Tuesday, August 18, 2015

Auditor refers Woolston's actions to feds, Jasper County prosecutor

David Wallace was nowhere in sight as Nicole Galloway ripped into the former master developer during the unveiling of the City of Joplin's audit report tonight, but another target of the audit sat uncomfortably in the front row of the Corley Auditorium at Missouri Southern State University

Mike Woolston listened as the state auditor listed a number of questionable, if not illegal, actions he had taken in connection with the sale of property in the 20th and Connecticut area.

Woolston sat with the City Council, sandwiched between Mayor Mike Seibert and Councilman Gary Shaw. At times, he looked straight ahead, no expression on his face, occasionally scratching the top of his head.

At other times, the man who billed himself as "the tornado mayor' during his re-election campaign looked toward the ground, occasionally putting his hand on his forehead.

It was not a good night to be Mike Woolston.

The audit report says what has been noted in the Turner Report and elsewhere- Woolston's actions have been turned over to law enforcement to investigate further. Galloway indicated that concerns had been given to the FBI and to the Jasper County Prosecuting Attorney's office.

Galloway spelled out a scenario in which Woolston had purchased property at the behest of Joplin developer Charlie Kuehn, who then sold the property to the Joplin Redevelopment Corporation at heavily inflated prices.

"It was a taxpayer-funded house flipping plan," Galloway said.

The auditor showed a chart which detailed the most egregious example of property flipping.

On July 1, 2013, Woolston, working on behalf of Kuehn's Four State Homes, bought property at 1801 Delaware for $35,000. Four State Homes then sold the property to the Joplin Redevelopment Corporation for $162,000.

In all, 16 parcels of property in that area were purchased by Woolston for Four State Homes for $963,380, then sold to JRC for $1,340,824.

"Council member Woolston was aware of the properties the JRC was considering buying for redevelopment and may have used this information for personal gain," the report says. "Council member Woolston signed the real estate sales contracts as the broker on the 16 properties originally purchased by the FSH (Four State Homes) and subsequently sold to the JRC. Further, NEWCO, LLC was formed on April 4, 2013, as a partnership between Wallace-Bajjali and Charlie Kuehn to purchase these 16 properties back from the JRC for redevelopment into a theatre and retail/loft shopping center near the new library."

Later in the report, Woolston's conflicts of interest are spelled out.

"Due to council member Woolston's involvement with the CART, he was aware of properties the JRC and city were considering buying for redevelopment and may have used this information for personal gain.

"Further, acting as a broker and signing the sales contracts involving FSH's purchase of real estate in the redevelopment area (which the CART and the city had identified for future development by the JRC) created an actual, or at the very least an appearance of conflicts of interest."

Though Woolston abstained from voting on anything having to do with these parcels, he did not abstain on another occasion when there was a clear conflict of interest, according to the report.

"Council member Woolston did not abstain from voting (or disclose his business relationship with the developer) on an ordinance approving a tax increment financing redevelopment plan involving Kevin Steele, a developer with whom he co-owns a local realty company.

"During the July 7, 2014, council meeting, the council approved the Hope Valley Tax Increment Financing Redevelopment Plan, which established a redevelopment area and designated Hope Valley Development Group, Inc., a group that includes Kevin Steele as the designer of the redevelopment project.'

The audit also noted the conclusions of Osage Beach investigator Thomas Loraine, who examined Woolston's dealings with Four State Homes and Wallace-Bajjali.

"In November 2013, the city entered into an agreement with an individual for investigative services including, 'The facts, circumstances, and ethical considerations surrounding the involvement of Council Member Woolston with Mr. Charlie Kuehn/Four State Homes, its subsidiaries and related entities, and the City's master developer, Wallace-Bajjali, with respect to the purchase, sale, or leasing of real estate for current or future development.'

"The investigator noted in his final report, issued February 3, 2014, that 'All business should be stopped under the contracts between Wallace-Bajjali and the City of Joplin. Further investigation should be considered.' "

The audit report noted, "Council members of a city serve in a fiduciary capacity. Personal interests in business matters of the city create actual or the appearance of conflicts of interest, and a lack of independence could harm public confidence in the council and reduce its effectiveness."

The audit features references to Joplin City Charter and state laws concerning conflicts of interest for elected officials, but since the state auditor is not a law enforcement official, those concerns have been turned over to others.

"We were unable to investigate in more depth the issues of possible conflicts of interest as the pursuit of some information (e. g. subpoenaing personal bank records) is beyond the scope of our audit power. However, we have referred this matter to proper law enforcement authorities who can conduct such in-depth investigations."
The Joplin Globe did not investigate these things when it would have done some good. The story about the perceived conflicts of interest of City Councilman Mike Woolston have been covered on the Turner Report and are covered even more in depth in my book, Silver Lining in a Funnel Cloud: Greed, Corruption, and the Joplin Tornado. If you have read it, tell others. It is available locally at Always Buying Books, Changing Hands Book Shoppe, and the Book Guy in Joplin and at Pat's Books in Carthage. It is also available in paperback and e-book formats from Amazon.com.


