We are pleased that Joanne Colt decided to do the right thing by handing in her resignation on Wednesday. But we are dismayed that Colt has spent the last week spreading the blame around for her decision to involve herself in a stock market manipulation scheme.
The Colorado Springs city councilwoman has blamed the media and the Securities and Exchange Commission for ill treatment related to her involvement in an illegal stock manipulation scheme allegedly cooked up by her son, Doug, a third-year student at one of the most prestigious law schools in the country.
On Wednesday, a week after the SEC issued an extensive report on the findings of their yearlong investigation into the scheme -- and a settlement agreement reached by both the Colts and the federal agency -- Joanne Colt resigned her elected post of 11 months.
In sometimes-tearful tones, the councilwoman conceded during the press conference she'd made a mistake. "I am very sorry for this and I want to apologize to every good citizen of this community for the pain this has caused all of us. I humbly ask you to forgive me."
Colt then went on to further lambaste those who would suggest that she and her family had not suffered financially and emotionally from the episode.
There is no doubt that the Colts have suffered. However, for Colt to now portray herself and her family as "victims" is unsettling and even offensive when one takes into consideration the money that the true victims of the scheme will never recover.
According to the SEC report, Colt, her son and three of his law school friends -- while fully aware of their actions -- netted $345,000 in the Internet stock manipulation scheme. The SEC called Doug Colt's operation a new twist on a classic "pump and dump" scheme designed to drive up the short-term price of targeted stocks, which initial investors then sell for huge profits. The losers are the secondary investors who ended up losing big-time when the price of the advertised hot stock plummeted.
Under the terms of the agreement, Joanne Colt, her son Doug and the other three law students are prohibited from talking about details of the case. They also do not have to pay back the money they made in the scheme, or make restitution to any of the victims of the Internet fraud.
Colt has tried to downplay the significance of the SEC's ruling and their settlement. She and several supportive city council members implied that the federal government had financially ruined the family and forced them to remain mute as part of the deal. But the facts suggest otherwise.
Colt's Washington attorneys who finagled the settlement deal, Harry Weiss and William McLucas, are former SEC enforcement directors who left the agency just two and three years ago, respectively.
Responding to suggestions that the charge must not be a serious one since the Colts will not be required to pay restitution to their victims, SEC Assistant Director Paul Berger forcefully disagreed.
"This isn't a slap on the wrist," Berger said. "The remedies we sought may have serious personal and professional consequences." Obviously the charges have already resulted in Colt's resignation. And though officials from Georgetown University Law School have said they do not plan to discipline the students, the men may face difficulties getting admitted to the bar.
However, by all measures, the Colt's definition of financial devastation differs radically from the standard. The family will keep their condo at the Vail Racquet Club purchased two years ago for $130,000. During her resignation speech on Tuesday, Colt said the "small condominium" is already worth less than they paid for it; however the Eagle County assessor's office this week listed its actual current value as $143,340.
The Colts also get to keep their downtown restaurant, Giuseppe's Depot. The restaurant is currently undergoing repairs from a fire that started in the restaurant's kitchen, causing massive damage last December.
And, the couple will not be forced to give up their family estate in the Broadmoor neighborhood in southwest Colorado Springs. According to the county assessor's office, the 15-acre spread was owned as three separate parcels until last July, four months after the SEC launched its investigation. Now the acreage has been consolidated into one large parcel.
During her nearly yearlong stint as a city councilwoman, Colt was never shy about taking strong positions. So it is disheartening that, at the time when she most needed to take personal responsibility, Colt attempted to lash out and make excuses for her -- and her son's -- extraordinarily poor judgment.
The past week of scandal has resulted in an embarrassing national spotlight on Colorado Springs and a massive outpouring of public distrust in City Hall. Yet, shortly after Colt's resignation, Mayor Mary Lou Makepeace and Councilman Jim Null suggested Colt had been treated unfairly by the public and the media.
Rather than continuing to make excuses for their fallen comrade, the mayor and remaining elected representatives should now dive into the work of reestablishing trust in government.