As audit information received in closed sessions, EDA authorizes litigation

Following a two-hour-and-10-minute closed session on Friday morning, the Front Royal-Warren County Economic Development Authority Board of Directors unanimously authorized the Sands-Anderson law firm to file litigation on its behalf. The Richmond law firm was contracted at an initial cap of $100,000 for legal work associated with the now six-month, quarter-million dollar audit investigation into EDA finances.

During a break prior to the convening of a second March 22 closed session, EDA counsel Dan Whitten and Board Chairman Gray Blanton declined to elaborate on the kind of litigation, when it would be filed, or whether there will be multiple filings or targets of that litigation.

Asked those same questions upon his exit an hour into the EDA board’s second closed session of the day, Sands-Anderson attorney Cullen Seltzer also declined further comment, though acknowledged to the media present, “Those are all perfectly reasonable questions.”

Apparently just not answerable until that EDA litigation is filed.

Sands-Anderson attorney Cullen Seltzer, right, and unidentified man who also stayed in closed session discussion of pending litigation to be filed on the EDA’s behalf related to its audit investigation. Photos/Roger Bianchini

Questioned about the reluctance to elaborate on the litigation to be filed by the law firm contracted for audit-related services, Whitten said only that since it is still pending litigation some detail or circumstance of the filing might not yet be finalized, so no additional public comment would be made prior to that filing.

However, Board Chairman Blanton said that a press release concerning the litigation could be forthcoming from the EDA upon its filing. The now six-month long, quarter-million dollars and climbing audit of EDA finances began a month after the Town of Front Royal Finance Department’s August 2018 discovery of nearly a decade of debt service overpayments to the EDA totaling over $391,000. Consequently it is believed the current exploration of EDA finances goes back far beyond the normal annual audit done by Yount-Hyde-Barbour at a cost of around $17,000.

The EDA has already approved payment of $150,000 to the unnamed audit consultant, and up to $100,000 of funding to Sands-Anderson for legal work related to the audit and audit investigation.

Seltzer and unidentified closed session participant, left, chat between Friday-morning closed sessions.

During a total of three-hours-and-20-minutes of closed sessions Friday the EDA received legal consultation on the litigation it is now poised to file; and information related to “EDA loan programs, accounting and debt service issues and related matters” – all topics included in the ongoing audit and audit investigation begun last September.

See a soon-to-be published, related story on the resignations of EDA board members Greg Drescher and Ron Llewellyn submitted following the second closed session of March 22. Those resignations come four days after the resignation of EDA Administrative Assistant Missy Henry on Monday. Both Drescher and Llewellyn, whose terms expired at the end of February, indicated they wanted to stay on pending completion of the audit investigation, which appears to be nearing.

See Ed Daley’s motion and the board’s unanimous vote in support of the motion to authorize litigation related to the pending report on EDA finances in this Royal Examiner video: