Abe Pollin testified yesterday that "there's a good chance" he advised Arnold Heft, his limited partner in Capital Centre, of prospective changes in license agreements between the arena and the Washington Bullets and Washington Capitals, then said, "If I didn't, I should have and I apologize."
Pollin, general partner in the Centre and principal owner of the teams, said under cross-examination in Prince George's Circuit Court that he testified in depositions that he had not consulted Heft because "I did not know for sure . . . I said I might have told him." He said Heft's testimony that the two had talked about "accounting matters" on June 8, 1982 -- three weeks before the adjustments were outlined in two memos -- "sort of flashed something in my mind."
During questioning by Stephen Grafman, one of Heft's attorneys, Pollin said, "I will not be dishonest and tell you I told him when I'm not sure I did."
Burton Schwalb, one of his attorneys, had asked Pollin earlier yesterday if he and Heft had had a meeting in June 1982. Pollin answered, "There could have been, but I don't recall."
In his civil suit, Heft contends that, through the adjustments, Pollin improperly diverted money from the profitable arena to the financially struggling teams. Heft's attorneys have argued Pollin had the fiduciary duty to advise their client of the changes, and that he violated two signed agreements between the men that contained advisory clauses.
Pollin took the stand yesterday for the first time in the 19-day trial, which is expected to conclude today with the continuation of his testimony. He maintained the adjustments were made to correct certain practices not specified in the teams' license agreements with the Centre, such as fees for using the scoreboard's Telscreen and providing complimentary season tickets to the arena.
Heft sat impassively while Pollin answered most questions in a low-key manner. The two did not speak to each other.
Pollin said that about half of the $864,000 that was effectively returned to the teams by the adjustments was used to pay off their debts. But he denied the adjustments were made solely to bring the liabilities under $400,000, the ceiling specified by the arena's bond agreement.
Grafman has alleged the adjustments were made for that purpose and that the teams' liabilities in June 1982 were over $1 million. Asked if he knew in April, May or June of that year that the teams' liabilities were that amount, Pollin said he didn't.
Pollin also testified that three transactions in 1982 and 1983, in which the teams sent checks to Capital Centre at the end of a fiscal quarter and received the same amount as loans back from the arena within a few days, were not done to "unage" their liabilities -- in other words, making new loans for the Bullets and Capitals. The arena's bond agreement specifies the teams cannot have debts for more than 90 days.
An accountant for Arthur Young and Co. earlier testified the three payments/loans were "sham transactions." Grafman has contended they were made to conceal the teams' true financial status.
Pollin's testimony that he might have advised Heft of the changes brought a surprised and angry response from Grafman. The attorney quickly brought copies of Pollin's deposition and demanded he indicate where Pollin had testified to having possibly consulted Heft.
Heft testified two weeks ago he met with Pollin at a Capital Centre partners' distribution meeting June 8, 1982, in which, Heft said, " . . . He patted me on my head, gave me a check and sent me on my way." Heft testified they talked of accounting matters, but that there was no talk of adjustments.
Pollin said Heft's testimony jogged his memory regarding the meeting, and that he might have had a datebook that recorded it. He said, "I've been looking for this thing for a long time," and that he located it Saturday at his home in Bethesda.
The datebook, he testified, indicated the men had met June 9, 1982, at 9:30 a.m. at Pollin's office at Capital Centre. "I can't swear to it on the stand," Pollin said, "but there's a good chance I did tell him."
Asked by Grafman why he made that statement, Pollin answered, "There were no other accounting matters taking place at this time."
After a short recess, Grafman cited a section of Pollin's deposition of March 13, 1985, when Pollin was asked if he kept any record or log of his meetings with Heft. "I don't keep records," Grafman quoted Pollin as saying.
" 'Any records at all?' " Grafman quoted his own question. He said Pollin's response was "Nope."
Pollin testified yesterday that he keeps an appointment book, not a diary, which he said Grafman had asked him about. "I don't keep notes," he said. "This is an appointment book."
Grafman then cited Pollin's deposition of March 13, 1985. When Pollin was asked why he didn't consult with Heft, Grafman said, the answer was, "I was working 18 to 20 hours a day (in the Save the Caps campaign) . . . Frankly, it slipped my mind at that time."
Later, Grafman asked if Pollin had ever told Heft of the check transactions and that their partnership money was involved.
"I made no disclosure to Mr. Heft," Pollin answered, "just like I didn't disclose to him that (the Centre) held hundreds of thousands of dollars of the teams' money."
Pollin explained the Centre often did not settle with the teams immediately after games, as specified by their license agreements.