FRONT ROYAL – At the February 20 meeting of the Warren County Board of Supervisors, Mark Egger, father of former Front Royal Councilwoman Bébhinn Egger, made pointedly critical remarks about the board and staff of the local Economic Development Authority. Egger went so far as to allege obstruction of justice and filing false police reports about break-ins he believes were staged targeting the EDA office and the home of the EDA executive director. Egger also raised questions about a closed session discussion of those incidents he cited as likely illegally convened.
During his references to a FOIA Council opinion the EDA closed session may have been convened illegally, an EDA board letter cited in that opinion was referenced. That letter signed by Greg Drescher as board chairman, dated July 17 three weeks after the EDA break-in, requested that the town police put its investigation of the EDA headquarters break-in on “inactive status” after a private investigator became involved. This request was what Egger cited as a potential obstruction of justice.
In the wake of Egger’s comments Royal Examiner asked EDA Board Chairman Greg Drescher and EDA Executive Director Jennifer McDonald if they cared to respond.
Drescher declined to comment on what is an active investigation regarding the EDA office reported break-in of May 18, 2017 or general EDA processes, but did respond to Egger’s closed session allegations. “The EDA has legal counsel at every meeting, including closed sessions to ensure that closed session rules are followed. The closed session referenced by Mr. Egger followed the appropriate guidelines and legal counsel was present to ensure those guidelines were followed.”
McDonald responded to questions related directly to her situation related to criminal and private investigations of incidents at her home property in the same timeframe as the EDA office break-in. She also sent a letter to the editor of Royal Examiner tracing the work and impact of the EDA on this community over the past two-plus decades, as well as how the EDA operates. That letter appears in the OPINION section of the Royal Examiner website.
As for her response to direct questions submitted by e-mail, McDonald explained that it was she, not the EDA board who hired a private investigator to explore the incidents directed against her and the EDA office.
“I hired the PI and provided a copy of the cancelled check. The EDA did not hire a PI,” she said. As for information gathered by her private investigator, she said “Information was provided as necessary” to local law enforcement investigating the incidents.
As to the incidents themselves, McDonald said, “Since this is an ongoing investigation I do not want to comment on what actually happened with all of the incidents and there were too many to keep count of starting in early December 2016.”
As for Egger’s suggestion a statute of limitations was approaching on the ability of law enforcement to make arrests in any of those incidents, McDonald said, “I was not aware of the limitations but have full confidence that the WCSO is doing everything they can to come to a conclusion, if any conclusion can be made on what happened at my home. I have a suspicion of who the culprit may be, but until he is located for questioning I am sure it will be difficult to prove anything.”
We asked Commonwealth’s Attorney Brian Madden and Town Police Chief Kahle Magalis about statute of limitations regarding prosecution of break-ins and similar criminal activity. Both confirmed that were an incident determined to be a misdemeanor, there would be a one-year statute of limitations; however, if ruled a felony there is no statute of limitations on bringing charges. The EDA office break-in occurred May 18, 2017. As McDonald stated above, the incidents at her home began in December 2016 and continued beyond the EDA office break-in. McDonald confirmed that to her knowledge there have been no public statements about details of the crimes.
In response to a question about who had been present in her home at the time of the incidents there, McDonald acknowledged that in addition to her husband, her stepson who had been in a car accident and was wheelchair-bound for some time after, had been.
“Yes, he was in a wheelchair for the first round of incidents that started shortly after the Berdyck stuff. For the duration of that time I stayed up at night trying to figure out how to get him in a wheelchair and out of the house if anything were to happen,” she said.
The “Berdyck stuff” McDonald referenced were social media posts by self-proclaimed “environmental activist” Matthew Berdyck beginning in January 2017. Berdyck is considered a cyber-stalker by a number of governmental, media and entertainment industry figures he has targeted around the country for six years or more. Berdyck landed in Warren County in 2016-17, after which he posted attacks on McDonald personally, the Avtex Superfund site cleanup in general, as well as the first announced commercial client at the site, ITFederal. McDonald says some of the personal attacks posted on social media included her home address with comments such as “let the lynching begin.”
Between January and March 2017 Royal Examiner published a series of commentaries about Berdyck’s allegations and actions locally, including a failed e-mail attempt to ingratiate himself with ITFederal principal Truc “Curt” Tran prior to his negative posts locally.
