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EDA in Focus

EDA to consider interim director appointment, get audit update this week

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The EDA board comes out of closed session on Dec. 20 to accept the resignation of Executive Director Jennifer McDonald. Royal Examiner File Photo

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.

EDA in Focus

EDA Board of Directors meeting of March 22

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Photo and Video by Mark Williams, Royal Examiner.

During the regular EDA meeting of March 22, Interim Executive Director John Anzivino briefed his board of directors on ongoing business recruitment; the recruitment process for appointment of a permanent executive director; and changes to the budget process he has implemented, as well as the coming fiscal year budget proposal.

His board lauded his efforts and the budget proposal he presented.

Also on Friday’s agenda were updates from the county administrator and town manager on respective projects.

See those reports in this Royal Examiner video:

As audit information received in closed sessions, EDA authorizes litigation

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EDA in Focus

‘As the Audit Turns’ – local EDA soap opera plot thickens

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Ron Llewellyn, far left, and Greg Drescher have now joined Jennifer McDonald, right, among others who have resigned their positions with the EDA in recent months. It is noteworthy that Drescher and Llewellyn’s terms expired at the end of February though the county supervisors have yet to name replacements. Royal Examiner File Photo Roger Bianchini

While the big news to develop out of the Front Royal-Warren County Economic Development Authority’s second hour-plus closed session of Friday, March 22, was the resignation of board members Greg Drescher and Ron Llewellyn, an interesting side plot to the escalating EDA soap opera developed upon the arrival of Shenandoah District County Supervisor Tom Sayre.

Prior to Sayre’s arrival, as previously reported by Royal Examiner, the blockbuster out of closed session number one Friday morning was the authorization of litigation to be filed on the EDA’s behalf by the law firm contracted to handle EDA interests related to the six-month, quarter-million-dollar-plus audit and investigation of EDA finances. See Related Story:

As audit information received in closed sessions, EDA authorizes litigation

Those finances under scrutiny are believed to stretch past the last fiscal year audit conducted annually at a cost of about $17,000 by Yount-Hyde-Barbour, across much of the decade-long tenure of former EDA Executive Director Jennifer McDonald. McDonald resigned by email on December 20 prior to the EDA board’s second scheduled closed session discussion of her job performance held within a week.

Sayre, who is engaged in dueling defamation civil lawsuits with McDonald surrounding alleged circumstances surrounding a reported May 18, 2017 break-in at the EDA office that showed no signs of forced entry and a reported June 15, 2017 vandalism at McDonald’s residence, arrived at the EDA office in the old American Viscose Admin building at 12:20 p.m., 45 minutes after the EDA Board of Directors convened that closed session. The first topic of discussion announced behind those doors closed at 11:35 a.m. were issues related to the audit and investigation of EDA finances. A second topic was the process of selecting a new executive director to succeed Jennifer McDonald on a permanent basis.

Tony Carter and Doug Stanley remain seated in meeting room as EDA board convenes to closed session. Photos/Roger Bianchini

In addition to a suspected audit consultant representative, the EDA board and legal representatives, present behind those closed meeting doors were Warren County Administrator Doug Stanley and Happy Creek Supervisor Tony Carter.

In the wake of EDA Administrative Assistant Missy Henry’s resignation earlier in the week, other than two reporters the only person present in the front office was former County Finance Director Carolyn Stimmel. Stimmel, who has retired from her county position, has been assisting Interim EDA Executive Director John Anzivino on a part-time basis recently.

Upon discovery of Stanley and his board colleague Carter’s presence in the closed session, Sayre began lobbying Stimmel to see if he could join the closed session as a county supervisor. In fact as board vice chairman, upon his arrival Sayre was the highest-ranking elected county official present. Stimmel’s inquiry resulted in an apparent “no” with the added information that Carter and Stanley would be exiting the closed meeting “in a minute”.

Unsatisfied with that answer, an additional inquiry forwarded by Stimmel for Sayre led EDA and County attorney Dan Whitten to exit the closed session to engage in a lengthy discussion with Sayre outside the closed meeting room. A second person, Sands-Anderson attorney Cullen Seltzer, eventually joined Whitten in conversation with Sayre outside the closed meeting.

