KMGH News (Denver, Colo.). 2008--excerpts, Public Corruption Uncovered: Black Hawk


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Created: 2008

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KMGH News (Denver, Colo.). 2008--excerpts, Public Corruption Uncovered: Black Hawk
Summary: "In the early nineties, Colorado voters passed a state constitutional amendment that opened the door to gambling in three struggling mining towns. The goal was to revive the dying cities while also preserving each community's unique history. A percentage of tax revenue generated by gaming would be returned to each city in the form of grants specifically for historic preservation. KMGH-TV investigators found one community more interested in spending the money on questionable home improvements for government officials than preserving history.

"In the short time since gambling was legalized, Black Hawk received $39 million in historic preservation grants.

"That is $39 million for a city with fewer than 120 people.

"And $39 million with no outside oversight and no strings attached.

"As a home-rule city, it was left to Black Hawk's mayor and city council to determine how the grant money would be administered and who would get it.

"The KMGH investigation began in early 2008 when producers Arthur Kane and Tom Burke met with several long-time residents of Black Hawk who were outraged by decisions of their elected leaders.

"KMGH investigators dissected thousands of documents to determine how the grant money was administered. Files included items like architectural drawings, contractor bids, work invoices, voting decisions by Black Hawk city leaders and copies of checks to homeowners.

"It was quickly apparent that Black Hawk's elected leaders benefited the most. Millions of dollars went to properties owned by the mayor and members of city council. KMGH investigators discovered historic grant money spent on entertainment centers, granite countertops, routine household repairs and even a dog door. Furthermore, city officials passed an ordinance allowing historic grant funds to pay the taxes on the individual homeowner's grant 'income.' In one example, the mayor of Black Hawk received a check for $85,492.61 simply to pay the federal and state taxes on his personal property.

"We also found city leaders using the city's general fund money for lavish trips to Las Vegas with their spouses. The trips included limo rides, hotel suites, expensive dinners, alcohol and even a Cirque du Soleil performance, all on the taxpayers' dime and in direct violation of the city's own policies. KMGH repeatedly asked Black Hawk's mayor and city leaders for on-camera interviews to explain the spending. They repeatedly refused, so we took our cameras and questions directly to them. City leaders threatened KMGH journalists with violence and arrest, ran from cameras and demanded we leave public meetings. The small gaming town was now the center of an enormous public corruption scandal.

"More than a dozen KMGH reports sparked public outrage and investigations by the Jefferson County District Attorney and the Colorado Bureau of Investigation. The Colorado Gaming Commission has asked the Governor and Legislature to intervene on behalf of the state's taxpayers. The General Assembly is now considering ways to remove Black Hawk's unilateral ability to spend the grant money and ask voters to redirect the funds to programs that would help the public, specifically senior citizens."--2008 Peabody Awards entry form.

Corporate Producers: KMGH (Television station : Denver, Colo.)

Persons Appearing: John Ferrugia (Reporter) | Tony Kovaleski (Reporter)

Broadcast Date: April 24 - December 18, 2008