GlobeSt.com UPDATE: Crescent Defends Deals Involving Execs, Managers

For example, Moczulski oversaw the REIT's acquisition of the Hughes Center office complex in Las Vegas from Rouse Co. for $214 million, an asset Goff says is worth at least $40 million more than what Crescent Real Estate Equities paid. "We needed to bring in his expertise," Goff explained at Monday's annual shareholders' meeting, saying the relocation costs are "de minimus" compared to the amount of deals Moczulski has worked on.

While the SEIU argues Moczulski and Crescent executives knew $2.6 million was well above market value for the house in the River Oaks subdivision, Goff said the company became a victim of a collapsing Houston housing market, particularly higher-priced homes. Also, Goff defended what have been called "heart-stopping" loans to Crescent trust managers at below-prime rates by noting they were written at the Internal Revenue Service's "applicable funds rate." The loans also worked to prevent officers from "flipping" company stock, Goff said.

Crescent Real Estate Equities officials have been involved in companies doing business with the REIT, Goff conceded. However, the value of the deals involved pale in comparison to his and other executives' investments in Crescent stock. "My focus was on the value of my CEI holdings because, to be blunt, that's where I could get wealthy," he said.

An SEIU representative asked Goff whether the large pension funds Crescent Real Estate Equities is courting as joint venture partners have backed away in the wake of questions about the REIT's related party transactions. "We have had absolutely no push-back from our joint venture partners," Goff claimed. Instead, Goff said the company is having problems handling the large amount of capital seeking a place to invest.

Company officials acknowledge the REIT's most recent 13.4% total return is below market averages. However, much of that includes return of capital, which in hindsight Goff said should have been distributed in the form of a special dividend.

Regardless, corporate governance was on the mind of shareholders, even though president and chief operating officer Dennis H. Alberts and Worrell Investments president Terry N. Worrell were given new three-year terms on the company's board of trust managers. "I've witnessed the destruction executive greed can bring," a former Enron employee said. "CEI management hasn't gotten the message about executive excess."