The Sunday Bond Deal That Split Benton County

Testimony in the Benton County courthouse bond case revealed that the bond issue had been planned in secret by two members of the board of county commissioners. County Treasurer Harper produced the bonds, one of which bore the signatures of Mr. Clements and Mr. Harper, the latter certifying that he had registered it in his office on December 4. Harper testified that he had signed the bond on Sunday, December 3, after Judge Zent assured him it was perfectly safe to do so.

L. E. Johnson, Miss L. M. Harlow, John Tyacke and A. R. Gardner testified that Clements had threatened he would build a courthouse if he were not elected representative from the county. Some said Clements had declared he would build a courthouse and could get $10,000 for doing it. The defendants made no attempt to contradict this testimony.

The hardest-fought question was the price at which the bonds were sold. Mr. Keeler, the successful bidder, was not present. To show the bonds were sold below market price, the plaintiff called E. F. Jones, secretary of the state board of finance. He said the state of Washington was in the market for bonds of that kind and that, had bids been called for, the state would undoubtedly have taken them at 4½ percent par.

Mr. McMichael of Seattle, manager of the bond department of the Dexter Horton National Bank, testified that on December 4 the bonds should have sold for at least 4½ or 5 percent par; at the rate at which they were sold they should have brought premiums of at least $12,000. He maintained under rigid cross-examination by Judge Zent that it was not unusual for reputable bonding companies to bid where litigation was threatened or pending, and that the county seat fight was no reason companies would not have bid had they been given the opportunity.

The defense called E. A. Gilmore of Portland and H. P. Pratt of Tacoma as expert witnesses. Gilmore thought 5 percent par was a fair price for Benton County’s bonds under existing conditions, but when asked to assume no litigation or opposition he could not say what they would have been worth. He admitted he had dealt very little in Washington bonds in the last two years. Pratt testified that 6 percent par was fair under the circumstances, saying bond buyers generally refused to bid where litigation was threatened; he admitted his company had not been in the market for bonds since March.

O. W. Tupper of Spokane, whose name was attached to one of the bids submitted December 4, was called by the defense. He testified that he considered 5 percent par a good price. On cross-examination Tupper admitted he had never bought a bond and had never before bid on a bond issue. He said he had submitted the bid at the request of Mr. Powell of the firm of Zent & Powell; Powell had prepared it and Tupper signed it. He signed on Sunday, December 3, in Powell’s office. Asked whether he knew when he signed that the bid bore the date December 4, he said he did not. The bid was produced and shown to bear the date Spokane, December 4. Asked why he bid, he said he had arranged to sell the bonds to a bank at a profit of $8,000.

The defense called J. L. Hall, a civil engineer of Seattle, to prove the present quarters were unfit for courthouse purposes. The plaintiff objected that the fitness of the present quarters had not been raised, and the witness was excused without testifying.

In opening argument for the plaintiff, Judge Gose stated the facts and cited law on the qualifications of McNeill to sit as commissioner and the legality of the December 4 session. He recited a chain of circumstances he argued justified the court in presuming actual or constructive fraud. Mr. Davis opened for the defense, citing law and court decisions. Judge Zent followed, arguing that because of the county seat fight it was impossible to supply the county’s needs and build a courthouse without proceeding in secrecy. He maintained that Commissioners Clements and McNeill had exercised their best judgment in the interests of taxpayers, and that the court had no right to substitute its judgment for that of the board so long as its acts were technically legal.

Mr. Moulton, closing, answered Judge Zent by saying the court was not asked to substitute its judgment for the commissioners’ but to decide whether the true facts so shocked the conscience of the court that the two commissioners had violated their public trust. He said there was not one line in the record to show the bond question was even suggested at a board meeting until December 4. “On the contrary,” he said, “the evidence shows that two members of the board conspired to keep the third commissioner in ignorance of their plans. Two commissioners without any warrant of authority from the board went to Spokane and opened secret negotiations with a firm of attorneys, and from that time on the plans were carried forth by attorneys who were not the attorneys of the board, but the private attorneys of Clements and McNeill.”

Meeting the argument that secrecy was necessary to prevent litigation, Moulton said there was nothing to show litigation was threatened, suggested or thought of if the commissioners had kept within their authority and proceeded openly. “The only reason there is litigation is because two commissioners have acted dishonorably, dishonestly and fraudulently,” he said. “Perhaps I should not say fraudulently, but at least in such a manner that the net result of their acts was to defraud the people to whom they were responsible as public servants.”

Judge Grady said he would decide the case exclusively upon its merits, upon the facts established by the evidence and the law. “The fact that a county seat fight exists or has ever existed in the county will not be taken into consideration,” he said. “It makes no difference to the court whether or not this county needs a courthouse or whether the proposed courthouse is to be built in Kennewick or Prosser.”