out to competitive bid; they've just been handed to him.
Daniel says the reason he continues to get work is that he's the best man for the job. "I've done a lot of work for the city and have gotten really great reports," he says, adding, "It's hard for me to believe I'm the only person doing business for the city who's gone through financial difficulties."
His money problems, Daniel says, stem from a dropoff in business and two subsequent lawsuits that nearly bankrupted him in 1994. In the last year, various creditors have garnisheed the city for a portion of Daniel's contracts earnings; he estimates he's lost about a quarter of his revenue from the city to pay off people he owes. Daniel says RMD has earned $39,000 in city contracts since 1988, which he calls "a drop in the bucket" for the city. It's vital money to him, however, in his struggle to keep afloat.
Two of the city's contracts involving Daniel were vetoed by Mares. Mares says it's the first time he can remember sending back two contracts involving the same company since he was elected in 1995.
In May 1996 Mares vetoed a proposed Amendatory Agreement between Daniel and Denver's Department of Parks and Recreation. That contract, worth $1,290, called for Daniel to "negotiate for food and beverage providers at Mile High."
Why the Mares veto? Because from May 1, 1995, to May 22, 1996, RMD Financial, the corporate entity named in the city contract, did not exist. The company was dissolved for failing to file a biannual report. Both the Mile High contract and the Green Valley Ranch contract were drawn up during the time RMD was off the books, prompting Assistant City Attorney Andrew L. Weber to send a memo to Mares stating that he was concerned about "the failure of Mr. Daniel to maintain his corporate paperwork."
Once he learned his contract had been stalled, Daniel wrote to the auditor's office that the reason the report was never filed was that "we have moved our corporate offices twice since 1994 and never received the secretary of state's notice." A few days later, RMD was reinstated as a corporation, and the contracts eventually went through. But Daniel's problems continued.
In October 1996 he received the first of two contracts to assist in the selection of a concessionaire for City Park, Willis Case and Evergreen golf courses. A contract extension through this July was awarded earlier this year. The combined contracts were worth $7,300, but when the extension was sent to Mares's office for review, the auditor nixed it. The reason this time? Delinquent property taxes.
Daniel owed $541.93 in personal-property taxes from 1992 to 1995. The auditor's office issued a press release on Daniel's tardiness, which Daniel viewed as an attack. "I wonder how productive it is for the auditor's office to hold a press conference on taxes," he says. "He runs a $6 billion budget, and I was past due a few hundred dollars on my taxes?"
Chip Spreyer, an official in the auditor's office, says the press release went out because Daniel's case was the first in which a company doing business with the city had gone four years without paying its taxes.
"This is the second time I have had to reject a contract from RMD within the past year," wrote Mares in a letter this past January to B.J. Brooks, head of Parks and Recreation. "It is primarily the responsibility of the agency to ensure a potential contractor/consultant is qualified to do business with the city. Apparently, in the case of at least one agency, this is not being done." Brooks did not return several calls from Westword.
Some people shake their heads at Daniel's continued ability to get city work. Matthew Spriggs, a former intern for Daniel who later filed a lawsuit claiming that Daniel owed him a paycheck, says his former boss's work was "mediocre at best."
Spriggs, who is white, argues that Daniel's constant work with the city comes because Daniel is black. "There aren't a whole lot of people in the minorities who have this background in economic
modeling and financial investigation," Spriggs says. "Because there's a big emphasis on the city with minority contractors, by default they see him. They don't look at the quality of work--they just assume, 'He did it before, so we'll give it to him again.'"
Daniel acknowledges that the city comes to him to design models that will help it hire other minority businesses. "The reason they do is they want to get real clear on what the [minority] market is," he says. "If you don't do it every day, you won't have the experience to make that happen. It's knowing the territory."
But Daniel denies the city does business with him because he is black. "It's not a factor at all," he says. "We've been in the market for nine years. I've been able to develop my own share of the market based on my own expertise."
Daniel's expertise is to tell the city whom it should hire to run its golf courses and other city-owned venues. But some people in Denver's golfing community have questioned whether that expertise extends to the links.
In March 1996 Daniel was awarded the contract to develop requests for proposals, or RFPs, at the proposed municipal golf course at Green Valley Ranch. The contract is worth $17,200, according to records at the city auditor's office.
