The URL can be used to link to this page

Home My WebLink AboutEx 33 Deposition Michael Crisp Nov 5 2020.pdfDeposition of Michael Crisp In Re: TracFone Wireless, Inc. November 5, 2020 206.287.9066 l 800.846.6989 1325 Fourth Avenue, Suite 1840, Seattle, Washington 98101 www.buellrealtime.com email: info@buellrealtime.com In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 1 BEFORE THE HEARING EXAMINER OF THE CITY OF RENTON ________________________________________________________ RE: ) ) TracFone Wireless, Inc. ) ) Administrative Appeal ) ) ________________________________________________________ VIDEOCONFERENCE DEPOSITION UPON ORAL EXAMINATION OF MICHAEL CRISP ________________________________________________________ (All participants appearing via Zoom videoconference.) Taken at Spanaway, Washington DATE TAKEN: November 5, 2020 REPORTED BY: KATHLEEN HAMILTON, RPR, CRR, CCR 1917 In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 2 1 A P P E A R A N C E S 2 APPEARING VIA ZOOM FOR THE APPELLANT: 3 SCOTT EDWARDS 4 GRANT S. DEGGINGER Lane Powell PC 5 1420 Fifth Avenue Suite 4200 6 Seattle, Washington 98111 206.223.7000 7 deggingerg@lanepowell.com EdwardsS@LanePowell.com 8 9 APPEARING VIA ZOOM FOR THE CITY OF RENTON: 10 KARI L. SAND 11 Ogden Murphy Wallace P.L.L.C. 901 Fifth Avenue 12 Suite 3500 Seattle, Washington 98164 13 206.447.7000 ksand@omwlaw.com 14 15 ALSO PRESENT VIA ZOOM: 16 TAMURA CRISP 17 18 * * * * * 19 20 21 22 23 24 25 In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 3 1 DEPOSITION OF MICHAEL CRISP 2 EXAMINATION INDEX 3 EXAMINATION BY PAGE 4 MR. EDWARDS.............................................. 5 5 6 7 EXHIBIT INDEX 8 EXHIBITS FOR IDENTIFICATION PAGE 9 1 PROFESSIONAL SERVICES AGREEMENT FOR TAX AUDIT AND 21 RECOVERY SERVICES 10 2 Amendment to Professional Service Agreement For 55 Tax Recovery Services, LLC 11 4 Email from TRS to Iwen sent April 25, 2013 57 5 Email from TRS to Iwen sent June 5, 2013 59 12 6 July 5, 2013 Audit/Tax Investigation Update - 62 Renton 13 7 Email from Iwen Wang to TRS sent June 13, 2013 70 8 Letter to John Cavalieri from Iwen Wang dated 72 14 February 21, 2014 9 Email from TRS to Iwen Wang sent February 2, 2015 81 15 10 Email from TRS to Jan Hawn sent August 9, 2016 112 11 Email from TRS to Jan Hawn sent January 5, 2017 114 16 12 Email from TRS to Jan Hawn sent June 30, 2017 118 13 Email from TRS to Jan Hawn and Nate Malone sent 132 17 July 3, 2017 14 Email from TRS to Jan Hawn sent July 28, 2017 133 18 3 AMENDMENT to contract between the City of Renton 136 and Tax Recovery Services, LLC 19 15 August 4, 2017 Audit/Tax Investigation Update - 137 Renton 20 18 Email from TRS to Jan Hawn sent September 21, 2017 139 19 Email from TRS to Jan Hawn sent October 5, 2017 145 21 20 Email from TRS to Jan Hawn and Nate Malone sent 155 November 6, 2017 22 21 November 6, 2017 Audit/Tax Investigation Update - 158 Renton 23 22 December 6, 2017 Audit/Tax Investigation Update - 159 Renton 24 23 January 5, 2018 Audit/Tax Investigation Update - 167 Renton 25 24 AGREEMENT FOR TAX AUDIT AND RECOVERY SERVICES 173 In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 4 1 EXHIBIT INDEX (CONTINUED) 2 EXHIBITS FOR IDENTIFICATION PAGE 3 25 April 6, 2018 Audit/Tax Investigation Update - 178 Renton 4 26 May 4, 2018 Audit/Tax Investigation Update - 180 Renton 5 27 June 4, 2018 Audit/Tax Investigation Update - 183 Renton 6 28 Email from TRS to Nate Malone sent July 9, 2018 186 29 Renton-Outline 188 7 30 Email from Nate Malone to TRS sent August 1, 2018 232 31 Checkpoint Contents, State Tax Library, State Tax 232 8 Reporters, States, Missouri, Cases, Missouri Court of Appeals, 2018, TRACFONE WIRELESS, INC., 9 Plaintiff/Appellant/Cross-Respondent, v. CITY OF SPRINGFIELD, Defendant/Respondent/Cross-Appellant 10 32 October 5, 2018 Audit/Tax Investigation Update - 237 Renton 11 33 November 6, 2018 Audit/Tax Investigation Update - 240 Renton 12 34 December 6, 2018 Audit/Tax Investigation Update - 241 Renton 13 35 Email from TRS to Jan Hawn and Nate Malone sent 242 December 8, 2017 14 36 Email from TRS to Jan Hawn and Nate Malone sent 242 December 28, 2018 15 37 January 5, 2019 Audit/Tax Investigation Update - 254 Renton 16 38 Email from TRS to Nate Malone sent February 6, 255 2019 17 39 Email from Nate Malone to TRS sent February 7, 256 2019 18 40 Letter to Nicholas Ford from Michael J. Crisp 257 dated February 14, 2019 19 41 Email from TRS to Nate Malone sent February 19, 262 2019 20 42 June 5, 2019 Audit/Tax Investigation Update - 270 Renton 21 43 Collection of RCWs beginning with RCW 35.21.710 276 44 TRACFONE WIRELESS INC v. WASHINGTON DEPARTMENT OF 276 22 REVENUE 45 Collection of article excerpts beginning with the 277 23 Journal Sentinel 46 Sheet1 278 24 25 In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 5 1 SPANAWAY, WASHINGTON; NOVEMBER 5, 2020 2 9:34 a.m. 3 -o0o- 4 5 MICHAEL CRISP witness herein, having been 6 first duly sworn on oath, 7 was examined and testified 8 as follows: 9 10 E X A M I N A T I O N 11 BY MR. EDWARDS: 12 Q. Mr. Crisp, can you please state your name and 13 spell your last name for the record. 14 A. Yes. My name is Michael Crisp, C-r-i-s-p. And 15 what else did you ask me to do? 16 Q. That was that. Just that was that. 17 A. Okay. 18 Q. Yep. So thank you. 19 The -- have you ever been deposed before? 20 A. Once. 21 Q. Okay. 22 Can you describe that matter? 23 A. Somewhat similar to what we're doing now. I had 24 the attorney, and they had me, and they had a court 25 reporter, and, you know, a City attorney. I work for In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 6 1 the City of Tacoma. And the attorney for the company. 2 Q. Okay. 3 Approximately how long ago was that deposition? 4 A. Oh, that was, I would say, probably 20 years 5 ago. 6 Q. And were you an employee of the City of Tacoma 7 at that time? 8 A. Yes, I was. 9 Q. Okay. 10 Thank you. You have not been deposed since 11 then? 12 A. Public -- public -- you mean, I work for a 13 public company in our city? No, I have not. 14 Q. No. Have you ever had your deposition taken in 15 a situation like this, where you've got a court reporter 16 and an attorney asking you questions under oath that are 17 being -- 18 A. Just for the City of Tacoma, but no other time. 19 Q. Okay. 20 Before we get started, I want to go through just 21 a couple of quick ground rules. Yeah. First of all is, 22 you're under oath. Looking for your best truthful 23 answer. If at any time you realize that you need -- 24 made a mistake or need to correct an answer, please let 25 me know. We can go back and do that. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 7 1 A. Good, good. 2 Q. Secondly, you know, the court reporter is taking 3 down both my questions and your answers. So one of 4 the -- the -- the requirements for both of us is that we 5 don't talk over each other, that you wait until I'm 6 finished with a question, and then I need to wait until 7 you're finished with your answer. Do you understand 8 that? 9 A. Yeah. 10 Q. And then [distorted audio] it's important to 11 answer verbally. 12 A. Right. 13 Q. The court reporter cannot take down, you know -- 14 A. Nods. 15 Q. -- head shakes, nods, or other nonverbal 16 communications. Do you understand that? 17 A. Yes. 18 Q. Okay. 19 A. I may do it a couple times, but I'll say yes as 20 I'm doing it. 21 Q. That's quite all right. Thank you. 22 And then if you do not understand or do not hear 23 a question, please let me know, and I'll repeat or 24 rephrase the question. Do you understand that? 25 A. Yes. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 8 1 Q. With that, can -- I'd like to start with your 2 educational background. Did you go to college? 3 A. Yes. I have a B.A. in business, I have a B.S. 4 in accounting, and an M.B.A. 5 Q. Okay. 6 And where did you get those degrees? 7 A. I got my B.A. in business from Pacific Lutheran 8 University, a B.S. in accounting from Central Washington 9 University, and an M.B.A. from Amberton University, 10 which is an offshoot of Abilene Christian University. 11 Q. Okay. 12 Thank you. And then, can you tell me about your 13 employ -- your educational background -- or excuse me, 14 your employment background -- 15 A. Okay. 16 Q. -- starting with your -- your first job out of 17 college. 18 A. Oh. (Laughter). I'll do my best, because I am 19 almost 65 here. But out of college, I worked for 20 General Electric Credit Corporation. And then, from 21 there, I went back to school and got my accounting 22 degree. Then, from there -- from General Electric 23 Credit Corporation, I worked for -- I worked as a 24 property manager up in Seattle. And then, from there, I 25 worked as a -- Travelers Financial Services in Bellevue In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 9 1 as a accountant. And then, from there, I worked for the 2 City of Tacoma. I believe that's -- that is it. 3 Q. Okay. 4 And what did you do for the City of Tacoma? 5 A. As City of Tacoma, I was the financial analyst. 6 I was also an auditor, senior auditor, audit supervisor, 7 and also as acting tax manager. I also worked for a 8 short time as special assistant to the City manager. 9 And I also was on the City -- City of Tacoma's 10 retirement board. 11 Q. When did you first start in -- start working at 12 the City of Tacoma? 13 A. 1987. 14 Q. Sorry, what was that date? 15 A. 1987. 16 Q. Thank you. 17 A. Did I mention to you I was a financial analyst 18 also? 19 Q. You did. You started with the financial -- so 20 you started in 1987 as a financial analyst at the -- 21 A. Yes. 22 Q. -- City of Tacoma? 23 A. Yes. 24 Q. How long did you have that position? 25 A. Approximately five years. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 10 1 Q. Okay. 2 And what were your responsibilities as a 3 financial analyst? 4 A. Responsibility, I handled different departments' 5 accounting. 6 Q. And then, after the -- the financial analyst 7 post, what your next post was as an auditor? 8 A. Yes. 9 Q. And what were your -- what was the time period 10 that you were an auditor for the City of Tacoma? 11 A. Auditor, I believe ten years. 12 Q. That would have been roughly, what, 1992 to 13 2002? 14 A. Yeah. Roughly, yeah. 15 Q. And what were your responsibilities as an 16 auditor? 17 A. As an auditor, I was given responsibilities to 18 do audits for the City of Tacoma that dealt with 19 different various audits that they assigned me to do 20 during those ten years. Pretty much any type of company 21 you can think of, they had me audit. 22 Q. Okay. 23 You were auditing the companies for compliance 24 with City of Tacoma -- 25 A. Yes. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 11 1 Q. -- taxes? 2 A. Yes. 3 Q. What types of taxes? 4 A. Both B&O tax and telephone audits. 5 Q. After the -- you said you were an auditor for 6 approximately ten years, and then you said you became a 7 senior auditor; is that correct? 8 A. Yes. 9 Q. And what time period were you a senior auditor? 10 A. I would say -- there was a break in there. I 11 worked from 2002 to 2006. And during that time, I think 12 the first couple years I was a senior auditor. But 13 also, they had me go up and work as special assistant -- 14 assistant to the City manager for a short time. Then I 15 worked as a audit supervisor, I think 10 or 11 months. 16 And then, I was acting tax manager, I think, for a week 17 or so. 18 Q. So what would -- what were your responsibilities 19 as a senior auditor? 20 A. As senior auditor, they just gave me more 21 complex audits to do. 22 Q. And what did you do when you were acting as a 23 special assistant to the City manager? 24 A. I acted as the right-hand man to the City 25 manager, working with various different departments. At In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 12 1 that point, they would contact me, and I'd be a liaison 2 between the departments and the City manager as far as 3 getting anything done that needed to be done for the 4 City. 5 Q. Okay. 6 So that -- that role didn't involve City tax 7 audits then? 8 A. No, they did not. 9 Q. Okay. 10 And then you indicated that you were a... 11 approximately how long were you the special assistant to 12 the City manager? 13 A. Three months. 14 Q. Three months; okay. 15 And then after that, the next role? 16 A. Well, what it was, I worked as an audit 17 supervisor. And then they asked me to come up. They 18 had a break in between where I came up and worked as a 19 special City -- you know, a special City assistant 20 manager. And then they had me come back down and 21 continue being an audit supervisor. 22 Q. Okay. 23 What were your responsibilities as an audit 24 supervisor? 25 A. As an audit supervisor, I was responsible for In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 13 1 the audit section for the City of Tacoma and the 2 auditors who were under me. 3 Q. Approximately how many auditors were under you 4 at that time? 5 A. Joining both the auditors and -- and -- I'm 6 guessing about seven. 7 Q. I'm sorry. You said, including the auditors 8 and -- 9 A. Auditors and then people who -- who actually 10 did -- they weren't -- they were, like -- they kind of 11 audit the tax returns that came in. So a regular 12 auditor, and then, you know, a couple people who 13 actually audit the tax returns. 14 Q. Okay. 15 So how -- how many regular auditors? 16 A. I think there was five. 17 Q. Okay. 18 A. I'm -- I'm guessing now. That's about 15 years 19 ago. 20 Q. Sure. 21 A. About five. 22 Q. And then as -- as the supervisor, were -- you 23 were responsible for reviewing the draft audit schedules 24 prepared by auditors? 25 A. Yes, I was. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 14 1 Q. And was there any further review besides you, or 2 were you the -- the person that would then make the 3 determination about whether the assessment was ready to 4 go out? 5 A. The tax manager would then review it. 6 Q. Okay. 7 And who was the tax manager at that time? 8 A. Let me think. It was either Dusty Jensen or 9 Jodi [phonetic] -- I can't remember Jodi's last name 10 unfortunately. It probably was Dusty Jensen. And I 11 think he left, and then Jodi came on board. And 12 unfortunately, I can't remember Jodi's last name. 13 Q. Okay. 14 And then you had mentioned that you became 15 acting tax manager for a few weeks? 16 A. For one week. They wanted me to go longer, but 17 they had me go up to be special assistant to the City 18 manager instead. 19 Q. Okay. 20 I guess I'm getting a little bit confused about 21 the -- the sequence here. 22 A. Yeah. 23 Q. I apologize. 24 A. Right. What it is, there's a -- there's a break 25 in there. Basically, I was an auditor, a senior In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 15 1 auditor, and then they had me be an audit supervisor. 2 And then while I was audit supervisor, they asked me to 3 come up for three months to do -- be a special assistant 4 to the City manager. And then after that, I came back 5 down and resumed the position of audit supervisor for a 6 short while. And then from that point afterwards... 7 after being an audit supervisor, I think they then -- I 8 can't remember if they actually -- I think I came back, 9 and then resorted back to a senior auditor, I believe, 10 afterwards for a very short time, and then left the 11 City. I think that's what -- how it happened. 12 Q. Okay. 13 So -- so you were not the tax manager -- the 14 acting tax manager? 15 A. Just for a short time. For one week. 16 (Inaudible due to crosstalk.) 17 BY MR. EDWARDS: 18 Q. For one week -- 19 A. Right. 20 Q. And I guess so -- within the -- that sequence 21 that you just articulated, I didn't hear the point in 22 time in which you were the acting -- 23 (Inaudible due to crosstalk.) 24 BY MR. EDWARDS: 25 Q. -- tax manager. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 16 1 A. That happened, I believe -- like I said, we're 2 looking at 15 years ago. I believe it was actually 3 doing it when I was the audit supervisor. I just did it 4 for one week, if I remember correctly. The person left 5 out, and I did for one week. 6 Q. Okay. So that you would have been after either 7 Dustin Jensen or Jodi -- 8 A. Right. 9 Q. -- left their -- 10 A. Trueblood [phonetic] -- 11 Q. -- position? 12 A. Trueblood is her name. 13 Q. Okay. 14 THE REPORTER: I'm sorry. It's really 15 important that we speak one at a time. 16 THE WITNESS: Okay. I'm sorry. 17 MR. EDWARDS: I'm sorry. 18 BY MR. EDWARDS: 19 Q. So that would have -- after that period, you -- 20 you reverted to working as a senior auditor for the City 21 of Tacoma; am I correct in understanding that? 22 A. Right. For a very short time; right. 23 Q. Okay. 24 And then after that, you -- you left the 25 employment of the City of Tacoma? In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 17 1 A. Yes. 2 Q. Okay. 3 And what did you do after you -- you left the 4 employment of the City of Tacoma? 5 A. Well, I started the company, Tax Recovery 6 Services, in 2004. And at that point, then, I 7 started -- I started working -- you know, started doing 8 paperwork and everything. And once I left the City of 9 Tacoma, I continued on with the -- with the company, Tax 10 Recovery Services. 11 Q. Okay. 12 So you started the company while you were an 13 employee of the City of Tacoma? 14 A. Yes, just the paperwork part of it, yes, to get 15 registered. And we did do some work as -- as Tax 16 Recovery Services. 17 Q. So the -- the company Tax Recovery Services 18 started operations prior to your leaving the City of 19 Tacoma? 20 A. Yes. 21 Q. Okay. 22 And that was in 2004? 23 A. Right. 24 Q. Okay. 25 Who are the owners of Tax Recovery Services? In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 18 1 A. Just Tamura Crisp and myself. 2 Q. Okay. 3 And what are your ownership interests in the 4 company? 5 A. As far as ownership you mean, as far as the 6 breakout, as far as -- 7 Q. Yes. What's the allocation of ownership 8 between? 9 A. Oh, okay. 98 percent Michael Crisp, and 10 2 percent Tamura Crisp. 11 Q. Okay. 12 And your title at the company is -- 13 A. It's president. 14 Q. President. Okay. And you've been the president 15 since the company was formed in 2004? 16 A. Yes. 17 Q. Does the -- the company have any employees? 18 A. Right now it just has one employee. 19 Q. And who is that? 20 A. Nathan Crisp. 21 Q. Is he related? 22 A. Yes, our son. 23 Q. And what is his title? 24 A. Auditor. 25 Q. And how long has he been employed by TRS? In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 19 1 A. 2013. Correct? 2013. 2 Q. Okay. 3 And did he act as an auditor on the TracFone 4 audit? 5 A. No, he did not act as an auditor on the TracFone 6 audit. 7 Q. Did he have any other role with respect to the 8 TracFone audit? 9 A. He did input information for us. 10 Q. Can you describe the business of Tax Recovery 11 Services? 12 A. Tax Recovery Services provides auditing services 13 to cities within the State of Washington. 14 Q. How many cities does the company work for? 15 A. Currently, I believe six. I'd have to name them 16 out to -- 17 Q. Yeah. Does that -- 18 A. Let me -- let me think about this, see if I can 19 count them in my head. Let's see. 20 (Sotto voce comments.) 21 I believe five. 22 Q. And does the number of cities that you represent 23 change over time? 24 A. Yes. We had other cities that we worked for, 25 several other cities, and those contracts ran out. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 20 1 Q. And how do you obtain contracts with cities? 2 A. I simply contact the City. And at that point -- 3 and they usually, at that point, send me over to the 4 finance director. And at that point, I introduce 5 myself. Or I may actually attend a City council meeting 6 and may introduce myself to the mayor or City manager. 7 Q. Do you typically have a particular audit in mind 8 when you approach a city about doing work for them? 9 A. No, I do not. 10 Q. I think, just so -- if you can open now the 11 envelope that was marked as Number 1 in the package that 12 was sent. 13 A. Okay. (Complies.) 14 Okay. 15 MR. EDWARDS: And, Court Reporter, can you 16 mark that as Exhibit Number 1. 17 THE REPORTER: Counsel, I wasn't given 18 individual envelopes. I only have a stack of documents. 19 MR. EDWARDS: Okay. Mr. Crisp and Kari, did 20 yours come in individual envelopes or in one big 21 envelope? 22 THE WITNESS: Individual. 23 MR. EDWARDS: Okay. 24 MS. SAND: Individual. 25 MR. EDWARDS: All right. So the one on the In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 21 1 top, they should -- they'll be in sequence. I don't 2 have -- but the first one is a Professional Services 3 Agreement for Tax Audit and Recovery Services with the 4 City of Renton. 5 THE WITNESS: Right. 6 MR. EDWARDS: So the top one on your packet, 7 Court Reporter. 8 THE REPORTER: Okay. Just a moment. 9 MS. SAND: The Bates number is 000443. 10 (Exhibit No. 1 marked.) 11 BY MR. EDWARDS: 12 Q. Do you recognize the -- the document that's been 13 marked as Exhibit 1? 14 A. Yes. 15 Q. What is -- what is this document? 16 A. It's a professional agreement between Tax 17 Recovery Services and the City of Renton. 18 Q. Okay. 19 Who drafted the -- the agreement? 20 A. The City of Renton. 21 Q. Okay. 22 And then, if I look to page 7 of the document, 23 is that your signature on it? 24 A. Yes. 25 Q. I'm sorry. Did you say yes? In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 22 1 A. Yes. 2 Q. Thank you. 3 And it looks like here that it was signed in 4 October of 2011; is that correct? 5 A. Yes. 6 Q. Okay. 7 If I can direct your attention to the first page 8 of the -- of Exhibit 1, in the paragraph numbered 2 9 that's titled SERVICES. 10 A. What -- what page are you on? 11 Q. I'm on the very first page. 12 A. Okay. 13 Q. At Bates number 000443. 14 A. Okay. I see it. 15 Q. And there's -- the second numbered paragraph is 16 titled SERVICES. Do you see that? 17 A. Yes, I do. 18 Q. Okay. 19 The -- the first sentence, starting in about the 20 middle, so near the end of the second line there, 21 indicates that the services shall be performed, quote, 22 "In a manner consistent with the accepted professional 23 practices or other similar services within the Puget 24 Sound region in effect at the time those services are 25 performed." Do you see that language? In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 23 1 A. Let's see. 2 (Reviews exhibit.) 3 Read that again. Where are you -- where are you 4 at again? 5 Q. Yeah. So I'm near -- starting near the end of 6 the second line of that paragraph number 2, titled 7 SERVICES. 8 A. Okay. Okay. In a manner consistent with -- 9 okay -- accepted -- okay. Uh-huh, yes, I see it now. 10 Q. Okay. 11 A. Okay. 12 Q. What is -- what is your understanding of the 13 accepted professional practices that -- for services of 14 the type that Tax Recovery Services was providing to the 15 City of Renton? 16 A. At that time, to provide -- to go in and to 17 conduct the audit as far as -- as far as their code, 18 municipal code. And at that point, conduct the audit 19 per their code. 20 Q. Okay. 21 The -- if we move down to about the middle of 22 that paragraph, there's a sentence that begins, "The 23 contractor warrants that it has the requisite training, 24 skill and experience necessary to provide the services, 25 and is appropriately accredited and licensed by all In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 24 1 applicable agencies and government entities." Do you 2 see that? 3 A. Yes, I do. 4 Q. Okay. 5 Can you please describe the training, skill and 6 experience that -- that you had to -- to provide the 7 services? 8 A. Okay. I mentioned before, as far as my 9 schooling, both in business and as also accounting 10 degree, dealing with taxes and auditing of course. 11 Also, I was trained at the City of Tacoma for 12 many years by other -- by others who have senior 13 positions over me. In addition, seminars and 14 conferences. 15 Q. What types of seminars and conferences? 16 A. Just ones that were provided through the City of 17 Tacoma. 18 Q. Okay. 19 And were they put on by the City of Tacoma? 20 A. At times they were, and at times they weren't. 21 There might have been some other agency putting it on. 22 Q. And then what about this -- this appropriately 23 accredited, what accreditation did you have? 24 A. The accreditation I have is just my schooling 25 that I -- that I have, and also my training as -- as an In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 25 1 auditor. 2 Q. Okay. 3 Do you -- do you -- are you a licensed CPA? 4 A. No, I am not. 5 Q. And with respect to being licensed by all 6 applicable agencies and government entities, what 7 licensing do you or TRS have? 8 A. Of course we had to get licensed from the City 9 of Renton. And also we went ahead and also got a 10 license from the State of Washington. 11 Q. What type of license are you referring to? 12 A. The -- the making an LLC, Secretary of State. 13 Q. Okay. 14 So is that a business license? 15 A. Right. And also -- right. 16 Q. So it's not a separate license specific to 17 conducting tax audits; is that correct? 18 A. No. No. 19 Q. Just a -- a general license to -- to be engaged 20 in business? 21 A. Right. 22 Q. I'd like to turn to the second page under 23 paragraph 4 titled COMPENSATION. 24 A. Yes, I see it. 25 Q. Okay. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 26 1 What -- can you describe the -- the compensation 2 terms of your agreement with the City of Renton? 3 A. Okay. Basically we're looking at 41 -- 4.1, 4 4.2, and 4.3. And basically describing that we were 5 going and conduct audits for the City of Renton. And at 6 that point, the compensation I believe was 23 percent of 7 the recovery, if there was a recovery. 8 Q. Okay. 9 So in paragraph 4.1 there's a reference to 10 hourly rates being locked in for the duration of the 11 contract. Were there any hourly rates involved? 12 A. No, there were not. 13 Q. And you only get paid if there is a -- a 14 recovery -- 15 A. Yes. 16 Q. -- is that correct? 17 A. Yes. 18 Q. And a recovery is -- is an assessment that is 19 paid by the taxpayer? 20 A. Yes. 21 Q. How much have you been paid to date for work 22 that you've performed on the TracFone audit -- audit? 23 A. Zero for -- for City of Renton. 24 Q. How much do you expect to receive in payment for 25 the work done on the TracFone audit? In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 27 1 A. Right now that's still up in the air. 2 Q. It's going to turn on the outcome of this 3 proceeding? 4 A. Of the audit, uh-huh. 5 Q. What do you mean when you say "of the audit"? 6 A. Once the audit is completed. 7 Q. What remains to be done to complete the audit? 8 A. Well, I mean, completed, as far as what you 9 mentioned, after what happens with this court procedure, 10 whether it's taxable or not. 11 Q. I'd like to next turn to page 3. The -- at the 12 bottom of the -- the page, paragraph 7 is titled 13 CONFIDENTIALITY. 14 A. Yeah. 15 Q. Do you see that? 16 A. Yes, I do. 17 Q. What is your understanding of your 18 confidentiality obligations under this contract? 19 A. As it -- as it states: "Obtained by the 20 contractor in performance of this Agreement shall be 21 considered confidential, subject to applicable laws." 22 And also, breach of confidentiality by the contractor 23 may not happen. And it may happen -- if it does, 24 there's -- could be termination -- termination. 25 Q. Yeah. What would constitute a breach of In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 28 1 confidentiality? 2 A. Any information that was -- that was not about 3 the audit. 4 Q. I don't understand what you're... 5 A. What -- 6 (Inaudible due to crosstalk.) 7 BY MR. EDWARDS: 8 Q. Can you clarify? 9 A. Maybe you can rephrase that. I'm not quite sure 10 I understand what you're -- 11 Q. Yeah. So what is your understanding of what 12 your obligations are with respect to maintaining 13 confidentiality? What does that mean to you? 14 A. Information about the audit should not -- should 15 not be put out there, should not go outside this. The 16 City and the company, and also TracFone, anything that 17 TracFone gives us. 18 Q. That -- let me ask a clarifying question here. 19 So you're indicating that your confidentiality 20 obligation prohibits you from disclosing information 21 about either TracFone or the audit to anybody other than 22 the City or TracFone; is that -- 23 A. Yes. 24 Q. Okay. 25 Are there similar confidentiality requirements In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 29 1 in contracts that you have with other cities? 2 A. As far as the contract -- if they're all -- the 3 contracts required vary from city to city, but they 4 would probably have something similar to it. I would 5 assume. I don't have those contracts in front of me, 6 but it'd probably be something similar. 7 Q. So do you generally maintain the confidentiality 8 of audits that you're doing for one city, and that -- 9 you don't tell other city clients about audits that 10 you're doing for other cities? 11 A. No, we do not. 12 Q. If we go to the -- the next page, page 4, at the 13 very top of the page. Do you see that first sentence 14 there? 15 A. Yes, I do. 16 Q. It says, "Contractor will fully cooperate with 17 the City in identifying, assembling, and providing 18 records in case of any public records disclosure 19 request." 20 A. Yes, uh-huh. 21 Q. Have you ever had occasion to -- to assist in 22 responding to a public records request with the City of 23 Renton? 24 A. No. 25 Q. The -- the next paragraph, number 8, is titled In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 30 1 WORK PRODUCT. What work product have you delivered to 2 the City of Renton in connection with the TracFone 3 audit? 4 A. Well, unfortunately I don't -- I couldn't tell 5 you. Everything -- as far as I know, would be the audit 6 itself. 7 Q. And when you say, "the audit itself," what -- 8 what would be the component parts of the audit? What -- 9 what does that include? 10 A. It'd be the tax schedules. It'd be the... 11 Right now, I believe, tax schedules, the letter as far 12 as how we did the audit. And I think that would be it. 13 We might have -- they said, as far as -- let me read 14 this real quick just to be sure, as far as work product, 15 what else is in there. 16 (Reviews exhibit.) 17 Yes, I believe that anything that was related to 18 the TracFone audit itself, I think we have sent to them. 19 Outside of maybe sketches. And I'm not sure what they 20 mean by "sketches". 21 Q. Would that include any communications that you 22 had with TracFone? 23 A. As far as any communications that -- we do 24 provide a -- a monthly report to the City of Renton. 25 Q. Have you provided the communications themselves? In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 31 1 A. Yes, we do provide emails to them. 2 Q. And -- and you've provided to Renton all of the 3 emails between TRS and TracFone? 4 A. That I know of. 5 Q. Did you communicate with TracFone by -- by 6 written means, other than email, or any letters or other 7 types of written communications? 8 A. Right now we did have telephone conversations 9 with them. As far as written letters, I -- I don't -- 10 right now we're talking about several years. I can't 11 remember, but I'm -- [distorted audio] to be honest with 12 you. But we did talk to them by phone. 13 Q. And who did you talk to at TracFone? 14 A. Mr. Ford, I believe. I think Dylan, and I think 15 we -- I might have talked with Mr. Cavalieri. 16 Q. Anybody else? 17 A. No, I think that's it. 18 Q. Okay. 19 Did you take any notes of any of your 20 conversations? 21 A. If we did, they would probably have been -- they 22 were probably just basic notes. They were probably just 23 discarded because they really didn't need to be kept. 24 Q. So -- so you -- you haven't maintained any notes 25 of any conversations that you've had with any anyone In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 32 1 from TracFone? 2 A. No. What we usually do is, we usually type it 3 up in our -- you know, in our monthly report. So we -- 4 at that point, we may go ahead and type down what they 5 said. But we don't need to keep the -- the notes 6 itself. 7 Q. What about the -- the data that TracFone 8 provided during the course of the audit, have you 9 maintained that? 10 A. Yes. 11 Q. And have you provided a copy of all of that to 12 the City of Renton? 13 A. Okay. Maybe you could rephrase that. When you 14 say, "information," what -- what kind of information are 15 you saying? 16 Q. All kinds of information. Anything that you 17 received from the City of -- from TracFone relating to 18 the audit of TracFone. 19 A. That I would say, yes, that I know of. There 20 might be some -- there -- restate that. There may be 21 some information we still have that we haven't sent that 22 is kind of more irrelevant to the -- to the audit 23 itself. 24 Q. And what information is that? What type of 25 information is that? In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 33 1 A. That I would -- I -- I don't know. It would be 2 just a basic information that -- that would be reported 3 on the email. 4 Q. And you're talking about things that you have -- 5 that you have not shared with the City of Sea- -- of 6 Renton? 7 A. Right. Now, I'm not quite sure. Restate that. 8 Q. Yeah. 9 MR. EDWARDS: Can you go back and reread -- 10 read the answer about the information that was not sent 11 to the City of Renton? It was about two answers ago. 12 MS. SAND: You're talking to the court 13 reporter; right? 14 MR. EDWARDS: Yes, I'm sorry. I am talking 15 to the court reporter. I apologize. That wasn't clear. 16 (Question was read back.) 17 BY MR. EDWARDS: 18 Q. I'm asking for you to identify the information 19 referred to in that answer. 20 A. That I -- I would not know right off the top of 21 my head. I wouldn't be able to answer that at this -- 22 at this moment. 23 Q. You're not sure what you might have that you 24 have not shared with the City of Renton at this point? 25 A. Right. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 34 1 Q. But you believe that there -- there may be some 2 documents that fall in that category? 3 A. Possible. Minor stuff. 4 Q. Okay. 5 And -- and when you say "minor", I'm trying to 6 understand what you mean by that. 7 A. It would be -- it would be just basic 8 information. I can't even think of. When I say 9 "minor", it might be some -- some information about the 10 audit itself. I can't even think about what minor, if 11 anything at all, to be honest with you. So I don't have 12 everything in front of me. 13 Q. Okay. 14 Let's -- let's move on, and kind of jump ahead 15 towards the -- 16 A. Right now could I take a break? 17 Q. Oh, absolutely. 18 MR. EDWARDS: Kari, is this a good time for 19 a five-minute break? 20 And I apologize, that was one of the things 21 I would -- I was going to say early on, that -- that if 22 at any time you need a break, please let us know. 23 THE WITNESS: Okay. Okay. 24 MR. EDWARDS: Let's -- shall we take a 25 five-minute break? In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 35 1 MS. SAND: Sure. So I just want to note, 2 the time is 10:14. So should we resume at 10:20? 3 MR. EDWARDS: That -- that sounds good. 4 MS. SAND: Okay. 5 THE WITNESS: Okay. Thank you. 6 (A break was taken 7 from to 10:14 a.m. to 10:22 a.m.) 8 MR. EDWARDS: Yes. We're back on the 9 record. 10 THE WITNESS: Okay. That we sent all the 11 emails to the City of Renton. We believe we sent just 12 about almost all of them. But -- but there might have 13 been some we might not have sent. Because when we send 14 a report out, we're just summarizing what happened that 15 month. And of course TracFone would have all those -- 16 would have all the emails between us and TracFone. 17 BY MR. EDWARDS: 18 Q. You have not shared with the City all of the 19 emails with -- between TracFone and TRS; is that 20 correct? 21 A. If there was something -- yes, if there was 22 something that was minor when I'm doing a summary 23 report, at that point I wouldn't have included it on the 24 summary report to -- monthly summary report. 25 Q. What about emails that you mention more than one In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 36 1 city. Did you produce those to the City of Renton? 2 A. No. Redacted them. We did not do that. 3 Q. Okay. 4 When you say "redacted," did you send them a -- 5 a copy with the names blacked out, or did you just not 6 send them at all? 7 A. We just not -- we just wouldn't mention those 8 cities. We would redact the -- the email. But no other 9 city would be mentioned. 10 Q. And when you're talking about redacting emails 11 to not mention other cities, are you referring to the 12 monthly reports that you sent to the City of Renton? 