Above, Tom Sayre lobbies EDA attorney Dan Whitten to join other county officials in EDA closed session discussion of audit topics; below Sayre follows as Carter exits.

As promised, Carter and Stanley soon left the closed session, as did Sands-Anderson attorneys Seltzer and Dan Siegel. Siegel was present to present the same capital improvements bond issue options to the EDA in open session that he had presented to the county supervisors on Tuesday. Closed session number two finally adjourned at 12:45 p.m.

Immediately upon re-adjournment to open session, Drescher read his statement on his resignation; followed by Llewellyn’s. Both indicated their resignations were not related to any information presented in closed session (see related story). However both alluded to troubling revelations that may be forthcoming from the audit report, as did Chairman Gray Blanton in thanking Drescher and Llewellyn for their service to the EDA. See Related Story:

Drescher, Llewellyn explain EDA departure decisions

As board Vice-Chairman Bruce Drummond and Ed Daley listen, former chairman Greg Drescher reads from prepared statement on his decision to resign from EDA board.

Upon adjournment of the regular meeting Sayre approached EDA Board Chairman Gray Blanton about Carter and Stanley’s closed session presence and his exclusion. Blanton explained that Carter and Stanley had requested to be allowed in prior to the meeting, and were consequently invited to participate. Blanton suggested Sayre make a similar pre-meeting request if he desired to be included in any future EDA closed sessions.

Nodding to the two reporters present, Sayre made it clear he was making such a verbal request to the EDA Board chairman.

Contacted later, Carter said that in November while still board of supervisors chairman, he and Stanley met with a representative of the audit consultant. More recently following a meeting with Sands-Anderson staff, Carter said that in light of his and Stanley’s earlier consultant meeting it might be wise to include them in Friday’s closed session reports.

Stay tuned for future episodes of “As the Audit Turns” on your favorite Royal Examiner news and soap opera channel:

In first two photos Tony Carter plays hide and seek with Royal Examiner camera, first behind Carolyn Stimmel and then his coat – you got me, take one of my good side; County Administrator Doug Stanley wasn’t in as playful a mood as he exited the EDA closed session.

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EDA in Focus

Drescher, Llewellyn explain EDA departure decisions

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As Ed Daley and Tom Sayre, rear, listen Greg Drescher reads from prepared statement on his decision to resign from EDA board. In August Drescher resigned as EDA Board Chair one day after he and then-EDA Executive Director Jennifer McDonald met with town officials who informed them of discovery of years of town debt service overpayments to the EDA.

Both Greg Drescher and Ron Llewellyn announced their resignations, effective Saturday, March 23, following a second EDA Board of Directors closed session of Friday, March 22. For Drescher it was his second resignation in the past seven months.

On August 24, one day after he and former Executive Director Jennifer McDonald met with town officials over debt service payment irregularities discovered by the Town Finance Department, Drescher resigned his chairmanship of the EDA board.

Under increasing scrutiny from her own board, McDonald resigned her position four months later on December 20.

Noting completion of his third term on the board at the end of February, Drescher said, “During this last year there were several areas of concern raised and several investigations were started. I sincerely hoped all this would be done prior to the end of February. When it became evident it would not be finished at the end of February I asked the board of supervisors to continue allowing me to stay on so I could support whatever needed to be done to keep the EDA moving forward despite these issues. And they graciously agreed.

“I believe they understood that it would be helpful to have someone with a longer history to be part of the process. With the conclusion of the audit investigation imminent the board is on a path of reworking many of its practices and policies and hiring a new executive director. This is a good time for me to step aside from this voluntary role.

“It’s unfortunate I was unaware of any of the specifics of the investigation, as was the rest of the EDA board.

“But I remain committed to making this community a wonderful placed to live, work and play. The future of Warren County, the Town of Front Royal and the region depends on a strong, aligned and supported economic development authority to lure jobs, talent and investment in our community. And I stand ready to assist in any way possible as we begin a new chapter for the EDA.”

