WASHINGTON - "Just the facts, ma'am."
That was Sgt. Joe Friday's constant refrain in the long-running television series "Dragnet."
Like Sgt. Friday, reporters are always seeking "just the facts."
But it was impossible last week to get just the facts on the Harrisburg Authority's remarketing of $390.1 million of bond anticipation notes that were issued in May.
The notes were sold to refund and redeem bonds issued by the city of Harrisburg, Pa., in 1986 to finance construction of a dam and hydroelectric plant on the Susquehanna River.
The city earned millions of dollars of arbitrage profits from the bonds, which were remarketed in 1988 and 1991, but the project has never been built - and some folks in the state say it never will be.
The note issue, which redeemed the bonds six months before they were subject to a mandatory tender and netted the city another $8 million, turned out to be part of a larger scheme to keep tax-exempt financing available for the project.
But federal regulators and lawyers in June raised tax law concerns about another proposed transaction in the scheme involving simultaneous issuance of longer-term tax-exempt refunding bonds and taxable bonds. The deal would not only have continued financing for the project but would also have provided funding for other as-yet-unidentified city projects.
Standard & Poor's Corp. withdrew a tentative credit rating from that proposed bond transaction because of the tax law concerns. Participants then postponed the deal, saying they needed to address "investor confusion" stemming from "negative publicity."
Meanwhile, the 90-day refunding notes were to have been remarketed in mid-August.
It should have been easy to obtain information about the remarketing.
After all, the Harrisburg Authority is a public authority subject to state sunshine laws and these are tax-exempt notes, even if they were privately placed with Pittsburgh National Corp.
But it was impossible to get the facts.
Dan Lispi, the city's project manager and point person on the financing, did not return several telephone calls. Other city officials who were involved in the May note issue said information about the remarketing would have to come from the authority because the notes were, after all, issued by the authority.
But neither Thomas Mealy, the executive director of the authority, or William Balaban. the authority's attorney, returned repeated phone calls.
In an interview in June, Balaban said he was upset that participants in the second proposed transaction were reluctant to discuss it. Balaban said that although he was completely unaware of that transaction, he would find out about it.
The name Balaban sounded familiar.
Turns out his brother Robert was one of the investment bankers in the syndicate that was to sell the bonds. William Balaban hasn't been heard from since.
Mealy's secretary suggested calling Milton Lopus; president of Devon Capital Services Inc., the firm serving as financial adviser to the city and the authority. But Lopus did not return repeated calls.
Robert H. Long Jr., a lawyer with Rhoads & Sinon in Harrisburg, and David Vind, a lawyer with Stevens & Lee in Reading, the co-bond counsel for the note issue, also were unavailable.
Ditto for Henry Fisher, president of Commonwealth Securities and Investments Inc. in Pittsburgh, which has been the lead broker-dealer in the overall financing scheme.
Richard Cook, a corporate trust official at Dauphin Deposit Bank & Trust Co. in Harrisburg, trustee for the issue, also was not talking.
"I'm not giving out any confidential information on that." Cook said.
Why would information about the remarketing be confidential? Isn't this a simple market transaction, a public financing?, he was asked.
"At one point it was a simple market transaction. But thanks to you, you have made it otherwise," Cook replied.
Clearly, information about the remarketing will have to be obtained through a more formal request to the authority under the state sunshine laws.
If a reporter is having this much trouble getting just the facts about a transaction that has become controversial, imagine the difficulty for investors if the refunding issue had been publicly sold.
