After testifying before the House Banking and Finance Committee and appearing on CBS Evening News with Dan Rather, Pasquale Verona, President of Wiz Biz Solutions said, “quoting that great philosopher, Yogi Berra” ‘This is déjà vu all over again.’  The inference is that with the 2009 announced TARP rescue program will the same schemes and insider trading as what happen in the late 1980’s. 

As reported in the Wall Street Journal and other national media Mr. Verona become the center of attention during the late 1980 Savings and Loan debacle. Mr. Verona, originally from Western Pennsylvania, had relocated to Fort Myers, Florida several years prior.  He held a SEC investment license, owned a large real estate development firm and was a major real estate investor.

In the late 80’s multiple S&L’s failed and the government formed the Federal Asset Disposition Association (FADA) to pick up the pieces and sell the assets.  Apparently the direction the federal government is planning today (September 19, 2008).

In late 1987, Mr. Verona made several bids on failed shopping centers and all were rejected.  One particular property, a shopping center in Orlando by the name The Towne Center, was most attractive and he diligently pursued purchasing that property. 

He submitted a contract to purchase the shopping center to the FADA office in Lake Worth, Florida for what he recalls was “around $12M with $100,000 in certified funds as a deposit and he was ready to pay cash for the partially completed shopping center.”  Within several days of submitting his contract, Mr. Verona received a letter from FADA stating that they had a contract on Towne Center with “hard money” meaning a non refundable deposit.  He understood that many times you are too late to accomplish your objective and he moved on.  He then submitted a somewhat similar contract to purchase a shopping center in Naples and received a very similar letter. 

Several weeks later he was traveling in Orlando and check on The Towne Center to discover that nothing had changed. No new sign was up.  He checks the court house records and finds that the deed had not been transferred.  He found out from another developer that he too had made an offer and it, also, was rejected with the statement that they had a contract with “hard money.”  Mr. Verona then revisited the shopping center in Naples and check with fellow real estate brokers and discovered that other had received similar if not identical letters.

He questioned the delays in FADA’s mandate to get the government owned S&L failures off the books as soon as possible.  But he found no transfer of title on either of these shopping centers.  He contacted his friend, Congressman Connie Mack, who put him in touch with Bill McCollum, who was on the House Banking and Finance Committee and is now Florida’s Attorney General.  Congressman McCollum heard

Verona’s story and Mr. Verona thought the meeting went poorly and that the Congressman dismissed his concerns.

From the time Mr. Verona submitted his offers to buy both the Orlando and Naples shopping center more than 4 months had passed.  Then Mr. Verona got a call from Congressman McCollum’s office for a meeting. Grudgingly, Mr. Verona traveled from Fort Myers to Orlando for an early morning meeting with the Congressman.

At the meeting, Congressman McCollum, without comment, slides across the table a contract for the purchase of the Orlando Towne Center property.  The contract was from McCollum Construction, a fictitious company name the Congressman devised.  Mr. Verona shrugs.  Mr. McCollum then slides, also without comment, two letters one from FADA to McCollum Construction stating that Towne Center and a copy of the rejection letter Mr. Verona has given to the Congressman at his earlier meeting.  The rejection letters were identical with the same statement about “hard money”.  But no titles had transferred.  Congressman McCollum inquired to FADA as to the status of the sale of The Towne Center and the Naples shopping center.  He produced a letter, from the FADA office in Lake Worth, saying that neither property was under contract but they are earnestly seeking buyers.

Mr. McCollum asks if Mr. Verona would go to Washington to testify before the committee and he agreed to do so.  It was announced that the Congressional Committee would be holding hearing on FADA and Mr. Verona along with two other developer’s, William Juliano of Philadelphia and John McCrockin of Austin, Texas were to testify.