“It’s been a pleasure working on the board – I’ve been on for 12 years and a lot of good things have happened,” Drescher said, adding that without the unresolved investigation his plan was to step down at the February 28 end of his third term.

Llewellyn then offered the board his statement of departure.

As Tom Patteson, right, listens Ron Llewellyn explains his decision to leave the EDA board. Later he told media he was planning to spend more time at his Florida property and even planned on selling his and his wife’s lavish Rose Hill estate in town.

“Mr. Chairman I share Mr. Drescher’s comments on his term on the board. I have enjoyed working with this board for almost 10 years. I’ve experienced an awful lot of good things. I think we have set a pretty high bar to continue out as far as creating opportunities and jobs in Warren County.

However, it comes with much thought and consideration I think it’s in the best interest of the EDA and the Warren County population that I tender my resignation – and I’m making it effective tomorrow, March 23, 2009 (lost a decade there, Ron), from the Warren County Economic Development Authority.

“This has been an extremely difficult decision to make. I have very much enjoyed my time on the board, and it is a decision that one, I think is in the best interest of all concerned. Our county needs to move forward, they need to understand there are a lot of positive things going on in the county; and hopefully we’ll get past this chapter that’s been very difficult for all of us who have been on here.

“And I stand ready to assist the board in any way I can in the future. I’ve made that known to the board of supervisors and I’m also now making it known to you,” Llewellyn said to his EDA colleagues, adding, “I wish you all the best.”

Gray Blanton, who volunteered to accept the chairmanship in the wake of Drescher’s August 2018 departure from that role, thanked Drescher and Llewellyn for their service to the EDA.

“We certainly appreciate all your time and efforts, and all the good things that have happened – it’s unfortunate that we’ve gone into such a snag here,” Blanton said of the audit and anticipated consultant report on EDA finances.

Ed Daley then offered a motion to allow Llewellyn in the absence of a replacement to continue as liaison to one of the executive director candidates as the application and interview schedule suggested by Interim Executive Director John Anzivino has been underway. That motion passed by a unanimous voice vote.

The board authorized Llewellyn to continue as a liaison to one executive director candidate as he had been previously. The board hopes to have a permanent EDA executive director in place in May.

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EDA in Focus

EDA in Focus: Let’s take a look back

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Councilman Bebhinn Egger at the May 22, 2017 Council meeting. File photo.

The great thing about an online news source is that the stories are always there. With a story that develops over time, such as the unfolding events at the Front Royal-Warren County EDA, it is easy to look back and see what happened at an earlier point in time.

As the EDA has its report due out early next week, Royal Examiner wanted to take readers back to an earlier time and see what brought us to where we are now. Readers will realize that the Royal Examiner has been on the forefront, bringing you the “news behind the news” with video of work sessions and meetings, rather than mere sound bites.

Front Royal Councilwoman Bébhinn Egger was instrumental in sounding the alarm that “something didn’t make sense, and Royal Examiner also stayed on top of the issue, breaking many stories along the way, about other EDA projects that had elements of “not making sense”, such as the sale price of 30-acres of land to Tran for $1 and the Workforce Housing project’s “free land” that wasn’t actually free.

We’ve selected from the 160+ stories the Royal Examiner has written about the EDA over the past 3 years. 

We start with the then headline:

Egger stands alone in seeking assurances about 1st Avtex site client

Council unenthusiastic about ITFed query to Goodlatte

Councilman Bébhinn Egger issues statement addressing accusations

Egger, Connolly butt heads over workforce housing project changes

First impression of EDA reply: 383 pages later what have we learned?

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EDA in Focus

As audit information received in closed sessions, EDA authorizes litigation

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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:

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Crime/Court

What do the Sayre-McDonald lawsuit and the Titanic have in common?

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A photo Tom Sayre had taken of himself with Jennifer McDonald on June 18, 2018 celebrating the ITFederal groundbreaking behind EDA headquarters. Social Media File Photo

FRONT ROYAL – “This will be a damaging loss for whoever loses,” Judge Ian Williams observed Wednesday of the time, effort and expense being put into the Tom Sayre defamation lawsuit against former Front Royal-Warren County Economic Development Authority Executive Director Jennifer McDonald at the General District Court level – a level where the maximum award is $25,000. 