- In Defense of Jennifer McDonald and the EPA
- Superfund ‘watchdog’ reached out to ITFed owner prior to attack blog
- Royal Examiner responds to Berdyck denial of Tran e-mail
Asked if she could elaborate at all on the situation at her home property last year, McDonald said, “There is nothing I want to add here except it is a shame that we live in such a hateful world that people think it is okay to try and intimidate someone else just because they do not agree with their job description or have some type of vendetta to fulfill. I come to work every day, do my job as directed by my Board AND local officials AND according to state regulations and at the end of the day I go home to be with my family and/or come back out to night meetings – nothing that gives anyone the right to try and make me and my family uncomfortable in our home or this community that I grew up in and love.”
We concluded by asking McDonald about more generalized criticism aimed at Drescher over his dual role as superintendent of county public schools and EDA board chairman.
“There are those that feel Mr. Drescher spends too much time at the EDA, when in fact he does not. Greg attends our monthly meetings, comes in once a week to get updated on projects and to review invoices and checks. We have a Board of seven and they each have their own role, Greg is not the only Board member, but he is our leader and he is a very good chairman.”
Experienced municipal manager appointed interim EDA executive director
Three weeks after the resignation of Executive Director Jennifer McDonald the Economic Development Authority Board has appointed an interim replacement. Following a Thursday morning, January 10, special meeting closed session the EDA Board of Directors approved a contract with John Anzivino to become interim executive director.
According to the motion to authorize EDA Attorney Dan Whitten to draw up a contract to secure Anzivino’s services that contract will be for a 90-day period at a rate of $55 per hour. EDA Board Chairman Gray Blanton estimated the interim executive director will initially put in an average of about 30 hours per week.
Following the meeting adjournment Whitten said he hoped to have the contract written and signed by the end of the day. Leaving the meeting following its re-adjournment to open session Anzivino declined comment to the media, saying he preferred to defer comment until a contract was finalized and he had been officially hired.
“I hope it’s by the end of the day – I’m tired of doing all this,” Blanton said of certain day-to-day EDA operational responsibilities he as chairman has had thrust upon him in the wake of McDonald’s resignation on December 20. Related story: Oops, ‘Reply’ who? With staff out and procedures changed EDA board chair’s frustration levels rise
Attorney Whitten said a press release on Anzivino’s hiring, background and the interview process for an interim executive director would be out later in the day. An online search of Anzivino’s name indicates a person with extensive experience in municipal government management.
That experience includes 12 years as town manager of Warrenton; 12 years as county administrator of Caroline County; and six years as county administrator of Amelia County. Anzivino was also shown to have been appointed as interim town manager of Purceville in 2017. So it would appear that while semi-retired, Anzivino has experience jumping in to municipal situations in flux.
McDonald offered her resignation by e-mail on December 20, about 20 minutes prior to the start of a second EDA board closed session (the first was Dec. 14) scheduled to discuss her job performance in the wake of the Town of Front Royal Finance Department’s discovery of some accounting irregularities in its dealing with the EDA. That discovery was made while Finance Director B. J. Wilson was exploring the Town’s internal finances due to town council’s interest in funding some departmental purchases through interest-free internal loans. Related story: Resolution commends Town staff for uncovering overpayments to EDA
What Wilson discovered was about eight years of debt service overpayments by the Town of Front Royal totaling just over $291,000. A final number or whether there might be similar accounting errors on the County side of EDA business has not been determined pending the result of an ongoing audit of EDA debt service and accounting practices.
Along with the interim executive director contract, discussion of that EDA audit was also part of the closed session agenda the morning of January 10; as was a prospective business client’s location in the Happy Creek Technology Park. Anzivino, who arrived shortly before the start of the 10 a.m. special meeting, sat in through the entire one-hour-and-thirty-two-minute closed session.
During the open portion of Thursday’s meeting the board also rescheduled its 8 a.m. monthly meeting to Wednesday, January 30, to accommodate board member schedules. The meeting, at which EDA Attorney Whitten said he hopes a final summary of the EDA audit will be available, was originally scheduled for Friday, January 25. Related Story: County will pay $90,000 to ‘outside consultant’ in audit of EDA finances; Related Story: County authorizes legal contract for EDA accounting and debt service work
County continues cloak of secrecy on EDA, citing “attorney-client privilege”
Citing “attorney-client privilege” Warren County Attorney Dan Whitten has denied in full a Freedom of Information Act (FOIA) request filed by Royal Examiner on Jan. 2, 2019 seeking the identity, resume and CV (curriculum vitae) of the consultant hired by the Warren County Supervisors on behalf of the Front Royal-Warren County Economic Development Authority to examine debt service issues in which the town and county were overcharged related to debt service.
