Town council votes to sue EDA for financial report and information

Interim Mayor Matt Tederick, center, was often impassioned in addressing the EDA financial scandal’s impact on this community. Royal Examiner Photo and video by Mark Williams.

On Monday night, June 10, during the Report of the Interim Mayor, Matt Tederick called for Town-County discussion of the dissolution of the local Economic Development Authority in the wake of the multi-million-dollar financial scandal that has thus far left one former public official jailed without bond and another dead in what the Virginia State Police described as an “unattended death” with a firearm at the scene. Those officials are former EDA Executive Director Jennifer McDonald and recently early-retired Sheriff Daniel McEathron, respectively.

Then after somewhat of a public about face, the past critic of town government behind closed doors defended the necessity of such closed meeting Executive Sessions in the type of legal matters council was poised to adjourn to. On Monday those matters included “legal mechanisms regarding recovery of moneys owed the Town by the EDA” and whether there is compliance with the terms of the Afton Inn-old Town Hall exchange that put the EDA in control of marketing and redevelopment of the Afton Inn site at the head of Front Royal’s Historic Downtown Business District.

Tederick suggested the press to “stick around” to see if “any action” would be announced as a result of that closed session discussion – like we were going anywhere since there was subsequent work session discussion of rescinding past council exceptions to its building codes at the request of the EDA for its at the time workforce housing project. And while the interim mayor was far from the end of his remarks regarding the EDA scandal, its consequences and possible solutions, it was that “stick around” hint that led to evening’s major development.

That development was a unanimously-approved motion to authorize the Town Attorney’s Office to file a lawsuit against the EDA for recovery “of all moneys owed” or that “will be owed” to the Town by the EDA.

The lengthy motion read into the record by Gary Gillespie, seconded by Chris Holloway, added pointed criticism of past and current EDA officials for a refusal to comply with past Town FOIA requests for information related to the EDA’s debt to the Town compiled as part of the EDA financial investigation conducted by the certified public accounting firm of Cherry Bekaert.

Noting the filing of “multiple FOIA requests” to two former EDA executive directors (McDonald and Interim EDA Executive Director John Anzivino) the motion comments on a seeming word game being played by EDA officials about that Cherry Bekaert investigative report on EDA finances over the past decade.

“EDA officials on multiple occasions have stated, orally and writing that the EDA would furnish to the Town a copy of the EDA’s historical study of the finances of the EDA back to at least the year 2014, which EDA officials referred to both publicly … and to the Town as a ‘forensic audit’, yet currently EDA officials not only refuse, in writing, to furnish this ‘forensic audit’ to the Town, but based on publicly reported accounts of court proceedings, the EDA has now represented to a court of law that no ‘forensic audit’ exists and has never existed, just some sort of other ‘historical study of the EDA’s finances’,” the motion reads.

The motion asserts the Town’s right to the information despite the County assuming its share of operational funding of the EDA nearly a decade ago leading to the County footing the total bill for the “forensic audit’, ‘EDA Historical Financial Study’ or ‘Study’ as the Town motion continues to refer to it for legal purposes.

The authorization for Town litigation against the EDA also notes that Town citizens whose Town taxes may be involved in financial losses to the EDA are also County citizens whose taxpayer money is involved in funding the EDA “Study”.

See the emotion of the interim mayor and the Town’s statement of its legal right to what the EDA and County officials are believed to already have, or to at least have seen, in the Royal Examiner videos:

Watch as Mayor Tederick addresses the Town Council.

Councilman Gary Gillespie reads the motion to sue the EDA.