USS. Department of Justice JOHN W. HUBER United States Attorney District of Utah Office ofthe Unite Sates Atormey (aon 524-5682 111 South Main tet, Suite 1800 (600) 949-9681 SaltLate City, Uiah 84111 Fax: (601) 524-3399 April 4, 2017 Samuel Alba, Esq. Max D. Wheeler, Esq. SNOW CHRISTENSEN & MARTINEAU Attomeys for Utah Transit Authority 10 Exchange Place, 11° Floor Salt Lake City, Utah 84111 Re: _Non-Prosecution Agreement — Utah Transit Authority Dear Counsel: On the condition that Utah Transit Authority (“UTA”) fulfills its obligations under this agreement (“Agreement”), UTA will not be a target of any federal investigation by the United States Attorney’s Office for the District of Utah (“this Office”) and this Office will not bring any criminal action against UTA for any conduct relating to the ongoing investigation including, but not limited to, UTA’s operation of mass public transit services, application for federal grants and funding, expenditure and use of federal funds, or the negotiation for, and/or acquisition of, real property, equipment and other capital improvements related to UTA’s operations, In addition, this Office and the U.S. Department of Transportation’s Office of Inspector General (“OIG”) confirm that no referral has been made to the Federal Transit Administration for civil debarment or suspension action against UTA. This “Agreement” applies only to conduct that occurred prior to April 3, 2017. In August 2014, the State of Utah’s Office of Legislative Auditor released an audit (Legislative Audit”) of UTA. The Legislative Audit identified several areas where the lack of adequate institutional controls and oversight led to problematic actions taken by UTA. Based on information learned from the Legislative Audit and the on-going investigation, UTA recognized the need for improved institutional conformity with financial and ethical requirements and acknowledges the following issues and concems (the “four core issues”) focused on during the investigation: (a) Inadequate controls over federal funds and drawdowns from federal grants;(b) Improper handling and disclosure of property acquisition and disposition, including inadequate oversight of transit-oriented development projects; (©) Non-compliance with ethical standards, resulting in benefits to UTA employees and/or Board members; and (@ Improper approval of executive bonuses. UTA has put forth efforts to rectify the four core issues, including a number of reforms as outlined in the October 4, 2016, letter to this Office (attached as Attachment A), and will continue to monitor its reforms to ensure continued compliance. This Agreement does not constitute an admission of criminal or civil liability by UTA, but is a demonstration of UTA’s willingness to cooperate in good faith with the ongoing investigation and to facilitate its earliest possible conclusion. This Agreement applies to all federal criminal offenses related to the four core issues. This Agreement applies to UTA only. This Agreement does not apply to any other entities nor to any individuals, including UTA’s present and former board members, officers, employees, contractors, and consultants. It is understood that UTA shall: (a) completely disclose to this Office all relevant facts it learns about regarding individual criminal misconduct of any UTA personnel acting within their official capacity and identify all individuals of whom UTA leams are involved in or responsible for the misconduct at issue, regardless of their position, status or seniority. UTA will use its best efforts to lear of such acts and will provide information to this Office if any are found. (©) cooperate fully with this Office, and any other law enforcement agency designated by this Office, with respect to the ongoing investigation or UTA’s compliance with the terms of this Agreement; (©) at this Office’s request, use its best efforts to promptly secure the attendance and truthful statements or testimony of any current UTA board member, officer, employee, contractor, and consultant at any meeting, interview, grand jury hearing, trial, or court proceeding; (@ use its best efforts to promptly provide this Office, upon request, any document, record, or other tangible evidence relating to matters or conduct about which this Office or any designated law enforcement agency inquires that relates to the ongoing, investigation of UTA or UTA’s compliance with this Agreement; (©) to the extent known by UTA, bring to this Office’s attention all criminal conduct by or criminal investigations of UTA, including any of its present and former board members, officers, employees, contractors, and consultants that come to the attention of UTA’s board members, chief officers, or