The is the full text of the email from Stan Dirks as quoted by Tony Blaz at the meeting between the LOLA COLA retirees and Lt. Gov. Cruz:
I do not have the necessary knowledge of the details of the case to have a meaningful opinion concerning whether the Government owes COLA payments to its retirees or not. What I do know is that the Government should not use bond proceeds for payments that may someday be ruled unauthorized or invalid, because it would raise questions concerning the validity of the bonds. Frankly, however, the bond-related consequences of making the payments and then having them be ruled to have been invalid or unnecessary are not entirely clear. I presume that the obligation of the Government at that point would be to attempt to recover the payments from the retirees in order the use the money for valid governmental purposes. I think the possibility would be remote that the IRS would declare the bonds taxable under those circumstances. The IRS theory would need to be that the bonds are not valid obligations of the Government. (The bonds would not be "private activity bonds" because there is no loan and there are no "private payments" securing the bond issue. As long as the Government had been acting within the "law of the case" as the COLA case stood at time of any use of bond proceeds to make COLA payments, and tries to recover any invalid payments, it is hard to imagine that the IRS would claim that the bonds were invalid. Has the court ruled on the application to intervene?
Stan
Check these pictures out of Talofofo Elementary School, water pouring out of the tops of both tanks and shooting out of the bottom. No notices for these elementary kids to stay clear of the tanks, no tape, no nothing."
