“The report of the mayor: Bébhinn, please accept my sincere apology. I was never under the intention of quieting you or putting words in your mouth. But as we moved along we were told different things that sounded great – and we took it and drank the Kool-Aid. Thank you again for everything you did for the council. And thank your dad, Mr. Egger for coming and speaking to the council – please accept my apologies also.”
And so began and ended Front Royal Mayor Hollis Tharpe’s “Report of the Mayor” at the March 25, 2019, town council meeting.
The object of the mayor’s apology concerning his and council’s ignoring of warnings about the veracity and verifiability, or lack thereof, of EDA projects and processes was former Councilwoman Bébhinn Egger. Egger resigned her council seat effective June 30, 2017, to marry and move out of state.
As reported in Royal Examiner’s related story, former Councilwoman Egger – now Bébhinn Rowland of Maryland – returned Monday to remind former colleagues present and absent about the resistance she met over two years ago when she raised alarm bells about assertions being made by the Economic Development Authority and its then Executive Director Jennifer McDonald on a variety of fronts.
Following her remarks, her father Mark Egger, rose to call for both individual and collective apologies for the dismissive treatment his daughter received during that 2016-2017 timeframe from her colleagues.
And ALERT the MEDIA, those apologies were offered – at least by three who were there at the time, Mayor Tharpe as cited above, as well as Eugene Tewalt and Jacob Meza. As those apologies were offered, Mrs. Rowland listened from the hallway at the meeting room doorway.
Councilman Tewalt began the council mea culpa to their former colleague concerning the Kool-Aid they all appeared to have drunk regarding the EDA and its former executive director regarding projects from workforce housing to ITFederal and the New Market Tax Credit Program.
“I dealt with Ms. McDonald for quite a few years – before this time we didn’t have a problem with Ms. McDonald on anything that we’ve done. It came out later, and I don’t want to get into all the details, but when she came in and told us the stories that she told us, which becomes a lie. It became a lie and we know it’s a lie because of the things that are going on … and I do want to apologize to Bébhinn for that. I appreciate what she did when she was here.”
Next up was Jacob Meza, who opened by acknowledging his recent work session call for a joint full board meeting between council, the EDA and county supervisors. Then Meza acknowledged the current Mrs. Rowland and her father’s earlier remarks.
“First and foremost I wanted to say thank you to former Councilwoman Egger for all the information she brought forward related to the EDA and the transactions that were going on. And I want to thank Mr. Egger for his relentless perseverance in bringing to our attention the problems we are having at the EDA.
“I do regret that this action didn’t come sooner. And particularly as I hear Mr. Egger recount the actions that I was able to be a part of and witness for Councilwoman Egger – it does make it totally bad. And I do, from my point of view, I extend an apology. But that was the case, because I was there and I remember seeing it and I did not have enough information to act accordingly. So for that, I do apologize.”
And if Councilman and former EDA board member William Sealock didn’t apologize, he did try to explain the reasons, including apparent misinformation given to him as an EDA board member, for his reluctance to accept or act on then Councilwoman Egger’s suspicions that something was amiss in the state of EDA over two years ago.
As for councilmen departed who received some of Mark Egger’s most scathing criticism, Bret Hrbek and John Connolly, well time will tell if they choose to acknowledge Mark Egger’s request for atonement for past lapses of judgment regarding Councilwoman Egger’s calls for independent verification of assertions made to local government by the EDA and its former executive director while they were on council.
“John Connolly’s shameless arrogance towards Bébhinn knows no bounds,” her father began of the now-retired councilman. “At the May 8 and May 22, 2017 Council meetings, he accused her of grandstanding, airing personal grievances, having a personal vendetta, unprofessional behavior, disrespecting public officials, disgraceful behavior, and publicly shaming people. Talk about the pot calling the kettle black. If anyone wants to hear a disgusting tirade of Mr. Connolly, go to the Royal Examiner YouTube video of May 22, 2017.
“Mr. Connolly, you owe her an apology,” Mark Egger concluded.
