Let the subpoenas fly: A Bay Tech Building Swindle Update

Joe Friday comes to mind here folks since the parties did not remain silent and Magnolia Group Attorney Ben Galloway is hot on the trail. Sending a subpoena to the Echo, whose publisher is married to the School Board President, is an interesting maneuver. I’m sensing quality muck will emerge in this case as I hope the taxpayers learn the full extent to which their local schools have been co opted by the politically connected in service to their pecuniary interests.

Magnolia Group v O'Dwyer et al Doc 16

We now have an official donnybrook! O’Dwyer Realty cross sues other Bay Tech co-defendants

Click the pic to nab the 19 page pdf.

Magnolia Group v O'Dwyer et al Doc 14

Local good government groups in the news: Say what?!!!

Jefferson Parish activists demand action on proposed contracting reforms ~ Manuel Torres

Welp folks, it looks like Councilman at large/River Birch Landfill errand boy Chris “Mini-me” Roberts has not had enough 5am potty visits to fully learn about the procurement reforms recommended month ago by the BGR. Look no further than the Performing Arts Center debacle to understand the need of getting corrupt politicians outta the government procurement biz.

LANA NOONAN: Expenditure of public funds should be discussed openly ~ Letter to the editor

It appears the editorial police at the Sun Herald are now allowing mention of the Bay Tech Building swindle on their pages, which is progress.  While Slabbed never has a problem properly attributing third party sources certain old line media outlets such as the Sun Herald’s editorial page folks can’t seem to tell certain stories without weaving in some tall tales as well. The Seacoast Echo and Bay Tech? Now that’s funny. 😆

Let’s drill down on the OIG report on DMR’s friends and family program to expose fatal flaws in the appraisals obtained by the Bay Waveland School District in the Bay Tech Building Scandal

Let’s use some excerpts of the OIG report on DMR’s land acquisitions to illustrate why the taxpayer paid appraisals obtained by the Bay Waveland School Board as cover for their friends and family program are not worth the paper they are written on. First up we need to know what the OIG auditors did and they well explain it:

You see folks, the auditors may have had specific information that DMR Director Bill Walker and his assistant Tina Shumate were looting the program for their personal gain but going in blank they would have noticed a ton of red flags. Preliminary procedures would include comparing the real estate valuations (appraisals) against tax roll appraised values. Drilling down into the appraisal report themselves for those transactions that had large variances would include evaluating the appraiser’s work product against professional standards in the field. The OIG was kind enough to identify for us 15 requirements and best practices and summarize how each DMR transaction failed at least 4 of those 15 best practices/requirements: Continue reading “Let’s drill down on the OIG report on DMR’s friends and family program to expose fatal flaws in the appraisals obtained by the Bay Waveland School District in the Bay Tech Building Scandal”

Office of Inspector General report on the DMR friends and family program lends insight into the flawed appraisals obtained in the Bay Tech Building Scandal

I have a series of posts coming on the family and friends programs at both the DMR and the Bay-Waveland School District so today I begin with that preliminary US Department of the Interior Office of the Inspector General report on the problems at DMR.  The twist is that I’m going to use that report to highlight the inherently flawed purchase of the Bay Tech Building by the Bay-Waveland School Board. In this series of posts I’m completely in my field of expertise as an auditor and hopefully I’ll set off a few light bulbs.  First let’s do a quick review on the OIG report on the DMR family and friends program aka CIAP.

The DMR scandal broke on October 25 with reporting by the Sun Herald the Investigative Division of the Office of the State Auditor were at the Bolton Building in Biloxi going through Director Bill Walker’s office.  The story that came from officialdom was that investigators were following up on a somewhat routine US DOI OIG audit of the Coastal Impact Assistance Program that found major problems in how DMR was running the program.  The OIG audit, an unusual occurrence absent a major wasting of tax dollars or suspected criminal activity, was described in different terms by the folks at State Auditor’s office that claimed it was because the federal agency administering the program was changing.  I do not believe that for a second personally as I firmly believe a dime was dropped. (I’ll explain more on that next week)

In any event the folks at the various OIG offices are auditors and since I’m an auditor by trade with a bit of practical experience let’s recreate some of the events through the eyes of an auditor.

