UPDATED: Does Perkins BOE member have conflict of interest?
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.
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.