County approves board, staff EDA criminal legal fees; removes cap on EDA civil attorney fees

Why do people hate lawyers? – They make all the money

Legal fees were a central point of action at Tuesday evening’s Warren County Board of Supervisors meeting, both early and late in the agenda. In fact the initial motion out of a Closed Session, which was the last agenda item, was to amend the agenda so that a vote on EDA (Front Royal-Warren County Economic Development Authority) civil litigation attorney fees could be taken.

Both motions by Happy Creek Supervisor Tony Carter, seconded by South River’s Linda Glavis, passed unanimously.

The second of those motions removed the $750,000 cap previously put on payments to the Sands Anderson law firm contracted to handle the EDA’s civil litigation. That litigation initially filed March 26 was amended in October and is now seeking recovery of what has climbed to a total of $21.3 million dollars of allegedly misdirected or embezzled EDA assets.

The County Supervisors are anticipating continually climbing EDA civil cases legal costs – Tuesday they removed a cap on payments to the Sands Anderson law firm. Photos and video by Mark Williams, Royal Examiner.

Sands Anderson attorneys are also dealing with two countersuits filed by civil case defendants ITFederal (Truc “Curt” Tran, principal) and Earth Right Energy (Donald Poe, principal) seeking $15 million and $20 million in counter damages, respectively; as well as a suit by the Town of Front Royal against the EDA seeking recovery of “up to $15 million” in allegedly lost or misdirected Town funds.

The EDA is seeking to recover the balance of a $10-million dollar loan to ITFederal it contends was acquired under false pretenses; and another $2 million dollars moved to the company’s benefit through former EDA Executive Director Jennifer McDonald, ostensibly without proper EDA board authorization. The EDA is seeking around a million dollars in reimbursement of funds paid to Earth Right Energy (ERE), again through its former executive director and again ostensibly without proper EDA board authorization or work accomplished. However, ERE’s counterclaim revolves around a disputed $27 million dollar solar panel installation contract through the EDA for work on Warren County Public School facilities.

As we have previously reported, EDA-related court hearing discussion has indicated a voluminous amount of involved paperwork totaling somewhere between 700,000 and one million pages of financial fraud investigation documentation, court transcripts, EDA and related municipal financial and other meeting minutes and records.

Acting County Attorney Jason Ham, left, may be wondering if his firm might be included in Tuesday’s uncapping of legal fees by the County – just kidding, Jason. County Administrator Doug Stanley, right, later explained the process and thinking behind the board’s uncapping of EDA civil case legal fees.

Contacted the following day, County Administrator Doug Stanley noted that Tuesday’s vote will preclude the necessity of passing repetitive motions upping what has been authorized for legal fees in the now dueling EDA financial scandal civil litigations. Five times previously the County Supervisors have authorized payment caps to Sands Anderson, beginning on January 8 at $50,000; February 5 at $100,000; April 2 at $300,000; June 4 at $500,000; and August 6 at $750,000. Now the sky’s the limit and the unanswered question is how much money will it take to try and recover $21.3 million dollars in allegedly stolen money. The County invested another $500,000 in Contingency Fund money for the Cherry Bekaert public accounting investigation of EDA finances that is the basis for the EDA civil litigation.

Of the escalating legal fees, Stanley explained it this way, “If your house is broken into you go to the police and they file an incident report. Then you call your insurance company and they want an itemized report on what was stolen – you do that, not the police. The EDA has to catalogue, itemize all the stolen, misused or embezzled assets – the FBI is not going to do that for the EDA, Sands Anderson has to oversee all that and present it to the court because we want to hold those accountable to the full extent of the law.”

And THOSE legal fees

And speaking of the County Administrator, Mr. Stanley “won” the public groan meter during earlier meeting approval of County payment of his, former County Attorney Dan Whitten and four of the five board members’ EDA criminal case legal fees. Payments of those legal fees for the supervisors were all approved by 3-1 votes, with Tom Sayre dissenting and the supervisor whose payment was being approved, abstaining. Sayre has agreed to pay his own legal fees regarding those cases.

During earlier pubic criticism of County assumption of legal fees for the misdemeanor criminal defense cases of misfeasance and nonfeasance filed against County and EDA officials a compromise was broached. That compromise was that if the cases were dismissed or they were found not guilty, their fees would be covered; if found guilty they would pay their own attorneys fees.

Well all those charges were dismissed as having no legal basis, even dating back to English Common Law upon which the U.S. and Virginia legal codes were based. The fact those indictments were filed by the Commonwealth’s Attorney’s Office-led Special Grand Jury looking into criminality tied to the EDA financial fraud civil litigation on such nebulous legal grounds was a point of contention for public speaker and County critic Paul Gabbert during remarks directed at the board about those legal fees.

Paul Gabbert addressed a number of topics and expressed distress taxpayers will foot a nearly $50,000 legal bill on charges filed by the Special Grand Jury against County officials for things that are not illegal in Virginia.

As for the public groan meter, Stanley took the top spot with a criminal case legal bill of $15,166.54, edging out Glavis at $14,636.40.

The public may have been lured into a sense of complacency when the first supervisor whose fees were approved, Archie Fox, came in at $2,880. In fact, Glavis may have actually gotten a louder groan than Stanley when her $14,000-plus total was cited second, following Fox’s low-ball number.

Other legal fees approved for payment by the County were Dan Murray at $8,250; Carter at $5,000; and Whitten at $3,990.

No doubt that total taxpayer covered legal fee coming in just south of $50,000 at $49,922.94, was part of the fuel for Gabbert’s assessment of the court-ruled legally-baseless charges as “ridiculous”.

See the Board votes on those legal fees, the public response and Carter’s reply to some of the public criticism in the linked Royal Examiner video.

Attorney John Foote, no stranger to local development dynamics, explains Equus Capital Partners plans for a large distribution warehouse just north of the RSW Regional Jail. Foote told the supervisors he doesn’t anticipate problems from the neighbors directly to the south, who appear, for the most part, to be shut ins.

Other business on Tuesday’s Board of Supervisors agenda included approval of rezoning and a Conditional Use Permit (CUP) to allow construction of Equus Capital Partners 324,000 square foot warehouse and distribution facility projected to create 100 total jobs in two shifts on a lot just north of the RSW Regional Jail; approval of a County Ordinance Amendment and CUP to facilitate expansion of Backroom Brewery’s operations off Reliance Road to accommodate larger events hosting over 100 people.

Backroom Brewery’s Billie Clifton was lauded by Virginia Beer Museum proprietor David Downes, below, as a visionary who was ahead of the curve in developing a Farm Microbrewery in Warren County.

This agenda item drew an impassioned comment of support from Virginia Beer Museum proprietor David Downes, who called Backroom Brewery proprietor Billie Clifton “a visionary” in what has become a “growth industry” in the Commonwealth; and approval of necessary funding stream to proceed with much of the A.S. Rhodes Elementary School renovations; and approval of an EDA-requested rezoning on a two-acre parcel of the McKay property near the McKay Springs parcel for rezoning from Residential to Commercial, among other items.

See all these items on Royal Examiner’s full meeting video.