And of Hrbek he added, “At the November 28, 2016 Council meeting, Bret Hrbek, in disparaging remarks directed towards Bébhinn for daring to ask questions, said, ‘It seems that ITFederal, the owner specifically, Mr. Curt Tran, has become highly offended by the hostility that he feels directed towards him and the accusations that have been made in his direction.’
“He went on to further express complete confidence in Jennifer McDonald and the EDA saying, ‘I don’t believe that there are any back-room deals or shenanigans going on that will cause harm to our community and this Town.’
“At the December 12, 2016 Council meeting, Mr. Hrbek stated that the EDA had seen factual evidence of award letters of substantial federal contracts to ITFederal, even though there was absolutely no proof that this was true. And the rest of the Town Council, in a 5-1 vote, without any evidence given, approved a resolution stating this in support of ITFederal. Bébhinn was the sole negative vote.
“Mr. Hrbek, you owe her an apology.”
Neither Connolly nor Hrbek were present to react to Mark Egger’s request Monday evening.
Royal Examiner Editor Norma Jean Shaw reached out to Bret Hrbek on Tuesday evening, to follow up on questions Hrbek had agreed to answer regarding our recent story on the EDA, land purchases by its former director and current Warren County Sheriff Daniel T. Mceathron and the status of ITFederal, and he responded, “After looking at the questions I don’t think I would add anything useful to the discussion. I’ve been out of public sphere for two years and really only know the information that I’ve read in your paper and the NVD.”
Shaw replied, “I hope you will, at least, then, be gracious enough to extend a public apology to fellow formal council member Egger, as most council members have done.”
Hrbek stated, “Apologize for what?”
Watch the remarks:
EDA presents budget proposal to Board of Supervisors; delinquent taxes from contractors
On Tuesday, February 11 at the evening work session of the Warren County Board of Supervisors, the EDA Board and staff presented its budget proposal to get through the final 3 1/2 months of this fiscal year and to continue into FY 2021.
Also included on the agenda was a discussion with Building official David Beahm and Commissioner of the Revenue Sherry Sours on the payment of delinquent taxes and business license fees by contractors prior to issuance of building permits.
County Administrator Doug Stanley discussed the Department of Environmental Quality Financial Assurance requirements. Also, Stanley, along with County Attorney Jason Ham, discussed the management and lease agreements of the Front Royal Golf Club.
See the presentations, including discussion of the Town’s $8 million-plus debt to the EDA on the new police station and the status of the Front Royal Golf Club in this exclusive Royal Examiner video:
EDA report to County – long-time annual auditor withdraws from lagging 2018 audit process
During one of six operational updates from entities with which it is either directly or indirectly involved at its Tuesday, February 4 meeting, the Warren County Board of Supervisors got what Front Royal-Warren County Economic Development Authority Executive Director Doug Parson called “bad” and “very disappointing” news.
That news was that long-time EDA auditor Yount-Hyde-Barbour had withdrawn from the EDA’s 2018 audit process. That process is running considerably behind as the EDA tries to get to the bottom of the final year of a number of years during which a contracted financial investigation by Cherry Bekaert, known for its forensic audit discoveries of criminal financial behavior, alleged a number of years of financial improprieties within EDA operations.
The Cherry Bekaert investigation conducted from mid-September 2018 into the spring of 2019 has resulted in a $21.3-million EDA civil litigation against what currently stands at 14 human and business entity defendants and multiple financial felony indictments by a special grand jury empaneled to investigate potential criminality tied to the EDA civil litigation. At the center of both the civil and criminal cases is former EDA Executive Director Jennifer McDonald.
It was Yount-Hyde-Barbour that was contracted by the EDA to conduct its annual audits during most, if not all of the years during which the EDA financial scandal is believed to have occurred. In recent months retired Warren County Finance Director Carolyn Stimmel and Heather Tweedie of the auditing firm Hottel-Willis have been pouring through the EDA’s 2018 financial records trying to ascertain what EDA assets went where, how, to what purpose and most importantly, were those purposes legitimate and authorized by the EDA Board of Directors.