“The identity of the consultant is exempt from disclosure under the Virginia Freedom of Information Act. The applicable exemption sections are Virginia Code Ann. § 2.2-3705.1(2) which includes “[w]ritten advice of legal counsel to state, regional or local public bodies or the officers or employees of such public bodies, and any other information protected by the attorney-client privilege” and Virginia Code Ann. § 2.2-3705.1(3) which includes “[l]egal memoranda and other work product compiled specifically for use in litigation or for use in an active administrative investigation concerning a matter that is properly the subject of a closed meeting under § 2.2-3711.” The consultant is an expert engaged to aid legal counsel, and the identity of the consultant is exempt from disclosure. Accordingly, the resume and CV of the consultant are also exempt under the same code sections of the Virginia Freedom of Information Act,“ Whitten wrote, in denying Royal Examiner’s request.
When asked if Virginia State Police investigators were involved in the EDA audit, Whitten replied, “Any possible involvement of State Police would fall under the exemptions in Virginia Code § 2.2-3705.1(2) and Virginia Code § 2.2-3705.1(3).”
The response to the FOIA request was emailed at 3:56 p.m. on Wednesday, Jan. 9, just hours after the Warren County Board of Supervisors unanimously agreed to hire the Sands Anderson law firm on behalf of the EDA to represent the EDA in “unspecified legal matters.”
Whitten said the contract has a $50,000 legal fees cap, and no money has yet been spent. The motion at Tuesday’s regular board meeting to approve the contract states that the law firm will “provide legal counsel on a specific matter.”
That decision came after the Board of Supervisors held a closed session for consultation with legal counsel regarding accounting and debt service.
Whitten, who represents both the County and the EDA, said the firm would represent the EDA on a “specific legal matter.” He said the firm already represents the county and EDA on bond counsel issues, but the matter for which the firm was hired was a different matter.
When asked if there was a conflict of interest, with Whitten representing both the County and the EDA, Whitten stated, “It is not a conflict if the County and EDA are not adverse parties to each other, and both political subdivisions agree to my representation of both bodies. If the County wanted to take action against the EDA for any reason, there would be a conflict, and I would recuse myself.”
Warren County, on Dec. 21 approved an expense of $90,000 payment to an unidentified financial consultant who has been looking into overpayments the town and county made to the EDA relating to debt service.
On Dec. 20, Jennifer McDonald, former EDA executive director, resigned from that position after the EDA board held a number of closed sessions regarding debt and accounting services. See related story: EDA Director McDonald submits a resignation by email prior to Thursday meeting
On Oct. 31 Royal Examiner broke the story that the EDA had overcharged the Town of Front Royal over $291,278.264. See related story: EDA may owe Town of Front Royal nearly $300K
County authorizes legal contract for EDA accounting and debt service work
Following a 45-minute closed session added to the Tuesday morning, January 8, meeting agenda of the Warren County Board of Supervisors, a motion authorizing an expenditure of “up to $50,000” to contract the law firm of Sands Anderson “to provide legal counsel on a specific matter” to the Front Royal-Warren County Economic Development Authority (EDA) was approved unanimously.
The closed session was called for “consultation with legal counsel on legal advice related to accounting and debt services”.
Queried later as to whether the contract for legal services to the EDA might indicate a potential conflict of interest between his roles as both County and EDA attorney, Dan Whitten indicated that rather, it simply reflected that he did not have the time to devote to the ongoing exploration of EDA finances.
Richmond-based Sands Anderson is the firm that Dan Siegel, who has acted as bond counsel for the EDA on projects including the recent Valley Health hospital construction loan, is employed by. Over the years Siegel has often appeared with another Richmond-based bond consultant, Ted Cole of Davenport & Company, before the supervisors. Davenport & Company has long served as a financial and bond consultant to the county government.
“We hope it doesn’t get to $50,000, but if it did they’d have to come back for approval of further funding,” Whitten said of the contract for legal services from Sands Anderson.
On December 21, the County Supervisors approved a contingency fund payment of $90,000 to an unnamed consultant for three months of work on EDA finances. See related story: Warren County will pay 90000 to outside consultant in audit of EDA finances
With the county government propping up some unexpected EDA operating expenses, Whitten did note that the County began this fiscal year on the plus side with the EDA, contributing half – $54,000 – of what it had given the EDA in operating expenses the previous year ($108,000).
Both the Town and County governments, as well as the EDA board have had a series of closed sessions in recent months regarding accounting and debt service issues in the wake of the discovery of accounting irregularities by Town Finance Director B. J. Wilson. As Royal Examiner’s Norma Jean Shaw first reported, the Town Finance Department discovered debt service overpayments totaling over $291,000 to the EDA over an eight-year period.
A final number on overpayments on the town side or whether there are similar issues on the county side is not expected until the final report of the current audit of EDA finances is concluded. Whitten said it is hoped the audit will be completed in time to be
presented to the EDA Board of Directors at its monthly meeting of January 25. However Whitten noted a final report could take longer, depending on what is discovered over the course of the exploration of EDA finances.