13 A. Yes. 14 Q. Okay. 15 In connection with this proceeding, did -- did 16 the City of Renton ask you to send them copies of all of 17 the emails between TRS and TracFone with respect to this 18 audit? 19 A. No. 20 Q. What were you asked to produce to the City of 21 Renton? 22 A. A monthly summarized report of how -- 23 (Inaudible due to crosstalk.) 24 THE WITNESS: A monthly summarized report. 25 BY MR. EDWARDS: In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 37 1 Q. That was the only thing related to -- that you 2 were asked to provide with respect to this litigation? 3 A. As far as this litigation -- I -- I mean, we may 4 go -- we may have sent other information as far as, you 5 know, how the audit is going. That's all I can think 6 of. 7 Q. Let me -- let me try to put some more context 8 here. After TracFone filed an appeal with the City 9 hearing examiner, we requested that the City produce all 10 of the audit file with respect to the audit of TracFone. 11 We were told that the City needed to get those materials 12 from TRS. 13 A. Uh-huh. 14 Q. Did the City ask you to provide a copy of the 15 entire audit file to disclose to TracFone as part of 16 this appeal process? 17 A. Yes. I would send them that. 18 Q. Did they ask you to do that? 19 MS. CRISP: (Sotto voce comments.) 20 THE WITNESS: Right now, I think my wife 21 actually probably would be able to respond to that 22 better. 23 BY MR. EDWARDS: 24 Q. Well, your wife is not being deposed right now. 25 A. Okay. No -- In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 38 1 Q. I'll be deposing her later. 2 A. No, in that case, I couldn't tell you 3 everything, what we sent to them. 4 Q. Let me change gears a little bit. With respect 5 to how the audit was conducted, how did -- how did you 6 and Mrs. Crisp allocate your roles and responsibilities? 7 What did each of you do in connection with the -- the 8 TracFone audit? 9 A. At that point, I pretty much dealt with Mr. Ford 10 and -- and before that, Mr. Cavalieri. And at that 11 point, I went ahead and asked them to provide 12 information about the audit. And at that point, we 13 discussed what went back and forth. And they told us 14 that they did not have the information we requested. 15 And so at that point, we then began to try to understand 16 more, ask more questions of how they did their -- they 17 did their business. And at that point, from there, we 18 realized that they didn't have information we needed. 19 So at that point, then, Ms. Crisp then began working on 20 trying to come up with -- with some type of estimate, 21 because they could not provide the information we 22 needed. 23 Q. When -- when was the estimate that you're 24 referring to prepared? 25 A. 2017. I'm guessing. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 39 1 Q. So prior to 2017, were you the only person 2 working on the TracFone audit? 3 A. No. Ms. Crisp also worked on it. And also 4 Nathan Crisp did input. 5 Q. So what -- what did Mrs. Crisp do with respect 6 to the TracFone audit? 7 A. She came up with the methodology. 8 Q. Anything else? 9 A. That was the main thing she did. 10 Q. Who was responsible for producing to the City of 11 Renton the audit file in connection with this 12 administrative appeal? 13 A. Describe what you mean by "audit file". What -- 14 what do you mean? 15 Q. Again, we made a request of the City of Renton, 16 that the City of Renton produce the audit file. We were 17 told that they needed to get the audit file from you. 18 And so, that is all -- that is the question that I 19 asked. We then received a bunch of documents that we 20 understood came from you. 21 A. Right. 22 Q. So I'm trying to understand, what is it that you 23 were asked to produce as part of this administrative 24 appeal? 25 A. Okay. As far as our audit file itself, they In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 40 1 asked me to -- to produce the -- the audit itself, you 2 know, the -- you know, the complete audit as far as what 3 was in there, the tax schedules, the -- the methodology, 4 how we did it, and also a letter, basically stating what 5 we did and how we did it. 6 Q. Is that a letter that you prepared for this 7 appeal, or are you talking about something that was done 8 during the course of the audit? 9 A. Something that was done for the audit itself. 10 Q. I'm going to move on and get back to Exhibit 1. 11 And I'd like to direct your attention to the page that's 12 marked 8 of 10 in that document, Bates number is 000450. 13 Do you have that in front of you? 14 A. Okay. 15 Q. And you see it's titled EXHIBIT A: SCOPE OF 16 SERVICES. 17 A. Yes. 18 Q. Okay. 19 Who drafted this document or this page? 20 A. (Reviews exhibit.) 21 City of Renton, looks like. 22 Q. What causes you to -- 23 MS. CRISP: No. 24 BY MR. EDWARDS: 25 Q. -- to say that? In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 41 1 A. Let me think just for a moment. 2 TRS will need -- 3 (Reviews exhibit.) 4 Has to be the City of Renton. City of Renton. 5 (Sotto voce conversation.) 6 BY MR. EDWARDS: 7 Q. Is Exhibit A the standard form of scope of 8 services that you have in all of your contracts with all 9 of the different city clients of yours? 10 A. No. 11 (Sotto voce conversation.) 12 BY MR. EDWARDS: 13 Q. Did you retain a lawyer to draft a scope of 14 services for you -- 15 A. No. 16 Q. -- at any time? 17 A. No. 18 Q. Did Mrs. Crisp draft this? 19 A. (Reviews exhibit.) 20 I don't think so. 21 Q. Let me point you to paragraph 1 of Exhibit A. 22 It says, "Audits and tax investigations on selected 23 businesses may be conducted by the contractor as 24 mutually agreed upon by the City and the contractor." 25 Do you see that? In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 42 1 A. Yes. 2 Q. Can you describe the -- the process for how TRS 3 and the City of Renton mutually agreed how to select 4 businesses for audit? 5 A. Basically, we would, at that point, talk with 6 the City of Renton. And -- and at that point, they may 7 actually bring up some -- some companies. They may say 8 that, We'd like you to look into this company. 9 And at that point, if that was the case, we 10 would then say, Okay, would you like us to do this -- 11 this audit on this company or not? 12 And at that point, we would talk about it. And 13 also, if we think there might be something out there, we 14 might mention it to them also. 15 Q. Okay. 16 When you say "talk to," would you -- do you talk 17 to them verbally or by email? 18 A. Usually by email. It may be verbally, but 19 normally by email. 20 Q. What types of taxes have you audited for the 21 City of Renton under this agreement? 22 A. Type of audits that we've done I believe is just 23 utility -- utility audits. 24 Q. Only utility audits? 25 A. Yes. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 43 1 Q. You have not done any B&O tax audits? 2 A. No, not for them. 3 Q. What types of utility taxes have you audited? 4 A. Telephone companies. 5 Q. Only telephone companies? 6 MS. CRISP: (Sotto voce comments.) 7 THE WITNESS: That I remember. 8 MS. CRISP: (Sotto voce comments.) 9 THE WITNESS: And -- that I remember, yeah. 10 BY MR. EDWARDS: 11 Q. Okay. 12 Did Renton hire you for the purpose of auditing 13 telephone companies for utility taxes? 14 A. They hired me to do utility audits. 15 Q. And whose idea was it that you would do utility 16 audits? 17 A. City of Renton. 18 Q. Describe how you first -- how you and Renton 19 entered into this contract in the first place. 20 A. You're talking about 2011 when it actually 21 happened. 22 Q. Uh-huh. 23 A. And at that point, our company was simply just 24 contacting different cities, asking them if they want to 25 provide -- that we can provide services to them, as far In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 44 1 as accounting. 2 Q. Okay. 3 So you -- you approached the City of Renton and 4 asked them to retain you to conduct audits? 5 A. Right. Right. 6 Q. Did you ask them to retain you to conduct 7 telephone utility audits? 8 A. No. 9 Q. How did the focus on utility -- telephone 10 utility audits come about? 11 A. I believe they -- they suggested I do telephone 12 audits. 13 Q. Is there any record of that? 14 A. I don't know. 15 Q. And who at the City of Renton were you dealing 16 with at that point? 17 A. Initially, Ms. Wang. 18 Q. What was her role? 19 A. She was the, I think, administrator, services 20 individual. 21 Q. And so was she the person that you approached 22 to -- soliciting work from the City of Renton? 23 A. I don't remember as far as who exactly I 24 approached. 25 Q. Did you know her prior to doing work for the In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 45 1 City of Renton? 2 A. No. 3 Q. I'd like to direct your attention to 4 paragraph 5. Talk -- talking about regular reports. 5 Did you send monthly reports to the City of Renton? 6 A. Yes. 7 Q. And those generally were sent on the 5th of 8 every month? 9 A. Yeah. Pretty much around the 5th. 10 Q. Like to next direct your attention to 11 paragraph 7. It says, "TRS will then work with the 12 company to help them understand that the audit is done 13 correctly and in accordance to the law." Do you see 14 that? 15 A. Yes. 16 Q. And "the company" here is referring to the 17 taxpayer that's being audited? 18 A. Yes. 19 Q. Okay. 20 So part of TRS's scope of services is to work 21 with the taxpayer, to help them understand that the 22 audit is done correctly -- 23 A. Yes. 24 Q. -- and in accordance to the law? 25 What did you do in the TracFone audit to help In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 46 1 TracFone understand that the audit is done correctly and 2 in accordance to the law? 3 A. Say that again. 4 Q. What did you do to comply with this requirement 5 of the contract, to work with TracFone to help them 6 understand that the audit is done correctly and in 7 accordance to the law? 8 A. So at that point, of course, TracFone did not 9 really supply any information, besides the direct -- 10 besides the direct contact information between their 11 customer and them. So... 12 Q. What point are you referring to? 13 A. Say that again. 14 Q. So I asked you a broad question. What have you 15 done in the entire course of this audit to comply with 16 Item Number 7 in your contract and work with TracFone to 17 help TracFone understand that the audit is done 18 correctly and in accordance to the law? 19 A. Right. So basically, we went ahead, we used the 20 information that they did give us. And at that point, 21 we had -- we had to come up with a methodology as far as 22 what else could be done. We had asked TracFone if they 23 had the other information we needed, and they said that 24 they did not track it. So at that point, we came up 25 with an estimate according to -- as far as -- according In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 47 1 to what we thought was taxable per the law, per their 2 code, and then, at that point, presented it to TracFone. 3 Q. And what did you do to help TracFone understand 4 that that was done correctly and in accordance to the 5 law? 6 A. We showed them the methodology, as far as how we 7 did it. And because of that, that's the only thing that 8 we could do as far as what we thought was correct, as 9 far as the amount that was lawfully due. 10 Q. Would it have been possible to meet with them 11 and talk to them about how the audit was done and 12 whether it was done correctly? 13 A. Well, at that point, what I've noticed, we -- 14 talking on the phone and also on email, we did quite a 15 bit of that. If you look through the records, there are 16 a lot of back and forth. And at that point, we felt 17 that doing it that way was the better way to do it. 18 Q. When you -- you keep on referring to "at that 19 point." And I don't know what point you're referring 20 to. 21 A. When I say "at that point," it basically means 22 that, as we were going through the audit and dealing 23 with them, we felt that letters or emails -- and also, 24 if necessary, over the phone, was a better way to go. 25 And that way, we'd have a -- a written -- something In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 48 1 written down as far as what was said between us and them 2 to make sure that we understood what -- what TracFone 3 was looking at, and what we were looking at. 4 Q. Okay. 5 What did you provide to TracFone in writing, 6 showing them that the audit was done in accordance to 7 the law? 8 A. Right now, as far as according to the law, we 9 simply just -- like I stated before, we came up with 10 the -- what the code stated. And as far as -- and then 11 at that point, as far as what they were doing -- and at 12 that point, came up with an estimate. 13 Q. Did you send TracFone anything showing them how 14 the code applied to their business? 15 A. No. I don't think we did. 16 MS. CRISP: (Sotto voce comments.) 17 THE WITNESS: That I remember. 18 BY MR. EDWARD: 19 Q. Did TracFone ever ask to have conversations with 20 you to discuss that topic? 21 A. As far as the code? 22 Q. As far as the application of the tax to their 23 business. 24 A. Yes. We have -- they did call us, and we did 25 talk to them about the audit. If I remember In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 49 1 correctly -- 2 Q. Talk to them about how the code applies to their 3 business? 4 A. No. We just simply -- at that point, we looked 5 at the code. And then at that point, did the audit. 6 MS. CRISP: (Sotto voce comments.) 7 If you don't remember, say you don't 8 remember. 9 BY MR. EDWARDS: 10 Q. Did you -- have you taken any audit training 11 classes or participated in any seminars about conducting 12 audits since you left the employment of the City of 13 Tacoma? 14 A. That I don't remember. I can't say. I left in 15 2006. So I don't remember doing anything. 16 Q. You're -- you're not aware of having taken any 17 training or conducted any seminars since you started TRS 18 or -- 19 (Inaudible due to crosstalk.) 20 THE WITNESS: Not -- not that I remember 21 since that time. 22 BY MR. EDWARDS: 23 Q. Okay. 24 Are you a member of any professional 25 associations that relate to the work that TRS does? In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 50 1 A. No. 2 Q. Are you aware of any standards of conduct or 3 codes of ethics applicable to the -- the conduct of tax 4 audits? 5 A. As far as basic auditing goes, as far as 6 confidentiality, that kind of thing, yes. 7 Q. And -- and what is your -- what is your 8 understanding of the applicable standards of conduct or 9 code of ethics? 10 A. Basically that we do it, and we do it right, and 11 that it's confidential, and that -- and -- and go from 12 there. 13 Q. And is there a -- an organization or a document 14 that -- that provides standards of conduct or codes of 15 ethics for tax audits? 16 A. I don't know. 17 Q. What's the other practice for an auditor to 18 decline to meet with the taxpayer and its 19 representatives during the course of an audit? 20 A. For Tax Recovery Services, it's basically in our 21 policy to actually deal -- be better -- it'd be better 22 to actually deal with the -- the client over email, so 23 we can actually see what's going on. 24 The other thing basically we do, you know, meet 25 with somebody. At that point, it's just between the In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 51 1 company and -- and -- and us. And we would meet with 2 them in that manner, if they wanted to. 3 Q. When you were an auditor at the City of Tacoma, 4 did you ever meet with taxpayers that were being audited 5 and the taxpayer's representatives? 6 MS. CRISP: (Sotto voce comments.) 7 THE WITNESS: You're talking about an 8 attorney or something like that? 9 BY MR. EDWARDS: 10 Q. An attorney, accountant, any type of 11 representative that -- that was not an employee of 12 the -- of the taxpayer business itself. 13 A. Not that I remember. I remember meeting with -- 14 I met with the -- I met with the company's 15 representative before, with the City of Tacoma, yes, in 16 person. 17 Q. But never with -- never with an accountant or an 18 attorney who is assisting the taxpayer with the audit? 19 A. Not that I remember. 20 Q. Would it surprise you to learn that other tax 21 auditors routinely meet with me when clients of mine are 22 being audited? 23 A. I -- I don't know. I guess it -- it depends on 24 the person, I guess. I'm not sure. It wouldn't 25 surprise me that much. But our policy is -- is normally In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 52 1 to -- to meet with the person. If there is an attorney 2 there, then at that point we would want to have our 3 attorney there also. 4 Q. Does TRS have legal counsel? 5 A. We did, but we no longer do. 6 Q. When you say you did, are you referring to legal 7 counsel with respect to this matter, or legal counsel 8 generally, with respect to the -- the business of TRS? 9 A. A person in the past with TRS, in general. 10 Q. And that attorney help you with forming the 11 corporation or the LLC, and that type of thing? 12 A. No. He -- no, he did not. 13 MS. CRISP: (Sotto voce comments.) 14 BY MR. EDWARDS: 15 Q. I'd like to turn now to the next page, Exhibit 16 B, page 9 at Bates number 000451. Do you see that? 17 A. Yes. 18 Q. And this is the -- the portion of the contract 19 reflecting the 23 percent contingent fee that 20 TracFone -- or, excuse me, that TRS earned on audits 21 conducted for the City of Renton? 22 A. Yes. 23 Q. The last paragraph there defines the -- the 24 terms "revenues recovered". Can you explain to me, in 25 your own words, what that -- what you think that means? In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 53 1 A. It just means that whatever was paid by that 2 company to the City for the audit, that's what that 3 means. 4 Q. Okay. 5 But for -- for periods before or after the 6 audit, anything that the City recovers, that's not part 7 of the -- the measure of your contingent fee; correct? 8 A. Say that again. 9 Q. I'm looking at the prior paragraph. And it 10 indicates -- 11 A. Uh-huh. 12 Q. -- that you're not going to be paid on moneys 13 received for taxes owed either before or after the audit 14 period. 15 A. No. If I'm understanding your question 16 correctly. 17 Q. "No," you are not going to be paid, or it's 18 wrong that you're not going to be paid? 19 A. No. We will be paid if there's a recovery. But 20 if there is no recovery, we would not be paid. 21 Q. And you'll be paid if there's a recovery for the 22 audit period; is that correct? 23 A. Right. For that -- for that particular audit -- 24 uh-huh -- period. 25 Q. If there is a recovery by the City for a period In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 54 1 that is either before the audit or after the audit, will 2 you be paid a part of that recovery? 3 A. Before the audit, we would not. And as far as 4 after the audit, the City would have to have us open up 5 a new audit for the period afterwards. Unless there's 6 some type of settlement. 7 Q. I'm looking at the -- the next to the last 8 paragraph. And it -- and it -- it says, "Contractor 9 will not be compensated for money the City receives from 10 taxes owed for periods before or after the audit 11 period." 12 A. Right, uh-huh. 13 Q. (As read): The contractor will be paid only 14 when the City receives actual tax revenue. 15 A. Yes. 16 Q. So -- 17 A. Yes. 18 Q. So if there is amounts received for periods 19 after the audit period, is TRS going to be paid on those 20 post-audit recoveries? 21 A. Right now, unless there's a audit period that's 22 actually opened up at that point, then there would be. 23 Or -- I don't know, as far as whether there's a 24 settlement or not, the City of Renton would have to 25 decide that. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 55 1 Q. Okay. 2 And the audit period here is 2007 through 2013; 3 is that correct? 4 A. I believe so, uh-huh. 5 Q. The -- going back to the -- that last paragraph 6 defining "revenues recovered". The last clause there 7 says, "plus any additional funds received during the 8 audit phase directly attributable to performing of the 9 audit." What is the audit phase that's being referred 10 to in that sentence? 11 A. (Reviews exhibit.) 12 I would attribute it to mean that audit phase 13 would mean, first that you have the audit period, and 14 then the City of Renton would have to decide as far as 15 the audit phase. Would it -- would it also be part of 16 any settlement or not, or... 17 Q. Okay. 18 Let's move now to the envelope number 2, and 19 mark that as Exhibit 2, which is Bates number 00455. 20 It's a single page. 21 (Exhibit No. 2 marked.) 22 MR. EDWARDS: And did you -- did the court 23 reporter find the document I'm referring to? 24 Perfect. Okay. 25 BY MR. EDWARDS: In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 56 1 Q. Mr. Crisp, I'm going to direct your attention to 2 the document that's been marked as Exhibit 2. 3 Do you recognize this as an amendment to TRS's 4 contract with the City of Renton? 5 A. Yes, I do. Can't see the signature signed by 6 Iwen, but yeah. 7 Q. And that's your signature at the bottom? 8 A. Yes. 9 Q. And the -- the agreement originally was for work 10 to be conducted through the end of 2012; is that 11 correct? The -- 12 A. The original. 13 Q. Exhibit 1, the original? 14 A. Right, the original audit period, uh-huh. 15 Q. And this amendment extended that time period 16 through the end of 2014? 17 A. Right, uh-huh, yes. 18 Q. And that's the only revision that was made to 19 the agreement was the extension of the time period? 20 A. There were other amendments, but yeah, yes. 21 Q. But when you're -- other amendments, you're 22 talking about documents other than the one that we're 23 looking at as Exhibit 2? 24 A. Right. 25 Q. Okay. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 57 1 Let's -- 2 MS. CRISP: (Sotto voce comments.) 3 BY MR. EDWARDS: 4 Q. I'm going to skip envelope 3. And the next one 5 is envelope 4. And we're going to go ahead and mark 6 this as Exhibit 4, just to -- to keep things easier. 7 I'm going to come back with an Exhibit 3 later, with 8 envelope 3 and Exhibit 3. So the -- the 4 is a 9 one-page -- it's going to be just one page past. It's 10 an email from Nate Malone -- or I'm sorry, from TRS to 11 Iwen, it says, dated April 25, 2013, and bearing, at the 12 bottom, the Bates number 00530. 13 (Exhibit No. 4 marked.) 14 MR. EDWARDS: And does the court reporter 15 see that document? 16 Okay. 17 BY MR. EDWARDS: 18 Q. So do you have that document in front of you? 19 A. Yes, I do. 20 MR. EDWARDS: And, Kari, you've got yours 21 open? 22 MS. SAND: Yes. Thank you. 23 MR. EDWARDS: Okay. 24 THE WITNESS: Uh-huh. 25 BY MR. EDWARDS: In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 58 1 Q. So do you recognize this as an email from you to 2 the City of Renton? 3 A. Yes, I do. 4 Q. Okay. 5 And -- and who is -- I'm not sure if I'm 6 pronouncing this right. Iwen, I-w-e- -- 7 A. Iwen. 8 Q. Iwen; okay. And that's the person that you had 9 mentioned previously as being the -- the administrator 10 at the City of Renton? 11 A. Yes. 12 Q. Okay. 13 And she was your primary contact initially? 14 A. Yes. 15 Q. Okay. 16 And -- and it starts by saying (as read): We 17 have been working on the -- then there's redacted 18 audit -- and we'll need a copy of their tax returns. 19 Am I correct in assuming that's a name of a 20 business other than TracFone? 21 A. That I don't know. 22 Q. If I look at the next sentence -- 23 A. Yeah. 24 Q. -- it says, "Also, do you have TracFone Wireless 25 Inc. registered with your City?" In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 59 1 A. Right, uh-huh. 2 Q. "If they are not registered, this is a company 3 that I would believe would be a good one to audit." 4 A. Yes. 5 Q. Okay. 6 So I'm assuming that the three redactions are 7 names of businesses that are not TracFone? 8 A. I would -- I don't -- I don't know. I don't -- 9 I don't have the -- the actual document in front of me. 10 (Pause in the proceedings.) 11 BY MR. EDWARDS: 12 Q. The... Did you speak with Iwen at all about the 13 proposed audit of TracFone? 14 A. By phone, I don't remember doing that. 15 Q. Okay. 16 Let me move on to the next document, which is 17 envelope 5. And it should be the next one in your 18 stack, the email dated June 5, 2013, with Bates numbers 19 000531 at the bottom of it. 20 (Exhibit No. 5 marked.) 21 THE WITNESS: Uh-huh. 22 BY MR. EDWARDS: 23 Q. Do you see that? 24 A. Yes, I do. 25 Q. Do you have that document in front of you? In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 60 1 A. Yes, yes, I do. 2 MR. EDWARDS: Court reporter, I'm sorry. I 3 was looking down. Were you able to find it? 4 THE WITNESS: Yes. 5 BY MR. EDWARDS: 6 Q. Okay. The... This is a -- looks like a 7 follow-up email from you, inquiring about whether the -- 8 the City is approving the proposal to audit TracFone; is 9 that correct? 10 A. Yes. 11 Q. It indicates that you had done a lot of research 12 on this company. I assume that this company is 13 referring to TracFone? 14 A. Yes. 15 Q. What -- what research are you referring to here? 16 A. Basically just going through the Internet and 17 doing research as far as what -- what -- what they do. 18 And at that point, after looking at all the research on 19 the Internet, I thought it would be a good company to 20 audit. 21 Q. Did you maintain any records of the research 22 that you conducted on the Internet? 23 A. No, I did not. 24 Q. So what did you see on the Internet that caused 25 you to believe that this would be a good company to In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 61 1 audit? 2 A. Well, that it's -- that it's a company that's 3 operating, looks like, throughout the United States. 4 Also -- I've also heard, you know, ads on, you know, on 5 the radio, what have you. But basically that, after 6 looking at them being a company that was operating, and 7 also here in the State of Washington, I thought that it 8 would be a good company to -- to audit. 9 Q. So any company that operates throughout the 10 U.S., including in Washington, is a good company to 11 audit? 12 A. Maybe. A large -- if it's a large company, at 13 that point operating in Renton, would be a good audit. 14 Q. So why selecting TracFone as opposed to any 15 other company that's a -- operating in Washington and 16 also throughout the country? 17 A. Pretty much we probably audited them too, many 18 of the larger ones. And I think, at times, we've -- not 19 for Renton. We've done regionals. 20 Q. I'm sorry. You've done what? 21 A. Regional telephone companies also, but not for 22 Renton. 23 Q. How many different telephone companies have you 24 audited for Renton? 25 A. That I don't remember how many, as far as In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 62 1 exactly, maybe... five to seven. I don't -- I don't -- 2 I don't have the number in front of me. 3 Q. And -- and the only audits that you've done for 4 Renton have been of phone companies? 5 A. That I remember, but I could -- I have to verify 6 that. 7 Q. And this document is dated June 5 of 2013; is 8 that correct? 9 A. Yes. 10 Q. So this would indicate that, as of June 5, you 11 had not yet received authority from Renton to audit 12 TracFone; correct? 13 A. Yes. Yes. 14 Q. Okay. 15 I'd like to move next to envelope 6, which is 16 a -- a document on Tax Recovery Services letterhead, 17 dated July 5th, 2013. And bearing the Bates number, 18 first page 000001. 19 (Exhibit No. 6 marked.) 20 MS. SAND: Sorry. My record-keeping 21 purposes, are we now marking this document Exhibit 5? 22 MR. EDWARDS: It's going to be -- no, it's 23 going to be Exhibit 6. I -- there will still be an 24 Exhibit 3. 25 MS. SAND: Okay. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 63 1 MR. EDWARDS: Yeah, because otherwise I was 2 concerned that everything would be all out of sequence. 3 And given the volume of -- of documents, I wanted to try 4 to keep the sequence of the envelopes that I sent, to 5 the extent possible. 6 THE WITNESS: Okay. 7 BY MR. EDWARDS: 8 Q. Do you have that document? 9 A. Yes, I do. 10 Q. Okay. 11 And is this one of your monthly reports? 12 A. Yes. 13 Q. Okay. 14 And it's the report for -- for -- for July of 15 2013? 16 A. Right. 17 Q. Would I be correct that in -- inferring that the 18 first page and a half, where everything is redacted, is 19 a report about a different company that you -- you were 20 auditing at that time? 21 A. Yes. 22 Q. And then, if we look at -- in about the middle 23 of -- of page 2, under the heading, TracFone Wireless, 24 it starts: "The City of Renton has asked TRS to conduct 25 an audit on TracFone." In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 64 1 A. Yes. 2 Q. [Distorted audio]. 3 A. Yes. 4 Q. Is that a charac- -- a -- an accurate 5 characterization of how the -- how TracFone was selected 6 for audit? 7 A. Yes. 8 Q. So can you show me where the City -- City of 9 Renton asked TRS to conduct the audit? 10 A. No, I cannot. 11 Q. Isn't it true that TRS asked the City of Renton 12 for permission to conduct the audit? 13 A. Yes. 14 Q. The -- the rest of that sentence that describes 15 TracFone, is that description information that you've 16 learned in your Internet research of the company? 17 A. I believe -- I believe so. 18 Q. Okay. 19 Had you previously shared any of that 20 information with the City of Renton prior to this 21 report? 22 A. Not that I remember. 23 Q. The next sentence says, "TRS sent an email dated 24 June 6, 2013 to TracFone informing them that our company 25 would be conducting an audit on their company." Do you In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 65 1 see that? 2 A. Yes. 3 Q. Do you still have a copy of that June 6th, 2013, 4 email? 5 A. We'd have to verify that. I'd have to check 6 our -- to see -- check our record. 7 Q. Okay. 8 (Inaudible due to crosstalk.) 9 MR. EDWARDS: Kari, we have not been 10 provided a copy of an email, dated June 6th, 2013, so we 11 would like a copy of that document. 12 MS. SAND: [Distorted audio]. 13 THE WITNESS: One thing is, we want to make 14 sure that that is the correct date, you know, that -- 15 that -- that we have. So we will double-check the date 16 to make sure that was the correct date. 17 MS. CRISP: Typo. 18 THE WITNESS: Or it wasn't a typo. 19 MS. SAND: Mr. Edwards, have you asked 20 TracFone for a copy of the June 6th, 2013, email? 21 MR. EDWARDS: I'm not sure whether there is 22 a June 6th, 2013, email, quite frankly. So I -- 23 MS. SAND: I'm not sure either. 24 MR. EDWARDS: Yeah. 25 THE WITNESS: Okay. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 66 1 BY MR. EDWARDS: 2 Q. And the -- and that -- that's why I'm asking the 3 question, as to -- 4 A. Okay. 5 Q. -- try to figure out whether -- 6 A. Right. 7 Q. -- such an email actually exists. 8 A. Right. We'll verify. We'll verify that. 9 Q. And then the -- the next paragraph says (as 10 read): The City of Renton sent a letter, dated June -- 11 it doesn't have a date there -- TracFone Wireless, Inc. 12 Again, are -- do you have a copy of a letter 13 sent to TracFone by the City of Renton in June of 2013? 14 MS. CRISP: No. 15 (Sotto voce conversation.) 16 THE WITNESS: I'd have to check and see. 17 MR. EDWARDS: And -- and, again, Kari, we 18 have not been provided a copy of any letter from Renton 19 to TracFone in June of 2013. And if there is such a 20 letter, we would like a copy of it. 21 THE WITNESS: Yeah. That would be the -- 22 MS. SAND: As would I. The records are in 23 the possession of TRS. So if TRS could check and get 24 back to us, that would be great. 25 THE WITNESS: Okay. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 67 1 Write that down. 2 MS. SAND: I can also check with City of 3 Renton. 4 THE WITNESS: City of Renton -- 5 (Inaudible due to crosstalk.) 6 MR. EDWARDS: I appreciate that. Thank you. 7 I would presume that a letter that was sent 8 by the City of Renton is something that should be in the 9 City of Renton's possession as well. 10 THE WITNESS: Right. 11 MS. SAND: Agreed. I'll follow up. 12 MR. EDWARDS: Okay. 13 BY MR. EDWARDS: 14 Q. And then, if we go down, the next paragraph 15 appears to be simply a repeat of the first paragraph; is 16 that correct? 17 A. Yes. 18 Q. And -- and, again, the paragraph after that is a 19 repeat of the second paragraph? 20 A. Right. 21 Q. Okay. And then the next one -- 22 A. (Laughter). Missed that one. 23 Q. Looks like it's -- it's a slightly different 24 sentence, but it -- it -- I'm assuming it's referring to 25 the same letter that we were just talking about. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 68 1 A. The -- the TRS sent email, dated June 6th -- 2 Q. No. The City of Renton sent a letter to 3 TracFone informing them that TRS has been contracted by 4 the City to conduct an audit of their company. 5 A. Yes. 6 Q. Okay. That -- you think that -- that sentence 7 is basically a more elaborate version of the -- the 8 sentence that says, dated June, without a -- the rest of 9 the date? 10 A. Right. 11 Q. Okay. 12 And then, after that, there's a -- there are two 13 paragraphs about emails between TracFone and TRS, 14 including a list of things that TRS had requested from 15 TracFone. Do you see that? 16 A. Yes -- yes, I do. 17 Q. Okay. And then -- and it says, TRS received the 18 NDA from Mr. Cavalieri on July 3rd -- 3, 2013? 19 A. Yes. 20 Q. Okay. And then, after that, it appears to me 21 that the rest of the page is a duplication of -- 22 A. Yeah -- yeah. Unfortunately, we did not do a 23 good job as far as duplicating stuff. That's unusual 24 for us. 25 MS. CRISP: Typo. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 69 1 THE WITNESS: Yeah, typo. 2 BY MR. EDWARDS: 3 Q. Okay. 4 A. I don't know how we missed that, but yeah -- 5 that would not reflect what normally happens. 6 MR. EDWARDS: All right. At this point, I 7 have a -- a document that was not in the package. It's 8 a one-page e-mail that I -- I'd like to email to 9 everybody so that it can be made an exhibit. It's the 10 only one that I -- I think we're going to need to do 11 that way. 12 And I guess the question becomes, what 13 should be the -- the -- the way to mark it as an 14 exhibit? I am not intending to use the document in 15 envelope 7. So it might be -- the simplest thing might 16 be to just assign Exhibit Number 7 to the email that I'm 17 about to send. And that way, everything will stay in -- 18 in sequential numeral -- numeric order. 19 Is that okay with you, Kari? 20 MS. SAND: So just so I'm clear, you are 21 going to send an email, and you want us to look at that 22 as Exhibit 7, and not open the envelope? 23 MR. EDWARDS: Yes. It's a completely 24 different document than what's in the envelope 7. It's 25 pure happenstance of the sequencing of this. But it In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 70 1 does make it easier to figure out how to number it 2 potentially. 3 MS. SAND: Okay. So don't open envelope 7, 4 which I'm holding up. 5 THE WITNESS: Don't open 7. 6 MS. SAND: And you're going to send an email 7 right now? 8 MR. EDWARDS: Yes. 9 THE WITNESS: We get that email? 10 MR. EDWARDS: I -- I -- this is an area 11 where you're going to have to bear with my technological 12 incompetence for just a second. But I -- I had... 13 (A break was taken 14 from 11:09 a.m. to 11:14 a.m.) 15 (Exhibit No. 7 marked.) 16 BY MR. EDWARDS: 17 Q. So I'd like to first direct your attention to 18 the bottom of that document. 19 A. Yes. 20 Q. Page Bates number ending 533. And do you 21 recognize this as an email, dated June 13th, 2013? 22 A. Yes, I do, uh-huh. 23 Q. And that's from you to Iwen at the -- the City 24 of Renton? 25 A. Yes. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 71 1 Q. And here -- here you're asking to -- again, 2 about whether it's okay to do an audit of TracFone? 3 A. Yes, looks like, uh-huh. 4 Q. So as -- as of this point in time, you had not 5 yet received authorization from Renton to conduct a 6 TracFone audit; is that correct? 7 A. I don't think so. 8 MS. CRISP: No. 9 THE WITNESS: That I remember, no. 10 BY MR. EDWARDS: 11 Q. Okay. 12 And then, if we go to the top of the document, 13 that's the -- the response from Iwen on June 13th? 14 A. Yes, uh-huh. 15 Q. Okay. 16 And that's her authorization for you to conduct 17 the TracFone audit? 18 A. Yes, uh-huh. 19 Q. Other than the emails that we've looked at so 20 far, was there any other communication between you and 21 Renton about commencing an audit of TracFone? 22 A. Not that I remember. 23 Q. So if we go back to Exhibit 6, it wouldn't 24 appear that on -- as of June 6th, 2013, you had not yet 25 been authorized by Renton to conduct an audit of In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 72 1 TracFone? 2 A. If that's the correct date, uh-huh. 3 Q. Okay. 4 MS. CRISP: (Sotto voce comments.) 5 THE WITNESS: Yeah, I think that's a typo. 6 We'd have to verify that date. 7 MS. CRISP: 26th or something. 8 MR. EDWARDS: Okay. Let's move on now to 9 Exhibit 8 -- or envelope 8. 10 And for the court reporter, this is a -- 11 MS. CRISP: (Sotto voce comments.) 12 MR. EDWARDS: -- letter on City of Renton 13 letterhead. 14 MS. CRISP: It's this one. 15 MR. EDWARDS: And it's got Bates number 974 16 at the bottom of it. It should be -- 17 (Exhibit No. 8 marked.) 18 MS. SAND: Excuse me, Scott, did you say 973 19 at the bottom? 20 MR. EDWARDS: 974 is what I see. I'm 21 looking at a -- it's a letter, dated February 21, 2014, 22 and the Bates number at the bottom ends 974. 23 MS. SAND: I apologize. I accidentally just 24 opened my envelope number 7 by mistake. 25 MR. EDWARDS: (Laughter). In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 73 1 MS. SAND: Sorry. 2 MR. EDWARDS: No problem. You can put that 3 in the waste basket. We won't be looking at it, so -- 4 MS. SAND: Okay. 5 MR. EDWARDS: Does everybody have the 6 document in front of them? 7 THE WITNESS: Yes, we do. 8 BY MR. EDWARDS: 9 Q. Okay. 10 And, again, this document is dated February 21 11 of 2014, and is a letter from the City of Renton to 12 TracFone. And it is informing TracFone that -- that TRS 13 is going to be conducting an audit of them. Do you see 14 that? 15 A. Yes, uh-huh. 16 Q. This suggests that the City of Renton had not 17 sent the letter to TracFone back in June of 2013? 18 A. I don't know. 19 MS. CRISP: (Sotto voce comments.) 20 MR. EDWARDS: We've been -- I guess the 21 question at this point is -- is -- is this a good time 22 to take a break, or shall we push through till a longer 23 lunch break at this point? 24 THE WITNESS: I'd like to take a break. 25 MR. EDWARDS: Okay. Shall we take a -- I In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 74 1 guess, five-minute break be enough? 2 THE WITNESS: Let's see. Could we do ten? 3 MR. EDWARDS: Okay. 4 THE WITNESS: Okay. 5 MR. EDWARDS: Yeah. 6 (A break was taken 7 from to 11:19 a.m. to 11:31 a.m.) 8 BY MR. EDWARDS: 9 Q. Mr. Crisp, when the -- when you commenced 10 conducting the audit of TracFone in 2013 -- 11 A. Uh-huh. 12 Q. -- what was your understanding of TracFone's 13 business activities? What did they do? 14 A. You know, at that point I -- I didn't know a 15 whole lot about TracFone, except for what I researched 16 on the Internet. 17 Q. And what -- what did you learn during the course 18 of the audit about their business activities? 19 A. Well, basically how they conduct their business. 20 Q. How do they conduct their business? 21 A. As far as what I could tell, as far as their 22 activity, they actually buy airtime from a company and 23 then they turn -- turn around, and they provide access 24 to their customers for telecommunications. 25 Q. How do they provide access? In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 75 1 A. They provide access through their cards that 2 they sell, or they -- the customer may have called them 3 directly. 4 Q. How does that work? 5 A. Okay. Which one? The one as far as their 6 prepaid cards, or -- or -- 7 Q. Well, let's start with the prepaid cards. 8 A. Okay. To my understanding, as far as prepaid 9 cards, of course the person will go into a store of some 10 sort, a retailer, and will buy a TracFone card. And 11 then, at that point then, they will contact TracFone. 12 They would have to buy a handset also. And at that 13 point, contact TracFone, and they would tell them they 14 bought a card and that they would like to begin to use 15 it. And they then would set up terms and conditions 16 on -- on what's to be made. They're to provide a serial 17 number of the handset. And at that point, once -- once 18 that's done, they then set up the number of minutes that 19 they want for a certain period of time. Then, at that 20 point, they're -- they begin to have access to a 21 telecommunication, to a telephone network. 22 Q. And then how did you learn this information? 23 A. Basically either through talking with -- you 24 know, conversing with TracFone or -- or through 25 research. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 76 1 Q. By "conversing with TracFone" do you mean 2 talking to somebody from TracFone on the telephone? 3 A. Usually by email, but we -- I have talked with 4 Mr. Ford before on -- on the phone, and also Dillon. 5 Q. And Mr. Ford described to you what -- what 6 you've just described to me? 7 A. I can't remember what all he described exactly. 8 But I have talked to, you know, through email about 9 their -- about their activity. 10 Q. And you've produced all of those emails; 11 correct? 12 A. As far as emails -- as far as TracFone goes, 13 or -- 14 Q. Yes. 15 A. Right now we produced every one that I know of. 16 MS. CRISP: (Sotto voce comments.) 17 THE WITNESS: Except there may be some as 18 far as we thought TracFone had the email already. I'm 19 not sure if we sent those. 20 BY MR. EDWARDS: 21 Q. Whether you think TracFone has the email or not 22 isn't the standard for whether you need to produce it. 23 You were asked to produce all of them. 24 A. Okay. Okay. We can do that. 25 Q. Do any of those emails describe how airtime In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 77 1 cards work, or how handsets work? 2 A. That I don't know. [Distorted audio]. 3 Q. Did any of your conversations with either 4 Mr. Dillon or Mr. Ford discuss how air times work or how 5 handsets work? 6 A. No, they did not, that I remember. 7 Q. So how did you learn how airtime cards work and 8 how handsets work? 9 A. Looking at -- we reviewed different court cases. 10 We looked at the Department of Revenue, Washington State 11 versus TracFone, and we reviewed that -- that document, 12 and learned it that way. 13 Q. Okay. 14 So your knowledge about TracFone's business 15 comes exclusively from a -- what's written in a court 16 opinion about -- in a case? 17 A. And also the emails going back and forth with 18 Mr. Ford or Mr. Cavalieri -- Cavalieri. 19 MS. CRISP: (Sotto voce comments.) 20 BY MR. EDWARDS: 21 Q. How do -- how does -- how do those activities 22 relate to Renton's utility tax? 23 A. Okay. Well, first off, you have the -- the 24 different codes that are there. You have the -- the 25 utility code for the City of Renton, which is title 5 of In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 78 1 the chapter 11. Then also you have the RCA -- RCW 35 A 2 .82. And also you have the RCW 82.16 I think relate to 3 how we are to do that. 4 Q. Uh-huh. Do any of your emails with TracFone 5 make any reference to either -- to any of those code 6 sections or any of those statutes? 7 A. That I don't remember. I don't remember. 8 Q. Did you ever conduct an analysis of how those 9 code sections and statutes apply to TracFone's business 10 activities? 11 A. What -- what do you mean by "analysis"? I'm not 12 quite sure what you mean by -- by "analysis". I looked 13 at the code and -- and, at that point, did what the code 14 said. 15 Q. How did you determine what the code said? 16 A. Well, basically, looking at the -- the title 17 11 -- title 5, chapter 11, as far as what -- what it 18 said was taxable as far as telephone business, and at 19 that point -- 20 Q. What does it say is taxable? 21 A. Okay. Well, I'd have to read it. 22 MS. CRISP: You have it. You've got copies. 23 BY MR. EDWARDS: 24 Q. I'm not asking you to put it in front of you. 25 I'm asking you what you know as you're talking to me. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 79 1 A. Oh, okay. Basically that telephone companies 2 are -- businesses are taxable. 3 Q. What does that mean, that they're taxable? 4 A. That means you tax the -- the revenues, the 5 activity that -- that's being conducted inside the City 6 of Renton. 7 Q. What -- what activity are you talking about? 8 A. Telephone activity. 9 Q. What is telephone activity? 10 A. Telephone activity -- basically you're looking 11 at all the activity that -- that customers are within 12 the city, inside the City of Renton at that point, and 13 then at that point would be taxable. 14 Q. What -- what do you mean by "customer"? 15 A. Well, customers of TracFone. 16 Q. What -- what makes somebody a customer of 17 TracFone? 18 A. Well, if they go out and they buy a telephone 19 prepaid card, or if they contact TracFone directly, if 20 they're inside the City of Renton. 21 Q. And -- and -- if I were to walk into a retailer 22 and buy a TracFone card from the retailer, that makes me 23 a customer of TracFone? 24 A. At that point, you're looking at also primary 25 use as far as the ZIP Code. They would have to -- the In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 80 1 customer, to my understanding, would have to contact 2 TracFone to actually set up to get things going, 3 providing the handset, serial number, and also the 4 primary use ZIP Code. 5 Q. If I walk into a retailer and buy a 6 TracFone-branded airtime card, who do I pay for that 7 card? 8 A. Okay. 9 Q. Do I pay TracFone? 10 A. Well, you -- you actually pay money to the 11 retailer as far as buying it. 12 Q. Okay. 13 Who do I get a receipt from? 14 A. Okay. You get the receipt from that store. 15 Q. Okay. 16 Do you know whether airtime cards are subject to 17 sales tax? 18 A. No, I don't. 19 Q. Have you ever purchased an airtime card? 20 A. I haven't. 21 Q. Has anybody from TRS ever purchased a -- an 22 airtime card? 23 A. Not that I'm aware of. 24 Q. Let's go ahead and move on to Exhibit Number 9. 25 So envelope 9. And this is the -- the Bates number is In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 81 1 601. It -- it's a stapled two-page email, dated 2 February 2, 2015. 3 (Exhibit No. 9 marked.) 4 MR. EDWARDS: Did the court reporter find 5 it? Perfect. 6 THE WITNESS: Uh-huh. 7 BY MR. EDWARDS: 8 Q. And do you have that, Mr. Crisp? 9 A. Yes, I do. 10 Q. Okay. 11 Can you scoot back just a little bit, so I can 12 see you on the video here. 13 A. Oh, okay. 14 Q. Thank you. 15 A. Is that better? 16 Q. That's much better. Thank you. 17 A. Okay. 18 Q. The -- do you recognize this as an email from 19 you to the City of Renton, dated February 2, 2015? 20 A. Yes, I do. 21 Q. Okay. 22 And in the second paragraph, you indicated that 23 TracFone had requested that a -- a meeting between you 24 and their attorney, Scott Edwards. Do you see that? 25 A. Okay. Where is that? Is that -- you said In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 82 1 second paragraph on -- 2 (Inaudible due to crosstalk.) 3 BY MR. EDWARDS: 4 Q. Yes. The paragraph simply says, "Hope 5 everything is going great for you." 6 A. Okay. 7 Q. Second paragraph begins, "Also." 8 A. Okay. 9 (Inaudible due to crosstalk.) 10 BY MR. EDWARDS: 11 Q. -- TracFone? 12 A. Yep. 13 Q. And you're aware that I am the Scott Edwards 14 that -- 15 A. Right, yes. 16 Q. And as you point out, you and I met previously; 17 correct? 18 A. Yes, we have. I think once. 19 Q. Yeah. 20 A. Once. Right. 21 Q. And that was quite a few years ago, wasn't it? 22 A. Right. In Bremerton. 23 Q. Yes. It would have been at least 12 years or so 24 ago? 25 A. Oh, more than that. Yeah. I left the City in In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 83 1 2006. So we're talking -- yeah, I think it's 2 probably -- no, maybe about that, about 15 years ago, 3 now that I think about it, yeah. 4 Q. So and -- and the indication is that what you 5 were asked is to meet with us to review how 6 TracBone [sic] -- Fone -- does its business; correct? 7 A. Uh-huh, yes. 8 Q. Okay. 9 And you advised the City that you didn't think 10 there's anything to talk about; correct? 11 A. At this point, I did not, because as I mentioned 12 before, I preferred to do it by email than talking. 13 Yeah. 14 Q. May I -- don't you think it's important to 15 understand how TracFone -- what TracFone's business 16 activities are and how they work in order to figure out 17 how the -- the tax code applies to them? 18 A. Yes. 19 Q. And do you think that it's sufficient to figure 20 that out by looking at things on the Internet and 21 reading court opinions? 22 A. No. 23 MS. CRISP: You don't? 24 THE WITNESS: You need more, yeah. 25 BY MR. EDWARDS: In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 84 1 Q. Yeah. But a requested conference with the 2 taxpayer and -- and -- and their counsel, you don't need 3 that? 4 A. As I mentioned before, our policy, basically, if 5 we wanted to meet with the -- with the company itself, 6 we could do that. We -- at that point, we did not have 7 a -- an attorney. 8 Q. Okay. 9 You also said that you thought my participation 10 in a meeting would likely be unhelpful. Why is that? 11 A. Well, at this point, I would feel like if I just 12 went by myself, you know, and without -- without an 13 attorney, then at that point it wouldn't be very helpful 14 for us to really have a -- have a conversation, 15 because -- 16 Q. Why not? 17 A. Because you're an attorney. You have a lot 18 of -- you have a lot of legal background. And of 19 course, you know, I don't. And so, at that point, just 20 meeting us alone and without -- without another attorney 21 would not be good. It would not be helpful. 22 Q. Did you suggest meeting with TracFone without 23 their attorney so that you could learn more about their 24 business? 25 A. Say that again. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 85 1 Q. Did you suggest meeting with TracFone without 2 their attorney present, so that you could learn more 3 about their business? 4 A. Not that I remember. I prefer doing it by 5 email, because you have a written transcript, what's 6 going on back and forth. 7 Q. What is it about your experience with me that 8 caused you to think that meeting with me would 9 personally be unhelpful? 10 A. (Laughter). Well, like I said before, I -- I 11 felt that if I didn't have an attorney, I thought I 12 would be at a disadvantage. 13 Q. But you're indicating it was your personal 14 experience with me that -- 15 A. No. 16 Q. -- that helped -- 17 A. No, no, I -- unhelpful -- well, as far as 18 unhelpful, I think at that point, like I said, you have 19 a legal background and I don't, and I'd be at a 20 disadvantage. And so, you would bring up stuff to me, 21 but I wouldn't know how to reply in some instances 22 without maybe our own attorney being there, too, having 23 a fair conversation, back and forth. 24 Q. So no conversation is better than an unfair 25 conversation? In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 86 1 A. (Laughter). Well, I think, as I said before, 2 I'd rather have a conversation, if we're going to do 3 that, that we both have attorneys there. 4 Q. Did you ask for that? 5 A. At that point, I didn't have -- like I said, 6 Mr. Harding Roe had retired. And we just didn't have an 7 attorney that I felt that we could go to who -- who 8 really knew the business and about utility tax. 9 Q. Now, in the next paragraph, you -- you -- you 10 note that TracFone has indicated that their business is 11 different from other telecom -- telephone companies. 12 But you've gained access to a brief by Chris Bacha of 13 Kenyon Disend that outlines the legal issues and shows 14 that prepaid calling cards, such as TracFone's, are 15 taxable. 16 A. Right, uh-huh. 17 Q. Yeah. So you had legal counsel, it sounds like, 18 in this email? 19 A. No. Not at that point. It wasn't really legal 20 counsel as far as them being an auditor -- I mean, being 21 an attorney for TRS. We did not hire them in any way to 22 be an attorney for TRS. 23 Q. How did you obtain a copy of this legal brief? 24 A. I don't remember exactly how we -- how I got it, 25 to be honest with you. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 87 1 Q. Did you get it from Mr. Bacha? 2 A. I believe so. But like I said, I don't -- I 3 don't know -- I don't know for sure. 4 Q. Why would he have given you a copy of the brief? 5 A. At that point, as far as the brief goes, the 6 only thing I can think of is -- I can't remember whether 7 he did it or not. So I -- whether he gave it to me or 8 not, I don't know. 9 Q. Was it something that you had asked to have 10 prepared? 11 MS. SAND: Objection. Wait -- wait. Time 12 out. Objection to the extent that calls for privileged 13 information. 14 Go ahead and answer the question, Mr. Crisp. 15 THE WITNESS: Okay. What was the question 16 again? 17 MR. EDWARDS: Can you read the question 18 back? 19 (Question was read back.) 20 THE WITNESS: And as I remember, I don't 21 remember for sure. We'd have to check our records. 22 BY MR. EDWARDS: 23 Q. How do you know Mr. Bacha? 24 A. We had worked with their company before. And if 25 I... and also, Mr. Bacha was a City of Tacoma attorney. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 88 1 Q. If you didn't receive it from him, do you have 2 any sense of where you would have gotten it from? 3 A. I -- I -- yeah, I don't remember. 4 Q. Do you remember what the legal brief said? 5 A. No, I don't. Not -- no. It just talked about 6 the telephone activity -- telephone company. I don't 7 remember exactly what it says. 8 Q. Did it talk about TracFone? 9 A. That I don't know. I don't think so. 10 Q. Did it talk about the -- any of the ordinances 11 or statutes that you had mentioned previously? 12 A. I don't think so. 13 MS. CRISP: (Sotto voce comments.) 14 BY MR. EDWARDS: 15 Q. So the -- the last sentence in that paragraph 16 says, "After doing further research on their company, as 17 far as we can see, their business works like other 18 telephone companies." 19 A. Right. 20 Q. What research did you do? 21 A. Well, at that point, like I mentioned before, I 22 did go and look at prepaid telephone cards. And it 23 looked like they -- they were the same as any other 24 pre -- prepaid telephone card. 25 Q. When you say you went and looked at prepaid In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 89 1 telephone cards, what do you mean? 2 A. I just went to a store and picked one up and 3 turned it around, look at the back of -- of what it said 4 on there. 5 Q. All right. You -- you didn't buy the card? 6 A. No, I didn't buy the card. No. 7 Q. Okay. 8 So you walked into a retail store and you picked 9 up a TracFone airtime card and other airtime cards as 10 well? 11 A. Yes, I believe so. 12 Q. And -- and you looked at them front and back? 13 A. Well, yeah. You can see the front of each card 14 when you walk in, but -- yeah. But I -- yeah. 15 Q. Did you take any notes? 16 A. No. 17 Q. What was it about the cards that caused you to 18 believe that they were the same? 19 A. What it looked like to me, they -- they were 20 basically providing the same thing, providing airtime, 21 competing as far as the -- what they cost and the 22 airtime that they provided. 23 Q. What -- what airtime cards did you look at 24 besides TracFone airtime cards? 25 A. That I don't remember. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 90 1 Q. So the -- the further research that you're 2 referring to here is the act of having gone into a store 3 and looked at airtime cards on the shelf? 4 A. Yes, I believe so. 5 Q. Anything else? 6 A. Not that I remember. 7 Q. And you believe that's a better way to figure 8 out what TracFone does than having a conversation with 9 them? 10 MS. SAND: Objection. Argumentative. 11 BY MR. EDWARDS: 12 Q. You can still answer the question. 13 MS. SAND: Yes, please still answer. 14 THE WITNESS: Okay. Say that one more time, 15 the question. 16 MR. EDWARDS: Can you please read that back. 17 THE WITNESS: Yeah, read that one more time. 18 MR. EDWARDS: The court reporter's going to 19 read it back. 20 THE WITNESS: Yeah. That's good. 21 (Question was read back.) 22 THE WITNESS: No. I -- I believe that is 23 one of -- of -- of many things that we would do to try 24 to find out what TracFone does. 25 BY MR. EDWARDS: In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 91 1 Q. What else did you do to find out what TracFone 2 does? 3 A. Conversations back and forth with TracFone. 4 Q. And -- 5 A. Or emails, basically. 6 Q. Okay. 7 So other than the emails that you've referred to 8 and that you have -- have produced or -- or have not 9 necessarily produced, that's the only record of any 10 communications with -- of what you've learned, other 11 than what you saw from walking into a store and looking 12 at TracFone airtime cards and other unknown airtime 13 cards? 14 A. And also, I believe talking with Mr. Ford and 15 maybe Mr. Cavalieri, but I can't remember. 16 (Sotto voce conversation.) 17 BY MR. EDWARDS: 18 Q. What do you remember about any conversations 19 that you had with Mr. Ford? 20 A. I can't remember. We just talked about his 21 company. I can't remember what was said. 22 Q. You don't remember him telling you anything 23 about how -- how TracFone's business works? 24 A. I don't remember exactly what was said. 25 Q. Do you remember inexactly what was said? In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 92 1 A. No. 2 Q. What -- what -- what do you remember? 3 A. Like I said, I don't -- you're talking about a 4 conversation that happened years and years ago. I can't 5 remember exactly what was said. 6 Q. I'm not asking you to remember exactly what was 7 said. I'm asking you to tell me what you remember. 8 A. I -- I don't remember what -- what I said to be 9 honest with you. 10 Q. What did you -- what did he tell you? What did 11 you learn from him? 12 A. Yeah, see, I don't remember what all he said in 13 that conversation. 14 Q. I'm not asking for all that he said. I'm asking 15 for anything that he said. 16 A. Yeah. I don't remember. Yeah, I don't remember 17 anything. It's just too long ago. 18 Q. Okay. 19 And you kept -- you -- you didn't make any notes 20 of those conversations? 21 A. If there were any notes, we would -- probably 22 would just type it on an email. But I don't remember -- 23 I don't remember taking notes. If we did, we would have 24 simply sent -- you know, typed it on email. 25 Q. So you have maintained no records of any of the In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 93 1 conversations that you've had with Mr. Cavalieri, 2 Mr. Ford, or Mr. Dillon, other than what may be 3 reflected in emails? 4 A. No. We have to check -- 5 MS. CRISP: (Sotto voce comments.) 6 THE WITNESS: We'd have to check to be sure. 7 Only thing I can think of is updates, but we'll check. 8 (Sotto voce conversation.) 9 THE WITNESS: Check if anything. 10 MS. CRISP: I don't have anything. 11 THE WITNESS: Okay. We'll check. 12 MS. CRISP: (Sotto voce comments.) 13 BY MR. EDWARDS: 14 Q. Then the next sentence says: Every telephone 15 company that we have completed an audit on paid the tax 16 on any prepaid calling card revenue -- revenue either 17 before the audit began, or due to the audit. 18 Do you see that? 19 A. No, I don't. What paragraph are you on? 20 Q. I'm at -- it's right in the middle of the page. 21 It's the two-line paragraph. 22 A. The third paragraph? 23 Q. Yes. I -- if you -- if you ignore the opening 24 line. 25 A. Okay. (Reviews exhibit.) In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 94 1 Okay. Uh-huh. 2 Q. So -- 3 A. Your question? 4 Q. How many telephone companies have you audited? 5 A. Right now, including -- I don't know exact 6 number, but I'll give you a number. Probably either I, 7 myself, audited it or I had someone under me maybe 8 audit, probably... 35, 45. 9 Q. 35 to 45 different telephone companies? 10 A. Telephone audits. 11 Q. Telephone audits, of how many different 12 companies? 13 A. That... I don't know the exact number. I just 14 guess -- I mean, I don't know the number. 15 Q. Give me an approximate number. 16 A. Hmm. Probably seven to ten. 17 Q. How many of these 30 to 45 audits were conducted 18 while you were an auditor at the City of Tacoma, or 19 while you were employed by the City of Tacoma? 20 A. That I don't -- probably... I don't know the 21 number. I could just give you an estimate. Is that 22 okay? 23 Q. That's fine. Rough -- we're roughly -- 24 A. Roughly -- probably -- maybe 10 to 15. 25 Q. Okay. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 95 1 Was it roughly a -- a -- a third while you were 2 at the City of Tacoma, and roughly two-thirds since you 3 left the City of Tacoma? 4 A. Yes, that'd probably be about right, about 5 estimate. 6 Q. Okay. 7 And if -- and if you audited the same company 8 for multiple cities, that -- that would -- that -- 9 that -- that would be multiple audits in that number of 10 35 to 45? 11 A. I believe so. 12 Q. Okay. 13 A. Yes. 14 Q. And -- and does that number include the audit of 15 TracFone? 16 A. Yes. I think it would. 17 Q. Do... Were... Did all of the companies that 18 you audit provide prepaid wireless airtime? 19 A. As far as I remember, they did, yes. 20 Q. And -- and did they also provide -- or did any 21 of the companies that you audited provide landline 22 telephone service? 23 A. Yes, I believe so. 24 Q. Other than TracFone -- or, I guess, of the 25 companies that you audited -- and, again, I'm not In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 96 1 looking for exact numbers. I'm trying to get -- get the 2 relative numbers. How many of those seven to ten 3 companies provided landline telephone service? 4 A. Wow. 5 MS. CRISP: (Laughter). 6 THE WITNESS: That -- oh, I can't -- I don't 7 think I can -- I can remember that, because many 8 companies were going long away from landlines, but I 9 can't remember. 10 BY MR. EDWARDS: 11 Q. How many of those seven to ten provided cellular 12 telephone service? 13 MS. CRISP: (Sotto voce comments.) 14 THE WITNESS: Probably about -- yeah, I 15 can't remember. 16 MS. CRISP: (Sotto voce comments.) 17 THE WITNESS: Yeah, I'm not sure. 18 BY MR. EDWARDS: 19 Q. What's your best guess? 20 MS. CRISP: (Sotto voce comments.) 21 MS. SAND: Obviously object to the extent it 22 calls for speculation. 23 Go ahead and answer. 24 THE WITNESS: Seven to ten? I don't know. 25 Five or six, seven. Just guessing. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 97 1 MS. CRISP: Did they even have cellphones 2 back then? 3 (Sotto voce conversation.) 4 THE WITNESS: It's a guess. I don't know. 5 BY MR. EDWARDS: 6 Q. Of those seven to ten, how many provided prepaid 7 service? 8 MS. CRISP: (Sotto voce comments.) 9 THE WITNESS: You're talking about all the 10 different audits both at City of Tacoma and at TRS? 11 BY MR. EDWARDS: 12 Q. Yeah. I'm talking about the companies 13 themselves, not necessarily the audits. 14 A. Okay. The company itself. How many provided 15 prepaid telephone -- telephone? 16 Q. Yeah. 17 A. Probably... most of them. I don't know the 18 number. 19 Q. And so that would both be prepaid landline 20 service and prepaid cellular service? 21 A. That -- that I don't -- I don't know. 22 Q. Do you have an understanding of the difference 23 between landline and tele -- and cellular telephone 24 service? 25 A. Yeah. Landline, of course, would be you're In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 98 1 actually hooked up to a -- to a phone at your -- at your 2 house via landline leading to your house. And of course 3 cellular phone, of course, you're doing it by cellphone. 4 MS. CRISP: (Sotto voce comments.) 5 MR. EDWARDS: Mrs. Crisp, I would appreciate 6 it if you wouldn't talk to Mr. Crisp during the 7 deposition. 8 THE WITNESS: Okay. 9 MS. CRISP: Sorry. 10 BY MR. EDWARDS: 11 Q. The... How many of the seven to ten companies 12 that you've audited had cellphone towers? 13 A. I don't know. I don't know. 14 Q. Did you review the prepaid and post-paid revenue 15 of every telephone company that you audited? 16 A. I reviewed their revenues. 17 Q. But you -- you were careful not to say that you 18 reviewed both prepaid and post-paid revenue. Why not? 19 A. Well, at that point, I just looked at all 20 revenues. And both -- you know, how they provide the 21 information to me is what I looked at. Usually the 22 information came in and -- and -- and -- and telephone 23 activity is taxable. Many times they didn't break it 24 out either. 25 MS. CRISP: (Sotto voce comments.) In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 99 1 THE WITNESS: Not always. 2 (Sotto voce conversation.) 3 BY MR. EDWARDS: 4 Q. You say telephone activity is taxable. What do 5 you mean by that? 6 A. Say that again. 7 Q. When you say telephone activity is taxable, what 8 do you mean? 9 A. Activity that -- where basically people who 10 are -- who are having telephone service in that 11 particular city. 12 Q. So -- 13 (Inaudible due to crosstalk.) 14 THE WITNESS: Telephone service is provided 15 in that city. 16 BY MR. EDWARDS: 17 Q. What does it mean to provide telephone service? 18 MS. SAND: Object to the extent it calls for 19 a legal conclusion. 20 Go ahead and answer. 21 THE WITNESS: Say that one more time. I'm 22 sorry. 23 BY MR. EDWARDS: 24 Q. What -- what is your understanding of what it 25 means to provide telephone service? In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 100 1 A. It means providing customers access to -- to -- 2 to telephone services. 3 MS. CRISP: Yeah. 4 BY MR. EDWARDS: 5 Q. And what do you mean when you say "providing 6 customers access to telephone services"? 7 A. Well, the ability to be able to communicate with 8 different people. 9 Q. So is Zoom providing telephone services as part 10 of this deposition today? 11 A. Well, that's probably considered data. Probably 12 not. 13 Q. Are we communicating with each other? 14 A. Did you hear me? 15 Q. I did, yes. 16 A. Okay. Did you hear my answer? 17 Q. I -- I did. I -- I -- I -- the -- your first -- 18 your first answer was that providing telecommunications 19 services is accomplished by providing communication. 20 But Zoom is providing the ability for us to communicate, 21 and you said Zoom is not providing telephone service -- 22 A. No. 23 Q. -- so clearly, there's more to providing 24 telephone service than simply enabling communication. 25 A. Right. And -- In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 101 1 Q. So I'm trying to understand, what more is 2 required? 3 A. Well, at that point, you're looking at net -- 4 net -- network telephone services, which is provided to 5 different people. And I also -- there are certain 6 things that can be -- as far as, you know, taxable and 7 what is not, so... 8 Q. Is network telephone service a term that's 9 defined by a statute? 10 A. Yes, it is. 11 Q. And so does a -- does a business have to be 12 providing network telephone service as defined by the 13 statute in order to be taxable? 14 A. Not necessarily. You're looking at the RCWs, 15 and you're looking at -- as far as definition of 16 telephone services. 17 Q. So what -- what definitions are you looking at 18 beyond network telephone service that would be taxable? 19 A. We're looking at RCW 82104, RCW 35.82. 20 Q. I'm -- I'm not asking for a list of statutory 21 cites. 22 A. Okay. 23 Q. I'm trying to under- -- I -- I asked you whether 24 it is necessary to be providing network telephone 25 service, as that term is defined by the statute, in In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 102 1 order to be taxable. And by "taxable" I meant subject 2 to a city utility tax. 3 If I understood you correctly, you said that's 4 not the only activity that is subject to telephone 5 utility tax. Am I -- was I correct in understanding 6 your answer? 7 A. You're only looking at whatever the code says as 8 far as what -- what they find as telephone activity. 9 Q. When you audit somebody, do you need to 10 determine whether their activity is something that is 11 subject to tax under the relevant code or -- or statute? 12 A. Yes, we do. 13 Q. Okay. 14 And you've been doing this for how many years? 15 A. Probably since 19 -- well, you're talking about 16 telephone companies. We probably started at -- I don't 17 know how many. I've been doing tax audits since 1992. 18 Q. And so do you feel like you have an 19 understanding of what the tax codes that you audit 20 compliance with provide for? 21 A. Yes. 22 Q. Okay. So what is your understanding of what 23 activities are subject to Renton's telephone utility 24 tax? 25 A. Well, at that point, as far as what's actually In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 103 1 stated as far as revenues that are actually collected, 2 it lets out data. It lets out interstate, foreign 3 commerce. Things of that nature would not be included 4 in part of the revenue. And so we're just looking at 5 what's actually intrastate. 6 Q. What is the activity that is subject to tax? 7 A. It's the telephone activity. 8 Q. Okay. What is telephone activity? 9 A. Telephone activity deals with people making -- 10 MS. CRISP: (Sotto voce comments.) 11 THE WITNESS: -- callers and stuff like that 12 that are -- that are there. It said right there in the 13 code as far as defining telephone activity. You know, 14 right now, you know -- 15 BY MR. EDWARDS: 16 Q. Does telephone -- 17 (Inaudible due to Crosstalk.) 18 THE WITNESS: You know, looking at RMC 19 5-11-3, as far as gross income, defining what we -- 20 what's actually income and also what's -- what's taxable 21 and what isn't. 22 BY MR. EDWARDS: 23 Q. Are you familiar with the term "the incident of 24 a tax"? 25 A. Incident of a tax? In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 104 1 Q. Yes. 2 A. No. 3 Q. If I were to tell you that the incident of a tax 4 generally describes the activity that causes somebody to 5 be subject to tax, do you understand that concept? 6 A. I see what you're saying, as far as what 7 actually would make a person taxable or not taxable as 8 far as their activity; okay. 9 Q. Correct. So and -- and that -- I'm trying to 10 understand what is it that makes a person subject to the 11 telephone utility tax. 12 A. Right now there's -- 13 Q. What are the activities that cause them to be 14 taxable? 15 A. Right now, as I basically said before, it's 16 actually, I read -- reading the code as far as what it 17 states, as far as what's taxable and what's not taxable. 18 And that's -- that's under RMC 511, gross income. And 19 also -- 20 (Inaudible due to crosstalk.) 21 BY MR. EDWARDS: 22 Q. At some point, receiving gross income makes you 23 subject to tax? 24 A. No, that's -- you have to report the total 25 income, and then you have to take out what is not part In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 105 1 of what is actually deductible. 2 Q. Okay. I -- I -- I receive gross income as 3 defined in the ordinance. Am I subject to telephone 4 utility tax? 5 A. No, no, because right now -- what do you mean by 6 that? 7 Q. I'm -- I'm -- in order to be subject to the tax, 8 you have to engage in an activity that the tax is 9 imposed on -- 10 A. Right. 11 Q. -- isn't that correct? 12 A. That's what the telephone businesses are doing. 13 Q. Okay. So "telephone business" is a term you're 14 using to describe activities that are subject to tax? 15 A. Right, uh-huh. 16 Q. Okay. What activities constitute the telephone 17 business? 18 MS. SAND: Again, objection to the extent it 19 calls for a legal conclusion. 20 But go ahead and answer, Mr. Crisp. 21 THE WITNESS: Okay. So basically, I know 22 when you do that -- could you reread that again? 23 BY MR. EDWARDS: 24 Q. So let me -- let me try to rephrase it, and -- 25 and take this from a different tact. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 106 1 When you conduct an audit, isn't it important to 2 understand what the company's business activities are? 3 A. Right. They actually send us their activity. 4 At that point, they report what revenues they are 5 receiving in that city. 6 Q. I'm -- I'm trying to distinguish between 7 activities and revenue. 8 A. Okay. 9 Q. So I'm not asking about what money they get in 10 the door, and -- it's what do they do to earn the money; 11 right? 12 A. Right, right. 13 Q. Because I get money -- I get paid. When I get 14 paid, that's gross income. 15 A. Right. 16 Q. I'm -- I'm practicing law. I'm not engaged in a 17 telephone business; correct? 18 A. Right, so you would not be taxed. 19 Q. So what activities does a person engage in to be 20 considered to be engaged in a telephone business and 21 subject to telephone utility tax? 22 A. We provide telephone communication to their -- 23 to their customers. 24 Q. And how -- how do you figure out what -- what 25 activity is subject to tax? In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 107 1 A. As I mentioned before, they would then send what 2 they do to us -- 3 Q. Yeah. 4 A. -- as far as -- 5 Q. I -- I -- Mr. Crisp, I -- 6 (Inaudible due to crosstalk.) 7 BY MR. EDWARDS: 8 Q. I need you to pause and listen to the questions 9 that I'm asking you. 10 A. Yeah. I'm not. I'm just -- 11 Q. I'm not asking you questions about revenue. 