Anonymous said...

Not sure where to begin, but here would be a good start:

•Begin a citizen's petition for the resignations of Woolston, Seibert, Shaw, and Glaze from the City Council. Their support and involvement with Wallace-Bajjali and those that advocated for Wallace-Bajjali is well documented.
•Require the Joplin Area Chamber of Commerce to terminate Rob O'Brian or terminate the City's contract with the JACC. Remove the influence and control that the Chamber has in directing the City's policies and decisions. The Chamber is not a department of the City and should not be treated as if it were. It is a service provider just like any other contracted service provider.
•Remove all Chamber employees and/or designees from all City boards and commissions. Their presence of these boards represents a major conflict of interest. The Chamber's role with the City should be strictly limited to providing economic development services...not involving itself in city government.
•Do not allow any individual to serve on multiple city boards or commissions at any one time.
•Make meeting minutes of all city boards and commissions available online to the public.
•Terminate the City Finance Director. She utterly failed in her responsibility to the citizens.

The audit report clearly indicates that there was a concerted effort by members of the City Council, Chamber of Commerce, and individuals who were too heavily involved with either the Chamber or the City, to direct City policy and decisions in a direction to either benefit themselves or the special interests they represented without due regard or diligence to doing what was right for the community as a whole. This was not government of the people for the people....it was politics for the privileged few and it represents the worst of what is wrong with our society today. It's time for the citizens of Joplin to take back control of our City and lead the way to a better future.

Anonymous said...

Just because I like to read fiction, I will see how this is covered in The Glob.

Anonymous said...

Since it was not in the Globe, it did NOT happen.

Anonymous said...

Woolston, Obrian and Haase need to go today. The others will retire or be voted out. Woolston/4 State homes should face criminal charges.

Anonymous said...

The jerk at the end who tried to justify David Wallace being the only one to say he would pay his pursuit cost was totally wrong and out of line. After the audit he stopped to visit with an old pal Globe editor Carol Stark. I am cancelling my Globe subscription in the AM.

Anonymous said...

I pledged to read the entire audit before posting thoughts, however, with about 60 percent left to go, I had to stop, share a few thoughts and ask questions, I'm sure many more of us will have questions.

I agree with the comment made by Anonymous 6:44, only that the individual omitted several key players who should also be held to task.

As a business owner and taxpayer in Joplin, I myself are at fault for failing to act accordingly at the polls and with my business finances by being a chamber member. No more. I will allow our membership to expire. Anxious to see how many other business agree. I feel blatantly deceived by Rob O'Brian.

Next thought, how is the Joplin Globe going to spin this report? Especially when the Globe failed to hold public officials to task and obviously protect other public officials, specifically those who have been written up in this audit. I have to believe the newspaper credibility is in jeopardy.

Go back and read my comments in this blogs in posts in reference to Wallace-Bajjalli and the RFP process. I asked if anyone had a copy of the city's master developer RFP and the specific details listed in the RFP. As it turns out, the Chamber President and staff met repeatedly with Wallace-Bajjalli and custom built the RFP to cater to Wallace-Bajjalli.

The city finance director is in BIG TIME trouble for failing to file the insurance paperwork. $60 million? If any other city employee cost the city so much as $1,000 let alone $60 million they would be held to task. This is embarrassing and shows the city finance director is inept and should not be in a position to dictate the city's finances. Immediate resignation or termination.

Does anyone else find it ironic that KOAM hosted the Chamber Business After Hours today, yet when the KOAM reporter asked Chamber President the tough question following the report, he ended the interview? Rob O'Brian, your credibility is gone sir. Please do the right thing and step down. Immediately. You were on TV tonight and through the entire CART committee under the bus.

Can Gary Box honestly with a straight face appear in public in Joplin ever again?

I'll let the FBI and its investigation take care of Mike Woolston. I feel as my comments on him would be a waste of time.

If any person or business was to ever do business with Charlie Kuehn and Four States Homes ever again, it is their own fault for failing to do their due diligence.

When Mark Rohr was upset following his termination, he mentioned the truth would come out in an almost vendetta manner. Why do I have a sinking suspicion that Rohr and O'Brian are still working together?

Can someone, anyone, tell me what the Chamber of Commerce does? Economic Development activities is a pretty broad task. Ribbon cuttings, coffees, business after hours, really, what else? A lot of social function, not a lot of substance or proven results.