EDA to consider interim director appointment, get audit update this week
The Front Royal-Warren County Economic Development Authority has announced a special meeting for Thursday, January 10, 2019. Barring last-minute agenda alterations, the 10 a.m. meeting will immediately adjourn to closed session to discuss three topics: 1/ appointment of an interim executive director; 2/ discussion with legal counsel regarding the ongoing audit and investigation of EDA debt and accounting services; and 3/ discussion of a prospective business or industry locating or expanding in the Happy Creek Area.
It is the first two items that are of the most interest in the wake of the resignation of Executive Director Jennifer McDonald by e-mail shortly before the EDA board’s last closed meeting of December 20. That special meeting also immediately went into closed session to discuss McDonald’s job performance and the ongoing audit of EDA debt and accounting service practices. Acceptance of her resignation letter was announced following the closed meeting. See related story: EDA Director McDonald submits resignation by email prior to Thursday meeting
As previously reported EDA finances have been under scrutiny by both the town and county in a series of closed sessions for several months following the town finance department’s discovery of about eight years of overpayments by the Town of Front Royal to the EDA. That overpayment was originally estimated at just over $291,000, though a final figure has yet to be determined. Neither has it been publicly announced whether any irregularities in the EDA’s finances with the county government have become apparent during the audit.
The day after the closed EDA meeting and McDonald’s resignation the Warren County Board of Supervisors had its own special meeting and closed session. Following that closed session the county supervisors voted unanimously to authorize a $90,000 expenditure to pay for three months of work by an outside consultant working on the audit of town-county Economic Development Authority.
That consultant, whose identity had not been revealed based on attorney-client privilege according to County and EDA Attorney Dan Whitten, is one of three financial entities now involved in exploring EDA finances. The others are the contracted auditor Yount, Hyde & Barbour and the EDA’s new accounting firm of Hottel & Willis. See related story: Warren County will pay $90,000 to ‘outside consultant’ in audit of EDA finances.
Warren County will pay $90,000 to ‘outside consultant’ in audit of EDA finances
After a one-hour closed meeting convened at 10 a.m. Friday morning, December 21, the Warren County Board of Supervisors voted unanimously to authorize a $90,000 expenditure to pay for three months of work by an outside consultant working on the audit of town-county Economic Development Authority.
The money will come from the County’s Contingency Fund in its current fiscal year budget. Board Vice-Chairman Dan Murray explained the EDA does not have adequate funds in its operating budget to cover the expense. Murray added that due to the county government’s larger annual budget ($107.8 million FY19) its contingency fund for unexpected expenditures is significantly larger than the EDA’s contingency fund.
A Contingency Fund of $136,299 was approved in the County’s FY 2019 budget.
Friday’s closed meeting was attended by the full board of supervisors, County Administrator Doug Stanley, County and EDA Attorney Dan Whitten and EDA Board Chairman Gray Blanton and Treasurer Tom Patteson.
The open session motion to approve the funding was made by Murray, seconded by Tom Sayre.
Following adjournment of the special meeting shortly after 11 a.m. the board of supervisors released a brief statement regarding the funding authorization:
“In order to proceed to complete the audit of the EDA, the outside consultant has requested to be paid for their services over the past three months. Due to the uncertainty still of the various EDA accounts and loans, the Board of Supervisors is stepping up to provide $90,000 at this time. We are hopeful that the consultant can wrap up the audit process in the next month which will include specifically what is owed to the Town and County.”
Following the meeting Attorney Whitten explained that the “outside consultant for financial services” is a separate entity from the auditor or the EDA’s new accounting firm. He also explained that the name of that outside consultant remains protected under attorney-client privilege until completion of the audit report.
“Basically it’s an outside eye coming in outside of your normal accountant and normal auditor … They do fact-finding, intrinsic review – that type of thing. It’s just basically they’re looking for indicia of any improper activities,” Whitten said.
Whitten also said he, Board Chairman Blanton and Treasurer Patteson would participate in a closed meeting conference call with the new EDA accounting firm Hottel & Willis Friday afternoon to discuss the parameters of their work. Hottel & Willis was hired following the announced retirement of former EDA bookkeeper Josie Rickard earlier this year.
EDA Director McDonald submits a resignation by email prior to Thursday meeting
Following a 2-hour-and-20-minute closed session at a special meeting called for Thursday morning, December 20, the Front Royal-Warren County Economic Development Authority Board of Directors unanimously voted to accept the resignation of Executive Director Jennifer McDonald.