12 A. Okay. 13 Q. Okay. How do you determine whether the activity 14 that a business is engaged in is subject to the tax -- 15 the -- the telephone utility tax? 16 A. We have -- at that point, we look at what they 17 actually are doing, whether they're selling prepaid 18 cards, you know, whether they were doing landlines, any 19 activity as far as providing communications is what 20 we're looking at. 21 Q. Okay. Does the code define what is subject to 22 tax? 23 A. The code right here does. As far as what's -- 24 what defines as far as gross income. And so does the 25 RCW. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 108 1 Q. Does it -- what does the tax impose -- I'm -- 2 I'm going to give up on this line of inquiry and move on 3 for the time being. 4 A. Okay. 5 MR. EDWARDS: Kari, we are at 12:14. Does 6 this make sense as a time to break for lunch, or should 7 we keep going? 8 MS. SAND: I think perhaps it does. 9 Is that okay with the court reporter? 10 (A luncheon recess was taken 11 from to 12:14 p.m. to 12:47 p.m.) 12 (Whereupon, Mrs. Crisp leaves the proceedings.) 13 BY MR. EDWARDS: 14 Q. Mr. Crisp, other than TracFone, have you ever 15 audited a company that sold prepaid airtime cards to 16 retailers? 17 A. Yes, I have. 18 Q. How many? 19 A. I don't know an exact number. 20 Q. Give me an approximate number. 21 A. Either I, or someone working for our company, 22 probably seven or ten. Of course, like I mentioned, I 23 have audited telephone companies for more than one city. 24 So if you count that too. Go ahead. 25 Q. When you're saying -- you're talking about seven In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 109 1 to ten audits, not seven to ten different companies? 2 A. Right. Right. 3 Q. I'm asking for how many companies have you 4 audited that engage in the activity of selling prepaid 5 airtime cards to retailers? 6 A. I see what you're saying now. I -- I don't know 7 the exact number. I would say... at -- at least... five 8 or six of them, so, you know. 9 Q. And did you -- did you audit their wholesale 10 sales of prepaid airtime cards to retailers? 11 A. Okay. I guess that's a term that you use as far 12 as wholesale. But we did -- we did tax the prepaid card 13 activity. 14 Q. When you... The... When a company sells 15 prepaid airtime cards to a retailer, the revenue they 16 receive comes from the retailer; is that correct? 17 A. Okay. You mean for the card? The card itself. 18 They -- they pay the -- the retailer for the card, yes. 19 Q. They -- they pay the retailer, or the retailer 20 pays them? 21 A. Okay. The retailer, they're actually -- say 22 that one more time, what you're saying. 23 Q. When a company sells a prepaid airtime card to a 24 retailer -- 25 A. Uh-huh; right. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 110 1 Q. -- the retailer pays for that airtime card; 2 correct? 3 A. Well, they pay for the -- for the -- for the 4 card itself when they're, you know -- so if that's what 5 I'm understanding what you're saying. Maybe phrase it 6 one other way. When you say "retailer," I'm assuming 7 you're talking about the store. Is that what you're 8 talking about? 9 Q. Yes. 10 A. Okay. So basically, when the store sells the 11 card to -- 12 Q. I'm not talking about the store. 13 A. Okay. 14 Q. I'm talking about -- I'm not talking about when 15 the store sells. I'm talking about when the store buys 16 the card. 17 A. Okay. When they buy that card from -- from who? 18 Who -- are they -- 19 Q. I'm -- 20 (Inaudible due to crosstalk.) 21 BY MR. EDWARDS: 22 Q. You had said you -- you audited companies that 23 sold airtime cards to retailers. 24 A. Right. Right. 25 Q. That's the activity that I'm focusing on. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 111 1 You've audited companies that have engaged in that 2 activity. 3 A. Right. 4 Q. So let's -- yeah, let's make up a -- whether 5 it's AT&T or Verizon or T-Mobile or -- they all sell 6 airtime cards to Walmart and Target and the like -- 7 A. Right. Okay. 8 Q. -- correct? 9 A. Uh-huh. 10 Q. Okay. 11 Do those companies pay Renton utility tax on the 12 income that they receive from Walmart and Target for 13 those airtime cards? 14 A. No, they do not. 15 Q. Why not? 16 A. Well, because you're looking at, they're not 17 actually -- they themselves are just selling the -- the 18 cards or, like, AT&T or Verizon, they are -- are 19 basically -- or let's say, TracFone, whoever. At that 20 point, they actually are -- are under the RCW. They 21 basically -- you can't tax two people. So what you're 22 doing then, is you're -- they actually are selling 23 the -- the card to -- let's say, TracFone, the card to 24 the retail -- let's say, Walmart or something like that. 25 And at that point, Walmart then turns around and sells In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 112 1 that card to a customer. And at that point, because of 2 the RCW, you can't tax both the -- you know, the -- the 3 person providing the -- selling -- that's selling the 4 airtime to, let's say, TracFone. And at that point, 5 because they are just selling airtime to TracFone, and 6 because they're two separate companies under the RCWs, 7 you can only tax one of them. 8 So at that point, TracFone would then turn 9 around and sell that -- that card or -- that -- well, a 10 person would come in and actually buy that card, the 11 TracFone card. And at that point, TracFone is providing 12 access to that customer, to the telephone network. 13 MR. EDWARDS: I'm going to move on to 14 Exhibit Number 10. Open that envelope. 15 And I'm sorry, Court Reporter, this is an 16 email with the Bates number 626 at the bottom. 17 THE WITNESS: Uh-huh. 18 MR. EDWARDS: August 9, 2016. 19 THE WITNESS: Right. 20 (Exhibit No. 10 marked.) 21 MR. EDWARDS: I realize that the court 22 reporter is the only one that doesn't have actual 23 numbers on the different exhibits, so I -- I make sure 24 that she knows which and -- 25 You've got it? Yep? In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 113 1 THE WITNESS: Okay. 2 BY MR. EDWARDS: 3 Q. All right. This is dated August 9, 2016, an 4 email from you to Jan Hawn. 5 A. Uh-huh. 6 Q. Who is Jan Hawn? 7 A. Okay. Oh, the name just popped out. I think 8 Jan Hawn was the person that I began working with at the 9 City of Renton, I believe. 10 Q. After you -- so did she succeed Iwen Wang? 11 A. I believe so. 12 Q. How did you -- how did you learn about that 13 transition from Iwen Wang to Jan Hawn? 14 A. Just quickly, Ms. -- Ms. -- Ms. Wang, I think, 15 sent us something, if I remember correctly, letting us 16 know that they were taking over. 17 Q. Okay. And so in -- in this email, you were 18 introducing yourself and sending a copy of the August 19 2016 update? 20 A. Right. 21 Q. Okay. And prior to that, you had not had any 22 interactions with Ms. Hawn? 23 A. No, not that I remember. 24 Q. Okay. 25 Let's move on to Exhibit 11. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 114 1 (Exhibit No. 11 marked.) 2 MR. EDWARDS: That is a one-page e-mail 3 Bates number 630, dated January 5, 2017. 4 Does the court reporter have that? 5 Perfect. 6 BY MR. EDWARDS: 7 Q. And do you have that in front of you yet, 8 Mr. Crisp? 9 A. Just about. 10 Q. Okay. 11 A. (Reviews exhibit.) 12 Okay. 13 Q. Are you ready? 14 A. Okay. 15 Q. Okay. And this is an email dated January 5, 16 2017, from you to Jan Hawn. 17 A. Okay. 18 Q. Is -- is that correct? 19 A. Yes. 20 Q. And -- and you're enclosing the January 2017 21 update with this email? 22 A. Yes. 23 Q. Okay. And it looks like there's a typo as you 24 say, "Here's the update for January 2016"? 25 A. Okay. Yeah, that should have been 2017. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 115 1 Q. That's the change in the year. I think we all 2 go through that. 3 A. Yeah. I've got it, yep. 4 Q. If we look at the -- in the body of the -- the 5 bigger paragraph, about, you know, it's indicating 6 that -- that you're going to be sending her a -- an 7 estimate. And then after she reviews it, it says -- and 8 this is right in the middle of that paragraph -- "Then 9 we will answer any questions that TracFone may have 10 concerning the estimate and show them why they owe these 11 taxes to the City of Renton." Do you see that? 12 A. Yes. 13 Q. Did you ever do anything to show TracFone why it 14 owes the taxes on the assessment? 15 A. I don't remember exactly. What we normally do, 16 we usually have the City take a look at the audit to 17 make sure they think it's okay. Then we send it to the 18 company, and then we have the company look at it. And 19 then, if they have any questions about it, then we turn 20 around and we answer those questions. 21 Q. Okay. Have you ever explained to TracFone, in 22 any form, why they owe the taxes on the assessment? 23 A. We have provided the methodology. And we have 24 gone back and forth in emails, showing us how we did it 25 and -- and -- and they provided us information as far as In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 116 1 enabling us to actually come up with -- with -- with the 2 audit itself. So we did -- we did talk quite a bit 3 going back and forth. And -- 4 Q. Is how the numbers were calculated the same 5 thing as why the tax is owed? 6 A. Well, right now, as far as why it's -- you know, 7 calculations are one thing. Coming up with as far as 8 why they're owed, of course we -- we then stated that 9 the activity is that they -- the selling of airtime to 10 customers were -- were taxable. 11 Q. What -- what did you do to explain to TracFone 12 why they owe the taxes in the assessment? Not how the 13 assessment was calculated, but why the tax is due. 14 A. Well, I don't remember everything what I told 15 them. Only thing that I -- I stated, if I can remember, 16 is that we -- the -- the activity that they were doing 17 is selling airtime, at that point, we believed was -- 18 was taxable as far as that goes, as far as their -- and 19 also, as far as direct and indirect. And that's 20 probably -- I think that's what I told them. 21 Q. So what -- what did you do to satisfy what you 22 told Ms. Hawn that you were going to do, of showing 23 TracFone why they owe the taxes? 24 A. Well, at that point, we -- we went ahead. And 25 as far as the -- the -- if I remember, that we went In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 117 1 ahead and at that point presented the -- the -- the 2 schedule to them. And we told them that what you're 3 doing, as far as selling prepaid cards and that, and the 4 activity that you're doing, as far as what you do, we 5 believe is taxable. 6 Q. And how did you tell them that? Was there an 7 email? 8 A. I -- I don't remember. Yeah, I don't remember 9 exactly. 10 Q. Was it -- was it a verbal communication, or was 11 it in writing? 12 A. I would think it would be in writing. I 13 don't -- I don't remember for sure though. We did -- 14 most of our conversations were emailed a vast, vast 15 majority of the time. 16 MR. EDWARDS: Kari, I would like to have 17 produced to us any email that provides an explanation to 18 TracFone about why the taxes are owed. 19 MS. SAND: Understood. 20 Do you understand the request, Mr. Crisp? 21 THE WITNESS: Yes, I do. 22 MS. SAND: Okay. You need to produce that 23 as soon as possible, any documentation that shows how 24 you explained to TracFone why they owe the taxes to the 25 City of Renton. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 118 1 MR. EDWARDS: And next, I'd like to move to 2 Exhibit Number 12, which is -- should be stapled in the 3 court reporter's stack. And it begins with Bates number 4 634. 5 (Exhibit No. 12 marked.) 6 BY MR. EDWARDS: 7 Q. Do you have Exhibit 12 in front of you, 8 Mr. Crisp? 9 A. Yes. 10 Q. Okay. Do you recognize Exhibit 12 as an email 11 from you to Jan Hawn, dated June 30th, 2017, 12 including -- enclosing the preliminary schedules and the 13 methodology? 14 A. Yes. 15 Q. Is there anything in the email that describes 16 how Renton's tax code applies to TracFone's business 17 activities? 18 A. Not on this email. 19 Q. Okay. So this is all focused on how the numbers 20 in the -- in the schedule were calculated; is that 21 correct? 22 A. Yes. 23 Q. And then, if we turn to page 3 of the document, 24 which is titled TracFone Audit Methodology. Do you see 25 that? In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 119 1 A. Yes. 2 Q. And is that the document that is identified on 3 the first page in the attachments as Renton TracFone 4 Methodology.doc? 5 A. Yes. 6 Q. Okay. 7 And this was prepared by TRS? 8 A. Yes. 9 Q. Okay. 10 I'd like to -- to point you to the second 11 paragraph that has the heading of Why sales and not 12 usage is used in this estimate. 13 Do you see that? 14 A. Yes. 15 Q. Okay. And it begins, "While it is true that 16 taxation of this prepaid phone activity is properly owed 17 on usage, not sales..." Do you see that? 18 A. Yes. 19 Q. Okay. How did you make the determination that 20 the tax is owed on usage, not sales? 21 A. You'd have to talk to Ms. -- Ms. Crisp on that. 22 She'd have to answer that. 23 Q. Why is that? 24 A. Because she is the one that prepared the 25 methodology. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 120 1 Q. Okay. Did she do the research on which the 2 methodology was based? 3 A. Yes, she did all the work on the method -- 4 methodology. 5 Q. Okay. So does -- did you do any work to 6 determine how the - the Renton tax works? 7 A. As far as related to this methodology, or -- 8 Q. Well, I mean, this -- this is not a method -- 9 this is the -- the statement that tax is properly owed 10 on usage is not describing how the numbers were 11 calculated. It's describing what Renton's tax code 12 does. 13 A. Right. 14 Q. Who made the determination that that's what 15 Renton's tax code does? 16 A. Ms. Crisp would -- you'd have to talk to her 17 about that. 18 Q. Did you review this document? 19 A. I did review it. I did take a look at it, yes. 20 Q. Okay. Did -- did you -- were you -- did you see 21 those words? 22 A. Yes. 23 Q. Did you make a determination as to whether or 24 not they were accurate? 25 A. I had Ms. Crisp make that determination, define In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 121 1 decision. 2 Q. Okay. And then, it -- it goes again to say (as 3 read): We would like to stress here that taxes are not 4 being levied on sales, but rather sales are being used 5 as a method to estimate -- to estimate usage. 6 Is that correct? 7 A. Right, uh-huh. 8 Q. And I -- I need to direct any questions about 9 that to Mrs. Crisp? 10 A. Yes. 11 Q. What about if -- if we move down, you've got -- 12 the next paragraph starts, "How the taxable usage was 13 estimated." And then there's a break, and it begins, 14 "However, this only gave us an idea of the city taxable 15 revenues for direct sales to TracFone." And then the 16 piece I want to focus on is the rest of that sentence. 17 "... the larger proportion of TracFone customers buy 18 indirectly from TracFone, via outside carriers such as 19 Walmart." 20 A. Okay. 21 Q. What does it mean to buy indirectly? 22 A. Okay. So as far as buying indirectly, they were 23 basically -- instead of contacting them directly, the 24 customer contacted TracFone directly. At that point, 25 turns out that a customer would go in to a store like In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 122 1 Walmart, and they would then buy the -- the card, the 2 TracFone prepaid card. 3 Q. And who are they buying the TracFone phone card 4 from when they walk into a Walmart? 5 A. No. 6 Q. Are you buying it from Walmart? 7 A. No. They're buying a piece of plastic from 8 Walmart, yes. 9 Q. And who are they paying for that card? 10 A. They pay Walmart. 11 Q. And who gives them a receipt? 12 A. Walmart. 13 Q. Okay. 14 What is the -- the tax concept -- what is the 15 significance under the Renton tax code of the concept of 16 an indirect sale? Where does that come from? 17 A. That -- well, basically you don't see the word 18 "indirect" in there. How -- however, we do not see a 19 Walmart actually providing telecommunications. We see 20 TracFone providing access to their customers through 21 their prepaid card to actually -- to use it. 22 Q. And -- and -- and what do you -- how do you -- 23 what -- what do you use to see those two different 24 things? 25 A. Well, at that point, when you look at it, if In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 123 1 there is a problem -- if you look at the back of the 2 card, if you read it, are -- are basically on that 3 Department of Revenue court case. It basically details 4 what's on there and what -- also, as far as communicate 5 the terms, conditions, and -- and that they have 6 complete control over the communications that happen. 7 So it's not Walmart that's actually buying 8 communications; it's actually TracFone who's buying 9 access. 10 Q. How do you make the determination that Walmart 11 is not buying communications? 12 A. Well, I called up Walmart, and I asked them, 13 this card -- if I was to buy a card, as a customer, and 14 I said, if something went wrong or if I had to change 15 my, you know, whatever plan or -- or time, whatever, who 16 would I contact if I have a problem with this card? Who 17 do I -- who do I talk to? Would it be you? 18 And they said, No, it would not. They said, You 19 need to contact TracFone, because they're the ones who 20 are providing this -- this -- this service. 21 Q. So who did you call at Walmart? 22 A. I just called -- just -- just -- I just called 23 the person who worked at the store. Any -- any person. 24 I just picked up the phone and -- 25 (Inaudible due to crosstalk.) In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 124 1 Q. It's all right. You're talking -- you -- you 2 called the general store number for which store? 3 A. Right. Just a general store by our house, yes. 4 Q. Okay. And would it -- is it a store in Renton? 5 A. We have -- not that particular time, but we 6 have -- 7 Q. The store that you -- was the store that you 8 called located in Renton? 9 A. I don't think -- no. I don't think it was, no. 10 Q. Who did you talk to at that store? 11 A. I don't know. It was just a -- I didn't get the 12 person's name. 13 Q. Who -- whoever answered the general number? 14 A. Phone in that -- in that part of the store. 15 Q. Do you -- did that person give you their name? 16 A. No, they did not. 17 Q. Did that person give you their title? 18 A. No. 19 Q. Did that person give you any information to 20 demonstrate why they knew the -- the answers that they 21 gave you? 22 A. No. They just told me that -- that they would 23 not answer that -- they would not answer that question. 24 Q. If I walk into a Walmart and I buy an Apple 25 iPhone, am I buying that iPhone indirectly from Apple? In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 125 1 A. Say that -- say that one more time. If you went 2 in -- 3 Q. If I walked in to a Walmart and I purchased an 4 Apple iPhone at a Walmart store, am I buying that iPhone 5 indirectly from Apple? 6 A. Well, you're buying that phone -- Apple is 7 selling it, and you're buying the phone from Apple, 8 uh-huh. 9 Q. But when I -- when I walk -- when I walk into a 10 Walmart and I get -- I pay money to Walmart and give -- 11 give a receipt from Walmart for -- for my Apple phone, 12 I'm actually buying it from Apple; is that correct? 13 A. I would think so. I mean... 14 Q. And how do you make that determination? 15 A. With -- with Apple? 16 Q. Yes. 17 A. Just what you told me. That they -- 18 Q. It's true, just like with a TracFone card, if I 19 have a problem with that phone, I'm going to be told I 20 should call Apple about the problem with my phone; 21 right? 22 A. No, there -- there -- there is -- there is -- I 23 don't -- as far as Apple operations, I don't know all 24 the ins and outs, as far as what they do. So I can't 25 answer that. But as far as what TracFone does, they -- In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 126 1 they are the ones who are providing telecommunications. 2 And so... 3 Q. And how did -- how did you determine that 4 TracFone is the one that's providing telecommunications? 5 A. So at that point, first off, reading, like I 6 said, the Department of Revenue -- [distorted audio] -- 7 court case, but also talking with the individual at 8 Walmart, that -- that they are not -- they are not the 9 ones to contact. They are not the ones who are selling 10 any type of communications, that you have to contact 11 TracFone for -- for your communications, issues. 12 Q. So there's a -- a court case that says that 13 TracFone is subject to utility tax for selling 14 telecommunications services? 15 A. No, Department of Revenue court case, of course, 16 versus the -- the State versus TracFone, I think, 17 covered that issue. 18 Q. What issue? 19 A. The issue just mentioned. 20 Q. So in -- in your own words, what is the TracFone 21 v. State of Washington case about? 22 A. Okay. One thing it was about -- I don't have 23 the court case in front of me. But -- 24 Q. What's your understanding of it? 25 A. It dealt with, I think, the -- how they actually In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 127 1 conducted business. It also dealt with the, I think, 2 the 911 issue, if I remember it correctly. So -- but 3 like I said, I don't have the court case in front of me. 4 Q. So it's a case that dealt with the E911 tax? 5 A. I believe so. 6 Q. Is that a different tax than -- than city 7 utility tax? 8 A. It is a different tax. 9 Q. Is the E911 tax imposed on telephone companies 10 selling telecommunications services? 11 A. I would think so. But -- but I'm not the State 12 of Washington either, so [distorted audio]. 13 Q. But if it was instead a tax imposed on a 14 telephone line and -- and imposed on the consumer of the 15 telephone line, would that be a different type of tax? 16 A. Are you talking about -- right now, you know, of 17 course we're talking about TracFone, which don't have -- 18 have cellphone lines, so... 19 Q. You're -- you're telling me that you made the 20 determination about how the -- the City utility tax 21 applies to TracFone -- 22 A. Right. 23 Q. -- by reading a case that dealt with how E911 24 tax applies; is that correct? 25 (Inaudible due to crosstalk.) In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 128 1 THE WITNESS: I'm sorry. 2 Yeah, also, looking at what -- what the -- 3 the code says as far as what's -- what's taxable and -- 4 and basically utility taxes, telephone business is 5 taxable. 6 BY MR. EDWARDS: 7 Q. We'll -- we'll get to the code later. But -- 8 A. Okay. 9 Q. -- the -- so you've got the code, the Washington 10 Supreme Court decision, and -- and an unidentified 11 person at a Walmart outside of Tacoma -- 12 A. And also -- 13 Q. -- are the basis for your conclusions? 14 A. No. Also, the RCW gives us the right to tax 15 that -- that -- that activity. 16 Q. Okay. And what in the RCW gives you that right? 17 A. That would be -- be RCW 35 A.82. (As read): 18 Any code city which imposes a license fee or tax upon 19 the business activity of engaging in the telephone 20 business -- 21 Q. Whoa, whoa, whoa -- 22 THE REPORTER: Sir, you need to -- whoa. 23 THE WITNESS: I'm sorry. 24 (Inaudible due to crosstalk.) 25 BY MR. EDWARDS: In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 129 1 Q. Are -- are-- are you reading something that's in 2 front of you there? 3 A. Yeah. I told you, we had the utility code and 4 the RCW in front of us. 5 Q. Oh. 6 A. That's all we have in front of us is the code. 7 Q. Which statute specifically were you reading 8 from? 9 A. RCW 35A.82.060. 10 Q. Okay. Thank you. You don't need to repeat 11 that -- 12 A. Okay. 13 Q. -- document. 14 A. Okay. Okay. 15 Q. The -- if we go back to the page on Exhibit 12 16 that we were looking at, the -- the methodology. The -- 17 it says, next line, "Estimate of non-direct sales (sold 18 through outside carriers)." 19 What is an outside carrier? 20 A. Okay. As I mentioned before, I think it would 21 be better that Ms. -- Ms. Crisp answered these questions 22 on the methodology. She could explain it better. 23 Q. Okay. 24 Let's -- if we move, then, to the page that's 25 Bates number 000639. Do you see that? In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 130 1 A. Yes. 2 Q. Is -- is that a part of a printout of the 3 attachment that is titled, "ExcelPrelimRenton 4 Tracfone.xls," an Excel file? 5 A. I believe so. 6 Q. Okay. 7 And -- and this would have been the -- the 8 summary tab of that Excel document? 9 A. Yes. But it -- it is not -- it's not correct. 10 Doesn't -- doesn't look right. 11 Q. And you're aware that there's been an issue in 12 this case with the Excel files that you've provided 13 getting corrupted -- 14 A. Yeah. 15 Q. -- and not accurately reflecting data? 16 A. Yes. We heard about that. 17 Q. Yeah. And this would appear to be a -- an 18 example of that? 19 A. Apparently. 20 Q. So you -- you're indicating that, although this 21 is what we received as a printout of the attachment, 22 what it's depicting is not what somebody would have 23 actually seen if they had opened that attachment; is 24 that right? 25 A. Right, right. And... In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 131 1 Q. Is it possible that the recipient at the City of 2 Renton, when they opened it, saw it like this and it was 3 corrupted at the time they received it? 4 A. I don't think so. 5 Q. Is it possible? 6 A. I don't think it's possible. I -- I've never 7 seen this happen before. 8 Q. Do you know whether or not anybody at the 9 City -- City of Renton actually looked at what you had 10 sent them? 11 A. I would -- I -- I don't know for positive, but I 12 would think the person I'm talking with, who I sent this 13 with, looked at it. So I don't -- so -- so I assume 14 Ms. Hawn probably would have look at it. I -- I don't 15 know for sure who would have -- who looked at it. 16 Q. Thank you. 17 A. Okay. 18 Q. And then if we move to the... the two pages 19 down, point zero -- yeah, 000641, you'll see that it is 20 nearly -- or it is illegible at this point. 21 (Inaudible due to crosstalk.) 22 BY MR. EDWARDS: 23 Q. It got condensed down so small when it got 24 printed out that it -- you can't read it. 25 A. I can't do it. Yeah, I can't read it. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 132 1 Q. Okay. Was Mrs. Crisp the one that prepared this 2 Excel file as well -- 3 (Inaudible due to crosstalk.) 4 THE WITNESS: Yeah, she provide -- 5 BY MR. EDWARDS: 6 Q. -- methodology, or did you prepare the Excel -- 7 A. She pretty much prepared that part of it too, 8 so... 9 Q. Okay. So should I defer questions about the 10 Excel file to her as well? 11 A. Yes. 12 Q. Okay. 13 Let's move on to Exhibit 13. 14 MR. EDWARDS: And for the court reporter, 15 it's a email with the Bates number 645, at the bottom of 16 the first page, dated July 3, 2017. 17 (Exhibit No. 13 marked.) 18 BY MR. EDWARDS: 19 Q. And can you confirm that this is a continuation 20 of the email string in Exhibit 12 that Ms. Hawn 21 responded to you by asking you to include Nate Malone, 22 the City's in-house tax auditor, on future emails? 23 A. Yes. It looks like it. 24 Q. Okay. Prior to this email, had you ever 25 interacted with Mr. Malone at all? In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 133 1 A. No, not that I remember. 2 Q. Okay. 3 And you -- you agreed, at the top, to include 4 him on future communications? 5 A. Yes, I see that. 6 Q. And it looks like you also checked about whether 7 you're going to be authorized to conduct a audit with 8 somebody else, a -- a different company? 9 A. Looks like it. 10 Q. Okay. 11 And presumably, at this point, you had not yet 12 received any questions about the methodology or the -- 13 the Excel file? 14 A. No, not that I know of. 15 Q. Okay. 16 Let's move on to Exhibit 14. 17 MR. EDWARDS: And this is -- the Bates 18 number on this is 653 at the bottom. 19 (Exhibit No. 14 marked.) 20 BY MR. EDWARDS: 21 Q. Do you have that document in front of you now? 22 A. Yes, I do. 23 Q. Okay. 24 And it -- if we look at the beginning of the -- 25 the email -- or I guess at the bottom of that first In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 134 1 page, it's an email from you to Jan Hawn, July 28 of 2 2017? 3 A. Uh-huh. Yes. 4 (Inaudible due to crosstalk.) 5 THE WITNESS: Yes, July 28th is the one 6 you're looking at? 7 BY MR. EDWARDS: 8 Q. Yep. 9 A. Okay. 10 Q. And it indicates that Mr. Ford had asked to have 11 a meeting about the assessment? 12 A. Yes, uh-huh. 13 Q. And you've recommended not to meet with the -- 14 the -- the taxpayer? 15 A. Is that the last paragraph you're looking at? 16 Q. Yes. 17 A. Okay. 18 Q. It says: I would suggest that we instead send 19 TracFone a copy of the tax schedules and let them know 20 that if they have any questions, they can send them to 21 us by email -- 22 A. Yes, okay. 23 (Inaudible due to crosstalk.) 24 BY MR. EDWARDS: 25 Q. -- electronically? In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 135 1 A. Yes. 2 Q. And then, if we move to kind of the middle of 3 the page, Ms. Hawn responds within two minutes of your 4 email that she's fine with your proposed approach? 5 A. Let's see the minutes. 6 Q. Let's see the minutes. I'm looking -- it looks 7 like your email was sent at 4:29 p.m., and her response 8 came at 4:31 p.m.? 9 A. Okay. Let -- let's see. Just one sec. 10 Q. Sure. 11 A. (Reviews exhibit.) 12 4:31. And you're talking -- okay. I see two 13 minutes there between the two different emails. 14 Q. Yeah. So within two minutes she got back to you 15 and said, it's okay that -- to decline the meeting; 16 correct? 17 A. The first one -- let's see, yeah, 4:31, "I'm 18 fine with the approach. Thank you." 19 Q. So and the approach that she's referring to is 20 your recommendation -- 21 A. Right. 22 Q. -- to not have a meeting? 23 A. No. The approach as far as how I did the audit, 24 if I remember correctly. 25 Q. (As read): I would suggest that we send In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 136 1 TracFone a copy and let them know that if they have 2 questions, they can send us an email -- 3 A. Right. 4 Q. -- as a response to TracFone's asking for a 5 meeting; correct? 6 A. Right. 7 Q. Okay. So the proposed approach is referring to 8 the approach of not having a meeting; correct? 9 A. Let me look at that. It must be. I'm looking 10 at it, yeah. I thought we were talking about the actual 11 schedules, but that's what it looks like to me. 12 Q. Okay. Thank you. 13 Let's move on to Exhibit 15. Actually, before 14 we do that, I want to go back to Exhibit 3, just to get 15 it on the record here. And I -- I kind of missed it 16 from time. But Exhibit 3 -- I -- hopefully you set it 17 aside earlier -- is -- is Bates numbered 460. That's a 18 one-page amendment to the contract. 19 (Exhibit No. 3 marked.) 20 THE WITNESS: Okay. 21 BY MR. EDWARDS: 22 Q. Okay. And this is an extension of the original 23 contract we looked at as Exhibit 1, now taking it out 24 through the end of 2017? 25 A. Yes. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 137 1 Q. And as -- as you -- I believe that as they were 2 produced to us, this was actually amendment number 4. 3 So there was a series of -- 4 A. Right. 5 Q. -- amendments that each of them extended the 6 time period? 7 A. Yes. 8 Q. And this is your signature on this document? 9 A. Yes, it is. 10 Q. Do you recognize the -- the signature of the 11 person from the City of Renton? 12 A. It looks like Hawn, but -- just looking at it. 13 It's kind of hard to read, but that's what it looks 14 like. 15 Q. Okay. 16 Let's move on then to Exhibit 15 now. 17 MR. EDWARDS: And -- and the Bates number on 18 that is 122. 19 (Exhibit No. 15 marked.) 20 BY MR. EDWARDS: 21 Q. Do you have that in front of you? 22 A. Yes, I do. 23 Q. Okay. 24 The -- this is the August 2017 report to the 25 City of Renton? In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 138 1 A. Yes. 2 Q. Okay. And is the part at the top information 3 about a different audit than the TracFone audit? 4 A. Yes, different audits. 5 Q. Okay. All right. And then the report on 6 TracFone is describing the email from Mr. Ford that you 7 received on July 26th. And then the -- the email string 8 that we just looked at as Exhibit 14, the July 28 9 communications between you and Renton about Mr. Ford's 10 request? 11 A. Okay. Let me -- you want me to read it first? 12 Q. Yeah. You can take a quick look at it. 13 A. Okay. 14 (Reviews exhibit.) 15 Okay. I read it. 16 Q. Is there anything in Exhibit 15 that talks about 17 anything other than the email exchanges that we've 18 already looked at in Exhibit 14? 19 A. I mean, there's a last paragraph that -- that -- 20 that's talked about, as far as if they have any 21 questions, and that we will answer them over the -- 22 electronically. And if they think it's -- a meeting is 23 still necessary, we would consider it. 24 Q. Isn't that a cut and paste of the email that we 25 had looked at as Exhibit 14? In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 139 1 A. I'd have to look at Exhibit 14. 2 Q. Well, let's move on then. 3 A. Okay. 4 Q. I'm going to pass over 17. So we'll set that 5 aside for the time being. 6 MS. SAND: What about 16? 7 THE WITNESS: Yes. 8 MR. EDWARDS: Oh, I'm sorry. 16 was the one 9 I meant to set aside. I think -- that -- that's going 10 to be part of the deposition with Mrs. Crisp later. 11 THE WITNESS: So what number are we on? 12 BY MR. EDWARDS: 13 Q. Now I -- I want you to look at... let's skip 14 past 16 and 17 right now. And that will take us then 15 to 18. 16 MR. EDWARDS: And 18 is Bates number 682, 17 for the court reporter. 18 THE WITNESS: Yes, uh-huh. 19 (Exhibit No. 18 marked.) 20 MR. EDWARDS: Okay. 21 BY MR. EDWARDS: 22 Q. Did you want to take a minute to read that? 23 A. Yes. I'm reading it right now. 24 Q. Okay. 25 A. (Reviews exhibit.) In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 140 1 Okay. I read it. 2 Q. Okay. And -- and, again, it's reflecting 3 TracFone's latest request to -- to meet with you; is 4 that correct? 5 A. Yes. 6 Q. And at the bottom of the first paragraph there, 7 you indicate that what the focus is on whether or not 8 some of all of their business activity is taxable? 9 A. Yes. 10 Q. Do you think that's an appropriate thing to 11 discuss with a taxpayer? 12 A. Whether something is taxable or not taxable? 13 Q. Yeah. 14 A. Yes. And I think, like I said before, we would 15 have been more than happy to discuss it over email. I'm 16 not sure -- I don't have all the emails in front of me, 17 so I'm not sure if that came up. But -- but, yeah. 18 Q. Well, you're -- you're explaining that that's a 19 reason why there's no need to talk to them, because you 20 only want to talk about the methodology of how the 21 numbers were calculated and not whether or not their 22 business activity is subject to tax. 23 MS. SAND: Is there a question there, 24 Mr. Edwards? I think you were just making a statement. 25 BY MR. EDWARDS: In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 141 1 Q. Am I reading this correctly and understanding 2 that this is an explanation for why the request to talk 3 should be declined? 4 A. Basically, yes. I'd rather do it through email 5 instead of through meeting. I think, like I said 6 before, things in writing, we have something concrete. 7 Q. And the next paragraph says, "There are some 8 other things happening concerning utility audits that 9 may help this audit that we are not able to discuss 10 right now due to nondisclosure agreements signed by our 11 company." 12 A. Uh-huh. 13 Q. What was happening? 14 A. I can't tell you that. It's nondisclosure. I'm 15 sorry. I can't tell you that. 16 Q. Was there another audit that you were 17 conducting? I'm not asking you to identify any -- any 18 city or any taxpayer. 19 A. No. Yeah, see, I feel like -- yeah, I can't 20 answer that. 21 Q. Was it something that I was involved with? 22 A. No. 23 Q. You're confident of that? 24 A. They feel -- when you say "involved with," what 25 are you saying? Like -- like a -- like a court case, or In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 142 1 something like that? 2 Q. I'm saying an audit of a taxpayer. 3 A. Not that I know of, no. I don't remember 4 anything like that. 5 Q. Okay. 6 Is it something that you were involved with? 7 A. No. 8 Q. Was it -- it was something that -- 9 (Inaudible due to crosstalk.) 10 THE WITNESS: See, but there are some things 11 happening that you just have to -- 12 (Inaudible due to crosstalk.) 13 BY MR. EDWARDS: 14 Q. Why were you subject to a nondisclosure 15 agreement if it was something that you were not involved 16 with? 17 A. Okay. Obviously, I had to reread that to make 18 sure I read what -- what you're saying. 19 (Reviews exhibit.) 20 Okay. Yeah. I would be involved in that, yeah, 21 because I signed a nondisclosure agreement. 22 Q. Okay. Can you remember, as we are sitting here, 23 what -- what this is referring to? 24 A. No, I can't. And wouldn't be able to tell you 25 anyway. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 143 1 Q. Okay. So even if there wasn't a disclosure 2 agreement -- nondisclosure agreement, you don't remember 3 what this refers to? 4 A. No, not off the bat. No, I don't. 5 Q. So in that regard, you don't know whether or not 6 I was involved, because you don't remember what it -- 7 what this is? 8 A. Well, as far as a nondisclosure agreement -- 9 Q. I wasn't a party to a nondisclosure -- 10 A. Yeah. 11 Q. -- agreement, but -- 12 A. Right. You weren't a party to that. 13 Q. Was I involved with the thing that was -- that 14 you were subject to a nondisclosure agreement on? 15 A. No, not that I remember. 16 Q. Okay. 17 Was it something that was occurring in 18 Washington, or in another state? 19 A. I can't remember. That's three years ago. 20 Q. Let me move then to Exhibit 19. Actually, 21 before we do that, at the bottom, this says -- you ask, 22 (as read): Is it okay with you -- let us know if it is 23 okay with you. 24 It's referring to your -- your proposal to not 25 talk to TracFone? In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 144 1 A. Okay. (As read): If it's okay with you, I'd 2 like to hold off a little while on this audit until we 3 have -- until -- 4 Q. I'm still looking at number 18 right now. 5 A. Yeah, okay. 6 Q. It says, "Let us know if this is okay with you 7 and if you have any questions." 8 A. (Reviews exhibit.) 9 Okay. 10 Q. You see that? 11 A. Yes, I do. 12 Q. And so, what you're asking for is, is it okay 13 not to meet with TRS and -- and me; correct? 14 A. Yes, I would think so. 15 Q. Did you ever get a response to this? 16 A. I don't remember. I'd have to -- let me see. 17 MR. EDWARDS: Kari, again, this is one where 18 we don't have anything from you that would reflect a 19 response to that request. 20 MS. SAND: Mr. Edwards, I produced 21 everything that has been produced to me. So it's -- 22 it's my assumption that I have received everything that 23 TRS has. 24 If TRS could double-check and see if they 25 got a response from Renton, that would be helpful. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 145 1 MR. EDWARDS: And of course, if a response 2 came from Renton, Renton should have a copy of it as 3 well. 4 MS. SAND: Agreed. And, again, I've 5 produced everything that's been produced to me, but I 6 will ask Renton to double-check also. 7 MR. EDWARDS: Okay. 8 THE WITNESS: Okay. 9 BY MR. EDWARDS: 10 Q. So it's possible that they did not respond; 11 correct? 12 A. Right. It is possible. 13 Q. Okay. 14 A. More than likely. 15 Q. Now I'm ready to move on to Exhibit 19. 16 MR. EDWARDS: And I'm saying for the court 17 reporter, Bates 000686. 18 (Exhibit No. 19 marked.) 19 BY MR. EDWARDS: 20 Q. Do you have Exhibit 19 in front of you, 21 Mr. Crisp? 22 A. That's 00686? 23 Q. Correct. 24 A. Right now I have a question. 25 Q. Sure. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 146 1 A. The one -- let's see. The -- from TRS to Jan 2 Hawn on January 2017, do you remember which one that was 3 in, which package that was in? Is that -- 4 Q. January 2017 is number 18. 5 A. Number 18. 6 Q. Oh, no, no, no. That's September of 2017. I'm 7 sorry. 8 A. So is that number 18? 9 Q. I'm trying -- 10 A. Okay. 11 Q. I -- I apologize. No. 18 is dated September of 12 2017. 13 A. Okay. Okay. 14 Q. But you will be getting a -- a packet of all of 15 the exhibits afterwards -- 16 A. Okay. 17 Q. -- from the court reporter, I believe. 18 A. Okay. 19 Q. And -- and I believe Ms. Sand is also keeping 20 track of which documents are which exhibit numbers. 21 A. Okay. So we're on number -- 22 MS. SAND: Indeed. 23 THE WITNESS: -- 19 now. 24 BY MR. EDWARDS: 25 Q. Yes. Correct. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 147 1 A. Okay. 2 Q. Do you have -- and -- and so number 19 is a 3 email from you to Jan Hawn, dated -- 4 A. Right. 5 Q. -- October 5, 2017? 6 A. Yes. 7 Q. And -- and it -- in the body it says that you're 8 attaching the October 2017 update as well as the 9 brief-slash-memo from Kenyon Disend law firm -- 10 A. Right. 11 Q. -- concerning the taxability of TracFone. 12 Do you see that? 13 A. Okay. Is that on the letter? Oh, yeah. 14 Q. That's on the email, itself. 15 A. The email -- email -- yeah, email, right. 16 Q. So the email is describing the attachment as a 17 memo concerning the taxability of TracFone; correct? 18 A. Yes. 19 Q. Okay. Up where it says attachments, it 20 identifies two attachments. One says, "PDFOctober 2017, 21 Update Renton.pdf." Am I correct in assuming that's the 22 October 2017 update to Renton? 23 A. I would think so, uh-huh. 24 Q. Okay. The next one is titled (as read): KD Web 25 Version - Cle -- Cln drft v4 103012.docx. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 148 1 Do you see that? 2 A. Yes, I do. 3 Q. Is -- is that the -- the document that was -- is 4 the brief-slash-memo from Kenyon Disend law firm? 5 A. I -- I don't know. Yeah, I don't know. 6 Q. Does KD appear to refer to Kenyon -- or could 7 that refer to Kenyon Disend? 8 A. It might, yeah. 9 Q. 103012, is that potentially the date that the 10 document was created? 11 A. Possible. I -- I -- yeah. Just looking at it, 12 I don't -- yeah. 13 Q. Do you recall when you obtained the memo from 14 Kenyon Disend? 15 A. No, I do not. I don't remember exactly when I 16 did get that from -- from that company. 17 Q. Do you remember whether it was before or after 18 you started auditing TracFone? 19 A. I'd have to -- I don't know. I'd -- I'd have to 20 double-check to see, but -- yeah, on that. 21 Q. What would you be able to double-check to 22 confirm whether it was before or after? 23 A. They have a date here. If -- if the date of 24 103012 is correct on here, I guess we could look for 25 emails before that. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 149 1 Q. So you -- it would be an email to you from the 2 Kenyon Disend law firm? 3 A. Maybe, if that was the case. 4 Q. Is -- is that the way that you got the document? 5 A. That I don't remember, sir. I'd -- I'd have 6 to -- I'd have to check to see how it got -- how we 7 received it. 8 Q. Do you remember being aware of this before you 9 started -- this document, before you started auditing 10 TracFone? 11 A. I -- I'd have to double-check to be sure. I'd 12 have to double-check. 13 Q. I'm asking what you remember. 14 A. See, I don't remember. 15 Q. Let me ask you -- when you look at the second 16 page of Exhibit 19, do you recognize that to be the 17 brief-slash-memo from the Kenyon Disend law firm? 18 A. It looks like it, yes. 19 Q. And this is -- this document isn't dated on -- 20 on that page; correct? 21 A. No. 22 Q. Doesn't identify who the author is? 23 A. No. 24 Q. Doesn't identify who the recipient is? 25 A. No. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 150 1 Q. Does it discuss any city ordinances or state 2 statutes? 3 A. No, not that I know of. 4 Q. Does it make any reference to TracFone, other 5 than the citation to the -- the State case that we were 6 talking about earlier? 7 A. I don't see anything else besides that one -- 8 that one deal with TracFone on there. 9 Q. Okay. 10 How did you use this document in the conduct of 11 your audit of TracFone? 12 A. Basically that -- that at that point, we looked 13 at it. And -- and if we -- we look at, I think, down 14 below. I think the last paragraph, they said -- let's 15 see. 16 (Reviews exhibit.) 17 Right. The last sentence: A tax audit will 18 likely be the only way to determine whether a taxpayer 19 is properly reporting [distorted audio]. 20 So at that point -- 21 Q. At which point? 22 A. You know, whether -- whether it was or wasn't, 23 there's no way -- this is just information provided to 24 us saying there's a possibility it might be, and that 25 the only way you could find out for sure is to do an In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 151 1 audit. 2 Q. Okay. What do you learn when you do an audit? 3 A. Well, we're trying to find out the business 4 activity that -- that's going on in -- in the audit and 5 in the company and what they're doing, and -- 6 Q. Okay. 7 A. -- and go from there. 8 Q. So how do you find out what the business 9 activity is and what a company is doing? 10 A. Normally, we talk to the company. You know, we 11 may do some research. We may look at briefs, court 12 cases. We also, most definitely and most important is 13 talking to the company itself and directly asking them 14 questions, a lot of questions, on what they do and how 15 they do it. 16 Q. What questions did you ask TracFone about what 17 they do and how they do it? 18 A. That, I can't remember. Yeah. 19 Q. Did -- did you ask any of those questions by 20 email, or did you ask them all only by telephone? 21 A. I would think the vast -- probably all of them 22 by email. Like I said, I did talk to, I think, Mr. Ford 23 once. I'm not sure, but I think it was once. And I 24 think -- or -- or may have been twice, because we also 25 talked to a person named Dillon one time, if I remember In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 152 1 correctly. So I think we talked to them twice on -- I 2 think on the phone, that -- that I can remember. 3 Q. So within the emails from you to TracFone, we 4 should email -- see emails asking about what they do and 5 how they do it? 6 A. Yes, basically. 7 Q. And -- and what did you do with the information 8 that you learned from them about what they do and how 9 they do it? 10 A. Well, at that point, we went ahead and looked 11 at -- well, first off, they weren't able to provide -- 12 the only information they could provide were the direct 13 sales, as far as -- as far as activity. They didn't 14 have any indirect sales. 15 Q. I -- I'm not asking about revenue numbers. I'm 16 asking about information about business activities, what 17 they do and how they do it. 18 A. Okay. What I remember, they simply told us that 19 they -- they have prepaid cards, and they either sell 20 them directly or indirectly to their -- to their 21 customers. 22 Q. And -- and they used the word "indirectly"? 23 A. I think they used retail, wholesale, if I 24 remember correctly. 25 Q. And did you have a conversation with them about In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 153 1 what retail and wholesale means? 2 A. I believe I did, but I can't remember for sure. 3 But -- yeah. 4 Q. But that would be reflected in emails; correct? 5 A. Probably. Unless -- unless they were covered in 6 that telephone call. 7 Q. But the telephone call, you would have -- if you 8 took any notes about it -- would have been reflected in 9 emails or in your reports to Renton? 10 A. I would think so. I'm -- I'm not sure. I -- I 11 can't answer for sure. 12 Q. So how did you make the determination that 13 TracFone's sales of air -- of -- of airtime cards are 14 indirect sales instead of wholesale sales? 15 A. Well, we just -- that's just the terminology 16 that we came -- that we came to use, that -- basically 17 that -- that they were -- they were selling their stuff. 18 People would contact them directly, or people would 19 actually go to a retailer store of some sort and buy 20 that. And that's how we went ahead and -- and named it 21 that, either directly contacted them or indirectly 22 through an intermediary, as far as selling their 23 product. 24 Q. Okay. In your experience for over two decades 25 as a tax auditor, is there a tax significance to the In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 154 1 difference between a retail sale and a wholesale sale? 2 A. Yes. 3 Q. Is there a tax distinction between a direct sale 4 and an indirect sale? 5 A. Say that one more time. Is there a difference? 6 I think there would be, because we're talking about -- 7 as far as retail/wholesale, a lot of times you're 8 [distorted audio] about equipment or some sort, some 9 object. In this case, we're talking about a phone. 10 Q. Isn't it true that the reason that there's a tax 11 distinction between retail sales and wholesale sales 12 because tax codes and tax statutes distinguish between 13 retail sales and wholesale sales? 14 A. Yes. 15 Q. Do tax statutes and tax codes distinguish 16 between direct sales and indirect sales? 17 A. I didn't use that -- that terminology, as far as 18 direct or indirect. 19 Q. Okay. Does -- does indirect mean the same thing 20 as wholesale? 21 A. As far as -- as far as how we defined -- B&O 22 would be different than utility tax. And as far as 23 defining -- as far as indirect, we would actually see 24 that -- in a way that, you're not selling the -- you 25 know, you're not actually selling them the same object. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 155 1 Retail/wholesale, you might be selling the same object 2 from one to another. In other words, here we're 3 actually selling a -- a -- providing a card for access. 4 Q. Where -- where in the tax code or the -- or tax 5 statutes is the distinction that you're just describing? 6 A. Okay. At that point, I'd have to -- I would 7 have to take a look at it. But when you look at it, as 8 far as RCW 35.82, basically they're talking about gross 9 receipts or gross income. So we're talking about all 10 income, either directly or indirectly, per 35 A.82. 11 MR. EDWARDS: Next, I'd -- I'd like -- let's 12 move on to Exhibit 20. And the Bates number on this is 13 692. 14 (Exhibit No. 20 marked.) 15 BY MR. EDWARDS: 16 Q. Do you have that in front of you? 17 A. Yes, I do now. 18 Q. Okay. 19 And this is submitting the November 2017 -- 17 20 update? 21 A. Let's see. 22 Q. Or -- excuse me, yeah -- November -- yeah. 23 A. Yeah, I have it wrong. Yeah, it should be -- 24 yeah, 2017 instead of 2013. Yes, uh-huh. 25 Q. And it says, "We are hoping to hear something In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 156 1 concerning TracFone this month." 2 A. Right. 3 Q. What -- what were you hoping to hear? 4 A. I don't -- I don't remember, at this point. 5 Yeah, it was three years ago. 6 Q. Do you have any records that would refresh your 7 recollection about what you were hoping to hear? 8 A. I don't know. I don't know if there's an email 9 or not. But we could look at that time period and see 10 if there's something just before that. I guess, you 11 know, we look at our updates, there might be something 12 reflecting it there. 13 Q. Okay. When I -- I look at the second page of 14 the -- the document, which contains the next consecutive 15 Bates number, it appears to be a duplicate of the 16 methodology rather than the update that's referenced as 17 the attachment; is that correct? 18 A. I can't say for sure if it's a duplicate or not, 19 or whether it was an update. 20 Q. But you -- you can say that it is not the 21 November 2017 update; correct? 22 A. Right. 23 Q. And it is some version of the methodology 24 instead? 25 A. Right. Whether it's the same one or whether In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 157 1 there was a slight change, I don't know. But again -- 2 Q. Well, if we look at the first page, and we see 3 the attachment, it looks like the attachment is the 4 November update; correct? 5 A. (Reviews exhibit.) 6 Q. It shows attachments, "PDFNovember 2017 Update 7 Renton.pdf." 8 A. Okay. "PDFNovember 2017 Update." Yes, it would 9 be -- the attachment would be -- would have been the 10 update. But -- 11 Q. Okay. So page 693 is not the attachment to -- 12 A. No. The update -- no. 13 Q. -- 692? Okay. 14 A. No. 15 Q. Let's move then to Exhibit 21. Or actually, 16 before we get to Exhibit 21, we're now at November of 17 2017. And the -- you know, the draft schedules had been 18 sent out in -- in July. What's... Why hasn't the 19 assessment been issued yet? 20 A. At that particular point, I don't remember why 21 we had not -- had done it. You say it was July that 22 the -- that the schedules had actually been completed? 23 Q. That's when they were sent to both the City and 24 to TracFone. 25 A. Right. I can't -- yeah, I can't remember. Let In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 158 1 me read this real quick. 2 (Reviews exhibit.) 3 Q. Maybe we'll -- maybe Exhibit 21, which is Bates 4 number 129, the November 2017 update will refresh your 5 recollection. 6 (Exhibit No. 21 marked.) 7 THE WITNESS: No, I don't. I don't remember 8 why -- exactly why we were holding onto that at that 9 point. 10 BY MR. EDWARDS: 11 Q. But it suggests that you're the one that's 12 asking for a delay in the issuance, it's not the City; 13 correct? 14 A. Right. 15 MS. SAND: And, Mr. Edwards, I believe 16 that's dated November 6th. 17 MR. EDWARDS: Yeah. Did I say something 18 different than that? 19 MS. SAND: That's what I heard. 20 MR. EDWARDS: Okay. Yeah. You're right. 21 It's dated November 6th, 2017. And if I misread that, I 22 apologize. 23 THE WITNESS: Right. Okay. 24 BY MR. EDWARDS: 25 Q. Okay. Let's move to -- to Exhibit 22. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 159 1 THE REPORTER: Sorry, Counsel, what's 2 Exhibit 22? 3 MR. EDWARDS: I'm sorry. The Bates number 4 is 130. 5 (Exhibit No. 22 marked.) 6 BY MR. EDWARDS: 7 Q. Do you have that in front of you, Mr. Crisp? 8 A. Yes. I'm reading it right now. 9 Q. Okay. 10 A. (Reviews exhibit.) 11 Okay. I've read it. 12 Q. Okay. 13 So -- and this -- this is the December 6th, 14 2017, update? 15 A. Yes. 16 Q. The -- for TracFone Wireless, it makes reference 17 to Audit 1 and Audit 2? 18 A. Yes. 19 Q. What is Audit 2? 20 A. City of Renton, if I remember correctly, asked 21 us to open up another audit on TracFone. 22 Q. Did they ask you in the same way that they asked 23 you to open the first audit for TracFone? 24 A. I don't remember. I'm not sure how the 25 conversation went. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 160 1 Q. Did -- did -- was the request -- did the request 2 come from the City, or did the request come from TRS? 3 A. I don't remember that neither. 4 Q. Do you remember whether the City authorized the 5 commencement of a second audit? 6 A. Yes, I believe they did. 7 Q. Now, the question initially was: Why is there a 8 second audit? And -- 9 A. Uh-huh. Well, at that point, we had done -- I 10 think we told -- the first audit went through -- was it 11 2013? 12 Q. And had that audit -- was all of the work 13 completed with respect to that audit? 14 A. I can't -- I -- I don't -- I don't remember 15 that. I can't remember for sure if it was all totally 16 depleted or not for the first audit. 17 Q. At what point in time was the work completed for 18 the first audit? What... what -- what activity 19 constituted the end of the work that needed to be done 20 on the first audit? 21 A. I'd probably have to ask Ms. Crisp on that one, 22 since she was actually doing the -- the methodology and 23 the tax schedules. We had an judgment on there, on the 24 methodology. So she might be able to answer that 25 better. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 161 1 Q. But -- but the work is done once the schedules 2 are completed? 3 A. Well, at that point, not necessarily, because we 4 might have done it, but then at that point we would want 5 the City to look at it and -- and TracFone too. 6 Q. Okay. And -- and it had been sent to both the 7 City and to TracFone; correct? 8 A. I -- I -- I don't know for sure. I assume, but 9 I don't know for sure. I'd have to follow up on that. 10 Q. Didn't we just look at exhibits that showed that 11 they were sent to the City and TracFone in July of 2017? 12 A. Those are the ones that we couldn't read? 13 Q. Yes. 14 A. Okay. In that case, then, I'm not sure what 15 TracFone got or City of Renton got, but I'm assuming 16 they got the correct one. So then I guess they would 17 have gotten them. 18 Q. So once those schedules had been sent, what 19 additional work needed to be done to complete the 2007 20 to 2013 audit? 21 A. At that point, you'd have to ask Ms. Crisp. 22 Q. You -- you don't know -- once the -- how many 23 years have you been auditing? 24 A. Remember, we do audits for many, many cities. 25 Q. Okay. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 162 1 A. Not just City of Renton. 2 Q. In your experience as an auditor, when you get 3 to the point of time in an audit where you've prepared 4 schedules -- 5 A. Yes. 6 Q. -- and you've shared those schedules with the 7 taxpayer and the taxing authority, what additional work 8 needs to be done to finish an audit? 9 A. Well -- 10 Q. An audit. 11 A. A audit. Well, at that point, it depends if -- 12 if they're ready for us to send it out. At that point, 13 the City directs us to send out the -- the tax schedule, 14 the audit, send it out. Then we'll send it out. 15 Q. So the only work that's left to be done is 16 sending out the audit at this point? 17 A. Once it's totally completed, unless there's 18 something else that has -- that has stopped it from 19 going up. 20 Q. Okay. What had stopped the TracFone audit of 21 the 2007 through 2013 period from going out? 22 A. That I -- I don't remember. I'd have to check 23 and look at our emails and see just what was going on 24 and why. 25 Q. Okay. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 163 1 And your reports say that it -- that you're 2 waiting for something; correct? 3 A. Holding pattern, further developments and will 4 contact City. Yes. And unfortunately, I don't remember 5 what I was waiting for. I don't know if it was a court 6 case or what, but I don't know. I don't remember what I 7 was waiting for. 8 Q. Okay. Well, let's -- let's look at Exhibit 22 9 now, which is the -- the December 2017 return. 10 A. You mean 23? We just did 22. 11 Q. I'm -- I'm still at 22. 12 A. Okay. 13 Q. Have you already opened 23? 14 A. No, just got 22. 15 Q. Okay. And you see that it's the December 2017 16 update? 17 A. December 6, 2017 update. 18 Q. Okay. And we were talking about its reference 19 to audit number 1 and audit number 2. And I'm going 20 to -- 21 A. Audit number 1. Okay. Go ahead. 22 Q. Okay. I'm going to drop that topic for the time 23 being. 24 It says: On November 28, 2017, TracFone 25 discovered there needs to be a -- In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 164 1 MS. SAND: No, it says TRS. 2 MR. EDWARDS: I'm sorry. TRS. Thank you. 3 BY MR. EDWARDS: 4 Q. I'm getting a little bit tired here. 5 (Laughter). 6 A. We all are, yeah. 7 Q. Yeah. Says: TRS discovered there needs to be 8 an adjustment to the methodology sheet that we sent to 9 TracFone. 10 Do you see that sentence? 11 A. Yes, uh-huh. I see that first sentence. 12 Q. What happened on November 28th of 2017 that 13 alerted TRS to the need to make an adjustment to the 14 methodology? 15 A. Yeah. Because Ms. Crisp did the methodology, 16 she would have to answer that one. 17 Q. Okay. And... and this says that you plan to 18 send the update of the method -- and so -- and this -- 19 who drafted Exhibit Number 22? Did you draft it? 20 A. Exhibit Number 22? 21 Q. Yep. The December 6th, 2017, Renton report. 22 A. Oh, the report? 23 Q. Yes. 24 A. Yeah. I noticed that. 25 Q. Number 2, it's just what we've just been looking In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 165 1 at. 2 A. Okay. That's number 22? 3 Q. Yeah. December 6, 2017, Audit Tax Investigation 4 Update Renton. 5 A. Okay, uh-huh. 6 Q. It's number 130? 7 A. Yes, uh-huh. 8 Q. Did you write that document? 9 A. Yes, I did. 10 Q. Okay. And it says -- so, these are your words? 11 A. Right. 12 Q. Okay. 13 "We have taken out the assertion that prepaid is 14 taxed on usage, as prepaid is properly sourced 15 differently from post-paid." Do you see that? 16 A. Right uh-huh. 17 Q. What was your basis for determining that prepaid 18 is sourced differently than post-pay? 19 A. Like I said, Ms. -- Ms. Crisp would have to 20 answer that. She simply told me that's what happened, 21 and I simply put that in the report. So she was the one 22 that -- that -- that said this is what -- what's 23 happening, and we need to -- to do that. 24 Q. And -- and you don't remember why she said that? 25 A. No, I don't. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 166 1 Q. It says (as read): Actually usage has been used 2 by other companies to estimate prepaid revenues. 3 However, now that the bundles are done mostly with 4 unlimited movements -- minutes, the movement has been 5 towards companies using sales figures instead of usage. 6 Did you write that? 7 A. Yeah, basically, she told me that that's what 8 she wanted, the statement that -- that there. So you'd 9 have to talk to Ms. Crisp about what she meant by that. 10 Q. What about the lessons? "As we have seen, that 11 is the more correct method for estimation per the 12 codes." 13 A. Yes, she also would have stated that. 14 Q. So Mrs. Crisp is the one that did the analysis 15 about the application of the -- of the codes to -- 16 A. Right. 17 Q. -- TRS -- or to TracFone's business activities? 18 A. Right, uh-huh. Basically, yeah. 19 Q. And you don't remember why TRS has the first 20 audit in a holding pattern? 21 A. No, I don't. Besides there was something 22 coming, I don't know what it -- what it was. 23 Q. Was it the same -- was it related to how the -- 24 there was a discovery that the methodology sheet needed 25 to be adjusted? In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 167 1 A. That I don't -- I don't know. I don't remember. 2 Q. Is it possible that it related to another audit 3 you were conducting of TracFone for another city? 4 A. No, it would not. 5 Q. You're certain of that? 6 A. Yeah. We -- we don't do that. They're 7 separate. Yeah, yeah. We don't do that, so... 8 Q. Okay. Let's move to Exhibit Number 23. 9 MR. EDWARDS: And this is Bates number 131. 10 (Exhibit No. 23 marked.) 11 BY MR. EDWARDS: 12 Q. Do you see in the -- the -- I guess -- I guess 13 first indented paragraph, on December 28, 2017, TRS sent 14 the following email to Mr. Ford of TracFone? 15 A. What -- what day was that? 16 Q. I'm kind of right in the middle of the page, 17 where it starts, "On December 8th." 18 A. Okay. Okay. 19 Q. And then, what's below that is a -- is a quote 20 of the email; is that correct? 21 A. Let me -- let me read it, just to be sure. 22 (Reviews exhibit.) 23 Okay. Yeah. I don't remember talking to you 24 about it. But go ahead, what's your question? 25 Q. Well, is this a -- a quote from an email from In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 168 1 you to Mr. Ford? 2 A. Yes, it would be. 3 Q. Okay. And the Mr. Edwards referred to there is 4 me; correct? 5 A. Right. 6 Q. And you and I haven't talked since the matter 7 that we had involve -- for Bremerton 15 or so years ago; 8 right? 9 A. Yeah. Not that I remember. I couldn't remember 10 that. I don't remember -- yeah, I don't remember. 11 Q. You are correct. We have not spoken since then. 12 A. Okay. Yeah. I was going to say, I'm old, 13 but -- 14 Q. How did you become aware of something that I -- 15 I pointed out? 16 A. That I don't know. I'm looking at that, and I 17 kind of -- and that kind of stuns me, because I don't 18 know why your name would be there. Yeah. 19 Q. Are you aware that I represent TracFone with 20 respect to audits that you're doing of TracFone for 21 other cities? 22 A. Right now, I -- I don't -- I know you're 23 representing the City of Renton. 24 Q. I don't represent the City of Renton. I 25 represent TracFone. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 169 1 A. Sorry. But you represent TracFone, yes. I'm 2 sorry. Yeah, you represent TracFone, uh-huh. 3 And what was your question again? 4 Q. And that representation is not limited to your 5 audit, your City of Renton audit. I represent TracFone 6 in connection with other audits you are conducting for 7 other cities. You're aware of that; correct? 8 A. I'd have to check the records to be sure that 9 you are dealing with other -- I -- other cities, to be 10 sure. 11 Q. Isn't it true that this refers to a memo that I 12 sent to a city attorney of another city that you're 13 auditing TracFone for? 14 A. Not that I remember, no. 15 Q. Whether or not you remember it, that is -- that 16 is the case. 17 A. Right. But I don't -- I don't -- I don't know 18 if it is or isn't. Because -- yeah. I don't know why 19 your name would be there. 20 Q. Would you have -- did you receive information 21 about an email -- a memo that I drafted to a city 22 attorney of another city about the application of local 23 utility taxes to TracFone? 24 A. Not that I remember, no. 25 Q. Does the language about tax being imposed on In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 170 1 usage occur in the methodology for every city that 2 you're auditing TracFone for? 3 A. We could -- I couldn't tell you that. 4 MS. SAND: Excuse me, everyone. I think 5 we've been going for 90 minutes straight since lunch. 6 Can we maybe have a quick break? 7 MR. EDWARDS: That's probably a good idea. 8 Thank you for -- I -- I get so wrapped up, that I -- I 9 lose track at times. 10 THE WITNESS: Okay. 11 MR. EDWARDS: Is five minutes, or do you 12 think people need ten? 13 MS. SAND: I think -- 14 THE WITNESS: I need ten, to be honest. 15 (A break was taken 16 from to 2:12 p.m. to 2:27p.m.) 17 BY MR. EDWARDS: 18 Q. Mr. Crisp, we were talking before the break 19 about Exhibit Number 23. 20 A. Right. 21 Q. And I want to take you to the second page of 22 that document at Bates number 132. 23 A. Okay. 24 Q. Are you there? So that -- the -- the last 25 sentence, before a bunch of redacted stuff, says, "We In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 171 1 had found out that TracFone has lost some major court 2 cases in another state" -- 3 A. Okay. 4 Q. -- "confirming the same issues that we have with 5 this audit." Do you see that? 6 A. Uh-huh. 7 Q. What is that referring to? 8 A. Basically, what I can remember, it might have 9 been the -- the -- the Missouri State Supreme Court, I 10 believe, against TracFone. I think that's the one I was 11 referring to. 12 Q. Okay. 13 When you say "Missouri State Supreme Court," do 14 you mean the Supreme Court, not the Court of Appeals? 15 A. Yeah, the -- the Missouri Supreme Court. 16 Q. Okay. 17 A. Not the appeal. 18 Q. What -- what was that case about? 19 A. I can't even remember. It -- it was -- I can't 20 remember exactly what all it said, but I thought that it 21 would help [distorted audio]. 22 Q. How did you find out about that case? 23 A. I just did some research. I simply just went to 24 the Internet, and I simply typed in TracFone court 25 cases. And at that point, see if there was any court In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 172 1 cases out there. 2 (Pause in the proceedings.) 3 BY MR. EDWARDS: 4 Q. And did that Missouri Supreme Court case that 5 you're referring to involve the City of Springfield, 6 Missouri? 7 A. No. I thought it was -- I thought it was the 8 actual Supreme Court, Missouri -- the State of Missouri 9 against TracFone is what I thought it was. 10 Q. Okay. 11 And -- and you believe that that case has an 12 impact on the Renton local utility tax obligations of 13 TracFone? 14 A. At that point, I don't remember all it says on 15 the court case, but I must have thought that. 16 Q. When you use the word "cases" plural -- 17 A. Okay. 18 Q. -- is there more than one court case? 19 A. If there was, I'm not sure exactly what. I 20 don't know whether it's Springfield or somebody else. I 21 don't know for sure which other court case I was 22 referring to. 23 Q. Is the City of Springfield court case a 24 different one than the State of Missouri case that 25 you're referring to? In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 173 1 A. Yes. 2 MR. EDWARDS: Let's move now to Exhibit 24. 3 And 24 is a -- is a City of Renton contract, Bates page 4 number 461 on the first page. 5 (Exhibit No. 24 marked.) 6 THE WITNESS: Okay. 7 BY MR. EDWARDS: 8 Q. Okay. This agreement is dated January 1, 2018, 9 it indicates. Do you see that at the top? 10 A. Yes, I do. 11 Q. And when we'd looked at Exhibit 3, the original 12 agreement that you had had been extended through the end 13 of 2017? 14 A. Uh-huh. Yes. 15 Q. So -- and that's the -- the contract under which 16 you had performed the TracFone audit? 17 A. As far as the -- 18 Q. Exhibit 1, all the work that you'd done up 19 through 2017 had been done under the original contract 20 in Exhibit 1, as extended through Exhibit 3? 21 A. I couldn't verify that for sure. 22 Q. Okay. Was there a different contract that you 23 were working on -- under -- with Renton for periods 24 between 2013 and 2017? 25 A. No. They either had the contract or the In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 174 1 amendments. 2 Q. Okay. So Exhibit 1 and the amendments, 3 including Exhibit 3, were what controlled the work that 4 you'd done from 2013 through 2017; correct? 5 A. Well, at that point -- you know, I don't know 6 exactly when we finished up TracFone, as far as the 7 information. So I don't know if it went into 2018 or 8 not. I don't remember. But -- 9 Q. Well, we've just been looking at documents 10 showing that you put the TracFone assessment on hold for 11 several months in 2017. And it was still on that status 12 in the December of 2017 report; correct? 13 A. Right. And I don't know if we changed anything 14 else after that. You know, we finished it. I don't 15 know if anything else changed on it. So I don't 16 remember if -- if anything else was adjusted on that or 17 not. 18 Q. Between 2013 and 2017, whatever work that you 19 did do was done under the first contract; correct? 20 A. I would say yes to that. 21 Q. Okay. That contract expired at the end of 2017; 22 correct? 23 A. Right. But I can't for sure tell you whether 24 there was more information. 25 Q. I'm just asking you whether it expired. It's a In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 175 1 yes-or-no question. 2 A. It did expire -- the -- the contract expired in 3 2017. As far as the amendment goes, I would say yes. 4 Q. Okay. Was the original contract extended beyond 5 2017, or did you instead enter into a new contract with 6 the City of Renton? 7 A. If I remember correctly, what had happened is, 8 they had me do the original contract and then three 9 amendments. And then they told me that they couldn't do 10 another amendment, that they had to do another contract, 11 because they only could do so many amendments. That's 12 what I remember. I don't know... That's -- that's what 13 I remember. 14 Q. So -- and so who were you dealing with about the 15 need for a new contract instead of an amendment to the 16 original contract? 17 A. I think it was Jan Hawn, but I'm not sure. But 18 if I remember correctly, that's what they told me. 19 Because I didn't understand why we couldn't just do 20 another amendment. 21 Q. Okay. And so is it -- Exhibit 24 is the new 22 contract; correct? 23 A. Right. 24 Q. And so... the work that you did, beginning in 25 2018, was done under the new contract, Exhibit 24? In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 176 1 A. Yes. 2 Q. Were there any changes in the terms of the 3 contract between Exhibit 1 and Exhibit 24? 4 A. Not that I remember. Like I mentioned, I -- I 5 didn't understand why we needed another one. But they 6 said, you know, they can only do so many amendments. 7 And to my understanding, there was -- there was no 8 changes that I'm aware of. 9 Q. Go to the second page, at the top. It's 10 paragraph 4 B, regarding method of a -- of payment? 11 A. Uh-huh. 12 Q. There's a provision for interest on your fees if 13 the City is late in paying you. 14 A. Okay. 15 Q. Was that -- was that in the original contract, 16 do you recall? 17 A. I don't remember. I'd have to take a look at -- 18 at the other contract. Rather -- 19 Q. Is that something that you asked for? 20 A. I can't remember whether it was designated by us 21 or by the City. Maybe Ms. Crisp remembers more about it 22 since she handles our contract work. So she might be 23 able to answer you on that one. 24 Q. Let me look -- point you to paragraph 7 of the 25 contract called -- identifies -- labeled Record In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 177 1 Maintenance? 2 A. Okay. 3 Q. It says: The Consultant shall maintain accounts 4 and records, which properly reflect all Work provided in 5 the performance of the -- the Agreement, retain such 6 records for as long as may be required. 7 Do you see that? 8 A. Yes, I do. I'm reading that. 9 Q. So has TRS maintained records of all of the work 10 that it did on the TracFone audit? 11 A. All the work that reflected our work. So if 12 there's anything incidental, we might not have kept it. 13 But all the work that -- that -- that -- that reflect 14 the work that we did I believe we would have. 15 Q. Okay. 16 Do you track the amount of time that you spend 17 on these -- these audits? 18 A. No, we do not. 19 Q. So do you keep records of any research that you 20 conduct? 