senior managerial employees;() continue to implement the institutional reforms outlined in UTA’s counsel's October 4, 2016, letter to this Office, focusing in particular on those reforms intended to address the four core issues; (g) waive the Attomey-Client and Work Product privilege with respect to all documents or information requested, subpoenaed, or that UTA is obligated to disclose or promptly secure under paragraphs (c) and (4) above during the investigation, along with the subject matters covered by those documents and requests (the “waiver”). UTA has previously asserted claims of Attomey-Client and Work Product privilege over many documents subpoenaed during the investigation. As part ofits cooperation throughout the investigation, UTA voluntarily offered and agreed to the waiver under this Agreement, without any suggestion or prompting by this Office. The waiver shall include UTA’s previously asserted privilege claims with respect to those documents. This waiver expressly excludes any privileged communications with, or work product generated by or under the direction of, outside counsel UTA retained in its defense during the present investigation; (h) retain a monitor, under the terms described in Attachment B, to ensure the continued implementation of institutional improvements outlined in UTA’s counsel’s October 4, 2016, letter to this Office, focusing in particular on those reforms intended to address the four core issues, as well as recommendations by the monitor concerning additional reforms intended to address the four core issues. With the exception of the hiring of a monitor, which shall expire after a period of 36 months from retention (or sooner as provided in Attachment B), this Agreement and UTA’s obligations hereunder shall remain in effect for a term of either (a) 36 months from the date this Agreement is executed, or (b) the date upon which all prosecutions, if any, arising out of the four core issues are final, whichever is later. It is understood that should UTA violate or fail to comply with any provision of this Agreement, UTA may thereafter be subject to prosecution for any federal violation of which this Office has knowledge. Furthermore, itis understood that should UTA violate or fail to comply with any provision of this Agreement, UTA may be subject to suspension, debarment, or other civil sanctions. It is understood that if itis determined that UTA has violated this Agreement, then all statements made and documents provided by UTA or its officers, directors, employees, or agents (collectively, “UTA representatives”) to this Office, OIG, or other designated law enforcement agents, and any testimony given by UTA representatives in any related proceeding, whether prior to or subsequent to the signing of this Agreement, and any leads from such statements or testimony, may be admissible in evidence in any debarment or civil sanction proceeding brought against UTA. It is further understood that this Agreement does not bind any federal, state, or local prosecuting authority other than this Office. This Office will, however, bring the cooperation of UTA to the attention of other prosecuting and/or investigative officers if requested by UTA.With respect to this matter, from the date of the signing of this Agreement forward, the Agreement supersedes all prior understandings, promises and/or conditions related to the ongoing investigation, if any, between this Office and UTA. No additional promises, agreements or conditions have been entered into other than those set forth in this letter, and none will be entered into unless in writing and signed by all parties. Sincerely, STEWART YOUNG! Assistant United States. AGREED AND CONSENTED TO: CRebg+Ly Wsesih 4-4-7 Robert McKinley, Chairman of tl ITA Board Date 424217 7 mi, President and CEO of UTA. Date O4 Apel Zotp Date APPROVED: y y alt dhhe gent Samuel Alba, Esq. Date Attomey for UTA ay weber gagd-l 2 Max D. Wheeler, Esq. Date Attomey for UTApees 9 oe UTA Ss sa Lao oy. UF sor August 9, 2016 TGC Solo Partners, LLC The Thackeray Garn Company Attention: Michael Christensen 748 W. Heritage Park Blvd., Suite 203 Layton, UT 84041 Re: Solo Hotel Partners, LLC (“Solo Hotel”) Dear Mr, Christensen: Last week, pursuant to a request for a list of investors in SoJo Hotel Investment Partners, LLC, ‘Utah Transit Authority (UTA) leamed that two former UTA board members—Chris Bleak and Sheldon Killpack—have been invited to invest in the hotel project to be constructed by SoJo Hotel at the UTA South Jordan station. Both of the former board members were serving on the UTA Board when the Solo Hotel project was discussed and came before UTA for approval. This ‘causes us great concern, ‘You will recall from our