Why did Bonneville Pacific executives create an offshore company primarily to benefit Deedee Corradini, who is now Salt Lake mayor?
Bonneville Pacific executives didn't answer that question from a bank examiner, who repeatedly asked it during the executives' sworn depositions.The depositions were part of an investigation into Bonneville Pacific and its subsidiaries ordered by U.S. Bankruptcy Judge John Allen.
Those same executives again refused to answer the question when contacted by the Deseret News on Tuesday.
"I really prefer someone else answer that," said Raymond Hixson, a former Bonneville Pacific executive. Hixson and others were partners with Corradini in the ownership of a Panamanian company used to divert assets from Bonneville Pacific, according to court records.
The diversion of assets amounted to fraud and damaged shareholders of Bonneville Pacific, bank examiner Alan V. Funk reported to the judge.
Hixson suggested the Deseret News contact Wynn Johnson for an explanation of why the two men and others included Corradini in the creation and ownership of Sallah International Inc. Corradini is the only owner of the company who was not an executive of Bonneville Pacific.
But Johnson, too, evaded the question. "I really can't comment on that," he said."That was so long ago."
Both men said they are hampered by bad memories and pending litigation. Their attorneys advised them not to comment on Bonneville Pacific or its subsidiaries, they said.
Sallah International was created in 1985, according to Johnson. Two principals in the company testified in sworn depositions that the company was created primarily to benefit Corradini.
Bonneville Pacific wanted to reward Johnson, Hixson, Corradini and Robert L. Wood, as well as company executive John T. Dunlop. The company could reward Johnson, Wood, Hixson and Dunlop with bonuses because the men were company executives. However, Corradini could not be rewarded that way. So the four men and Corradini created Sallah International in 1985 primarily to cut Corradini in on their plan for fi
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nancial reward, according to court records.
Corradini on Tuesday responded briefly to allegations of fraudulent enrichment by saying she knew little about the business transactions of Sallah. Most of the company's transactions were handled by other officers, she said.
However, her statements differ from information contained in Funk's report. Corradini was one of Sallah's most active owners, the report says.
She frequently asked Sallah accountant David Tucker to send her financial information about Sallah, Tucker said in a sworn deposition taken by Funk's team.
She also repeatedly submitted expense vouchers she expected Sallah to cover, he said. Next to Dunlop, Corradini was the most active partner in the company, he said.
Other executives in Sallah and Bonneville Pacific issued a statement Tuesday challenging media reports on the investigation into Sallah and Bonneville Pacific.
Johnson, Hixson and Wood released a 11/2-page statement criticizing the media for focusing on only a few projects involving Sallah.
Bonneville Pacific financed more than 30 electric power projects since 1982, the statement says.
The media focused on the company's purchase of a plant near Rifle, Colo. Hixson, Johnson, Wood and Corradini each profited $500,000 from the purchase and sale of the plant, according to court records.
Johnson, Hixson, Wood and Corradini bought the project for $1.2 million in 1985 from Dunlop. Dunlop had purchased the project for $1,000 after he learned that Bonneville Pacific was interested in buying it. Six days later, he sold the project to Sallah for $1.2 million. Sallah owners - Hixson, Johnson and Wood - sold the project to Bonneville Pacific for $4.5 million two months later.
Johnson, Hixson, Wood and Dunlop wholly owned Bonneville Pacific at the time. In essence, they sold a project owned by one of their companies to another of their companies for a $3.3 million profit. The men and Corradini made the transaction just months before taking Bonneville Pacific public.
"These earnings were disclosed to the public at the time of the initial public offering of Bonneville Pacific stock in July 1986," the statement issued by Johnson, Hixson and Wood says.
Bonneville Pacific later sold the company for $53 million, they noted in their statement.
The men also said information contained in Funk's report has been available to the public for a long time. Most of it came from company files and public documents "which have always been available for analysis," according to their statement.
The former Bonneville Pacific executives criticized Funk for discounting much of the information they provided him during his investigation.
"We are confident that when all of the facts are presented in a complete and understandable fashion, it will be shown that we acted honestly and responsibly with respect to the management of Bonneville and that Bonneville's shareholders have not been damaged by our conduct."