21 A. No. Usually I just take a look at it and -- and 22 find out the information, but then -- then apply it. 23 Q. What research have you done? 24 A. Say -- just take that back, just for a second. 25 When you say "research," I might copy a court case, or In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 178 1 something like that, you know, I found on the Internet. 2 Like the Missouri, I think I copied that one. I might 3 have -- I might have copied something -- as far as 4 something, maybe an article or something, on TracFone. 5 But I don't remember for sure if -- if -- if I kept, you 6 know, everything. I mean, if I threw in everything or 7 not. But usually I -- I didn't keep it. But I can't 8 guarantee that I did throw away everything. 9 Q. Okay. Let me move to the page that's Bates 10 number 471. It's near the back, and it's EXHIBIT A: 11 SCOPE OF SERVICES. 12 A. Okay. 13 Q. And were there any changes to Exhibits A or B 14 between the first and second contracts? 15 A. I -- I don't know for sure. I'd have to -- I -- 16 like I said, my wife usually handles the contract work, 17 so I'm not positive if there was. So you might want to 18 ask her if she had -- had any changes on that or 19 anything happened. 20 MR. EDWARDS: All right. Let's move then to 21 Exhibit 25, which is -- has Bates number 136. 22 (Exhibit No. 25 marked.) 23 BY MR. EDWARDS: 24 Q. Do you see that? 25 A. Yes, I do. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 179 1 Q. It says, "TRS is continuing to do research..." 2 A. Okay. 3 Q. What research was TRS doing at this point in 4 time? 5 A. The only thing I could think about is any -- if 6 there was any other court cases out there that might 7 affect our -- our -- our -- our audit, is the only thing 8 I can think of. 9 Q. Okay. So did you find any other court cases? 10 A. I saw -- I remember I saw the City of 11 Springfield. But I don't know -- I don't think I -- I'm 12 not sure what I saw. There's a lot of TracFone court 13 cases out there. But as far as that affected us, I -- I 14 don't think there was anything that I saw. 15 Q. So you learned about the Springfield case 16 several months after you had learned about the State of 17 Missouri case? 18 A. I believe so. I don't know for sure exact 19 timing on that. 20 Q. There's no reference to any cases in -- in this 21 document; correct? 22 A. No. 23 Q. So it also says you're waiting to see how 24 certain outcomes turn out. What outcomes are you 25 referring to? In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 180 1 A. I'm sure I was probably thinking about the court 2 cases. 3 Q. You weren't thinking about the outcomes of other 4 TracFone audits you're conducting for other cities? 5 A. No. Nope. They're separate. 6 Q. You're absolutely confident that -- that there 7 was nothing going on with other TracFone audits for 8 other cities that you were doing that you thought might 9 impact the -- this audit? 10 A. Not that I can remember to be honest. I don't 11 remember everything, because they're -- you know -- but 12 not that I remember. 13 MR. EDWARDS: Let's move to Exhibit 26. And 14 it's Bates number 137. 15 (Exhibit No. 26 marked.) 16 BY MR. EDWARDS: 17 Q. And this monthly report also talks about 18 continuing to do research. 19 A. Okay. 20 Q. Is this still referring to Internet searches for 21 TracFone court cases? 22 A. Let me read, just to be sure. 23 (Reviews exhibit.) 24 I can't -- I'm not sure -- for sure. It might 25 have been, but I can't remember for sure. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 181 1 Q. In the meantime, while TracFone's assessment 2 isn't being issued, is interest accruing on that 3 assessment? 4 A. It would accrue. Of course TracFone could ask 5 us at any time to go ahead and just send us the 6 assessment too, so -- and also, it's up to the City as 7 far as whether they relieve the penalty and interest or 8 what they want to do with that. 9 Q. Did you ever talk with the City about whether or 10 not they should relieve interest while they're waiting 11 to issue an assessment at your request? 12 A. No, I don't think I did. 13 Q. Did you ever tell TracFone they could ask to 14 have the issue -- the audit issued? 15 A. I don't remember. But if they approached me and 16 said, Please issue the assessment, I would be more than 17 happy to have gone ahead and done it. 18 Q. Why would TracFone ask you to issue an 19 assessment that they've been telling you they think is 20 wrong, and you've been refusing to talk with them about 21 why they think it's wrong? 22 A. Well, we -- 23 MS. SAND: Objection. 24 Mike, wait. 25 Objection to the extent that calls for a In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 182 1 speculation. 2 You can go ahead and answer. 3 THE WITNESS: Say the question again. 4 MR. EDWARDS: Can you please read it back? 5 (Question was read back.) 6 THE WITNESS: So we had talked to them, that 7 I remember, in emails, going back and forth, why we 8 believe it was taxable. And they told us why they 9 believed it was not taxable. They believed that it 10 wasn't, and we believe that it was. And at that point, 11 that's where we stood. 12 BY MR. EDWARDS: 13 Q. What is the certain case -- court case that's 14 being referred to in this May 2018 report? 15 A. Where is that? Is that on here? 16 Q. On Exhibit 26, yeah. 17 A. Okay. 18 Q. It's the second line is: ... waiting to see how 19 a certain court case turns out that would affect this 20 audit. 21 A. You mean some legal issues? TRS is -- 22 Q. I didn't write it. You wrote it. 23 A. Well, yeah -- 24 Q. I'm asking you -- 25 (Inaudible due to crosstalk.) In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 183 1 THE WITNESS: -- completed this is that 2 reflects -- that reflects our audit and how we might 3 move forward. At that point, like I said before, I 4 don't remember exactly what court case or what -- what I 5 was looking for at that point. 6 BY MR. EDWARDS: 7 Q. Let's move on to Exhibit Number 27. Is that 8 Bates number 138, the June 2018 report? 9 (Exhibit No. 27 marked.) 10 THE WITNESS: Which -- which document are 11 you looking at? 12 BY MR. EDWARDS: 13 Q. It's -- it's -- the envelope was number 27. 14 A. And number down -- 15 Q. Bates number 138. It's the June 2018 report. 16 A. (Reviews exhibit.) 17 Okay. I'm not sure what you're -- are you 18 looking at 00718? 19 Q. No, 138. 20 A. I don't see a -- 21 Q. Did you open envelope number 27? 22 A. Yeah. Is that the one you want me to open? 23 Q. Yep. 24 MS. SAND: Yes. 25 THE WITNESS: 27, the first -- the first In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 184 1 page is -- 2 BY MR. EDWARDS: 3 Q. There's only -- there should be only one page in 4 envelope 27. 5 A. There are multiple pages. 6 Q. In the envelope that's numbered 27? 7 A. Yeah, number 27. Got a whole bunch of pages. 8 MR. EDWARDS: Kari, what do you have in 9 envelope number 27? 10 MS. SAND: I have a single page Bates number 11 000138, but that doesn't mean there might not have been 12 a mistake. So -- 13 MR. EDWARDS: Yeah. It sounds like there 14 was an error here. 15 MS. SAND: So tell us what Bates numbers 16 your documents reflect, Mr. Crisp. 17 THE WITNESS: I have Bates 00718, 719, 00 -- 18 MR. EDWARDS: Yeah. That should have been 19 envelope 28. 20 THE WITNESS: Right, it's in 27. It was in 21 27. I haven't opened 28. 22 BY MR. EDWARDS: 23 Q. Okay. Why don't you open 28 and see if they got 24 flipped. 25 A. Okay. It looks like the same stuff in both of In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 185 1 them. 2 Q. (Laughter). 3 A. Let me make sure, just to be sure. Yeah -- 4 July -- yeah. It looks like the same on both of them. 5 MS. SAND: Mr. Edwards, do you want me to 6 try to scan and have this emailed, or do you want to try 7 to email it to him? 8 THE WITNESS: Email it to me? 9 MR. EDWARDS: You know, if you could scan it 10 and email it. Let's wait until we get to the next 11 break, and I'll just keep moving on for the time being. 12 MS. SAND: Okay. 13 MR. EDWARDS: Because it's not a -- a 14 significant -- and I suspect that the answer is going to 15 be that he doesn't remember. 16 THE WITNESS: Okay. 17 BY MR. EDWARDS: 18 Q. But the -- in this report, it indicates that 19 you're expecting to hear something between the dates of 20 June 20th and June 25th of 2018. And -- and I was 21 curious what you were expecting to hear that you would 22 have such a specific time frame about what they were 23 expecting? 24 A. Yeah. See, I don't remember doing the email or 25 exactly what I was waiting for. That was -- yeah. I In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 186 1 just don't remember. 2 Q. Okay. 3 MR. EDWARDS: So we -- we -- we can, yeah, 4 scan and take care of it for record purposes later. But 5 in the interests of time, why don't we go ahead and keep 6 moving forward. 7 MS. SAND: Agreed. 8 THE WITNESS: Okay. 9 BY MR. EDWARDS: 10 Q. Okay. So now we -- now we get to Exhibit 28, 11 which you apparently have two of. 12 A. Yeah. I have two of them. 13 Q. And -- and this begins with the Bates number 14 718. And it's a -- an email from you to Nate Malone and 15 Jan Hawn. And it says, "Here are our responses to 16 possible TracFone objections." 17 (Exhibit No. 28 marked.) 18 BY MR. EDWARDS: 19 Q. "As you can see, we believe their objections are 20 not that strong..." And it reflects a doc -- an 21 attachment titled TracFone Renton Outline Response. Do 22 you see that? 23 A. It's all marked out. 24 Q. And then -- yeah. But up at the top, where it 25 says "Attachments," do you see where it describes the In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 187 1 attachment as a Word document, TracFone Renton Outline 2 Response.doc? 3 A. Okay. Uh-huh. Yeah. 4 Q. Okay. And the -- and you write -- then when you 5 go to page 713 -- so pages 713 through 717 are a 6 multi-page document that says, "Renton-Outline" at the 7 top, but the entire -- 8 A. Right. 9 Q. -- of it has been redacted? 10 A. Right. 11 Q. Do you know why this was -- any of that was 12 redacted? 13 A. Not that I know of at -- right off the top of my 14 head. 15 Q. Okay. 16 A. No, I don't. 17 Q. How did you -- how did you come to be aware of 18 TracFone's possible objections? 19 A. Well, first of all, I think dealing with 20 TracFone, we've dealt with a lot of different items 21 with, you know, talking with them back and forth about 22 things that they believe are taxable or not taxable. 23 And so, that's initially what I can -- I can think of. 24 I don't know if -- 25 Q. And -- and -- and based on your prior testimony, In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 188 1 there are going to be emails where TracFone has, in 2 writing, by email, identified those objections to you? 3 A. That I can't be for sure. I might have sent 4 some that said -- or they might pose this or that. But 5 as far as, for sure, exactly where I got the objections, 6 I'd have to take a -- I'd have to -- I don't remember 7 exactly where they got them from. 8 Q. Is it possible that they came -- is it possible 9 that they came from a memo that I wrote to another city 10 with respect to an audit you were conducting of 11 TracFone? 12 A. That I don't -- I'd have to -- I don't know for 13 sure. I'd have to -- you know, I'd have to ask that. 14 And maybe ask Ms. Crisp also if that might have been the 15 case. I don't remember. But we can -- yeah, so... 16 MR. EDWARDS: Well, let's go then to Exhibit 17 29. And that does not have any Bates numbers on it. 18 It's a printout of a Word document that was received 19 from Ms. Sand's office in electronic form as a Word 20 document. 21 (Exhibit No. 29 marked.) 22 THE WITNESS: Okay. 23 MR. EDWARDS: And it's titled at the top, 24 "Renton-Outline." Does the court reporter have that 25 document? In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 189 1 Okay. Good. 2 BY MR. EDWARDS: 3 Q. Do you recognize Exhibit Number 29? 4 A. Right now, I rep -- I recognize the response... 5 (Reviews exhibit.) 6 Yeah, I feel like a lot of it came from the 7 Washington State court case, and then some RCWs. 8 Q. Does it appear to you to be the document that is 9 the attachment to Exhibit 28, where the PDF copy is 10 fully redacted? 11 A. That I don't know. 12 Q. Can you spend a minute and compare the layout of 13 Bates page 713 on Exhibit 28 to the first page of 14 Exhibit 29? 15 A. Okay. What do you want me to compare? 16 Q. If you go back to Exhibit 28 -- 17 (Inaudible due to crosstalk.) 18 BY MR. EDWARDS: 19 Q. -- and compare it to page 713. 20 A. Okay. 21 Q. And then, put that beside the first page of 22 Exhibit 29. 23 A. Okay. 24 Q. Okay. 25 (Inaudible due to crosstalk.) In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 190 1 BY MR. EDWARDS: 2 Q. They both have the same title; correct? 3 A. Yeah -- 4 Q. And if you look at the pattern of the -- of the 5 redacting -- 6 A. Yeah, it looks like -- it looks like it's the 7 same. 8 Q. It appears to match exactly with the layout of 9 the text on Exhibit 29. 10 A. Right. It appears to, uh-huh. 11 Q. Was Exhibit 29 prepared by TRS? 12 A. I believe so. 13 Q. Did you draft Exhibit 29? 14 A. I don't think I did. I think Ms. Crisp did, but 15 I'm not -- I can't remember for sure. It's been -- 16 you're talking about a long time ago. 17 Q. If she drafted it, did you review it to ensure 18 that it was accurate before you sent it to the City 19 of -- of Renton? 20 A. I'm sure I took a look at it and reviewed it. I 21 didn't cite everything, but I probably reviewed it. 22 Q. And are you the president of TRS? 23 A. (Laughter). Yes -- yeah, I am. 24 Q. The 98 percent shareholder? 25 A. Yeah. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 191 1 Q. And you're responsible for the quality of the 2 work product that TRS produces? 3 A. Yes, I am. And I don't see anything wrong with 4 the quality of these. 5 Q. And -- and in that capacity, one of your roles 6 would have been to review this for accuracy? 7 A. Yes. I would take a look at it and review it 8 and take, you know, and read through it. But at the 9 same time, of course, if City of Renton had any -- any 10 questions and then, of course, they could always get 11 back to me too. 12 Q. During the -- the deposition today, you've 13 repeatedly made reference to statutes in -- titled 35A 14 RCW. 15 A. Uh-huh. 16 Q. But this document, instead, is referring to RCW 17 35 without the A. 18 A. Right. 19 Q. Do you know what the difference is between those 20 two sets of statutes? 21 A. Yeah, I don't -- I don't remember exactly the 22 difference. I think they were similar, but I don't 23 remember exactly the difference. 24 Q. Are you familiar with the difference between 25 charter cities and code cities? In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 192 1 A. Yeah. 2 MS. SAND: I -- I hold on. I object to the 3 extent that calls for a legal conclusion. 4 BY MR. EDWARDS: 5 Q. You can answer the question. 6 MS. SAND: Go ahead and answer, Mr. Crisp. 7 THE WITNESS: Okay. Well, to my 8 understanding, of course the code city is usually a 9 larger city. Not necessarily, but it has a code that 10 they've set up, that they've been allowed to actually 11 implement for their particular city as a code city. And 12 those are the ones we -- we -- we deal with versus -- I 13 think that's the only cities that we really have dealt 14 with are cities that have codes versus charter -- I 15 can't tell you for exactly sure what a charter city is. 16 BY MR. EDWARDS: 17 Q. And then, the second part here, this is a 18 quotation of an excerpt from the -- the Renton tax code? 19 A. Let's see. And where are you right now? 20 Q. I'm on the first page of -- of Exhibit 29, right 21 in the middle. There's a -- a heading. It says, "RMC 22 5-11-1 UTILITY TAX." 23 A. Okay. Just one sec. I'm wondering if I've 24 got... okay. And what's the number down at the bottom 25 of your -- In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 193 1 Q. There is no number. This -- this is the 2 Renton-Outline text. 3 A. Hmm. Just one sec. 4 Q. It's a -- it's a four- or five-page Word 5 document. It's the only one that you have that has 6 yellow highlighting on it. 7 A. That's not it. Just one sec. Not seeing that 8 one. 9 Q. We were just comparing -- 10 A. Yeah. 11 (Inaudible due to crosstalk.) 12 BY MR. EDWARDS: 13 Q. -- redacted language to the first page of it. 14 A. And what number is that, that we were comparing? 15 Was that number -- 16 Q. We were comparing to Exhibits 28 and 29. 17 A. Okay. 18 Q. Exhibit 28 is all redacted and has Bates numbers 19 at the bottom. Exhibit 29 has no Bates numbers on it, 20 and has yellow highlighting. 21 A. I can't seem to... okay. Okay. I have it now. 22 It's -- it has no -- yeah, Renton-Outline. Okay. Go 23 ahead. 24 Q. Okay. 25 So in the middle of the first page, there's a In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 194 1 reference to "RMC 5-11-1 UTILITY TAX"? 2 A. Right. 3 Q. Is that Renton Municipal Code? 4 A. Right. 5 Q. And what follows from that is a -- is a 6 cut-and-paste excerpt of the text of -- part of the text 7 of the Renton Municipal Code? 8 A. Okay. 9 Q. Is that correct? 10 A. Is that -- let me see. You mean where it says, 11 "TELEPHONE BUSINESS"? 12 Q. The whole -- everything from "RMC 5-11-1 UTILITY 13 TAX" down till you get the heading "A. Possible TracFone 14 Objections," that entire part is all -- a -- simply part 15 of the text of that code. 16 A. Okay. 17 Q. Correct? 18 A. Right. Looks like it. Okay, uh-huh. 19 Q. Okay. 20 A. Yes. 21 Q. Do you know why the -- the phrase "providing by 22 any person of access to the local telephone network" is 23 highlighted? 24 A. At that point, you know, we see it as a 25 telephone business, you know, that's what they do. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 195 1 They're providing access to local telephone networks. 2 And I think that's the only reason why we highlighted 3 it, yeah, is that reason. 4 Q. And then, below, it says: TracFone has claimed 5 in the past that they do not need to pay any taxes 6 because they are not required to pay for tax service 7 purchased for the purpose of resale. 8 A. Yes, I see that. 9 Q. And then it indicates that TracFone cited to 10 this particular statute, and an exclusion from that 11 statute from charges to another telecommunications 12 company. 13 A. Right. 14 Q. You see that? 15 A. Yes, I see that. 16 Q. Where did you learn about TracFone's claim with 17 this degree of specificity? 18 A. Right, that they didn't have to pay taxes? 19 Q. Well, citing this -- these particular statutes 20 and these particular phrases, where did that come from? 21 A. That I don't remember, to be honest with you. I 22 know Ms. Crisp worked on quite a bit of it, but I don't 23 remember exactly where she got the information. 24 Q. Did you ever receive anything from me with that 25 kind of information in it? In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 196 1 A. I don't think so. 2 Q. In fact, you haven't received anything from me 3 in connection -- 4 A. No. 5 Q. -- with this audit -- 6 A. No. 7 Q. -- have you? 8 A. No. 9 Q. And did you receive anything from TracFone with 10 this information on it? 11 A. I don't think so, no. 12 Q. You received this information from another city 13 for whom you're conducting an audit of TracFone, didn't 14 you? 15 A. I can't say for sure. I'd have to ask Ms. Crisp 16 if that was the case or not, so I would have to verify 17 if that came from that or -- right now... oh, I'd have 18 to look at that and verify it. 19 Q. Okay. 20 A. Or have her look at it. 21 Q. Okay. 22 Did she draft the -- and you think that she -- 23 she was the author of this document; is that correct? 24 A. Pretty much drafted, I believe. 25 Q. Okay. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 197 1 A. I... 2 (Reviews exhibit.) 3 Q. In the conduct of your audit of TracFone, did 4 you ever analyze whether TracFone was engaged in the 5 business activity of providing network telephone 6 service, as defined by the RCWs? 7 A. Okay. As far as their activity, did I actually 8 go to the code and -- and look at the code and said, 9 yes, they're -- they're doing that activity? 10 Q. Yes. That's the question. 11 A. That I don't know. I don't -- I don't -- I 12 don't know to be sure. I may have, may have not. I 13 don't know. I don't remember. We -- we go through 14 the -- 15 Q. If you had done that, would you have created any 16 work product reflecting that analysis? 17 A. I -- I don't remember that. I don't remember if 18 we would or wouldn't. 19 Q. If you had created any work product, would you 20 have maintained a record of it? 21 A. Of that product? 22 Q. Of -- of your analysis of -- 23 (Inaudible due to crosstalk.) 24 BY MR. EDWARDS: 25 Q. -- TracFone's, business activities -- In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 198 1 (Inaudible due to crosstalk.) 2 BY MR. EDWARDS: 3 Q. -- meet the statutory definition? 4 A. Probably not. Not that I know of. 5 Q. What is your understanding about whether a 6 company must be in the business of providing network 7 telephone service in order for a city to have the 8 statutory authority to impose a local telephone utility 9 tax? 10 A. At that point, the authority comes from the 11 RCWs, which we -- which is mentioned here, and as far as 12 giving them the authority to actually -- to tax in that 13 -- that manner. 14 Q. What is your understanding about what the RCWs 15 authorize? 16 A. Okay. They authorize the tax -- 17 MS. SAND: Wait -- wait, Mike. 18 Again, objection to the extent it calls for 19 a legal conclusion. 20 Go ahead and answer. 21 THE WITNESS: Okay. That basically would -- 22 what it states, on any code city which imposes a license 23 that they can actually tax that activity. RCW 24 35A.82.060. 25 BY MR. EDWARDS: In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 199 1 Q. That's not the question that I asked you. 2 A. Okay. What's your question again? 3 Q. So please listen carefully. 4 A. Okay. 5 Q. Do you have an understanding as to whether a 6 company must be in the business of providing network 7 telephone service as defined by statute in order for the 8 City to be authorized to impose a local util -- 9 telephone utility tax? 10 A. Okay. As far as -- as far as the network 11 telephone services, I believe I do understand that they 12 do have the -- the authority to actually tax that 13 activity with them as far as the network telephone 14 activity that -- that they are providing. 15 Q. Does the telephone utility tax apply to anything 16 except for network telephone service? 17 A. I think just except network telephone service, I 18 believe. I think that it's -- I think that's what it 19 says -- states. 20 Q. So is it your understanding that if a company is 21 not in the business of providing network telephone 22 service, it is not subject to utility tax? 23 A. Well, at that point, it depends. You know -- 24 Q. That's a yes-or-no question. 25 A. Say it one more time. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 200 1 Q. It's a yes-or-no question. 2 (Inaudible due to crosstalk.) 3 MR. EDWARDS: Can you please read the 4 question back? 5 THE WITNESS: Yeah. 6 MR. EDWARDS: Court reporter's going to read 7 the question back. I want to -- I want a yes or a no. 8 THE WITNESS: Okay. 9 (Question was read back.) 10 THE WITNESS: Providing network telephone 11 services, they are not... I -- I -- I still believe, 12 yes, yes, they would. 13 BY MR. EDWARDS: 14 Q. Let's try again. You -- you agree that if a 15 company is providing network telephone service, that's 16 an activity that's subject to utility tax; correct? 17 A. Yes. 18 Q. Are there any other activities that are subject 19 to telephone utility tax? 20 A. Any other activity that identifies them as a 21 telephone business, at that point, I would say it would 22 be taxable. 23 Q. What's the difference between a telephone 24 business and providing network telephone service? 25 A. Business actually, at that point, is -- In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 201 1 Q. Hold on. Ms. Sand wants to make an objection. 2 A. Okay. 3 MS. SAND: Thank you, Scott. Sometimes I 4 can't get a word in edgewise. 5 THE WITNESS: Sorry. I get fast. Sorry. 6 MS. SAND: Again, objection to the extent it 7 calls for a legal conclusion. 8 Go ahead and answer. 9 THE WITNESS: Okay. Well, what's the 10 difference between a -- a telephone network services and 11 telephone business, did you say? 12 BY MR. EDWARDS: 13 Q. What's -- yeah. What is the difference between 14 a telephone business and the business of providing 15 network telephone service? 16 A. Okay. The telephone business, at that point, is 17 actually setting it up where you're providing 18 telephone -- telephone communication services to -- to 19 your customers. Whereas, telephone network services 20 actually -- I can't re -- how to say it -- provides 21 access -- access to the customer. 22 Q. If we look to the first page of Exhibit 29, in 23 about the middle of the page, part of the excerpt of the 24 City code -- 25 A. Uh-huh. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 202 1 Q. -- you'll see the word "telephone business" in 2 all capital letters. Do you see that? 3 A. What page? 4 Q. The front page of Exhibit 29. 5 A. Okay. 6 Q. The one that has the yellow highlighting that 7 we've been looking at. 8 A. Right. Uh-huh. Right. (As read): Provide 9 access to local -- 10 Q. Do you see that, where "telephone business" is 11 in all caps? 12 A. Right. Uh-huh. 13 Q. Is that the -- the code's definition of 14 telephone business? 15 A. I believe it is. 16 Q. Okay. Did you make any effort to determine 17 whether the business activities engaged in by TracFone 18 fall within the definition of telephone business in the 19 City's tax code? 20 A. Well, as far as what they do, as far as 21 providing telephone services, I said, yes, we believe 22 that they're -- they're -- they're conduct -- they're -- 23 they're -- they're -- they're under that -- under that 24 form. 25 Q. What is the basis for your belief? In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 203 1 A. Okay. Basically, once again, that they are 2 providing telephone services to -- to their customers. 3 Q. And how did you make that determination 4 factually? 5 A. At that point, then, we asked for TracFone to 6 provide us with ZIP Codes. We provided them with ZIP 7 Codes for City of Renton. And at that point, we asked 8 them to provide information concerning those ZIP Codes. 9 And -- and that they provided it to us. 10 Q. How does revenue number about ZIP Codes tell you 11 anything about what business activity they're engaged 12 in? 13 A. Well, at that point, of course, we -- they asked 14 as far as usage. And the primary usage is what we're 15 looking at. And so at that point, when -- when a 16 person, a customer, buys the -- the handset -- and at 17 that point, they do provide a serial number, and they 18 provide the ZIP Code for it. And at that point, the 19 primary use is -- is what we went by. 20 Q. Does anything that you just said have anything 21 to do with the -- whether TracFone's business activity 22 meets the definition of telephone business in the 23 ordinance? 24 A. As far as I can tell, it looks like, you know, 25 to me they're buying access to local telephones, In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 204 1 providing cus- -- providing their customers with 2 telephone access or ability to use their phone service. 3 So that's what I would say. But like I said before, I 4 think to ask Ms. Crisp on this to be sure where -- where 5 this came from. 6 Q. If we can go to the next page, which talk -- 7 talks about response. 8 A. Okay. 9 Q. It says the telecommunications company referred 10 to here is whoever TracFone is buying the service from? 11 A. Okay. 12 Q. AT&T, T-Mobile, or whoever? 13 A. Okay. Yeah. 14 Q. How does -- this is talking about sales to 15 another telecommunications company. Why -- why is this 16 response talking about purchases from somebody else, 17 rather than sales to? 18 A. (As read): Telecommunications company referred 19 to here is whatever TracFone is buying the service from: 20 AT&T, T-Mobile. 21 Because basically those companies or other big 22 companies are basically selling the airtime to TracFone. 23 And at that point, then, of course TracFone is then 24 allowing that to be given out to their -- provided to 25 their customers. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 205 1 Q. Whose cell towers are used for calls made with 2 TracFone airtime cards? 3 A. That I don't know. I mean, there could be 4 several companies they could be using. But to my 5 understanding, at least we can -- I think the -- the -- 6 the deal -- the -- I'm not so sure. I don't know 7 what -- what cellphones they actually use. I know 8 they -- 9 Q. Does AT&T have cellphone towers? 10 A. I would think they would. 11 Q. Do you know whether they do or not? 12 A. I believe they would. They do in the State of 13 Washington. 14 Q. Okay. Do you -- do you have any personal 15 knowledge about whether they do or don't? 16 A. As far as personal knowledge, as far as whether 17 they do or don't, no. 18 Q. Do you know whether or not T-Mobile has any 19 cellphone towers? 20 A. I believe they do. I think I have read that. 21 Q. Okay. Do you know whether or not TracFone has 22 any cellphone towers? 23 A. No. They -- they said they didn't have any 24 cellphone towers. 25 Q. Is it -- is that a relevant distinction that In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 206 1 TracFone doesn't have any cellphone towers? 2 A. At this point, as far as cellphone towers, not 3 really. I don't think so. 4 Q. Why not? 5 A. Well, because at this point, with them selling 6 their -- their air -- per the code, I think 80 -- 80.04, 7 to my understanding, as far as what they do, it doesn't 8 matter whether they have a -- a -- a tower or not. The 9 fact is -- is -- is that -- it -- it's what they're 10 doing. And the tower is -- is not -- actually -- have 11 to actually have a tower to be taxed. 12 Q. Point number 2. I'm on the -- still on the 13 second page of Exhibit 9 in the -- 29 in the response. 14 It says: Since TracFone is widely acknowledged as a 15 telecommunications provider. 16 What is the basis for the statement that 17 TracFone is widely acknowledged as a telecommunications 18 provider? 19 A. Well, at this point, as far as looking at the -- 20 the Internet, and looking at what they do, and reading 21 up quite a bit on Internet, and reading about what their 22 company does, and also their advertisement that I hear. 23 Q. What is your understanding of what makes 24 somebody a telecommunication provider? 25 A. As far as the company, it's their -- it's their In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 207 1 business that they actually are -- are setting up the 2 ability for their customers to -- to receive network 3 telephone business. 4 Q. What do you mean by the ability to receive? 5 A. Well, the ability to use, you know, their -- 6 their -- their communication, to be able to use their 7 phone to be able to actually communicate, using their -- 8 with their -- their headset, and that kind of thing. 9 Q. And you say: According to Bloomberg, quote, 10 TracFone Wireless, Inc. provides prepaid phone services. 11 What does this mean? 12 A. So you're looking at prepaid phones, as far as 13 what they actually -- they actually go and they actually 14 pay upfront. And then they use the -- the airtime that, 15 how much airtime they buy, 30 minutes, 90 minutes, what 16 have you. 17 Q. What does it -- what does it mean to provide 18 prepaid phone service? What's the significance of that 19 word? 20 A. They provided to be able to have access to be 21 able to -- be able to use those phones at that point. 22 Because basically it -- it's actually the -- it's -- 23 it's -- it's a big company, like AT&T, T-Mobile, 24 whoever. Like you said before, it's actually selling 25 the airtime to that -- to TracFone, then TracFone turns In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 208 1 it around and then provides the ability for that -- for 2 that customer to -- to have communications. 3 Q. Is the term "telecommunications company" defined 4 in the RCWs? 5 A. I believe it is. 6 Q. And -- and in fact, if we look on page 1, it 7 indicates that "telecommunications company" is defined 8 in RCW 88.04.010? 9 A. Right, 80.04. 10 Q. As part of TRS's audit of TracFone, did TRS make 11 a determination about whether or not TracFone met the 12 statutory definition of telecommunications company? 13 A. What page are you on? Where -- where are you 14 at? 15 Q. We were just looking on the first page of 16 Exhibit 29. 17 A. Okay. And where -- 18 Q. Near the bottom. 19 A. Okay. 20 Q. Okay. 21 (Inaudible due to crosstalk.) 22 BY MR. EDWARDS: 23 Q. -- possible TracFone exemption [sic]? 24 A. Right, uh-huh. 25 Q. Okay. And on the third line of that first In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 209 1 paragraph -- 2 MS. SAND: It said objection, not exemption. 3 Objection. 4 MR. EDWARDS: Possible objection, yes, 5 you're correct. 6 BY MR. EDWARDS: 7 Q. The -- the -- the -- the key thing I was 8 focusing on is, there's a reference to another 9 telecommunications company. 10 A. Right. 11 Q. And then it cites RCW 84.04.010 as the statute 12 that defines the term "telecommunications company". 13 A. Right, uh-huh. 14 Q. Okay. 15 So you -- you understand that RCW 80.04.010 16 defines what a telecommunications company is for 17 Washington tax purposes; correct? 18 A. Okay. I would also -- that -- that's part of 19 it. But I do also believe that the RCW 35A and 35 and 20 also RCW -- what is it? 82.16 also comes into play. 21 Q. Okay. That -- that -- that very well may be. 22 But right now we're -- I've got a very -- more limited 23 question to you. 24 A. Okay. 25 Q. And that is: Did TRS, in its conduct of the In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 210 1 audit of TracFone, make a determination about whether or 2 not TracFone falls within the statutory definition of 3 being a telecommunications company -- 4 A. Uh-huh. 5 Q. -- as defined by RCW 80.04.010? 6 A. We believe that they -- they do. 7 Q. Mr. Crisp, the question that I asked you is not 8 your analysis. It's whether you did the work of making 9 a determination. You either made a determination, or 10 you did not make a determination. 11 A. Okay. 12 Q. I'm asking you a yes-or-no question. Did you 13 make a determination about whether they met the 14 statutory definition? 15 A. Okay. Yes. 16 Q. Okay. What was your determination? 17 A. Our determination was -- like I said, was from 18 the different RCWs that I just mentioned to you. 19 Q. I -- I'm asking you about the application of a 20 specific RCW that defines a specific term, and whether 21 or not you concluded that that specific statutory 22 definition applied. 23 A. Again -- 24 Q. You've indicated that you did make the 25 conclusion -- In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 211 1 A. We believe that -- 2 Q. -- they were a telecommunications company under 3 a specific statute -- 4 A. Right. 5 Q. -- is that correct? 6 A. Right. Different statute. 7 Q. What was the basis for making that conclusion? 8 A. More than one statute. 9 Q. I'm only asking you about the one statute that 10 defines telecommunications company. It's a defined 11 term. 12 A. Right. Well, right now -- 13 Q. This is whatever the legislature says it means; 14 correct? 15 A. Right. 16 Q. What was your basis for concluding that the 17 legislature's definition of telecommunications company 18 applies to TracFone? 19 A. Like I said before, they are providing access to 20 intrastate local companies, that -- as it states here, 21 local troll -- trolls -- telephone services, and they 22 provide access. So I don't know what else -- 23 Q. Is that part of the statutory definition of a 24 telecommunications company in 80.04.010? 25 A. That's one of them, uh-huh. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 212 1 Q. Let's move to the next page, right in the 2 middle, B. Possible TracFone Exem -- Objection. 3 MR. EDWARDS: Caught myself this time, Kari. 4 (Laughter). 5 THE WITNESS: Okay. 6 BY MR. EDWARDS: 7 Q. It says: Another way that TracFone has claimed 8 during this audit that they do not owe any taxes, 9 charges for network telephone service, is to claim -- 10 claim that they -- that when they sell through companies 11 such as Target, they simply sold the network telephone 12 service to companies who are reselling the telephone 13 service. 14 A. Okay. 15 Q. You see that statement? 16 A. Yes. 17 Q. Where did TRS learn that that was a claim being 18 made by TracFone? 19 A. Just one second. 20 (Reviews exhibit.) 21 Okay. Tell you what. Just one sec. 22 MR. EDWARDS: Kari, your typing is actually 23 fairly loud. 24 MS. SAND: My apologies. 