McDonald was not present for the meeting which immediately adjourned to closed session to discuss the executive director’s job performance and an ongoing audit of EDA debt and accounting service practices.
As first reported by Royal Examiner’s Norma Jean Shaw, EDA finances have been under scrutiny since the Town of Front Royal’s Finance Director B. J. Wilson discovered eight years of overpayments by the Town to the EDA on debt service. An initial figure slightly over $291,000 was reported, though a final number and other related matters have yet to be presented by EDA auditors.
McDonald’s emailed resignation letter was received by EDA and County Attorney Dan Whitten at 9:37 a.m., 23 minutes prior to the 10 a.m. convening of Thursday’s special meeting. McDonald’s letter and a brief board statement in reaction to it were both brief and polite.
“Dear Mr. Dan Whitten, Please accept this as my official notice of resignation. Over the past 20 years I have enjoyed the work at the EDA and want to continue to see the County grow and prosper. I wish everyone the best and look forward to working with everyone in the future on other projects,” McDonald wrote.
“Jennifer McDonald, Executive Director for the Front Royal-Warren County Economic Development Authority, has tendered her resignation effective December 20, 2018. Mrs. McDonald has served as EDA Director since April 2008 and has worked diligently to bring new business, investments and jobs to the County of Warren and the Town of Front Royal. The EDA board members thank Mrs. McDonald for her service and wish her the best in her future endeavors,” said the EDA board statement read into the record, as was McDonald’s resignation letter, by Chairman Gray Blanton.
Contacted later by phone, McDonald said, “I was ready to move on with the next phase of my career. A lot was accomplished during my tenure as Director and I am proud of those accomplishments.”
Several board members including Greg Drescher, Ed Daley and Vice-Chairman Bruce Drummond declined comment following the meeting’s adjournment. Drescher, who served as chairman in recent years and worked closely with McDonald on EDA business prior to his August 24 resignation from the chairmanship one day after he and McDonald sat down with Town officials to discuss the debt service situation, was especially tight-lipped, only nodding “no” in response to a request for a reaction to McDonald’s resignation. However, Board Chairman Gray Blanton did talk with media regarding the day’s developments.
Asked if McDonald’s resignation could have been made in anticipation she would be fired or asked to resign, Blanton replied, “I can’t really say yes or no to that.”
Further questioned on whether the board would have been divided on a vote to remove its executive director, Blanton said, “It was not divided in accepting that letter.”
As for receiving new or even final numbers on the accounting audit, the board chairman said, “We needed to get by this – and Dan has contact with that auditing firm and we will be getting those numbers.”
Asked if he anticipated that the next report from the auditors would be the final one, Blanton commented dryly, “These audit guys have charged a fortune to do what they’ve done. If they can’t come up with the numbers something’s wrong.”
Back to the subject of the EDA executive director’s resignation after over a decade overseeing town and county economic recruitment and development, Blanton said, “In the one year I’ve been here she has been very efficient in her presentations to the board. She’s always answered our calls, she’s always given us all the explanations and we all like that. That was good and we thought that everything she was doing was okay. But we found out through the audit that there might be something that’s not okay.”
Asked if “not okay” indicated that repayment of Town debt service overpayments might not be a simple matter, Blanton replied, “It won’t be as simple as that – but we do have our financing, we have our bank accounts, we have rents that we receive, we have income, we have properties that we own that are for sale. The last time I asked her, she said ‘yes, we have the money.’ ” As to specifics, Blanton who has been on the job as board chairman for less than four months pointed reporters to EDA Attorney Whitten.
“We haven’t gotten any information regarding that as to whether any – we don’t have the evidence now that funds might be missing. We don’t have any hard numbers at this point that we can present to media or to the authorities. So we’re still getting final numbers from both our auditor and the accountant,” Whitten told the two reporters present.
Whitten added that no conclusion had yet been reached on the County side of payments on EDA projects or debt service. “We haven’t gotten a final report yet, so we haven’t gotten any findings at this point – I thought we’d have them but we don’t,” the EDA and County attorney said.
Asked if he had a guesstimate on a timeframe for those final audit report figures, Whitten replied, “Hopefully soon.” He then pointed to a scheduled Friday meeting with the new EDA accountant Hottel and Willis. That meeting is scheduled for the afternoon of December 21, after a specially-called 10 a.m. closed meeting of the Warren County Board of Supervisors to discuss debt and accounting services.
Whitten was also asked if he thought McDonald’s resignation could have been pre-emptive, as in seeing board action seeking her resignation as imminent.
“She was in the closed session with us last Friday and she was met with the evidence … or documents that the auditors had found and felt she needed to resign.”