The Green Valley Ranch contract came on the heels of a city contract Daniel received in 1995--this one worth $1,800--to make recommendations on who the city should hire to head up a study on why Denver's golf courses were losing money. Daniel recommended--and the city chose--a team headed by political freewheeler Jim Monaghan, a friend of the mayor's. Monaghan, as it turned out, once represented a consortium that included a current owner of Green Valley Ranch, the Alpert Corporation.
Shortly afterward, Mayor Wellington Webb selected Daniel to serve on a golf task force, which led some to think that Daniel was a Webb crony. At task force meetings, says John Edwards, editor of Colorado Golfer, Daniel said that the mayor had invited him. But, adds Edwards, "when he made some presentations during the meeting, we would look at each other and say 'How did this guy get here?' From my observation, he didn't impress anyone with his presentations or with his knowledge."
Daniel says, "My role was to bring financial expertise to the task force." With regard to Webb, he says, "I'm catching so much heat because of his relationship with me, and we don't even have one. I've never been to his house. He doesn't know me from anyone else. It so happens I met him several years ago, but I have no political connections."
Daniel admits that the initial Green Valley RFP he issued last year drew no takers; he chalks it up to the city demanding too much from prospective concessionaires. Daniel says this year's RFP gives potential developers much more leverage.
But professional golf-management companies would have told city officials that the city's numbers were "way out of line," says Edwards, "and that would have saved a lot of time and money."
And time is running out on the course. If ground isn't broken on the project by this October, the land, which had been donated to the city, reverts back to the Alpert Corporation.
While he's been telling the city what to do with its money, Daniel has had numerous problems handling his own finances. In 1994 he fell more than $12,000 behind on his office rent to Alamo Center Ltd. The company filed suit, and court records indicate that Daniel cleared out his office belongings one night in February 1995 and moved across the street. Unfortunately, he turned off the phone system when he left, leaving his subleasee, attorney Andrew Quiat, high and dry the next morning.
Quiat filed suit against Daniel, claiming that the phone snafu cost him a week's worth of business. Daniel says that he actually moved out during the day and that before going he offered to sell the phone system to Quiat, who refused. Daniel lost both suits, however, and judgments against him totaled almost $150,000.
At the same time, Daniel and his wife, Monica Vital, were going through a divorce, and the court placed a temporary lien on the couple's large home in Evergreen. They sold the house for $400,000 and, per the dictates of the court, the proceeds were divvied up to pay off two mortgages, Alamo and some of Quiat's claim. The rest went to Vital.
Since 1993, Daniel has had several cases brought against him in Denver County Court and has lost them all. In 1993 he bounced two checks to System Parking, a parking lot owner, for a grand total of $6.75, according to court records. He never paid, was brought to court and a few months later was ordered to pay $336.93 in damages.
A year later, in September 1994, Daniel bounced a $20 check at a Conoco gas station on East Evans Avenue. He didn't pay up after a notice was sent, and he was taken to court by Conoco's collection agency. A default judgment for $250 was entered against him.
Spriggs, the former intern, also won a default judgment against Daniel in 1994 for $246, but he hasn't seen a penny of the money. Daniel dismisses that case as sour grapes. "I engaged this guy to do some writing, and he couldn't write a decent sentence," he says. "I ended up firing him. Yeah, I didn't pay him, and I won't pay him."
Daniel also had default judgments awarded against him and in favor of J.C. Penney, for $771.73, and Montgomery Ward Credit Corp. for $2,082.40. Of the latter, he wrote in an interrogatory that although he agreed to pay the debt off in monthly installments, "my ex-wife should pay this."
Vital sued him herself in April 1996, claiming that he had reneged on a promissory note to her, the amount of which was not disclosed in court records. She sought $6,600 in damages. A default judgment for that amount was entered against Daniel on July 15, 1996.
Daniel says far too much effort has been spent delving into his personal affairs already. But he admits that his current spate of city work has made it easier for him to make ends meet.
"The fact I've gone through some difficult times means I've found a way to survive with a combination of public and private sector projects," he says. "There's a lot involved with staying out and surviving for nine years."
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