It was a deal a long time in the making.
Central Coast construction and political heavyweight Don Chapin was part of a budget advisory group, convened in 2003 by Kanalakis, that discussed the need to acquire a surveillance helicopter long before a request for proposals was sent out.
2. Chapin and Cheatham were partners only in AirKnights, LLC. Chapin has neither ownership nor control over Verticare Helicopters.
Four years later, Chapin was a partner with the late Jim Cheatham in Salinas-based Verticare when the company beat out two competitors to win the million-dollar contract to provide the helicopter and related services for the Sheriff's Office.
Now, the sheriff is asking the county to back the $660,000 purchase of the same aircraft from Chapin. Both the county and Kanalakis say his office is not required to price other aircraft to ensure the county is getting the best deal.
Chapin's company Air Knights LLC was, and still is, the aircraft's owner, Federal Aviation Administration records show.
"I bought it as an investment — not a very good investment," Chapin said.
3. Again, you continue in your falsehood about Chapin's "ownership" in Verticare.
Kanalakis said he is not sure when he became aware of Chapin's ownership stake in Verticare. "I don't know that I even knew Chapin was even connected to it at that time," Kanalakis said. "All I know is Jim Cheatham came in and made a presentation and we picked it."
Chapin's name doesn't appear in the proposing bid nor the final contract, but county contracts and purchasing manager Michael Derr said that at some point,
"I know I didn't tell him. I didn't think it mattered," said Chapin, who added that he did not help his business partner put the winning proposal together.
But he did have a financial stake in the final deal. After buying the helicopter in early 2008, Chapin said, he leased it to Verticare, which leased it to the county.
The contract for the helicopter lease was billed as a two-year "pilot program" that included maintenance, pilot services and the use of a backup copter — aspects of the deal that Chapin says did not involve him.
5. How much was the 2007 contribution? Your "grand total" is misleading, as Kanalakis has clearly had more than one campaign, as well as fundraising throughout his termS.
A history with sheriff
Election office records show Chapin has contributed at least $3,254 to Kanalakis' campaigns. His last contribution was reported in 2007, the year Verticare submitted its proposal to the sheriff.
6. Who is the "he" in this statement? Are you refering, accurately, that Jim Cheatham was discussing a Sheriff helicopter for many years with Kanalakis? If so, you are a poor writer, as Cheatham is not mentioned in this entire section of your story. Alternately, are you again intentionally misleading the reader although Chapin was not involved in those discussions. If you refer to this Budget Advisory Committee from 2003, please provide minutes in which Chapin and Kanalakis were involved in a helicopter discussion.
But it was long before that, Chapin said, that he started talking to the sheriff about acquiring a helicopter. "The original discussion of the helicopter started many years ago," Chapin said. "It's got a long history."
Chapin says the surveillance craft could be a "force multiplier" for law enforcement in a county that spans 2.4 million acres and is plagued by gang violence.
"Gang war doesn't stop at city limits," he said. "There are a lot of good reasons why you should have eyes in the sky."
In September 2007, after several years of discussion, the Sheriff's Office put out a request for proposals to lease a Robinson R44 Raven II equipped for police surveillance. Verticare was chosen over two other bidders, its price tag falling in the middle range.
Kanalakis assured county supervisors, who were concerned about the budget, that the Sheriff's Advisory Council had offered to raise $300,000 toward two years' costs totaling $1,058,380.
7. Cheatham was the voice and face because he was the sole owner and President of Verticare. Chapin was not involved until after the contract was awarded, when Verticare was unable to secure funding on its own.
Cheatham, well-known as a popular air show performer, appeared as the voice and face of Verticare at supervisors' meetings.
Financing issues
8. Why "financing"? Why the quotes? Are you AGAIN leading the reader to believe something other than truth? What could possibly be your intentions? Additionally, what could be an alternate meaning?
Once the contract was secured, Cheatham told officials that "financing" issues kept him from meeting the Jan. 1 delivery date, and e-mail records show Kanalakis threatened to cancel the contract. Cheatham told the sheriff his company could collapse if he lost the helicopter deal, according to an e-mail from Kanalakis to his staff. By mid-month, Cheatham delivered and the helicopter was aloft.
9. You mention the demise of Verticare, yet do not describe the events which led to this end. Do you have the information? Or, are you making wild accusations about a company whose goings-on you know nothing about? You are plainly unaware of the totality of the situation, but rather small bits of information you weave into an entirely different tapestry than reality.