Yount-Hyde-Barbour had been expected to take the result of Stimmel and Tweedie’s work to belatedly conduct their annual audit for 2018. Completion of that audit has been termed crucial to the
EDA’s future ability to function as it attempts to traverse the operational aftermath of the financial crimes alleged to have occurred under McDonald’s decade of executive leadership of the EDA.
One EDA civil case defendant’s attorney wondered aloud during a past motions hearing that if their client was a defendant for the financial actions alleged against them, why the EDA auditor that had rubber stamped the EDA’s finances annually through the years of alleged embezzlements and misdirection of assets, wasn’t also a defendant.
Could Yount-Hyde-Barbour’s withdrawal from the 2018 audit process be an indicator of potential legal issues between the auditor and the EDA? In response to media questions Sands Anderson attorney Dan Siegel, present with lead EDA civil case attorney Cullen Seltzer for a closed session discussion with County officials of the EDA’s civil case landscape, said only that EDA counsel continues to explore potential legal liability in many directions.
VDOT Revenue Sharing
In other business Tuesday, after a week’s delay to allow new supervisors to gather additional information, the county board unanimously approved the County’s contribution to the Virginia Department of Transportation (VDOT) Revenue Sharing Program. It was explained that the program that runs through multiple municipal fiscal year budgets allows involved municipalities to get a 50% revenue match from the State on needed and desired road improvements throughout the county.
Numbers presented projected the County’s contribution in the coming FY 2021 budget at $250,000. It was a number projected to remain constant in FY 2021 through FY 2024. Six total involved road project costs were cited at $2.9-million over a number of years, with a 25% County contribution total of $753,312.50 and a 25% contribution from involved Sanitary District and POA fees at $703,313.50.
Short-term rental permit
By a 3-2 margin, a divided board approved a short-term rental Conditional Use Permit (CUP) for Stephen J. Aron Jr. despite some objections from neighbors in the gated River Ridge Property Owners Association. Tony Carter and Archie Fox cast the two dissenting votes.
Carter cited neighbor concerns about security issues tied to the applicant’s efforts to recoup some of his residential property improvement costs in purchasing what he said at the earlier public hearing was the run-down home of what he described as the less than conscientious previous occupants. In explaining her vote for the CUP, Delores Oates noted that renters wouldn’t be given the code to the gate, but would utilize a locked key box key to activate entry to the gated community.
Carter replied that, that solution still allowed entry and access of strangers to a community that many residents may have located to for the additional security provided by locked access available only to residents and their guests.
During the January public hearing it was noted in favor of the request that many short-term rental operations do quite a bit of vetting of guests. The applicant indicated he intended to be conscientious about those allowed to stay at the residence he and his family plan to spend a great deal of time at themselves.
In addition to the EDA, other operational updates the county received were from VDOT, RSW Jail, the Virginia Cooperative Extension Service, Department of Social Services and the Town of Front Royal.
See a related story on the Town report; and see the full Warren County Board of Supervisors meeting – other than the 3-hour-plus closed session – in this Royal Examiner video:
Economic development proceeds amidst legal and Spotted Lanternfly threats
This reporter sat down with Front Royal-Warren County Economic Development Authority Board of Directors Vice-Chairman Jeff Browne and Executive Director Doug Parsons on Friday, January 31, to discuss the work they do amidst challenges they face in the aftermath of the financial scandal that developed during the executive leadership of Jennifer McDonald and a previous EDA board majority.
In what we hope is the first of at least monthly video interviews on EDA business and affairs, listen as Browne and Parsons describe how their time is budgeted as they continue the EDA’s work of business retention and recruitment in an environment of dueling civil litigations. They continue to offer an olive branch to the Front Royal Town Council to work together in good faith to determine exactly what the EDA owes the Town in allegedly misdirected EDA assets generated by Town taxpayers, as opposed to an increasingly expensive attorney-driven civil suit filed by the Town against its existing co-created EDA.
It is litigation, as is pointed out in the interview, in which town taxpayers face the unhappy task of funding both sides, as Town taxpayers for the plaintiff and as County taxpayers for the defendant.