First thing we have to do is figure out exactly what in the heck were looking at because the folks at OIG are not walking encyclopedias of compliance requirements related to the thousands of federal programs out there but luckily for us we have the internet so my first stop would be “The Catalog” aka the Catalog of Federal Domestic Assistance, specifically CFDA #15.426 Coastal Impact Assistance Program and a close second would be the enabling legislation, which contains this: Continue reading “Office of Inspector General report on the DMR friends and family program lends insight into the flawed appraisals obtained in the Bay Tech Building Scandal”

Delisted: Bay Tech lot withdrawn from MLS

Just because I’ve not written anything on the Bay Waveland School District real estate scandal does not mean things have not been happening folks.  I’m not going to slice and dice this subject like some of the other matters I cover as there is no need. That said I’ve have enough accumulated for an update so here goes.

First is the local rumor mill, which is saying the FBI has been poking around.  I’ve found doing Slabbed that rumors about grand jury investigations and investigations in general to be notoriously unreliable since there are so many moving parts involved, so I’d urge the buyer of such ruminations to beware.

Second is I’ve heard several tantalizing tidbits about the confirmed investigation into this by the Mississippi Real Estate Commission.  After taking a peeksie at their list of disiplinary actions I wonder what it would take for a realtor to actually lose their license in this state. That said this investigation appears to be moving quickly to a resolution.

Third is what I’ll call a verifiable fact on the Bay Tech Lot next to the building as the listing with McDonald Realty has been cancelled per the MLS as of October 17, 2012.  Going back through my notes on the lot from earlier interviews with Mr Bill Washburn with the Magnolia Group and Avra O’Dwyer of O’Dwyer Realty I noted Mr Washburn indicated the lot was listed at $135,000 and that soon after Slabbed broke this story he indicated he fired his realtor Mary Bunch.  I duly noted the McDonald Realty sign remained on the property and the listing remained active in the MLS for weeks after Mr Washburn gave me that interview. Continue reading “Delisted: Bay Tech lot withdrawn from MLS”

Guest Post: What made Bay Waveland School Board President Sherry Ponder change her mind about the Bay Tech Building

What made Dr. Sherry Ponder change her mind about having the taxpayers purchase the Bay Tech Building?

She states in the Oct. 11, edition of the Sea Coast Echo that the school district had been looking at this building and others since Sept. 29, 2005. But, when the Hancock County Alliance for Good Government wrote to her on Sept. 6, 2011, asking that the school board look around the community for an older building to renovate for their business office rather than build a new one for two million dollars, she was not interested in our idea.

The business manager actually told me in an open meeting that FEMA was going to build it, and for me to think of it as a “gift.”

Now enter the architects!! From September 2011 to May 2012, the school board doled out over $90,000 in tax dollars for plans for the new building.

Then Bam!!! In July of 2012, the Board came out of Executive Session and announced that they were going to buy the Bay Tech Building and renovate it for their Business Office. Now, this was never discussed in open session since Sept. 2011, when they rejected our idea.

So what or who changed the Board’s minds and when? Let’s remember that nothing has changed about this building since 2005–no renovations, no improvements. It still has to be brought up to code, and cosmetic work has to be done to make it habitable for our Superintendent, her staff, and the children who will be housed there on a daily basis.

Wait a minute!! One thing did change in the last 9 months while our board was flushing $90 grand down the toilet and holding firm to their opinion that this building was not appropriate for their needs—-the ownership changed to LNG Investments- Gerald Rigby and Lloyd Nicaud.

