Blame it on the Evans UFO

The first report in this series, Conflict in Columbia County, peered into the April 2010 vote to grant the mass banking contract of Columbia County, Georgia to GB&T, Georgia Bank and Trust, a bank in which two commissioners, Ron Cross and Charlie Allen, held stock and a third, Ron Thigpen, serves as Chief Operating Officer.

The award came after an extensive Request for Proposal was issued to about a dozen local banks in January. Responses were due by February 18th. Four county employees were designated as evaluators of the proposals: Water Director Billy Clayton, Accounting Manager Debra North, Finance Director Lee Ann DeLoach (then Reece), and Phyllis Swain. After the evaluations were compiled and the scoring totaled, First Citizens Bank scored the highest of the responding banks, with GB&T in second place. First Citizens quoted a minimum interest rate on deposits of 1%, with DeLoach noting the lack of a floor with GB&T relative to First Citizens and Swain noting that First Citizens had the best rate. The initial recommendation was to award the agreement to First Citizens.

GB&T had quoted a variable rate with a floor of 0.75%, 0.25% less than First Citizens. This put the minimum interest rate income from First Citizens 33% higher than GB&T.

That is when the UFO landed and all sorts of communications were disrupted. In this case UFO means Unidentified Financial Official. Some member or members of the County Finance Committee put the award on hold and sought direction from Jeffries, the County’s sole-sourced Bond Underwriter. When asked the identity of the Finance Committee member(s) who initiated the request from Jeffries, the county administration could not provide it, not could it provide any correspondence from Jeffries other than an Analysis showing that the county would earn more with GB&T. That analysis became the basis for what came to the commission as “Option Two” and a revised recommendation to award the mass banking arrangement to GB&T.

Out of a Finance Committee comprised of then Chairman Scott Dean, who is now in prison on an unrelated conviction, commission chairman and GB&T shareholder Ron Cross and District one commissioner and GB&T executive Ron Thigpen, who was the UFO? If the UFO landed in the commission chambers, why is there no video, no tracks and no sign of his coming and leaving, only a mystery document which turned out to be wrong, predicting higher interest rates that never materialized and costing the county dearly?

Citizens-activists working with also sought whether First Citizens or the other banks responding to the RFP were invited to rebid or comment on the Jeffries analysis.The county answered that there was no written contact found with First Citizens after notification that their bank was on the list of finalists.

Finally, a response to a Georgia Open Records request to Columbia County, shows that the county was paid the 0.75% minimum throughout 2011 and 2012 on nearly all of the accounts covered by the mass banking RFP, rather than the much higher rates expected when the deal was awarded to the three commissioners’ bank.

Doesn’t an old construction guy like Chairman Cross know that nothing produces more controversy and lawsuits in procurement than awarding bids based on new criteria that have been denied to the other bidders? Isn’t doing something like that and having it lose 33% more revenue than the recommended vendor even worse? How much of his net worth is in that bank stock and its related business ventures, anyhow?

A lot of answers are due Columbia County voters before May 20.

Here is a video presentation recorded in the waning days of April 2014.

Next up in the series – County Revenue Vaporized by the Evans UFO?

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    • The Arrowflinger

      This report was based upon several Georgia Open Records Request Responses by Columbia County, review of the decisive commission meeting video, interviews with county staff and interviews with banking officials. Consolidation of banking within one bank in the aftermath of the 2008 and 2009 financial crisis, which struck Georgia hard after the state was Number 1 or 2 in Mortgage Fraud in the early 2000’s was of questionable prudence. Officials above the finance staff of the county intervened to make the award. Three members of the county commission were shareholders in the bank and the award followed an extraordinary commission meeting that saw non-bank shareholder commissioners have to vote to allow Commissioners Ron Cross and Charles Allen, jr. to vote on the award of the contract.

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    • The Arrowflinger

      In reply to Are Herbert or Tucker any Match for THE ARMADA? –

      This comment was based upon the award of a banking consolidation agreement to Georgia Bank and Trust in the first quarter of 2010 after a bid process that had concluded with a staff recommendation that the award be made to First Citizen’s Bank. Federal Deposit Insurance Corporation (FDIC) reports place the increase in total deposits for the bank for the year 2010 at approximately $117 million, while an open records request response from the Columbia County Finance Department shows new deposits of approximately $107 million for the year. Given the share of new deposits into the bank from Columbia County in 2010, certain bank asset quality issues noted by regulators in 2009 before the bid process, Securities and Exchange Commission (SEC) Reports, discussions with area bankers and peer bank data from the Federal Deposit Insurance Corporation, the author is of the opinion that the cash infusion rose to the level of being a substantial contributor to the bank’s improved year ending December 31, 2010 financial position.

      If there is new or contradictory information, please provide it.

      As to the “back door” description, that seems appropriate given that a yet- unidentified member of the county finance department intervened into the bid award process to interject new criteria or factors that were not made available to the competing banks. Subsequent discussions with the County Administrator, Scott Johnson, and the county Finance Director suggested that the finance official might have been former Administrator Steve Szablewski. However, under strict definition of whom a finance committee member would have been, Mr. Szablewski was a staff employee, not a commissioner member of the Finance Committee.

      If there is documentation of which Commissioner on the County Finance Committee intervened in the process by requesting an opinion from the bond underwriter, please submit it.

      As to the status of Mr’s Pollard, Prather and Thigpen, the banking contract with Columbia County was for 3 years, plus two option years, so that the arrangement was no longer in effect when their bank merged with South State Bank, such merger having been completed in the first quarter of 2017. Nothing stated implies that any of these men have ongoing roles with a bank doing business with Columbia County.

      It is also noted that Administrator Johnson was asked on the Austin Rhodes show at one point if he would come back on tom discuss this matter in an open public forum, but he never offered to do so.

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