And speaking of olive branches, Browne and Parsons conclude the interview by describing the economic threat presented by the expanding presence of the fruit-tree and grapevine feeding Spotted Lanternfly in Frederick County to our north; and how Warren County citizens and businesses can be on the alert to spot, report and mitigate early signs of the destructive bug’s presence in our county.
Watch the discussion in this exclusive Royal Examiner video:
Judge denies EDA civil suit defendants’ motions for removal from case
In a written ruling signed January 24 and filed in the Warren County Circuit Court Clerk’s Office on January 27, Judge Bruce D. Albertson denied a host of EDA civil litigation defense motions for removal from the case as alleged co-conspirators with central defendant, former EDA Executive Director Jennifer McDonald.
Among defendant attorneys involved in the December 12 motions hearing were those representing April Petty, Jesse Poe, Donald Poe and his Earth Right Energy (ERE) solar panel installation company, and ITFederal and its principal Truc “Curt” Tran.
The basis of those defense counsel arguments for dismissal of their clients from the civil case primarily revolved around the plaintiff’s notion of an overarching conspiracy that somehow links the various defendants to central figure and former EDA Executive Director McDonald; and that there are legally definable contractual breaches making those defendants individually liable for funds that came their way through McDonald.
At the December motions hearing christened “Groundhog Day” by one media rep present (guilty as charged) for the bulk of four-and-a-half-hours of repetitive legal arguments put forth by each defense attorney on essentially identical claims for removal of their clients from the civil case, lead plaintiff attorney Cullen Seltzer’s counter was briefer.
That was because Seltzer’s reply was essentially a one-response-fits-all argument. That response was that there did not have to have to be direct knowledge among all defendants of each interlocking conspiracy McDonald is alleged to having been a party to, for that conspiracy to exist to the benefit of separate defendants in separate transactions. Seltzer scoffed at the idea of McDonald as “a rogue tornado” distributing EDA assets to various defendants without a general common knowledge that something illegal was transpiring to each defendant’s benefit.
“I deny each Demurrer and Plea in Bar for the reasons cited by the plaintiff,” Judge Albertson wrote in his brief, three paragraph ruling.
However, the judge also ruled that a plaintiff claim of “Breach of Fiduciary Duty” against all defendants, cited only McDonald and her former Administrative Assistant Michelle Henry for such action.
“Plaintiff alleges that this count applies to all defendants due to the conspiracy count. The manner in which this count is written, however, names only Ms. Henry and Ms. McDonald as parties that have breached this duty. I find that his count does not apply to the other defendants as written in the Amended Complaint,” the judge ruled.
The judge also continued a decision on Earth Right Energy’s “Plea in Bar and separate Motion for Sanctions” based on other arguments heard December 12. There was disagreement between ERE attorney Ryan Huttar and EDA counsel on the validity of contracts between the EDA and ERE in amounts over $10,000, which is most, if not all involved contracts.
EDA counsel noted that any EDA transaction or contract over $10,000 had to be approved by the EDA Board of Directors, which EDA counsel stated did not happen in the Earth Right Energy cases. However, Earth Right attorney Huttar contended the company’s contracts, including a $27-million one with the Warren County Public School system negotiated while Greg Drescher was both an EDA board member and superintendent of schools, were legally binding.
It appears a decision on those arguments will require additional factual information to be brought to the court.
Economic Development Authority Board of Directors Meeting – January 24, 2019
The Economic Development Authority held their monthly Board of Directors meeting on January 24, 2020.
One of the topics was the sale of the Stokes Market (most recent the Main Street Market) to William Huck, owner of C&C Frozen Treats on Main Street in Front Royal. Huck has been trying to remodel the property he owns adjacent to C&C but because of costs higher than anticipated and issues with zoning and permitting, he has been exploring other options to open his newest business known as My Lagniappe – it’s a Louisiana expression that means ‘An extra or unexpected gift or benefit, such as that given to customers when they purchase something.’ If you know Huck, you know he always offers his customers a little lagniappe.
The solar panels on the roof of the EDA office building was also a point of discussions. The EDA is advertising for any party interested in purchasing the solar electric system currently stationed on top of the EDA Building at 400 Kendrick Lane, Front Royal.