But why would this be attractive to the school district?? And, why did the taxpayers end up paying $255,000 more than LNG paid for it only 8 weeks prior with no renovations to justify a quarter of a million dollar increase in price on a piece of property in a county where the mil de-valued this year?? That is $31,875 a week profit for LNG. Not a bad piece of change!

The Hancock County Alliance for Good Government has been notified that we cannot have a tour of the building at this time because it is unsafe. I personally doubt the building is unsafe, but what is unsafe is having this board negotiate real estate transactions for the taxpayers.

Now, I have no problem with anyone making a profit, but let’s remember this is a small school district that is trying to recover from the worst natural disaster in our nation’s history.

Kind of reminds me of buzzards on road kill.

I’ll just leave you with the explanation from Mary Bunch (Lloyd Nicaud’s mother) “in the Sea Coast Echo of Sept. 29—–“these guys bought that building–they re-sold that building. That’s what they do.” Really??!!

Lana Noonan, Chairman
Hancock County Alliance for Good Government

Slabbed welcomes all points of view on the topics we cover. Our readers can submit guest columns to Slabbed New Media. While we allow anonymous comments on the blog, guest columnist must submit a verifiable name and contact information in order to be published.

Links to Slabbed’s previous coverage of this matter:

And upon the hill they planted their flag…….

Trustees approve Bay Tech renovation ~ The Sea Coast Echo

As the shifting story continues to evolve:

Both Bunch and the LNG partners have said their actions were entirely proper and legal and that the so-called “controversy” has been manufactured; and Ronnie Artigues, attorney for the BWSD, said the district was happy because it purchased the property for well under its appraised and assessed values.

Slabbed has learned The Magnolia Group has begun the formalities of commencing civil litigation in this matter.  Slabbed has also learned the Mississippi Real Estate Commission has also opened a formal investigation based upon multiple complaints they have received on this specious, taxpayer funded transaction.

Slabbed will be covering this debacle and related wasting of taxpayer money by the Bay Waveland School Board as events unfold. Stay tuned.

Links to Slabbed’s previous coverage of this matter:

School District records suggest collusion in Bay Waveland’s School District’s purchase of Bay Tech Building

Bunch described the growing controversy as unnecessary and unfounded “havoc and chaos.”

“The people that bought the building (LNG) are all very good human beings and good citizens of Hancock County. These are businessmen and what they did – they didn’t go to the school board, from what I understand, the school board came to them. … These allegations are baseless. These guys bought that building. They re-sold that building. That’s what they do.

I was reminded of the Miranda warning when I read the Sea Coast Echo’s second try at poorly telling the stinky story of the Bay Waveland School District’s purchase of the Bay Tech Building from 3 politically connected local business people because as this drama plays out, I guarantee certain people will wish they had kept mouths shut as we visit next with local businessman Gerald Rigby and get his take on this unfolding scandal:

LNG President Jerry Rigby said Friday that any allegations of wrong-doing are completely false. Rigby said it may have been a short while between the time LNG closed on the property and then sold it to the school board, but his company had actually been working on a couple of different development deals at the Bay Tech site since at least last December.

“We contacted (Magnolia Group) through the realtor. … We proceeded with a normal real estate acquisition. We offered a number. They came back with a counter offer. They countered our counter and they accepted (our next offer) very quickly. … I don’t think we had any power to compel them to accept the offer.”

Slabbed has obtained certain documents with the help of the local Alliance for Good Government, a citizens group the Sea Coast Echo regularly paints as loons in their beat reporting on the school district. Worth noting is the editor of the Echo, Randy Ponder is married to School Board Prez Sherry Ponder, thus the lack of integrity in said beat reporting but that subject is best fleshed out in a dedicated post.

What documents did I obtain? For purposes of this post I’m going to zero in on three: One page from the deed related to the sale of the building by LNG to School Board, one of the two appraisal reports that were ordered by the School District and the following letter from the AFGG to School Board Prez Sherry Ponder dated September 6, 2011: Continue reading “School District records suggest collusion in Bay Waveland’s School District’s purchase of Bay Tech Building”