25 MR. EDWARDS: Oh, no worries. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 213 1 THE WITNESS: (Reviews exhibit.) 2 Oh, I think they actually -- I think that 3 was discussed in an that email, that -- that they 4 basically sell stuff through stores, and that give 5 stores the percentages. It's about 80 -- 80 percent or 6 so is actually sales, or we call indirect sales, by 7 Target, if I remember correctly. I think they told us 8 that. 9 BY MR. EDWARDS: 10 Q. Is it possible that instead it came from a memo 11 that I submitted to a city attorney in another city? 12 A. Right now, it's possible. That's why I'd like 13 to talk to Ms. Crisp to -- to make sure one way or 14 another, did this come from that or -- or -- or not. 15 Q. Okay. And if we look in the inset quote from 16 RCW 35.21.714 -- 17 A. Uh-huh. 18 Q. -- it starts (as read): The City shall not 19 impose the fee or tax on that portion of network 20 telephone service which represents -- and then the 21 phrase "charges to another telecommunications 22 company" -- 23 A. Right. 24 Q. -- is highlighted. Do you see that? 25 A. Uh-huh. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 214 1 Q. So is it your understanding that this statute 2 prohibits cities from taxing revenue that are charges 3 from other -- to another telecommunications company? 4 A. To my understanding is that you can't tax both. 5 So if, for instance, AT&T is -- is actually selling 6 airtime, at that point, you know, we can't tax -- you 7 know, you can't tax AT&T and TracFone for the same 8 activity. 9 Q. Okay. This -- this is a specific provision 10 that, if you fall in with -- to this category of charges 11 to another telecommunications company, the statute says 12 you can't tax that; correct? 13 A. Right. What do you consider another -- 14 Q. It's my deposition, not yours. 15 A. Okay. I'm sorry. Okay. 16 Q. Yeah. The -- if we go down further, there's a 17 second phrase that is highlighted in yellow. 18 A. Right. 19 Q. It says, "charges for network telephone service 20 that is purchased for the purpose of resale". Do you 21 see that? 22 A. Right. Right. I sure do. 23 Q. That's a separate additional prohibition, isn't 24 it? 25 A. (Reviews exhibit.) In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 215 1 Yes. 2 Q. Are you familiar with the concept of sale for 3 resale? 4 A. Yes, I've -- 5 (Inaudible due to crosstalk.) 6 BY MR. EDWARDS: 7 Q. And in your experience as a Tacoma auditor, did 8 you deal with distinguishing between retail sales and 9 sales for the purpose of re -- resale? 10 A. As far as B&O tax, but not for utility company. 11 Q. And you know what a sale for the purpose of 12 resale is; correct? 13 A. Right. Basically, yeah, you're -- you're -- 14 Q. And isn't it correct -- 15 (Inaudible due to crosstalk.) 16 BY MR. EDWARDS: 17 Q. -- that that's a wholesale sale? 18 A. Retail to wholesale. Yeah. Go ahead. What 19 were you going to say? 20 Q. I'm sorry. We were talking over each other 21 there. 22 A. Okay. Okay. 23 MR. EDWARDS: Was the court reporter able to 24 get that, or did we talk completely over each other? 25 Yeah. We -- let me try to start again. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 216 1 BY MR. EDWARDS: 2 Q. Isn't it true that a sale for the purpose of 3 resale is a wholesale sale? 4 A. That basically -- as far as the purpose of a 5 sale -- of a retail sale to someone else, at that point, 6 for them to sell -- resell that to another person, I 7 would say, yes, you're -- you're taking something from 8 retail, you're selling that to -- to a person. That 9 person then turns around and then wholesales it out to 10 somebody else. 11 Q. Are you familiar with a -- what a resale 12 certificate is? 13 A. I've seen them, uh-huh. 14 Q. But have you ever -- have you ever dealt with 15 them at all in any audits? 16 A. Not -- not for a utility tax. And I can't 17 remember for B&O. 18 Q. And -- and your -- your experience with respect 19 to B&O audits have been for city B&O? 20 A. Correct, city B&O, uh-huh. 21 Q. And cities don't collect sales tax, the sales -- 22 the city portion of sales tax is reported to the 23 Washington State Department of Revenue rather than to 24 the city; is that correct? 25 A. That's dealing with sales tax, but -- but to In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 217 1 my -- yeah, so, not dealing with sales tax. 2 Q. So when you were -- when you were an auditor for 3 the City of Tacoma, you didn't have any experience 4 auditing whether sales tax had been properly collected; 5 correct? 6 A. No. 7 Q. That's done by the State? 8 A. Right. 9 Q. Are you familiar with what a reseller permit is? 10 A. Okay. I haven't heard that exact term. No, I 11 haven't. Resell permit. 12 Q. Are you aware that beginning in 2010, the 13 Washington Department of Revenue changed from using 14 resale certificates to reseller permits? 15 A. No. 16 Q. In response, at the bottom of the page, Item 17 Number 1, it says, "TracFone is not selling 18 telecommunications to companies such as Target for 19 resale." Do you see that? 20 A. What page -- are you on the first page still? 21 Q. I'm on the same page we've been on, page 2. 22 A. Okay. 23 Q. The second page. I'm just a little bit further 24 down. 25 A. Okay. Now where are you reading? In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 218 1 Q. Response -- 2 A. Okay. Responses. I see that. 3 Q. Number 1. 4 A. Yeah, I see it now. 5 Q. "TracFone is not selling telecommunications to 6 companies such as Target." In the highlighted language, 7 from the statute, it says, "charges for network 8 telephone service that is purchased for purposes of 9 resale." 10 A. Okay. Where are you? 11 Q. The highlighted language that we were just 12 looking at. 13 A. Okay. Charges to another tele -- telecom -- 14 Q. No, no, the second highlighted provision. 15 A. "Charges for network telephone service that 16 is" -- 17 Q. Okay. 18 So -- and I'm looking at the -- the statute 19 says, "Network telephone services." And the response 20 says, "telecommunications". 21 A. Okay. 22 Q. My question is: Are those the same thing, or 23 are they different? 24 A. (Reviews exhibit.) 25 I think they're -- they're the same thing. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 219 1 Q. Okay. Why were two different words used then? 2 A. Charges for telephone -- for network telephone 3 services, as purchased for the purpose of resale. And 4 let's see, "TracFone is not selling communications to 5 companies such as Target for resale." So... 6 (Reviews exhibit.) 7 Because at that point, you have Target -- you 8 have -- Target is not the one actually -- 9 Q. That -- I'm asking why there's two different 10 words being used here, if they mean the same thing. 11 A. Charges for network telephone services? I 12 mean -- 13 Q. The statute uses the phrase, "Network telephone 14 service," and the statute defines what that means. 15 A. Right. 16 Q. But the response uses the -- the word, 17 "telecommunications," which is not something that's 18 defined in the statute. And I'm trying to understand 19 why the analysis about whether the statute applies uses 20 language different from the statute that is being 21 analyzed. 22 A. The network -- network -- network telephone 23 services is actually where you're basically setting up 24 the ability to actually... you know, provide access to, 25 you know, to a -- to a person. As far as I can tell -- In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 220 1 Q. Mr. Crisp, do you understand the question that 2 I'm asking you? 3 A. I totally do, to be honest with you. 4 Q. Okay. 5 Let me -- do you understand that the phrase, 6 "network telephone service" is defined in the statute? 7 A. Yes, I do. 8 Q. Okay. 9 A. Matter of fact, it's -- 10 Q. Okay. And the statute uses that defined term in 11 describing what cities are prohibited from taxing; 12 correct? 13 A. Right. And -- and basically network telephone 14 services -- like I said, access to a telephone network. 15 Q. Okay. 16 So when the response would have -- uses the word 17 "telecommunications," I'm trying to understand whether 18 "telecommunications" is -- means something different 19 than the defined statutory term, "network telephone 20 service," or whether it's intended to mean the same 21 thing. Why -- why not use the defined term? And why is 22 it being replaced with other language? 23 A. Okay. Because you have, you know, one -- one 24 company is actually, at least what I could tell, is 25 actually just providing, you know, the ability, like -- In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 221 1 like -- like an AT&T, is actually providing the ability, 2 selling airtime to TracFone. 3 And then at that point, you've then got the -- 4 the situation where -- and so you have the network 5 telephone service going on there. And then, at the same 6 time, then they turn back around and then they sell it 7 to TracFone. And then at that point, they -- 8 Q. But, so when -- when I read this, I should 9 understand that the statutory term, "network telephone 10 service," was replaced with the word 11 "telecommunications" to mean that there's a difference 12 between AT&T and TracFone? 13 A. Yeah, I think so. But like I said, I -- I -- 14 I -- I would still like to talk to Ms. Crisp, you know, 15 see where we got this from, because -- yeah. 16 Q. Got you. 17 And the next bullet point says, "... companies 18 such as Target are purchasing and selling cards..." You 19 see that? 20 A. Number 2, uh-huh. 21 Q. Number 1, the bullet right beneath it. 22 A. Right. "Cards purchased in the indirect way 23 have the TracFone name..." Okay. 24 Q. No. We're not looking at the same thing. 25 A. Okay. Where are you at right now? In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 222 1 Q. I am on the bullet immediately beyond -- 2 underneath Number 1 that we were just talking about. 3 I've only moved down one line. 4 A. Okay. 5 MS. SAND: Look at the bullet point above 6 the one you were just looking at, Mr. Crisp. 7 THE WITNESS: Okay. Yeah. (As read): 8 These companies, such as Target -- and it has: Cards 9 purchased in this indirect way. 10 BY MR. EDWARDS: 11 Q. The bullet point above. I -- I don't see -- the 12 bullet point above that, where you see the -- see 13 "Companies such as Target"? 14 A. (Reviews exhibit.) 15 Okay. 16 MS. SAND: Mr. Crisp, you were looking at 17 the right one. 18 THE WITNESS: Right. These, I mean... 19 MS. SAND: Read it out loud. 20 THE WITNESS: (As read): TracFone is not 21 selling telecommunications companies such as Target for 22 resale. 23 Okay. Now, which bullet are you looking at? 24 BY MR. EDWARDS: 25 Q. The one immediately below that, the very next In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 223 1 line. 2 A. "These companies such as Target are purchasing 3 and selling cards which give the TracFone customer 4 access to the telephone service which TracFone 5 provides." Yes, I agree with that. 6 Q. I'm not asking whether you agree. 7 A. Yeah, yeah, I know. 8 Q. I'm trying to get you oriented on it -- 9 A. Yeah, yeah. 10 Q. -- so I can ask you a question about it. 11 A. Yeah. Okay. Go ahead. 12 Q. Okay. 13 Okay. This describes companies, such as Target, 14 as purchasing and selling airtime cards; correct? 15 A. Right. 16 Q. Doesn't that reflect that they are purchasing 17 for the purpose of reselling? 18 A. As far as reselling the piece of plastic, yes. 19 Q. Next bullet, where you were going before, "Cards 20 purchased in this indirect way..." What do you mean by 21 "indirect way"? 22 A. Okay. Basically, as far as cards purchased in 23 the indirect way, we're looking at customer coming in 24 and buying that card from a retailer instead of calling 25 and going to TracFone directly and buying it. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 224 1 Q. The next bullet says, "Upon activation, the 2 customers also enter into a contract with TracFone." 3 A. Right, uh-huh. 4 Q. How did you make the determination that the 5 customers enter into a contract with TracFone? 6 A. Because what's on the back of the card. And 7 also, because that Washington State Department of 8 Revenue court case also. 9 Q. If we go to the -- the fourth bullet point. 10 A. Okay. 11 Q. It says, "Target acts as an intermediator for 12 TracFone." 13 A. Right. 14 Q. What does that mean? 15 A. So basically, what it means, as far as an 16 intermediator, it's just that Target is actually being a 17 go in between basically where they are providing the 18 ability of TracFone to sell their cards through their 19 store. And at that point, they're allowing them to 20 sell, you know, that card. 21 Q. Where does the word intermediator -- 22 intermediator come from? Is it in the Renton code? 23 A. No, I don't believe it is. 24 Q. Is it in any of the statutes? 25 A. No. It's a term that I threw out there, that I In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 225 1 know of, yeah. I could be wrong, but not that I 2 remember reading it. It may be there, but... 3 Q. Then it says, "Purchasing an access card is not 4 the same as purchasing telephone service." 5 A. Right, uh-huh. 6 Q. What was the basis for that statement? 7 A. Basically when you're purchasing an access -- 8 access card, it still is just a card. It's -- it's not 9 the same as purchasing -- 10 Q. What -- what evidence did you rely on in making 11 that statement? 12 A. Well, because of -- of calling Walmart for 13 one -- for one situation where basically they said, 14 We're simply selling a card for them. We're not -- 15 we're not providing telephone services. We're simply 16 selling a card for TracFone. 17 Q. And -- and -- and what was the name of the 18 officer of Walmart that -- that told you that? 19 A. I just talked to a person in their -- in their 20 department. Called up the electronics department and 21 asked, Can I talk to someone about your -- about your 22 prepaid cards. 23 Q. What day did you do that? 24 A. That I don't -- I don't remember the date. I 25 didn't write the date down. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 226 1 Q. Do you know that -- do you know whether Target 2 pays city utility taxes? 3 A. No. I -- I can't say. I've never talked to 4 City of Renton and asked them if Target pays utility 5 tax. No, I never asked them that. But they never asked 6 me to do an audit on -- on -- on Target neither, as a 7 telephone company. 8 Q. Let's move to the next page, where it -- 9 A. Okay. 10 Q. Actually -- yeah. Yeah. So now, the next page 11 that has, in the middle, in number 4 and the inset quote 12 with some more yellow highlighting from the State 13 Department of -- of Revenue case. 14 A. Okay. 15 Q. Just above that, paragraph 3 says, "There are 16 plenty of telephone utilities selling their cards 17 indirectly at these types of stores, and they are paying 18 city utility taxes on the revenues from these sales." 19 A. Yes. Yes. 20 Q. How do you know that? 21 A. Okay. We're just looking at the City of Renton, 22 you know, we've done other audits for the City of 23 Renton. And during those tele- -- telephone audits, 24 every one of them that we dealt with was paying taxes on 25 prepaid cards. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 227 1 Q. On -- when you say "paying taxes on prepaid 2 cards," but -- 3 A. Right, uh-huh. Selling their cards and -- and 4 doing basically -- 5 Q. So those -- other companies like TracFone make 6 sales of -- of cards directly to retail customers; 7 correct? 8 A. Right. And they also do it through stores. 9 Q. You keep saying, "through stores." They -- they 10 make sales to retailers; correct? 11 A. They sell -- they sell a piece of -- they sell a 12 piece of card that they -- that they use as access. But 13 go ahead, uh-huh. 14 Q. And they get money from that store; correct? 15 A. Right, just for that -- for that card, but not 16 for telecommunications. 17 Q. The -- the utility tax is based on the money 18 that a telephone company receives; correctly -- correct? 19 A. Right, but -- 20 Q. Okay. So are you saying that when Walmart pays 21 AT&T for an AT&T prepaid airtime card that Walmart 22 resells to somebody else -- 23 A. Uh-huh. 24 Q. -- that AT&T is paying Renton utility tax on its 25 sale to Walmart of that card? In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 228 1 A. Okay. As far as AT&T, basically, at that point, 2 I don't know what -- what -- what agreements they have 3 as far as AT&T using Walmart to -- to sell their cards, 4 you know, to customers so that they could get access to 5 telecommunications. 6 Q. So you don't know what AT&T is doing with 7 respect to how it treats that for utility tax purposes? 8 A. No. I can't -- I can't, as far as -- tell you 9 whether or not we did an audit on AT&T or not. 10 Q. Do you have personal knowledge that companies 11 that make sales of prepaid cards to retailers are paying 12 utility tax on the money that they are receiving from 13 the retailers? 14 A. Okay. Say that one more time. Say it one more 15 time. 16 MR. EDWARDS: Can you please read that back? 17 THE WITNESS: Yeah, read that back. 18 (Question was read back.) 19 THE WITNESS: As far as doing audits for the 20 City of Renton, yes, they were paying, different audits 21 that I conducted for the City of Renton. 22 BY MR. EDWARDS: 23 Q. On the income they're receiving from retailers? 24 A. No, they're receiving -- the income that we were 25 taxing is for the -- for the telecommunications, you In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 229 1 know, that -- that was being provided. 2 Q. Where -- where's that money coming from? 3 A. Okay. Well, as far as the -- the money itself, 4 the -- the money is actually, like I said -- I guess 5 we're using AT&T; right? So I guess we'll just use 6 AT&T. 7 So AT&T, to my understanding, actually sells -- 8 gives their cards to a Target, or what have you. Then 9 at that point, the Target then turns around and -- 10 and -- and -- and provides -- sells that card to someone 11 else. 12 Now, as far as the -- the money -- to my 13 understanding, as far as the -- the -- the money itself, 14 the airtime, what they're paying, that money is actually 15 going to -- to -- to AT&T, you know, just like TracFone. 16 They do the same thing. When they add on airtime, you 17 know, the money goes directly to TracFone. 18 Q. Still on this same page, but now up in 19 paragraph 2, at the top of the page. About the middle 20 of that paragraph it says, "Target may activate the 21 cards as a courtesy..." Do you see that? 22 A. Right. Uh-huh. 23 Q. What does mean? 24 A. Well, what that means is, they -- they have the 25 ability -- apparently some of them do, have the ability In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 230 1 to actually set up the -- open up -- open it up. 2 They're buying a handset. So to my understanding, at 3 that point, Target can also, I guess, use the handset, 4 also get the ZIP Code. And at that point, to my 5 understanding, they can actually activate it. But -- 6 but that's -- that's just as a courtesy. That's not -- 7 that's not Target actually selling telecommunications. 8 Q. What is the basis for your understanding? 9 A. As far as -- because TracFone, as I mentioned 10 before -- not TracFone, but retailer stores, like I 11 mentioned, Walmart, they're not providing telephone 12 services. 13 Q. How did you learn what you just described to me 14 happens at Target as a courtesy? 15 A. Okay. You mean as -- as an access? 16 Q. You just described a set of facts for me. I'm 17 asking you, how do you know those facts? How did you 18 learn that information? 19 A. Right, that one I would have to ask Ms. Crisp. 20 Like I said, she also did a lot of this, putting it 21 together. So -- so... 22 Q. So you don't know why you know or how you know 23 what you just described happens at a track -- at a 24 Target? 25 A. Okay. Not as a Target. But as far as Walmart, In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 231 1 like I said, I called them, talked to them, as far as 2 Walmart goes. And as far as Target goes -- 3 Q. Did the person you talked to at Walmart describe 4 this courtesy activation that you were just talking 5 about? 6 A. Not for Walmart they did not. And where are 7 you -- what page are you on right now? 8 Q. The same place we just were. This phrase, 9 "Target may activate the cards as a courtesy." 10 A. Right, uh-huh. 11 Q. I'm trying to understand where that information 12 came from. 13 A. Right. Like I said before, you know, we need to 14 ask Ms. Crisp to verify what -- where we got this, 15 and -- and we can go from there. 16 Q. Did Ms. Crisp ever have any conversations with 17 TracFone? 18 A. She -- we dealt heavily, as far as emails, going 19 back and forth. We do work together. And at that 20 point, you know, she -- in that -- in that aspect, she 21 has, yes. 22 Q. So do -- do you guys use the same email address, 23 or do you use -- 24 (Inaudible due to crosstalk.) 25 THE WITNESS: Same email address. Same In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 232 1 email address. 2 BY MR. EDWARDS: 3 Q. So is it possible that some of the emails that 4 come from that email address and -- and say -- and have 5 your name at the bottom were actually sent by her? 6 A. You know, well, what it is, there's a 7 possibility that, yes, I do sign off on emails at times 8 where she might have gotten information, and then I 9 would at that point agree with it, and then put my name 10 there and send it off. 11 Q. Let's move on to Exhibit 30 at this point. 12 A. Okay. 13 MR. DEGGINGER: Scott... 14 MR. EDWARDS: Yes. 15 MR. DEGGINGER: Can we take a short break? 16 MR. EDWARDS: Yes. Do you want to do five 17 minutes? 18 MR. DEGGINGER: Five minutes would be 19 perfect. Thank you. 20 THE WITNESS: Okay. Thanks. 21 (A break was taken 22 from to 3:50 p.m. to 4:03 p.m.) 23 (Exhibit Nos. 30-31 marked.) 24 BY MR. EDWARDS: 25 Q. Let's move now to Exhibit Number 30 is the next In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 233 1 envelope. 2 A. Okay. 3 Q. If you can open that, it's Bates number 722. 4 A. Okay. 5 Q. And do you have that in front of you? 6 A. Yes, I do. Let me read it. 7 Q. Do you recognize that as an email from 8 Mr. Malone to you on August 1st, 2018? 9 A. Right. 10 Q. Indicating that they've decided to hold off on 11 issuing the assessment, waiting for the court case? 12 A. Okay. "I think for now lets hold off on issuing 13 the assessment until potentially we get a result on the 14 court case. I do feel pretty comfortable with issuing 15 the assessment as their arguments are likely not going 16 to hold up in court." 17 Okay. I just read it. 18 Q. So -- and am I correct in understanding this is 19 a -- an email from the City asking -- asking you to hold 20 off issuing the assessment? 21 A. Yes. 22 (Inaudible due to crosstalk.) 23 THE WITNESS: Yes. 24 BY MR. EDWARDS: 25 Q. Do you know what court case is being referred to In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 234 1 there? 2 A. No, I don't, to be honest with you. I don't 3 know which one that he's referring to on that. 4 Q. Okay. And the date on this is... 5 A. August 1st, 2018. 6 Q. August 1st of 2018. I'm going to -- if you go 7 to Exhibit 31, the next envelope. 8 A. (Complies.) 9 Q. Do you have that document in front of you? 10 A. Okay. Yes, I do. 11 Q. Do you recognize that as a copy of the Court's 12 decision in the Springfield v. TracFone -- City of 13 Springfield, Missouri, v. TracFone case? 14 A. Yes, I do. 15 Q. And do you see where it reflects, in about the 16 middle of the page, that it was issued July 17th, 2018? 17 A. Okay. Yes, I do. 18 Q. Do you recall when you became aware of this 19 decision? 20 A. No, I don't. I don't remember exactly when I 21 found out about that one. 22 Q. Was this a decision that you were waiting for? 23 You were aware of the case and waiting for the decision? 24 A. I knew I was waiting for -- I knew -- I knew of 25 Springfield, and I knew that might have been one of In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 235 1 them. But I thought -- I can't remember -- when did 2 the -- the other one happen? Is that 2017, the 3 Washington State? I think -- I mean, not Washington 4 State, but the Missouri Supreme Court or State of 5 Missouri against TracFone. I can't remember when that 6 was. I'm not sure if that was 2017. 7 Q. Okay. 8 A. But I think this was -- I think this was one of 9 them, I think, that we were waiting for, I believe. But 10 I don't know -- I don't remember when I saw it though. 11 Q. And how did you learn about the case? 12 A. I -- I kept on checking from time to time on the 13 Internet to see if it had been decided or not. 14 Q. And what -- what did you do after you -- you 15 learned that it had been decided? 16 A. That I don't remember. I simply read through 17 it, and -- and at that point found [distorted audio] and 18 said, okay, that's what they decided. 19 Q. And what did you do with that information? Did 20 you report that to the City? 21 A. I can't remember if I did or whether they had 22 already gotten it. I don't remember. 23 Q. Okay. And in that decision the -- the Missouri 24 Court of Appeals held that TracFone was not subject to 25 city utility tax on wholesale sales; correct? In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 236 1 A. I believe that's what it said, uh-huh. 2 Q. Okay. 3 The -- the Court rejected the same argument that 4 you're making in this case? 5 A. No, I don't think so. 6 Q. Why not? 7 THE WITNESS: Kari, you want me to answer 8 that? I could. 9 Reason being, I felt that the -- the code 10 for Springfield was very light, very -- and did not 11 cover nearly as much stuff, I felt, as the -- as the 12 municipal code for the City of Renton. I felt that it 13 was very vague, and -- and what -- and what their code 14 was stating and versus the -- the code for -- for -- for 15 Renton. So... 16 BY MR. EDWARDS: 17 Q. So you conducted a -- a legal analysis of the 18 two different codes? 19 A. Yeah, well, I took a look, and I read it, what 20 they stated And -- and that -- and that -- it was a 21 small code that was, if I remember correctly, for 22 Springfield, versus the code for -- for Renton was much 23 more comprehensive. 24 Q. Okay. The -- if we look to... Actually, I'm 25 going to -- let's jump now to Exhibit 32, the next In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 237 1 envelope, quickly, which is Bates number 143. 2 (Exhibit No. 32 marked.) 3 THE WITNESS: Okay. 4 BY MR. EDWARDS: 5 Q. Do you have that in front of you? 6 A. Okay. I sure do. 7 Q. Does this refresh your recollection of what you 8 did after you learned about the Court of Appeals 9 decision in the Springfield case? 10 A. Yeah. It was October 5th, 2018. So that was 11 the day of the Renton deal. So I still don't remember 12 exactly when I found out about it, but... 13 Q. What does this say you did? 14 (Inaudible due to crosstalk.) 15 THE WITNESS: Yeah, go ahead. 16 BY MR. EDWARDS: 17 Q. What does this say that you did? 18 A. That I contacted Mr. Davis to see if the 19 decision has been made in the court case. 20 Q. How did you get Mr. Davis's contact information? 21 A. I simply just went to the City of Springfield 22 website. 23 Q. And... and what did -- how many times did you 24 talk to Mr. Davis? 25 A. Probably once or twice. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 238 1 Q. Okay. 2 A. I can't remember exactly. 3 Q. After the Court of Appeals issued their decision 4 and before the Supreme Court declined further review? 5 A. I'm not sure exactly when -- when I talked to 6 him, but -- yeah. 7 Q. Okay. 8 That's the time period that -- that's involved 9 here. The Court of Appeals issued a decision in July of 10 2018 -- 11 A. Okay. 12 Q. -- and the City sought review by the Supreme 13 Court; correct? 14 A. Okay. It's what it says here, uh-huh. 15 Q. Yeah. 16 A. Yeah. 17 Q. And in October of 18, there -- the Illinois 18 Supreme Court had not yet decided whether they were 19 going to hear the case; correct? 20 A. Right. It states here, uh-huh. 21 Q. But you had read the case at this point; 22 correct? 23 A. I had reviewed it. I'd taken a look at it, 24 uh-huh. 25 Q. And you certainly knew that the result was that In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 239 1 TracFone was not subject to Springfield utility taxes on 2 wholesale sales; correct? 3 A. No. As I said before, I didn't agree as far as 4 their code versus looking at the Renton code. I felt 5 that -- 6 Q. But you knew that that was the result in that -- 7 A. Yes, I did. 8 Q. -- Springfield case; correct? 9 A. Yes, I did. 10 Q. Did you tell the City of Renton that that was 11 the result in the Springfield case? 12 A. I believe I did. I can't remember for sure. 13 Q. And did you tell them that in writing, or...? 14 A. Like I say, I don't remember if I did or didn't. 15 If I did, I could -- I would think it would be over the 16 email, but I'm not positive. 17 (Inaudible due to crosstalk.) 18 BY MR. EDWARDS: 19 Q. But in your October report, you don't tell them 20 that; correct? 21 A. No. 22 Q. If you told them, it would have been through a 23 mechanism other than through the monthly report? 24 A. Normally it would have been -- 25 THE REPORTER: I'm sorry. The papers again. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 240 1 Could you repeat your answer? 2 THE WITNESS: That's okay. 3 Normally it would be in the report. Nate 4 and I, whoever was there at the time, would talk very, 5 very seldom. So normally I think it would be email, but 6 I can't say positive for sure. 7 MR. EDWARDS: Let's move to Exhibit 33, the 8 next envelope. Bates number 145. 9 (Exhibit No. 33 marked.) 10 BY MR. EDWARDS: 11 Q. Do you -- do you have that in front of you? 12 A. Yes. I'm reading it right now. 13 Q. Okay. 14 A. (Reviews exhibit.) 15 Okay. I -- I've read through it. 16 Q. Okay. And so, when we get to November, by this 17 time, the Supreme Court has declined to hear the Court 18 of Appeals -- 19 A. Right, so it's left standing. 20 Q. -- Springfield case. So -- so the opinion 21 that's Exhibit 33, that became the final decision in 22 that case -- 23 A. Right. 24 Q. -- correct? 25 A. Right. Uh-huh. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 241 1 Q. And now that you know that, you're -- you're 2 telling the City what the decision was; correct? 3 A. Yes, uh-huh. 4 Q. Did you provide them with a copy of the case? 5 A. No, I did not. Not that I remember. And, of 6 course, they could look it up themselves. 7 Q. And this says, in about the middle -- the -- of 8 this paragraph, it says, "They also stated that due to 9 how the wording is made in their tax code that indirect 10 sales (TracFone calling cards sold by Walmart and other 11 stores) would not be taxable." Do you see that? 12 A. Yes, uh-huh. 13 Q. Is this a reference to what the -- the Missouri 14 Court of Appeals said in the court opinion? 15 A. I don't know the exact wording, but that's what 16 I got out of it. 17 Q. That -- that's your description of what you have 18 understood to have happened; correct? 19 A. Right, uh-huh. 20 Q. But you're not a lawyer though; right? 21 A. No. (Laughter). No. 22 Q. Let me move on to Exhibit 34. 23 A. Okay. 24 Q. Which is Bates number 146. 25 (Exhibit No. 34 marked.) In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 242 1 THE WITNESS: Okay. 2 (Reviews exhibit.) 3 Okay. 4 BY MR. EDWARDS: 5 Q. And then here, in December of 2018, you're 6 informing the City that you're working on a 7 recommendation of what to do next? 8 A. Right. I think so, uh-huh. 9 Q. Okay. Let's move on to Exhibit 40 -- 40 -- or 10 excuse me, 35. 11 (Exhibit No. 35 marked.) 12 THE WITNESS: Okay. Okay. 13 BY MR. EDWARDS: 14 Q. This is providing a updated methodology 15 narrative. 16 A. Right, uh-huh. 17 Q. And we're now in December of 2017. 18 A. Right. 19 Q. What is the -- what is the difference between 20 the methodology that you had submitted in December of 21 2017 from the -- the prior one? 22 A. Right, that would be something Ms. Crisp would 23 have to answer. 24 Q. Okay. Then let's move on to Exhibit Number 36. 25 (Exhibit No. 36 marked.) In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 243 1 MR. EDWARDS: Bates number 735. 2 THE WITNESS: Okay. 3 BY MR. EDWARDS: 4 Q. Do you have that in front of you? 5 A. Yes, I do. 6 Q. And this is an email dated December 28, 2014 -- 7 A. Okay. 8 Q. -- transmitting TRS's recommendation regarding 9 the TracFone audit? 10 A. Okay. 11 Q. Is that correct? 12 A. Yes. 13 Q. Okay. And the second page is the -- is the 14 recommendation that was attached? 15 A. Yes, I see it. 16 Q. Is that correct? 17 A. Yes. 18 Q. Who drafted this recommendation? Did you draft 19 it? 20 A. I believe I did. Probably with the help of 21 Ms. Crisp. I'm not sure, but I most definitely was -- 22 was part of it, uh-huh. 23 Q. Okay. So -- and it indicates that TRS has been 24 reviewing both the Washington v. TracFone case and the 25 Springfield v. TracFone case; correct? In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 244 1 A. Yes, uh-huh. 2 Q. Next it says: In the conclusion section of the 3 court's finding in the court case of the State of 4 Washington v. TracFone, it states, colon, quote, The 5 true object of TracFone's business was the sale of 6 prepaid wireless telecommunications services. 7 You see that? 8 A. Yes, I do. 9 Q. There's not an end quote there, but do you 10 understand that to be a quote from the Washington 11 Supreme Court case in the TracFone -- 12 A. Yes. 13 (Inaudible due to crosstalk.) 14 BY MR. EDWARDS: 15 Q. -- matter? 16 A. Yes, I believe it was. 17 Q. Okay. Would it surprise you to learn that the 18 phrase, "true object" doesn't appear anywhere at all in 19 that opinion? 20 A. Hmm. That kind of surprises me. I thought 21 that's where I -- that's where I got that from. 22 Q. Okay. 23 A. Then I guess I must be mistaken, but I thought 24 that's where that came from. 25 Q. Okay. And if it didn't come from there, from In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 245 1 the Supreme Court case, do you know where it came from? 2 A. And you're talking about the State of 3 Washington, that that wasn't in there. Wow. I thought 4 that it was. Maybe I read it in another court case or 5 something and thought it was the State of Washington -- 6 Washington State. That's the only other thing I can 7 think of, but I sure thought that was -- statement was 8 in there. 9 Q. Let's see. If we go to the -- the -- and then, 10 I guess, the next sentence says: Even though in this 11 situation, the tax dealt with was the sales tax. 12 Do you see that? 13 A. Right, I do. 14 Q. Is that a reference to the Washington State 15 Supreme Court case with TracFone? 16 A. Just one sec. 17 (Reviews exhibit.) 18 I think so. I can't say for sure. 19 Q. Isn't it true that that case dealt with an E911 20 tax, not a sales tax? 21 A. Yes, it did. I think the 911. That's why I'm 22 saying, I'm not sure if I'm looking at that one or 23 looking at another court case. I -- I -- I'm not sure 24 why I wrote that exactly, which -- which court case I 25 was referring to. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 246 1 Q. Okay. And then, in the next paragraph, there's 2 a discussion about the TracFone v. Springfield case? 3 A. Right. 4 Q. And you make the statement similar to your 5 testimony that Springfield's code is very narrow and not 6 as inclusive as Renton's code. 7 A. Right. 8 Q. Correct? 9 A. Right. 10 Q. And then there's actually a -- a quote from the 11 Springfield code. 12 A. Okay. Down below? Uh-huh. 13 Q. Is that -- and it says, "Every person engaged in 14 the business of supplying telephones, and 15 telecommunications and telephonic service, and 16 telecommunication services, within the city shall pay as 17 a license a tax a sum equal to six percent of the gross 18 receipts from such business." 19 Is that what the City of Springfield's ordinance 20 says? 21 A. Yes. That's what it states, uh-huh. 22 Q. Can you please tell me what's narrow about that? 23 A. Well, I -- I guess when I look at it, compared 24 to the -- the City of Renton, I just believe that 25 you're -- you're -- you're including pretty much In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 247 1 everything that -- that -- that TracFone does in the 2 City of Renton. And that's my -- my opinion. And 3 that's what I -- what I wrote. 4 Q. Does the City of Renton impose a tax on the 5 supplying of telephones? 6 A. Within the code, I would say yes. 7 Q. Telephones? 8 A. Is that -- is that what you're saying, is it in 9 the code? Are you reading from the -- 10 Q. In the City of Renton's code, is utility tax 11 imposed on the sale of telephones? 12 A. Oh, so you mean the telephone itself, the phone? 13 Are you talking about the handset? 