The RSW Jail has said they are not interested in the solar panels. The cost of installation and unknown purchase price makes the project not cost effective.
Discussion also included workforce housing, the 2018 audit, Afton Inn renovations and the big one, running out of money by March.
Watch the EDA Board at work in this exclusive Royal Examiner video:
Town given okay to amend its civil suit against EDA, with some explanation
Following a conference call with involved attorneys at their respective offices at 8:45 a.m., Friday morning, January 24, Judge Bruce D. Albertson granted the Town of Front Royal leave to amend its current $15 million civil filing against the Front Royal-Warren County Economic Development Authority. The Town has 30 days to file an amended suit and the EDA will have the option of filing a demur to dismiss the amended suit as not factually supported legally.
The Town initially filed its suit seeking the return of $3 million of its assets believed to have been misappropriated as part of the EDA financial scandal, on June 21, 2019. That filing was described by Town Attorney Doug Napier at the time as largely precautionary to prevent any statute of limitations deadlines from being passed on yet-to-be-determined fraudulent EDA transactions utilizing Town assets.
Just over three weeks later on July 12, the suit was amended to $15 million, as previously reported, still without any elaboration on the sources of that number.
Of the January 24 judicial okay to again amend its suit, Town Attorney Napier said any coming amendment would “have to be legally cognizable” – or accompanied by legally supportable documentation. Napier said the Town had a scheduled meeting with its contracted auditor, Mitchell and Company, next week. That meeting may shed light on which direction, and how far in either, the Town’s amended civil suit against the EDA will next go.
The EDA’s civil litigation against what has grown to a total of 14 human and business entity defendants currently stands at $21.3 million. And despite his being dropped from the list of EDA civil case defendants in the wake of his death last spring from a possibly self-inflicted gunshot wound, electronic computer and phone records of former Sheriff Daniel McEathron have recently been subpoenaed from his estate in the EDA civil suit.
The initial amendment to the original Town claim against the EDA coincided with the Town’s pulling back from participation in the “EDA Reform Committee” and three-way EDA-Town-County joint meeting efforts geared toward fixing what had gone wrong to allow the alleged misappropriations and embezzlements circling the former EDA executive director, Jennifer McDonald, to happen over a number of years.
At the helm of the EDA for a decade prior to her December 20, 2018 resignation, McDonald has been the central figure in both the civil and criminal cases brought as a result of the Cherry Bekaert investigation of EDA finances begun in September 2018. She currently faces 34 financial felony charges brought by the special grand jury empaneled to investigate potential criminality tied to EDA finances in recent years.
Stated justification for one publicly voiced Town financial dispute with the EDA, the 4% bond interest rate the Town has been asked to cover on construction of the new Front Royal Police Department headquarters, has pointed heavily at “promises” made by McDonald. Those promises revolved around anticipation the FRPD project would qualify for the New Market Tax Credit Program offered municipalities for economic growth capital improvement projects.
However, as a non-job creating project the FRPD construction did not qualify for what would have been a 1.5% interest rate over the 30-year life of the bond issue with funding through the NMTC Program. As that dispute festers on the edge of Town-EDA litigation, the Town has refused to pay what appears to be an undisputed $8.4-million in principal payments bill the EDA has submitted to the Town on the FRPD project.
Written references in a Memorandum of Agreement and Resolutions of support of the NMTC funding cite “anticipation” of the program’s funding and support of that funding being pursued.
Despite late 2017, early 2018 recommendations of then Town Manager Joe Waltz, Finance Director B. J. Wilson and People Inc. NMTC Program Administrator Bryan Phipps that a guaranteed bank-offered 2.65%, 30-year interest rate would be preferable to competing with multiple municipalities for limited NMTC funds, a council majority chose to hold out for the NMTC financing the FRPD project ultimately did not qualify for.
However, some Town officials have pointed to verbal promises made by McDonald that the funding was in place, as a basis for the Town claim it should not pay more than 1.5% interest rate tied to those promises.
A “legally cognizable” argument on one Town claim against the EDA?
Time will tell.