It’s very curious but I’m giving you more time to arrange the deck chairs on the Titanic,” Williams added of additional time he granted Sayre attorney Tim Bosson and McDonald counsel Lee Berlik in an attempt to reach a legal consensus on filings in the case. – “There will be no more hearings on this,” the judge warned of dueling evidentiary motions before the new trial date of August 2, at 1 p.m. The Winchester-based judge explained he had to change the original trial date from June 21 due to a conflicting trial assignment. 

As the March 20th motions hearing drew to a close after an hour-and-forty-five minutes, Judge Williams bemoaned the time and legal effort being put in on preliminary motions. He asked the attorneys what they made an hour. Bosson replied $350, Berlik $425 (I’m definitely in the wrong line of work). 

Noting that amounted to $775 for every hour put in by both sides on the case, the judge marveled at the work being done on a case with a $25,000 award cap. 

The most recent result of all that legal work was plaintiff Tom Sayre prevailing on a series of evidentiary motions argued Wednesday afternoon in his $25,000 defamation suit against McDonald. 

Overruled by Judge Williams on March 20 were defense motions to: 1/ a “plea and bar” which would have essentially thrown the plaintiff’s case out as having not established the grounds, including malice, upon which the civil suit is based; 2/ to further reduce the number of complaints on statute of limitations violations; 3/ remove additional detail on specific complaints in the case added since the initial filing; 4/ and prevent any plaintiff subpoena of records of EDA/McDonald Private Investigator Kenneth Pullen as privileged information. 

On that latter issue, plaintiff counsel Bosson told the court that he had verified that the EDA Board of Directors had initially hired Pullen in the wake of the May 17, 2017, EDA office break in. However, he said the EDA board had turned the private investigator’s contract over to its then executive director as incidents of alleged trespass and vandalisms reported by McDonald at her home escalated over the following month. 

The fact that then-EDA Board Chairman Greg Drescher requested Town Police to drop their investigation of the EDA office break in, in favor of the EDA’s private investigator’s handling of the case has been a sticking point for EDA critics, particularly former Town Councilwoman Bébhinn Egger’s father Mark Egger. The elder Egger has repeatedly questioned the board of supervisors on lapses in county oversight of the EDA; as well as seemingly conflicting stories regarding who hired the PI and why Drescher, speaking for the EDA board, sent a letter asking for a halt to the FRPD investigation. 

Jennifer McDonald and EDA board Chair Greg Drescher fielded some tough questions from County Supervisors Tom Sayre and Archie Fox at a June 6, 2017 joint work session of the supervisors and EDA. Royal Examiner File Photo/Roger Bianchini

Judge Williams authorized a subpoena of Pullen and his records from June 6 to August 16, 2017. However, Bosson told the court he had been informed by the EDA that they do not have any documents related to Pullen’s investigation; and that either “Ms. McDonald has them or they’ve been destroyed.” 

But the court ruling on Pullen and his records will allow information in a series of July 14, 2017 emails between McDonald and this reporter subpoenaed by the plaintiff and referenced several times in Wednesday’s hearing, to be corroborated or not corroborated by the private investigator, if not on paper, on the witness stand. 

As Bosson noted during Wednesday’s hearing, in those emails McDonald alleges “a culprit” in the alleged June 15, 2017 rock-throwing vandalism at her home had been identified and was being approached by Pullen to wear a wire on a suspected accomplice in an alleged plot to terrorize her. Bosson told the court that based on information from the recipient of those McDonald emails the references to “the first Putin” and “our photo boy” as a director of the operation against her are references to Mr. Sayre. The alleged plot to terrorize McDonald was outlined in the crumpled, typed note the WCSO incident report indicated was pointed out in her yard to sheriff’s office first responders investigating the June 15 vandalism reported at 9:02 p.m. 