past communications that ethical conduct is of paramount concern to UTA. is inappropriate for a UTA board member. officer, or employee to be on both sides of a ‘ransit-oriented development project. ‘This is not the first time a former member of UTA’s Board of Trustees has participated (or ‘otherwise become involved to their personal financial benefit) in a Thackeray Gar Company- UTA tansit-oriented development project. In the recent past, UTA raised concems about another former board member's participation in these transit-oriented development projects. You were informed of the same and asked to certify that the former board member (and other former UTA. board members, officets, and employees) would not be involved in any ctirent or frture ‘Thackeray Gam-UTA projectsMore recently. on the Soo Hotel, you will recall that we have had significant diseussion and negotiation over UTA’s desire to ensure that no current or former UTA board members, officers, or employees are profiting from the SoJo Hotel project. We have discussed this concesn in person, over the telephone, and through the exchange of draft documents. UTA made it elear that this was a significant issue. Mr. Killpack and Mr. Bleak were serving as members of UTA’s Board of Trustees, with Mr. Bleak serving as Vice Chait, at the time the SoJo Hotel project was presented to the UTA Board of Trustees for approval. Mr. Killpack actively participated, as @ UTA Board Member, in meetings to discuss the terms and conditions of the SoJo development, Chris Bleak was a participant in the ongoing discussions about the UTA transit-oriented development program for ‘years while he was a Board member, was a member of the UTA Board of Trustees when UTA selected The Thackeray Gam Company to develop certain UTA-owned properties, including the Solo Hotel property, and was a member of UTA’s Board of Trustees right up to the time UTA approved the Solo Hotel project. Both of these individuals had (or at least fad the opportunity to review) information about UTA’s transit-oriented development program, policies, strategy and ‘goals that may not have been available to the general public, Both signed UTA’s Board Member Code of Conduct, which imposes a duty of care, loyalty. and confidentiality, and demands the type of ethical conduct required of someone trusted with the care for public resources, Mr. Killpack had direct information about this SoJo project that was presented only in closed board sessions. ‘The involvement of Mr. Killpack and Mr. Bleak as investors in the Solo Hotel project raises significant questions fimdamental to UTA’s imderstanding of our relationship with The ‘Thackeray Garn Company and its affiliates. This is exactly the type of concern that UTA repeatedly gave voice to in discussions with you —and we do not believe there is any question that you understood UITA’s concems. While the Operating Agreement for the Solo Hotel has not yet been executed, the terms, as negotiated provide that UTA hhas the right to consent (or withhold consent) to any former board ‘member being a participant in this SoJo Hotel project. Simply burying the names of those board ‘members in a secondary investment entity does not remove or mitigate the conflict. UTA is weighing its options at this juncture, At a minimum, UTA will review whether it makes sense 10 delay moving forward with the Operating Agreement for Solo Hotel or related documents while we further evaluate the former UTA Board members” participation, whether individually or as investors in other entities. UTA will review and propose revised language for the SoJo Hotel Operating Agreement that more fully protects UTA from future ethical concerns similar to this matter Page 2 of 3‘We are available to discuss this matter further. jerry Benson Interim CEO/President General Counsel Sincerely, ZL hkn a ce: John Thackeray Kevin Gam Dean Smith, Fsq. Steve Meyer Paul Drake Page 3 of 3a) UTAS Sale ae cn ur eros August 20, 2015 “Tenty Diehl Wasatch Pacifie, Ine. PO Box 711879 Salt Lake City, UT 84171-1879 ‘Dear Me. Diehl: I recently learned that you have been contacting Utah ‘Transit Authority (UTA) board members, ‘executives, and staff in an attempt to influence certain UTA projects. As you may be aware, pending. legal matters call into question the propriety of your ongoing contact with UTA. For this reason, T ‘write to request that you cease and desist from any and all contact with UTA, effective immediately. 1 have instructed UTA officials to decline your requests for meetings and not to accept yous telephone calls, Any contact between you and UTA should be direeted to my office, Sincesely, —t. Jaye. Blakesley General Counse} 1509901 200 ans 1400; aoe 1-e88IOEUTA, wmsideutcom