Shortly after that announcement Mr. Verona received a telephone call, at his office in Fort Myers from the FADA Lake Worth manager.  Mr. Verona said “The caller stating that their is a need for professionals to help in disposing of government owned assets and FADA has recognized that I am a responsible real estate developer and apparently they investigated and found that I had worked for Merrill Lynch and that I held an SEC license and was a real estate broker; just the profile they said they needed.  And they asked if I would use my vast experience and in-depth knowledge of real estate to provide them with a market evaluation of a shopping center in Naples?  Of course, it just so happened to be the exact same shopping center that I had already performed my due diligence and had all the data in my file.  Of course, they had no way of knowing that (haa!).”  If Mr. Verona agreed they would send a contract.  He received the contract and it spelled out the work and the payment exceeded his perceive compensation – it was for $35,000.00. “Now the work entailed material that I already had in my file so my time and cost were zero, nada.  I stood to make $35,000.00 just for signing the contract, pulling the info from my file and putting a stamp on the package – no more than 15 sheets of info.  Wow!  This is going to be a pretty good deal so I signed the contract and sent it to Lake Worth” said Verona. 

A few days later another FADA officer called Mr. Verona and thanked him and again complimented him for his quick response and then said he had a little problem. Verona said the officer said “Mr. Verona we are in a difficult position.”  The officer stated that he would like to hire experienced professionals like Mr. Verona to help meet the government mandate.  But the Lake Worth official said that if he signed a contract with someone that was going to testify before congress his job would be in jeopardy.  How could he hire someone that knowingly is going to say derogatory things about his organization?   The phone call concluded with the FADA official imploring Mr. Verona to understand the predicament he is in.

It became obvious that no contract was going to be co signed unless Mr. Verona promised not to testify before the Congressional Committee. Then amazingly, Mr. Verona receives a phone call from Roslyn Payne the President of the government formed Federal Asset Disposition Associations and the highest paid government official at the time ($250,000.00 plus perks), more than the President of the United State. Ms. Payne said she was calling Mr. Verona from the airport in Denver (very important information) and she understood that her Lake Worth office wanted to hire Mr. Verona due to his vast knowledge and experience. She encouraged Mr. Verona to accept the contract “to help us out.” The conversation was brief and Mr. Verona interpreted the conversation to be don’t go to Washington and we’ll pay you $35,000.00.  As stated during his interview with Dan Rather on CBS Evening New on October 16, 1989 Mr. Verona said that sounded like a bribe to me and I said “hell no.”

Mr. Verona did testify along with William Juliano and John McCrockin and each had a similar experience.  At the hearing and under oath, Ms. Payne said she never made a phone call to Mr. Verona and never spoke to Mr. Verona and furthermore she did not know Mr. Verona until today.  The counsel for the committee in questing Mr. Payne presented her with her AT&T phone invoice.  It showed a phone call from a pay phone in the Denver Airport on the date Mr. Verona said she called him and the call was made to a phone in Mr. Verona’s office.  Astonished, she said her AT&T charge card was stolen months ago and someone must have made that phone call.  Counsel showed that within the last billing cycle the AT&T card was used calling business contract associated with FADA, FADA offices and more than a hundred of phone calls to Mr. Payne’s office. At that point she refused to answer any questions until she spoke to her attorney.

During the interview on CBS-TV with Dan Rather, prior to broadcasting Mr. Verona’s interview, when Ms. Payne was asked if she knew Mr. Verona she became outraged and discombobulated.  At that question she disconnected the microphone, which was laced up under her dress to he suit top and as she stormed off setting the camera continued to roll so the line tugged and lifted her dress making quite a screen for the highest paid government official.

A few days later, from the floor of Congress, it was demanded that Ms. Payne resign and she did so the next day. 

Several FADA employees were indicted convicted and sentences. The inside scheme was set up to reject legitimate offers so it would appear that no one was interested in them.  FADA program was set up to reduce the price on a schedule basis. The longer they remained inventory lower the price – traditionally a wise plan. Mr. Verona said he was trying to buy the shopping centers for around fifty cents on the dollar but the inside people had set up a shell company in the Netherlands Antilles and were buying prime properties for far less.

The question now is, with the government ready to set up a similar FADA or another Resolution Trust will the same occur again.  Mr. Verona thinks so.