Nov 4, 2013

UPDATED: Does Perkins BOE member have conflict of interest?

An update to last week's question about school board member Terry Champan's relationship with the district and Citizens Bank.

A week ago, a reader asked if Chapman — the vice president of commercial loaning at Citizens Bank — has a conflict of interest since his employer approved a Perkins Schools-approved loan.

The loan was for several millions of dollars to acquire plans for a new school that the majority of the community rejected at the polls.

To read last week's Mailbag entry, click here.

Based on the question, the Register submitted a public records request to obtain the affidavit Chapman should have filed with the district, stating his exact employment status with the political agency or Citizens Bank. That provision, among others, is outlined in the Ohio Revised Code.

Perkins Schools treasurer Lisa Crescimano said no such record exists. Furthermore, she indicated that Chapman "receives no bonus, salary increase, additional work, share of profits, or any other form of compensation or benefit as a result of the board’s loan with Citizens Bank."

Here is her full response:

Please be advised there are no records responsive to your request.  Under ORC 3313.33, a board member only has an obligation to file an affidavit where he has a “pecuniary interest” in a contract of the Board.  However, Mr. Chapman does not have any pecuniary interest in any contract between the board of education and Citizens Bank Co. 

I dealt with Rich Finneran out of the Water Street branch in applying for this loan. In applying for and obtaining this loan on behalf of the district, I had absolutely no dealings with Mr. Chapman, who works out of a Citizens Bank branch in Ottawa County.   
 
To the extent that any Citizens Bank employee has received a direct financial benefit from the loan, it was Mr. Finneran, not Mr. Chapman.

Nor has Mr. Chapman received any indirect financial benefit from this loan. It is my understanding that Mr. Chapman is a salaried employee of Citizens Bank Co. He does not own shares of stock in Citizens Bank.

It is my understanding that Mr. Chapman has not, and will not, receive any bonus or profit sharing as a result of this loan agreement between the board and Citizen’s Bank. In fact, the loan was not even placed  through the branch where Mr. Chapman works. Simply put, Mr. Chapman receives no bonus, salary increase, additional work, share of profits, or any other form of compensation or benefit as a result of the board’s loan with Citizens Bank.

Additionally, it is important to emphasize that Mr. Chapman was completely uninvolved in the decision of the board and Citizens Bank to enter the recent loan agreement. From the board’s side, I, not he, solicited quotes from three possible lenders in determining that Citizens Bank offered the best loan terms for the district. I, in consultation with our legal counsel, negotiated the specific terms of the loan agreement with Citizens. I ultimately recommended that the board enter a loan agreement with Citizens Bank for the benefit of the community because it offered the lowest interest rate at the most favorable terms. Mr. Chapman excused himself from all board discussions, deliberations, and voting on whether or not to enter the loan agreement with Citizens.  Lastly, Mr. Chapman has had no involvement with the board’s compliance with its obligations under the loan agreement.

Similarly, it is my understanding that Mr. Chapman was completely uninvolved with Citizens Bank’s internal review of the district’s application for the loan and decision to enter the loan agreement with the district. Rather, it is my understanding that such matters were handled by Citizens without any input from, or assistance by, Mr. Chapman. Citizens Bank employs over 350 people out of 26 offices in 10 counties. It is a publicly traded company with over $1 billion in assets.  I am fully confident that a bank this size is capable of handling our loan without any input or involvement by Mr. Chapman.

Finally, it is important to recall that the Perkins Local School District has had a long-standing relationship with Citizens Bank dating back to the 1930s. Citizens Bank provided services to the district long before Mr. Chapman was a board member or Citizens Bank employee. I feel that this district, and by extension this community, has benefited from that long-standing relationship for decades.

 

The Mailbag is a daily feature on sanduskyregister.com. Each weekday at noon, we will post one question from a reader and answer it. To ask a question, send a letter to The Mailbag at 314 W. Market St., or email mailbag@sanduskyregister.com. Please include your first name and a location in the email, e.g. “John from Decatur Street."

Comments

themomx6

You know, I really wish I could believe that, but I just have no trust in this administration. No matter, I don't believe Terry Chapman will be a board member come Tuesday evening.