As Royal Examiner previously reported, that note investigators assumed to be dropped by the vandal at the scene contains two phone numbers, Tom Sayre’s office number and former Town Manager Michael Graham’s cell phone number; as well as references a “Matt” being run off by a barking dog of McDonald’s; getting “files to the Examiner” because “Norma Jean will be waiting for them”; and instructions “not to call Tom during business hours…” and, drum roll please, “Do not take this sheet with you …” 

The incident report appeared to indicate no fingerprints found on the note. 

All those implicated by name and known to authorities testified at McDonald’s misdemeanor false police report trial that they had no knowledge of the note or any plot against McDonald. While dismissing the case against McDonald on October 31, 2018, General District Court Judge W. Dale Houff commented that there was something “terribly wrong” about the note. However, Houff ruled that Commonwealth’s Attorney Brian Madden had not established enough evidence or motive as to why McDonald would fabricate such a situation.* 

As for defense attorney Berlik’s complaint that plaintiff counsel Bosson has not been responsive to subpoenas of plaintiff records in a timely manner, Bosson noted that many of the responses were being delivered to the McDonald team in Circuit Court where the defendant has become the plaintiff in filing a $600,000 defamation suit against Sayre. 

“They filed the exact same thing in circuit court and will receive them there – I don’t understand why we are here,” Bosson said of the defense’s beef over the subpoena responses. 

“Do you think the two of you can agree on anything,” Judge Williams asked the attorneys. When Berlik began, “Not now,” the judge countered, “If you can’t do it, I can go through all of (the subpoenas) and choose (what’s in and what’s out) and you can live with it … we’re not having another hearing on this.” 

In making his case to reduce the scope of the defense subpoena submission, Sayre attorney Bosson pointed to his own four subpoenas totaling 20 specific requests in the wake of the judge’s earlier hearing admonishment to the attorneys not to turn evidentiary subpoenas into fishing expeditions. Bosson compared his numbers to the defense filing of seven subpoenas totaling 89 specific requests. 

While setting a series of dates for submissions and responses approaching the new trial date, the judge set May 10 for the final product – “either separate orders or one agreed-upon order,” Williams observed, adding, “If you achieve that (an agreed order) I may invite you all up here for champagne.” 

Williams then glanced to his left at Front Royal Town Attorney Doug Napier listening to the proceedings, offering to include him in the celebration of functional legal compromise; leading Front Royal Police Captain Crystal Cline to Napier’s left to inquire if she might be included in that celebration as well. 

Back on the serious legal train, Napier told the court that the town government could not respond to a defense subpoena of town personnel text messages because “we just don’t have them.” 

Napier was also present representing the Town in attempting to join the plaintiff in the effort to quash certain defense motions on the table that day. However, Napier acknowledged that two attempts he had made to notify Berlik of the Town’s planned joining in that motion had failed to reach McDonald’s attorney. During the hearing Napier simply deferred to the plaintiff’s arguments on the motions to quash. 

FOOTNOTE: Despite McDonald’s criminal case acquittal, it is noteworthy as previously reported by Royal Examiner, that the prosecutor did not call the Town Police investigator who developed the false police report case against McDonald, nor the State Police officer who filed the warrant, nor an EDA employee whose recorded FRPD interview appears to corroborate this reporter’s timeline on meeting with McDonald about incidents at her home prior to the report of the vandalism rather than the following morning as asserted in her criminal case defense. Madden also did not present evidence regarding motive given to him by one prosecution witness – Royal Examiner Editor Norma Jean Shaw’s exploration of McDonald’s use of large amounts of cash in purchases and down payments in her personal real estate business; as well as Shaw’s inquiries into the identify of a “secret investor” in the since-aborted police academy project slated for EDA land in the Happy Creek Technology Park. That investor was believed to be ITFederal principal Truc “Curt” Tran. Tran has since said such an investment was discussed, but never agreed to. A file containing that information stored in an obscure place in McDonald’s office was the only thing she reported missing from the May 17, 2017, EDA office break in. Without a shovel being turned on the site, the EDA reports it spent over $500,000 on the police academy project before its abandonment. 

Tom Sayre and ‘Curt’ Tran in EDA parking lot on Dec. 20, 2018, the day Jennifer McDonald resigned via email during extended EDA board review of her job performance. Royal Examiner File Photo/Roger Bianchini

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