Despite the cash infusion from the Sheriff's Office, Verticare — which had other bouts of financial shakiness over the years — began to crumble as debts and tax liens rolled in. By the end of 2008, it was clear the business likely would shut down.
Inside the Sheriff's Office, the project had its own problems. Kanalakis' advisory council could only raise $50,000 of its promised $300,000.
In January 2009, citing his department's budget concerns, Kanalakis canceled Verticare's contract and the helicopter program was grounded.
10. Cheatham did invest his own money into this project. He lost it all. Chapin merely partnered in an LLC which leased the helicopter to Verticare. Maintenance, fuel, insurance, and salaries are the true costs here, and solely Verticare's responsibility.
Cheatham appealed to county supervisors to renew the project, saying he had personally invested nearly $1 million in it. He did not mention Chapin.
Only a month after the contract ended, Cheatham suddenly died, reportedly after surgery for a minor heart attack.
11. Chapin was stuck with the aforementioned costs of this helicopter. They are astronomical.
Chapin assumed full ownership of the copter and put it up for sale. An online ad asks for $664,000, but Chapin added "any reasonable offer will be considered." Chapin said he's had a few offers, but is holding off on selling the helicopter "until the dust settles" and, he hopes, the county agrees to back Kanalakis' purchase of the craft for $660,000.
Kanalakis said he hopes the purchase will be covered by Homeland Security grants. But just in case, he asked county supervisors to guarantee the last two year's payments — $440,000 — of a three-year purchase contract.
The county voted it down Oct. 13, but asked Kanalakis to come back with commitments of financial support from area police chiefs.
Chapin said that, as a contribution to the county, he will not charge interest on the deferred payments.
"Anyone who knows Don Chapin knows that he does things for altruistic reasons," Kanalakis said. "At the same time, he believes in me and what I'm doing for the county."
Appraiser determines price
The asking price for the aircraft was determined by an independent appraiser hired by the Sheriff's Office. Brand-new, the 2007 model helicopter cost about $700,000, according to documents included in the appraisal.
12. As a licensed helicopter pilot, which clearly you are not, I can attest to the normal wear and tear on a helicopter. Read: normal. Would you please present FAA documentation of any mechanical problems in this helicopter? How about incidents, accidents, or even any notices to airmen? Does the R-44 hold a current Airworthiness Certificate?
But after the appraiser's work wrapped up in late September, a mechanic's inspection found a number of corroded and leaking parts.
Chapin said that kind of wear-and-tear is typical after the 500 hours the aircraft has flown, and said he will repair or replace those parts before delivery. All of the aircraft's components have an expected life of 2,200 hours, or about four years, before they should be rebuilt or replaced, appraisal documents show.
'No conflict of interest'
Kanalakis and Chapin say there is no conflict of interest in any of the arrangements.
"I can't talk people out of talking," Chapin said. "I think my record speaks for itself with my service to the community."
He has been an early and strong supporter of crime prevention programs around the county, including Rancho Cielo, a teaching and training program for at-risk youths. And he is passionate about this helicopter's role in keeping the county safe.
"I truly believe that crime in our community is our No. 1 issue. I don't need the money," Chapin said. "What I need is a safe place in my community for my family, my children and all my employees."
13. Here is the truth: Jim Cheatham, as sole owner and operator of Verticare Helicopters, won the Request For Proposals through a publicly bidded, and entirely transparent, forum. Afterward, Cheatham joined forces with Chapin to create AirKnights, LLC - the owner of the helicopter. AirKnights, LLC leased the helicopter to Verticare Helicopters. Verticare Helicopters, under the public contract, provided the helicopter, maintenance, fuel, insurance, pilots, office space, and the life of Jim Cheatham to this quickly canceled program.
From: Julia Reynolds <jreynolds@montereyherald.com>
To: Stacey Wilson
Sent: Wednesday, October 28, 2009 10:22:05 AM
Subject: Re: Chapin/Cheatham/Kanalakis
Thanks for offering to clarify things. Please let me know what was incorrectly reported.
-----
Julia Reynolds
The Monterey County Herald
831 251-3011
jreynolds@montereyherald.com
From: Stacey Wilson
To: jreynolds@montereyherald.com
Sent: Tue, October 27, 2009 3:55:36 PM
Subject: Chapin/Cheatham/Kanalakis