Good 2 B Me

Sounds like total BS to me.

Gonna call Shenanigans!

Darkhorse

Seems to be nothing there legally or unethically.

dontknowmuch

Nothing shady they claim... but can the average Joe walk in Citizens Bank and get the loan percentage rate that the Perkins Schools did? I bet not. We'd all like to get our hands on a rate of 2.79%

VOTENO

I will vote yes next levy!

Cowboy

Isn't it true that Chapman and Finneran spoke about this loan via phone while at work? Isn't it true that Chapman gave this loan a thumbs up to Finneran? Mr. Finneran, please enlighten us on the facts.

middleclassworker

SO.....The School system secured a loan for engineering and design for a new campus that the tax payer's do not want.

How did they secure this loan if the didn't have the money to make the payments and the school buildings have no value? Didn't the BOE & Gunner claim the buildings are nothing more than a liability than an asset? If the money (funds available)wasn't a question, then why move the school funds around and ask for more?

Bherrle

Once again, the Sandusky Register's reporting is not complete nor is it correct, and written in way to stir up controversy.

The loan was for new studies into renovation vs. building new (because some in the public didn't believe the first two that were done), architectural fees related to both, as well as the districts portion of the stadium project. It was not just about the design of building. SR , please correct your reporting.

The loan payments are being made from a portion, roughly 1/3rd, of the 5.2 mills that were moved.

It would be irresponsible of the district not to plan for the future of its facilities.

Cowboy

I just voted NO again! I also voted for Franklin and Ahner! Can't wait to see Gunnie's eyes when he hears that Franklin and Ahner are on the board! That just might be enough for Gunnie to throw in the towel! We can only hope and pray! Time to get this train back on track!

middleclassworker

$ 3.5 million study ???? Tax dollars we spent, I think not! Could have done a lot of work to existing school with that money and/or never moved the other money!

middleclassworker

How many repairs or upgrades could have been accomplished to the existing buildings for $ 3.5 million?

middleclassworker

Why does the BOE & Gunner need $ 2.5 Million plus per year levy passed for 10 years ( 25 million or more ) to pay back a $ 3.5 Million loan? Seems to me a levy of half the size and duration would be more than sufficient.

We seem to be shielded from the true purpose of this levy they are asking for.

Good 2 B Me

S.S.D.D.

Julie R.

Geez, another story involving CITIZENS BANK? This is getting to be old hat. I've been hearing stories about that bank for a long time .... and those stories are in ADDITION to the following:

Wasn't CITIZENS BANK involved in the prosecution of Krista Harris, the lady that the county claimed stole from her elderly aunt even after the aunt's doctor, Susan Gallagher, testified that the POA that was used was prepared years back when the aunt was still very much competent?

Didn't the Journal report that the thief that stole $150K of taxpayer monies in the Erie County Treasurer's office worked at Sandusky's CITIZENS BANK prior to landing the job with the county? Of course, that could just be a coincidence but wasn't it also said that Harris's two "appointed" lawyers both got jobs in the county prosecutor's office after Harris's harsh 5-year prison sentence?

Wasn't it CITIZENS BANK that foreclosed on a Sandusky factory in 2001, was in & out of the building for years, yet when the former factory owner died they filed a lawsuit saying his estate should pay to have the oil drums removed? Didn't Binette rule in CITZENS BANK's favor but the 6th District Court didn't agree and told Binette to review the case again? (whatever happened to that case, anyway?)

Wasn't it also CITIZENS BANK that the "$3 Million Mystery Account" was at .... the one the former clerk of court Barb Johnson got the blame for .... the account that the county claimed nobody knew about but Johnson (a lie) .... the mystery account that was no more a mystery than the $23 Million Account in Cuyahoga County --- it belonged to people in court cases dating back years & years that were never told by their stupid attorneys that they might be entitled to a refund after the conclusion of their cases.

Once again, ANOTHER story involving CITIZENS BANK?

BabyMomma

I love that Mr Chapman's ethics are being questioned!!!!! It's a topic I am glad someone addressed!!!!!