14 Q. I'm looking at the language in the -- in the -- 15 A. In the -- 16 Q. -- municipal code, the business of supplying 17 telephones. 18 A. Okay. Where are you reading? Are you 19 reading -- 20 Q. I'm reading from the quote from the Springfield 21 ordinance. 22 A. Right here. "Every person engaged in a 23 business -- " is that what you're -- is that what you're 24 reading? 25 Q. Yes. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 248 1 A. Okay. 2 Q. So Springfield's code imposes tax on the 3 business of supplying telephones; correct? 4 A. Right. I see that, uh-huh. 5 Q. Does Renton's code impose tax on supplying 6 telephones? 7 A. I don't see that in there. 8 Q. Okay. And then, Springfield's code identifies a 9 number of other things that are subject to tax: 10 telecommunications, telephonic service, and 11 telecommunications services? 12 A. Uh-huh. 13 Q. You see that? 14 A. Right. I do. 15 Q. Okay. 16 A. Right. I still think -- 17 Q. And how is that language more narrow than the 18 language in the Renton code? 19 A. Well, I just think, in my own opinion, I think 20 that it includes -- they -- they actually include many 21 more items, "Including toll service, originating from or 22 received on telecommunications equipment or apparatus." 23 It just goes on and on. 24 I just feel, personally, that -- that what 25 they're stating here, what they're doing, is more In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 249 1 inclusive than -- than what Springfield. Of course, 2 that's -- that's going to be left up to the Court, so -- 3 (Inaudible due to crosstalk.) 4 BY MR. EDWARDS: 5 Q. What -- what part of the language in the -- in 6 the -- that's quoted here in the -- in the Springfield 7 code did the Missouri Court find excluded wholesale 8 sales of telephone service? 9 A. Say that again. 10 Q. Can you show me where in this quoted excerpt 11 there's anything about excluding wholesale sales of 12 telephone service? 13 A. Okay. Are you talking about in Springfield 14 or -- 15 Q. Yep. 16 A. Okay. 17 (Reviews exhibit.) 18 No, I don't see it. Every person engaged, pay a 19 license fee. Okay. I don't see it. Go ahead. 20 Q. So -- and then, if we go down to the bottom, it 21 says, "In the Springfield case, it was stated that 22 companies such as Target and Walmart would be telephone 23 companies and are selling telecommunications." 24 A. Uh-huh. 25 Q. Is this a description of something that is in In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 250 1 the Court opinion in the Springfield case? 2 A. I don't remember. I don't think it is, but I 3 don't -- I don't remember. 4 Q. Okay. So if it wasn't there, where was it 5 stated? 6 A. At that point -- 7 MS. SAND: Well, hold on. Hold on. I 8 object, Mr. Edwards. He just said he doesn't remember. 9 So -- 10 THE WITNESS: Yeah. 11 MR. EDWARDS: He also said he didn't think 12 it was in the Court opinion. 13 THE WITNESS: Right. 14 MR. EDWARDS: So... 15 THE WITNESS: Right. So I guess -- yeah, I 16 guess -- ultimately, I guess I don't know. 17 BY MR. EDWARDS: 18 Q. And then, this says, "However, TRS talked with 19 Walmart, and they assured TRS that they only sell the 20 card, but are not selling telecommunications." 21 A. Right, uh-huh. 22 Q. Is this a reference to your call to the unknown 23 person at the local Walmart store? 24 A. I believe so. 25 Q. Okay. What type of assurance did you receive In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 251 1 from that person? 2 A. Just that, when I asked them who would -- who -- 3 who would you contact if I had problems with -- with the 4 card, they said that you would not contact us. That -- 5 Q. And that's the standard for what -- selling 6 tele- -- telecommunications services is, it's who would 7 you contact? 8 A. No. It comes down to the fact of who was 9 actually providing the service. And -- and Walmart 10 isn't providing the service. So -- and that's what the 11 whole deal was about. 12 Q. How do you determine who's providing the 13 service? 14 A. Well, I determine it by, number one, like I said 15 before, talking with Walmart. And also, you look at the 16 back of the card, of course, it says who's -- what you 17 can do and what you can't do, the terms and conditions. 18 Q. What -- what -- what is the standard in the code 19 for determining who's providing the service? 20 A. As far as who is providing access? You're 21 talking about the RMC right now? 22 Q. Sure. 23 A. Right. Okay. Well, basically, as far as RMC, 24 basically it states under, I think -- I can't read it 25 verbatim of course, but I think under 82.16, I think, In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 252 1 kind of outlines the defining what is business and 2 what's -- what's -- what would be taxable. 3 Q. And then if we go on, there's a -- to the next 4 page, it starts, in another statement, the State of 5 Washington case. And then there's a -- a recital of a 6 inset quote with three paragraphs. Those three 7 paragraphs come from the -- the State Supreme Court -- 8 A. Yeah. 9 Q. -- in the E911 tax case? 10 A. Yes, I believe they do. 11 Q. And this is simply a description of -- of the 12 recital of facts in that case? 13 A. Right. 14 Q. And -- but you conclude that the information 15 stated in -- in those three paragraphs cause you to 16 believe that TracFone owes the whole of taxes on both 17 direct and indirect sales? 18 A. Well, no. Basically, beside -- besides that and 19 besides the code, as far as how I read it, and 20 basically -- and also, of course, reviewing the -- 21 the -- the -- the Missouri -- Missouri case. But 22 looking at all the different cases, and also looking at 23 what was told to me by City of -- by -- by Walmart, and 24 also talking with TracFone as far as -- you know, as far 25 as understanding what they do. And I believe that it's In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 253 1 taxable. I'm not an attorney, but, of course -- but 2 that was my conclusion. 3 Q. There's a reference at the bottom of this to a 4 first audit covering January 1, 2007, through May 31, 5 2013. 6 A. Right, uh-huh. 7 Q. And then a reference to a second audit for the 8 period of June 1, 2013, through October 31, 2017. 9 A. Okay. Yeah, yeah. 10 Q. Can -- we haven't seen any documents yet today 11 authorizing the second audit, have we? Only your 12 reference to Audits 1 and Audit 2 in the monthly 13 reports. 14 A. To my -- as far as I remember, they did -- they 15 did give the go-ahead to do -- to open that up. I would 16 not open up a second audit unless they told me to do so. 17 Q. What action has been conducted on the second 18 audit? 19 A. Basically, nothing, because at this point, you 20 know, we're -- you know, we're at a standstill. We 21 didn't -- we weren't provided any information from 22 TracFone, I remember, for -- for the second audit, 23 because we're still trying to decide the first audit. 24 And so, to my understanding, they didn't send us 25 anything. So there was nothing that we could do with In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 254 1 the second audit. 2 Q. Let's move to Exhibit Number 37. 3 (Exhibit No. 37 marked.) 4 BY MR. EDWARDS: 5 Q. Do you have that -- Bates number 147? 6 A. Okay. 7 Q. And -- and this is your January 2019 report? 8 A. Yes, it is. 9 Q. And it indicates that -- that you've sent a 10 recommendation to the City concerning the -- the audit? 11 A. Let me -- let me read it. 12 (Reviews exhibit.) 13 (Sotto voce comments.) 14 Okay. 15 Q. So would I be correct in assuming that this is 16 referring to what we had just looked at as Exhibit 36? 17 A. Yeah. Right now, as far as -- 36? 18 Q. Right. We just looked at an email, December 19 28th, transmitting a recommendation and the two-page 20 recommendation. 21 A. Right. And right now I'm simply... 22 Q. And so when you say, "TRS has sent a 23 recommendation," this is a reference to -- 24 A. Right. 25 Q. -- Exhibit 36; correct? In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 255 1 A. I believe so, uh-huh. 2 Q. Okay. So then, let's move on to Exhibit 38, the 3 next envelope, Bates number 745. 4 (Exhibit No. 38 marked.) 5 BY MR. EDWARDS: 6 Q. Do you have that in front of you? 7 A. Yes, I do. 8 Q. Okay. Can you read what it says in that 9 to sent -- to line -- 10 (Inaudible due to crosstalk.) 11 THE WITNESS: (As read): Here is the update 12 for February 2019. I also thought -- I also thought I 13 sent you the recommendation for TracFone. I can't see 14 where I sent it, so I included a copy with this email. 15 BY MR. EDWARDS: 16 Q. Okay. And then if we look at the next page. 17 A. Okay. 18 Q. This is the recommendation? 19 A. Right. That is -- that is what we -- yeah, I 20 thought we went over it already, uh-huh. 21 Q. Yeah. But it's not exactly the same, is it? 22 It's partly the same, but it looks like it's a slightly 23 different version? 24 A. Right. I might have added some stuff to it. 25 Q. It looks to me like the top half of the page up In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 256 1 to the place where it says, "Compared to your utility 2 code, which partly states:" but in the second version, 3 you have a longer excerpt from the utility code. 4 A. Okay. Yeah, I don't know why I would have done 5 it differently, but... 6 Q. As far as I can tell, that appears to be the 7 only difference between the two documents. 8 A. Okay. Yeah -- yeah. I don't know why that 9 would be different. Yeah, I'm not sure why I did that. 10 Q. Let's look now at Exhibit 39. 11 (Exhibit No. 39 marked.) 12 BY MR. EDWARDS: 13 Q. Do you have that in front of you? 14 A. Yes, I do now. 15 Q. Okay. And this is Mr. Malone's response to 16 the -- to Exhibit 38 -- 17 A. Right. 18 Q. -- to move forward with issuing the -- the Audit 19 1? 20 A. Right, uh-huh. 21 Q. Okay. 22 A. Yes. 23 Q. And then -- but he says that -- not to do 24 anything further with other periods; correct? 25 A. Right. We haven't done anything with -- that's In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 257 1 all we've done. We haven't done anything else with the 2 Audit 2. 3 Q. Okay. Let's next look at Exhibit 40. 4 (Exhibit No. 40 marked.) 5 MR. EDWARDS: And this is Bates number 473. 6 THE WITNESS: Okay. 7 BY MR. EDWARDS: 8 Q. Okay. And -- and is this your handwritten 9 notation on the top of it? 10 A. Yes, it is. 11 Q. "Hi Nicholas"? 12 A. Right. Yep, that's mine. 13 Q. Okay. 14 A. Yes. 15 Q. At the bottom of the page, it shows the total 16 amount due, 326,145.06. Do you see that? 17 A. I think so, yes. That does. 18 Q. And the amount due is 147,108.72? Or excuse me, 19 the amount of tax was 147? 20 A. Right. I think I -- for some reason, I think 21 that that amount doesn't quite match the correct amount. 22 I could be wrong on that. I'd like to double-check 23 that. But go ahead. What are you going to say? 24 Q. What -- what -- what do you mean that it doesn't 25 match the correct amount? In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 258 1 A. I know it's 226, I believe, thousand. And 2 therefore, the first one -- or maybe I'm getting it 3 mixed up too. I deal with so many numbers. 4 Q. 226,000 in tax? 5 A. No, 147,108.72 in tax it looks like. 6 Q. Yeah. But you don't think that number is 7 correct? 8 A. I'll double-check just to be sure. 9 Q. Okay. I mean, if we look at the fourth page, 10 at -- that's Bates number 476 -- 11 A. Just one sec. Let me write that down. Check 12 that Renton -- that amount due. 13 Q. When you say you're going to check it, where are 14 you looking to check it? 15 A. I want to look at -- just compare my -- my 16 spreadsheet, make sure it's the -- it's the same. Okay. 17 Go ahead. What are you going to say? 18 Q. When -- when you say comparing the spreadsheet, 19 what spreadsheet are you referring to? Are you looking 20 at a -- a spreadsheet differently -- different than the 21 one that's part of Exhibit 40? 22 A. No. I just don't know. Like I said, I want to 23 double-check that number -- 24 Q. Okay. 25 A. -- just to be sure. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 259 1 Q. Because if I look at the fourth page of Exhibit 2 40, which is Bates number 476 -- 3 A. Right. 4 Q. -- is this a printout of your spreadsheet? 5 A. Yes, it is. 6 Q. And do you see where it says the total 7 147,108.72? Is that the tax amount calculation? 8 (Inaudible due to crosstalk.) 9 THE WITNESS: Okay. 10 BY MR. EDWARDS: 11 Q. So do you think you have a spreadsheet that has 12 a different amount than that on it? 13 A. I -- I -- I want to verify it, just to be sure. 14 Q. Okay. And then the -- the penalty shows as 15 36,777.30. And that's a fixed percentage of the tax? 16 A. Right. Pretty much, yeah. 17 Q. And then the interest is 142,259.04; is that 18 correct? 19 A. Right. 20 Q. Now, that interest, you didn't run that number 21 by the City first. You calculated the interest -- 22 A. Right. 23 Q. -- up to a new due date? 24 A. Right. We calculated the -- the interest. And 25 per their -- per their code. And then at that point, In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 260 1 came up with that amount. And then, from there, you 2 know, worked from there. 3 Q. And what was the interest rate under the code at 4 that time? 5 A. It's -- no, I can't -- I can't remember for 6 sure. I deal with so many different cities. I just 7 couldn't rattle it off. 8 Q. Okay. We've got nearly two years of interest 9 that has accrued on this between when the schedule was 10 last adjusted and when the assessment was actually 11 issued? 12 A. It actually goes to the... I believe the date 13 that it was issued, if that's what you mean. 14 Q. Uh-huh. Didn't you come up with the tax amount 15 of 147,108.72 back in July of 2017? 16 A. If it -- if it was completed at that time, I 17 would say so. 18 Q. Okay. And then, so this interest amount here 19 includes additional interest that has accrued from July 20 of 2017 through February of 2019 -- 21 A. That was -- 22 Q. -- while you've been waiting to issue the 23 assessment? 24 A. That would be included, uh-huh. 25 Q. And so if you'd issued the assessment in July of In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 261 1 2017, there would have been nearly two years less of 2 interest at that time? 3 A. Yes. 4 Q. And interest was running at 1 percent a month? 5 A. I think so. But like I said, I -- I don't have 6 the code in front of me. I -- I deal with a lot of 7 different codes as far as interest and penalty. But I 8 think that's it. Let's see. Yeah. It looks like 9 that's it. Looking at... 10 The code actually changed also. So as far as 11 interest -- so -- so I -- I can't right off the bat say 12 exactly how I -- how I computed it or how it was 13 computed. 14 Q. So later in 2019, the City amended their code? 15 A. I believe they amended it sometime or another, 16 yes. And I think it did affect how we -- how we did the 17 calculations. So I don't -- I don't remember the code 18 at all. 19 Q. The 2019 changes affected what calculations? 20 A. It might have affected the interest. But like I 21 said, I don't have the code in front of me. 22 Q. Okay. 23 And do you know whether the interest was reduced 24 in 2019? 25 A. I think it was reduced, but I'm not sure. I'd In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 262 1 have to look at it. 2 Q. Doesn't the -- didn't the 2019 change conform 3 Renton's interest calculations to the way the Washington 4 Department of Revenue calculates interest? 5 A. I think so, but I'd have to verify to be sure. 6 Q. And -- and those rates are more -- 7 (Inaudible due to crosstalk.) 8 BY MR. EDWARDS: 9 Q. -- in the neighborhood of 3 or 4 percent per 10 year, instead of 1 percent per month? 11 A. Right, they are -- I think they are smaller. I 12 don't know an exact number, but they are -- they are 13 smaller. 14 MR. EDWARDS: And can we take a five-minute 15 break at this point? I need to kind of -- 16 THE WITNESS: Okay. 17 MR. EDWARDS: -- reorient and figure out how 18 much more I've got here. 19 MS. SAND: Sure. 20 (A break was taken 21 from 4:43 p.m. to 4:52 p.m.) 22 MR. EDWARDS: Let's go ahead and start with 23 the next exhibit, 41, which is Bates number 753. 24 (Exhibit No. 41 marked.) 25 BY MR. EDWARDS: In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 263 1 Q. Do you have that in front of you? 2 A. Yes, and I'm reading it. 3 Q. Okay. 4 A. (Reviews exhibit.) 5 Okay. I've read it. 6 Q. Okay. In the -- at -- at the top of the big 7 paragraph there, you say, "I would suspect that TracFone 8 will want to pay for the direct sales to their customers 9 but not sales via a store (like Target)." Do you see 10 that? 11 A. Yes, I do, uh-huh. 12 Q. What was the basis for that suspicion? 13 A. I think it came from the court case. It was 14 the -- the Springfield -- whatever court case where they 15 were -- I think TracFone only paid the direct, and not 16 the indirect. I think that's where that came from. 17 Q. Because of the outcome of the Springfield case? 18 A. Right. I think that was it, uh-huh. 19 Q. Okay. And was it related to anything else? 20 A. Not that -- not that I remember. 21 Q. You have no knowledge about TracFone's conduct 22 with respect to other audits that you're conducting? 23 A. As far as direct or -- or as far as -- not -- 24 not that I know of. So -- but of course I can't say 25 anything for a nondisclosure agreement, but not that I In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 264 1 remember. 2 Q. Is there a difference between not knowing and 3 saying you can't say? 4 A. Well, right now what I'm saying is -- right now, 5 looking at the Springfield, I think that's what I went 6 by. At least it's what I remember. 7 Q. Okay. 8 Do you have personal knowledge of what TracFone 9 is saying in other audits that are not City of Renton 10 audits? 11 A. Do I have personal knowledge of what? 12 Q. Yeah. Of what position TracFone is taking in 13 other audits that you are conducting involving TracFone? 14 A. Yeah. I can't really -- that's nondisclosure 15 agreement. So I can't -- I don't think I -- yeah. 16 Q. I'm not asking you what you know. I'm asking 17 you whether you know anything. 18 A. The only thing, as far as -- well, of course, 19 you know, the other cities, you know, I -- I -- you 20 know, I talk with them about -- about those -- about 21 those -- about the TracFone with that city. But -- but 22 as far as -- I'm not sure if that -- is that what you 23 mean? You know, of course I do other cities and talk 24 with other people. But -- I'm not sure. 25 Q. In your audits with TracFone with other cities, In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 265 1 do you learn anything about TracFone? 2 A. I'm sure... I -- I might. I might, depending on 3 what the city does. I might. I might not. I don't -- 4 I don't know. 5 THE REPORTER: Sorry. Say again. 6 Paper shuffling. 7 THE WITNESS: Oh, okay. I'm not sure if -- 8 I forgot what I was going do say now. You know, the 9 different cities, you know, are -- are different. But 10 as far as knowing something, you know, as far as that 11 city goes, I mean, it would apply to that city. 12 BY MR. EDWARDS: 13 Q. Do -- do the different cities have different tax 14 codes? 15 A. I believe they do, yeah. 16 Q. Okay. 17 A. Yeah. Depending -- yeah. 18 Q. And does the -- do the RCWs control what cities 19 are permitted to do in their tax codes? 20 A. Yes, it does. 21 Q. So if the city's tax code attempts to impose tax 22 on something that the RCWs say they can't tax, what 23 would be the result? 24 A. As long as the RCW says that the city can't do 25 it, the city -- the city code does not always go along In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 266 1 with the RCWs. The RCWs is the guideline that they -- 2 cities have to follow. But if there's nothing in there 3 saying that a city can't do something differently, then 4 in their code they can do it. 5 Q. Okay. But the provision in the RCW that says a 6 city can't impose utility tax on sales of network 7 telephone service purchased for resale, that applies to 8 all cities; right? 9 A. Right. 10 Q. No city is permitted to do that? 11 A. (No audible response.) 12 Q. And if that provision prohibits cities from 13 imposing tax on TracFone's wholesale sales, that's true 14 for all cities; correct? 15 MS. SAND: I'm going to object to the extent 16 that that calls for a legal conclusion. 17 Go ahead and answer. 18 THE WITNESS: Right. As I've said, that 19 would be up to the courts. Not going to answer that. 20 BY MR. EDWARDS: 21 Q. But it's up to you to determine what the -- how 22 the code applies to TracFone for purposes of conducting 23 an audit? 24 A. Yeah. I can read the -- I read the code, and -- 25 and I believe that -- that it was taxable. We'll find In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 267 1 out in court. So... 2 Q. Have you ever testified as an expert witness in 3 a tax case? 4 A. No, I have not. 5 Q. Have you ever testified as a witness in a tax 6 case? 7 A. No, I have not. 8 Q. If we jump down -- go back here, the -- further 9 down in the same paragraph, it says, "If they think that 10 you might consider going to court over the issue, they 11 may try to settle the audit for a higher amount." Do 12 you see that? 13 A. Yes, uh-huh. Yes, I do. 14 Q. What was the basis for your making that 15 statement? 16 A. Well, I've been in a lot of -- of audits over 17 the years, and it's not that unusual for people to come 18 up with settlements a little bit higher to try to -- 19 to -- to wrap it up, so they don't have to go to court, 20 and just get it over with. 21 Q. You mentioned earlier that when you were looking 22 for TracFone court cases, you found a lot of them; is 23 that correct? 24 A. Well, there -- I found other ones, but they 25 didn't have anything to do with -- kind of pretty much In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 268 1 what I was looking at. 2 Q. That give you any sense about what -- whether 3 TracFone is afraid of going to court? 4 A. No. They seemed like they had no problem going 5 to court, if necessary. 6 Q. Think they're more interested in trying to 7 figure out what the right answer is? 8 A. I don't know what -- I'm assuming they are. I 9 don't know what they're thinking, but I would think so. 10 Q. Now, the next thing you say is, "If you decide 11 to go to court, I believe other cities would support 12 your efforts." What do you mean? 13 A. Well, basically, at that point, once it -- once 14 it's open issue, it's public record, that it's out 15 there, that it's going to court and a hearing examiner, 16 other cities might feel the same way. 17 Q. By "other cities," do you mean other cities that 18 you have a contract with? 19 A. I don't know if them or other cities. Because 20 their -- you know, TracFone is throughout -- you know, 21 throughout the state. So... 22 Q. So are you actively trying to find other cities 23 to engage you to -- for a contingent fee to assess 24 TracFone? 25 A. No, I'm not at this moment, no. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 269 1 Q. At this moment? 2 A. Right. I don't know -- and I don't know if I 3 will ever. I mean, it just depends if -- if -- you 4 know, time is -- I'm getting older. So not like I'm 5 going to be doing this forever. That's for sure. 6 Q. Let's move on to Exhibit 42. Actually, let 7 me -- before we do that, the -- at the very end, it 8 says, "Let us know if you have other questions or need 9 us to assist with anything else with TracFone. We have 10 done quite a lot of research regarding TracFone, and 11 should be able to provide helpful input in answering any 12 of their questions or objections." Do you see that? 13 A. Yeah, I see that. 14 Q. What did you mean when you talked about "quite a 15 lot of research"? 16 A. The only thing I could think of is more -- more 17 research out of the Internet. I can't think exactly 18 what -- what -- what that was. But the only research 19 that I can do is on the Internet. So -- but what it 20 was, I can't remember. But -- yeah, the only thing I do 21 is the Internet. 22 Q. And you don't keep any records of any of that? 23 A. No. If I'm just looking through from one -- one 24 thing to another, no, I don't. 25 Q. Let's move on to Exhibit 42 now, which is Bates In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 270 1 number 152. 2 (Exhibit No. 42 marked.) 3 BY MR. EDWARDS: 4 Q. This is the June 2019 report to the City? 5 A. Yes. 6 Q. And it's reflecting an email exchange between 7 TracFone -- or between TRS and the City about whether 8 TRS has obtained copies of any contracts from TracFone 9 during the course of the audit? 10 A. Let me review that. 11 (Reviews exhibit.) 12 Okay. 13 Q. And -- 14 A. Okay, uh-huh. 15 Q. It indicates that you didn't have any contracts; 16 correct? 17 A. No, no. 18 Q. Did you ever ask TracFone for copies of 19 contracts during the audit? 20 A. I don't know why -- what contracts we'd even be 21 talking about here. Yeah -- besides a -- 22 (Inaudible due to crosstalk.) 23 BY MR. EDWARDS: 24 Q. You didn't -- you didn't think you needed any 25 contracts to be able to conduct an audit of TracFone; In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 271 1 correct? 2 A. Well, I had a -- of course I have a contract 3 with the City of Renton. And the City of Renton, by the 4 authority, allows us to do an audit on -- on TracFone, 5 if that's what you mean. 6 Q. No, I -- do... Do contracts that a business 7 enters into with others help reflect what type of 8 business activity they're engaging in? 9 A. Yeah. I -- I -- maybe rephrase that. I'm not 10 sure what you're -- you're trying to say. 11 Q. When you conduct an audit of a business -- 12 A. Right. 13 Q. -- is one of the things that you're trying to do 14 figure out what the businesses activities are? 15 A. Yes. 16 Q. Do you ever ask the businesses to give you 17 samples of contracts that they have with other people to 18 help you understand what type of business activity they 19 engage in? 20 A. No, I don't. 21 Q. We go down to the bottom of the -- of the -- the 22 same first page. There's a quote here which says, "We 23 may, at any time and without prior notice to you, 24 modify, cancel, and/or deactivate your Service and/or 25 take other corrective action --" In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 272 1 A. Uh-huh. 2 Q. "-- for any reason in our sole discretion." Do 3 you see that? 4 A. Yes. 5 Q. Where does that come from? 6 A. I believe that came from the Washington State 7 court case. I'm not -- I'm not so sure on that, but I 8 think that's where that [distorted audio]. 9 Q. If it didn't come from there, do you think -- do 10 you have another guess about where it may have come 11 from? 12 A. That or it might have maybe read it on the back 13 of a -- maybe looked up at the back of a card or looked 14 it up on the Internet or that way. But I can't think of 15 any other place. 16 Q. And on the Internet, it'd probably be at the 17 website, www.TracFone.com? 18 A. Yeah. 19 Q. And you said, you -- you never purchased an 20 airtime card, you only looked at them in the store? 21 (Inaudible due to crosstalk.) 22 THE WITNESS: No. I never -- I never -- I 23 never did buy a card, though. 24 BY MR. EDWARDS: 25 Q. Okay. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 273 1 (Inaudible due to crosstalk.) 2 BY MR. EDWARDS: 3 Q. So you probably don't have a good enough memory 4 to be able to do a direct quote of language that's on 5 the back of an airtime card that you only looked at? 6 A. No, I don't think I would. 7 Q. Okay. So probably doesn't come from the back of 8 an airtime card; correct? 9 A. What's that? You mean this right here? 10 Q. This quote. You didn't get that from the -- 11 (Inaudible due to crosstalk.) 12 THE WITNESS: No. I didn't -- I didn't get 13 the back of a card and looked at it, no. 14 BY MR. EDWARDS: 15 Q. Okay. 16 And then, if we go to the next page, there's 17 some -- there's a paragraph that is bullets. It says: 18 In TracFone v. Washington DOR, Section 2, it states. 19 And is this a quote from the Washington State 20 Supreme Court case? 21 A. I believe it would be. 22 Q. And then the rest of this is simply a -- a quote 23 from the Statute RCW 82.16. -- 24 A. Right. 25 Q. -- 010? In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 274 1 A. Right. 2 Q. Which includes the statutory definition of 3 network telephone service? 4 A. Right. 5 Q. And the definition of telephone business? 6 A. Right. 7 Q. Basically telephone business is defined to be 8 network telephone service? 9 A. Right, uh-huh. 10 Q. And then, in the definition of network telephone 11 service... it's also -- near the end, it's -- and it 12 specifically excludes the provision of Internet access. 13 Do you know -- 14 A. Where's that? 15 Q. It's -- it's, like, third line from the bottom 16 of the definition of network telephone service, "... nor 17 the provision of internet access as defined in RCW 18 82.04.297..." 19 A. Uh-huh. Of course that's -- that's referring to 20 82.04.297. So I don't know what all that means, as far 21 as that RCW and how that relates to the Internet access 22 and how it's applying to this RCW. So I wouldn't be 23 able to answer that. 24 Q. Let me -- you'd testified earlier that 25 telephones -- the telephone utility tax does not apply In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 275 1 to data; correct? 2 A. Right, right, data, uh-huh. 3 Q. Okay. Is this provision here that precludes or 4 takes Internet access out of the definition that network 5 telephone service, is that why data is not subject to 6 utility tax? 7 MS. SAND: Object to the extent that calls 8 for a legal conclusion. 9 Go ahead and answer. 10 THE WITNESS: It may. I mean, as I -- as I 11 look at it, Internet access could be -- could be data. 12 So... 13 BY MR. EDWARDS: 14 Q. Okay. So how did you come to learn that 15 telephone utility tax does not apply to data? 16 A. I believe, I remember correctly, it was a court 17 case. I think it was Quest court case against the City 18 of Bellevue I think was -- I think I had read that, and 19 I think that had come to that -- to that conclusion. 20 Q. Okay. And it -- it doesn't -- it also doesn't 21 apply to interstate or international calling; correct? 22 A. Right. 23 Q. Do you -- do you know what the basis is for that 24 limitation? 25 A. Well, the State of Washington made a law where In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 276 1 cities could -- could not do that. 2 Q. Okay. Is that in the RCW? 3 A. At least as far as the -- look at the RCW, it 4 states that gross revenue derived from intrastate. And 5 so at that point, it's saying, only from intrastate and 6 not -- you know, that eliminates interstate and foreign. 7 MR. EDWARDS: Okay. Let's move on -- 8 looking at the time -- to 43. And with respect to 43, 9 I'd like to have it marked as an exhibit, but I -- so 10 that we can use it later and not screw up the numbering. 11 But I don't think I'm going to ask any questions about 12 it. It's simply a collection of various RCWs. 13 (Exhibit No. 43 marked.) 14 MR. EDWARDS: While I had intended to ask a 15 number of questions, I simply don't think I have time 16 now. 17 Then move on to Exhibit Number 44, which is 18 Bates number 1020, which is Bates number 1020. 19 (Exhibit No. 44 marked.) 20 THE WITNESS: Okay. 21 BY MR. EDWARDS: 22 Q. Does this look like a copy of the Washington 23 State Supreme Court case that we've been talking about 24 throughout this deposition? 25 A. Yes, I do. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 277 1 Q. Okay. Is this a copy that you printed out and 2 gave to the City? 3 A. I don't know. I don't remember doing it. I 4 don't know if I did or didn't. 5 Q. I'm just going -- I just noticed that it shows a 6 date of June 29th, 2020. And I was trying to understand 7 whether that maybe reflected a time when you printed it 8 out -- 9 A. No. 10 Q. -- for the City. 11 A. No, I don't think. I don't remember June 12 printing anything out, this out, to the City of Renton. 13 Q. Okay. Well, then, in that case, let's move on 14 to Exhibit 45. 15 A. Okay. 16 Q. And it's Bates number 999. 17 (Exhibit No. 45 marked.) 18 THE WITNESS: Okay. 19 BY MR. EDWARDS: 20 Q. Can you please describe for me what this is? 21 A. Looks like a printout of some information from 22 an Internet. 23 Q. Is this information that you printed out? 24 A. That I don't remember. I -- I -- I don't 25 recognize it, but -- yeah, I don't remember doing this. In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 278 1 Q. It looks like, if I look at the -- the second 2 one, the Reuters article, it reflects that the article 3 is from 2012/5/10. I assume that's May 10, 2012. 4 A. Okay. 5 Q. And it's talking about TracFone's business in 6 2011. Do you see that? 7 A. Right. I do. 8 Q. Is it possible that this is the Internet 9 research you were referring to that caused you to become 10 interested in auditing TracFone? 11 A. That I would not know. I looked at a lot of 12 information. TracFone, whenever it popped up, I looked 13 at it. And I don't know if this was -- was it or not. 14 So... 15 Q. Is this -- is this a document that TRS provided 16 to the City of Renton as part of the audit file in this 17 case? 18 A. I don't know. I don't recognize it, but I don't 19 know. I don't recognize it. 20 Q. Okay. Let's move on to Exhibit 46 then. 21 (Exhibit No. 46 marked.) 22 MR. EDWARDS: Bates number 1001. 23 THE WITNESS: Okay. 24 BY MR. EDWARDS: 25 Q. Do you recognize this document? In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 279 1 A. It looks like something that Ms. Crisp had done. 2 Q. Okay. So you -- you're not familiar with -- you 3 didn't personally work on this? 4 A. No, I did not. 5 Q. And I assume she'd probably be the right person 6 to ask about it? 7 A. She can talk about this, yes. 8 Q. Okay. 9 Believe it or not, in that case, I think at this 10 point, I -- oh, actually... Have you ever had any -- 11 have you ever spoken with the city's expert, 12 Mr. Ashbaugh? 13 A. Ashbaugh, no, I don't -- I don't recognize that 14 name. What city is he for? 15 Q. He's -- he's been retained by the City of Renton 16 to be an expert in this case. 17 A. I never -- I never have spoken to him by phone, 18 no, I have not. No, I have not talked to him. 19 Q. Have you communicated with him by email? 20 A. At that point, we've gotten... I believe -- 21 might be something that Kari might want to address 22 there, as far as that goes, as far as information. 23 MS. SAND: Well, go ahead and answer the 24 question. 25 THE WITNESS: I know -- I think we've gotten In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 280 1 emails from Kari about him, but I've never talked with 2 him directly, that I can recall in any way. 3 BY MR. EDWARDS: 4 Q. Okay. What emails have you gotten about him? 5 What did they say? 6 A. That, I can't remember. Just basically talking 7 about that -- that he's a -- you know, he'll be the 8 witness for -- for -- for City of Renton. And that -- 9 and that he's an expert in whatever he does, as far as 10 telephone companies go. And -- and as far as also -- 11 not telecom, but as far as how things utilities and 12 things my wife had done -- Ms. Crisp had done, as far as 13 calculating stuff and that kind of thing. But I never 14 talked to him directly. It was always emails that were 15 kind of -- that were forwarded on to me. 16 Q. So you -- you've reviewed emails that he was a 17 participant in, but you've never sent emails to him or 18 received emails from him; is that correct? 19 A. No, no, I never did. 20 Q. What about Mrs. Crisp? 21 A. No, she hasn't either. 22 MR. EDWARDS: Okay. At this point, I have 23 no further questions. 24 THE WITNESS: Okay. 25 (Pause in the proceedings.) In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 281 1 THE REPORTER: Are you ordering the 2 transcript? 3 MR. EDWARDS: Yes. 4 THE REPORTER: Copy of the transcript, 5 Ms. Sand? 6 MS. SAND: I am going to reserve, and I need 7 to talk to my clients and get back to you. 8 (Deposition concluded at 5:19 p.m.) 9 (Signature reserved.) 10 -o0o- 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 In Re: TracFone Wireless, Inc.Michael Crisp 206.287.9066 l 800.846.6989 BUELL REALTIME REPORTING, LLC 83cf41a5-feeb-4a5d-a0eb-b6ef92c16a85 Page 282 1 C E R T I F I C A T E 2 3 STATE OF WASHINGTON 4 COUNTY OF KING 5 6 I, Kathleen Hamilton, a Certified Shorthand 7 Reporter and Notary Public in and for the State of 8 Washington, do hereby certify that the foregoing 9 transcript of the deposition of MICHAEL CRISP, having 10 been duly sworn, on NOVEMBER 5, 2020, is true and 11 accurate to the best of my knowledge, skill and ability. 12 IN WITNESS WHEREOF, I have hereunto set my hand 13 and seal this 12TH day of NOVEMBER, 2020. 14 15 16 ________________________________________ 17 KATHLEEN HAMILTON, RPR, CRR, CCR #1917 18 19 20 21 22 23 24 25