I felt like the renovation to Joe Becker Stadium and the new baseball team was too good to be true. As it turns out, it was and the audit found it. No wonder why the parks and recreation director left. He knew they failed to do due diligence in an independent study. It's only time until the Blasters fail and leave. Then the city and the community will be left holding the bill.

Back to reading the report, I feel so dirty and shamed of our community that it has come to this. How can our city leaders, Chamber President, city employees truly feel good about themselves and their service to this community with this now public.

Anonymous said...

Reading through the audit also, just come across this gem on page 58:

It is questionable why the city spent approximately $3,500 to send the former City Manager and 2 city employees to Tuscaloosa, Alabama, for 3 days to observe and discuss Tuscaloosa's recovery from an EF-4 tornado, which struck in April 2011. No documentation was retained to support the benefits received from this trip. In addition, some costs of the trip were excessive. For example, $1,140 of the total hotel costs incurred ($1,440) pertained to stays at a hotel on the University of Alabama campus on Friday and Saturday nights when motel rates were inflated because of a football game. The city paid rates of $285 per room per night for 2 rooms and the city employees attended the University of Alabama football game on Saturday. City officials completed a tour of Tuscaloosa's tornado recovery on Friday, but did not fly back to Joplin until Sunday. Email correspondence between Tuscaloosa and a Joplin representative indicated ". . . we would enjoy staying over on Saturday and footballing with you all. . . ."

You have got to be kidding me? We paid for three city employees to visit Tuscaloosa during football season to observe recovery, an observation that was done on Friday, yet we paid MORE so they could stay and watch football on Saturday? I want to hear the Rohr defenders stand up for him on this one. I am so upset right now. 160 people lost their lives in a tragedy in this community and our city manager got to use it as an excuse to go to an Alabama football game. Please someone tell me my anger is misplaced.

Anonymous said...

The city finance director is in BIG TIME trouble for failing to file the insurance paperwork. $60 million?

How did you come up with this total? I haven't started reading the audit, but a search for "insurance" didn't show anything that high. The summary under "Disaster Recovery" indicated maximum possible losses from failing to handle insurance and reimbursement properly at $13.5 million dollars (hmmm, ironically rather close to the lump sum $13 million Huff was depending on Wallace-Bajjali to miraculously pay the district in return for supporting the TIF district). I'd say that amount hurts, but I suspect as I read the audit it'll be clear it would have been wasted as so much other money was.

10:20 PM: You anger is not misplaced; how so many people never noticed that Rohr was obviously a sociopathic thug, something obvious to the old Globe when he was first hired, is beyond me.

A city can afford bad leaders until it's seriously stressed, which will eventually happen even if it's not as bad as an EF-5 tornado. We'll be paying the costs for a long time for allowing these corrupt idiots to be in charge when the tornado hit and after.

Anonymous said...

Dear Anonymous 7:17AM, many people did know that Rohr was a bully and conducted business in questionable and unethical ways. Many of these same people voiced their opinion to the City Council members and/or the media, but their voices were muted or ignored because Rohr was doing exactly what they wanted him to do. They allowed him to run rough-shod over many facets of our community in order to benefit and promote the revitalization efforts of downtown and the special interest projects of a "select" few. These same "select" few were also the key players involved with CART and the Chamber and should also be held accountable.

Anonymous said...

promote the revitalization efforts of downtown

You would think that after 40+ years of failed efforts to do that, people would realize it's just a code phrase for putting money into certain people's pockets.

Anonymous said...

The city council can and needs to rescind the whole commercial building restrictions ordinances they passed at the behest of the Master Developer. They have made it absurdly out of reach for all but the dumbest and richest to even consider a main street or 20th street location by establishing these controlled zones that require some vision of appearance specific to how any building structure must look, a parking space to floor space ratio, etc., in the name of creating some kind high end significance in appearance only. One owner told me that on his building on Main, which is very small, the city's requirements cost him six months in time, and 70,000 dollars more than his original plans. Let people build what will work as long as it is safe. Several have told me they abandoned there plans to rebuild specifically because of the city's requirements which are only in place within these established zones. So they simply found an existing property or built outside the zone. This is one thing the city could do right away that would also have an impact. The city might then also have more success selling a bunch of this land they now own in these zones not having to inform an interested buyer that he can only build what the zone says he can build.

Anonymous said...

Just to let those of you know that the finance director did not fail to file any insurance. The funds to be requested are from FEMA and FEMA instructed not to file right away. The paperwork will be done and FEMA will reimburse the City. No money has been lost and I would guess the paperwork would have already been filed, if not for time spent with state auditors. The people questioning Mark Rohr's involvement, he orchestrated the whole thing. He is out of state and out of reach of the state auditor. City staff was not included in any of the master developer plans and all correspondence was directed to go through Rohr. I have to choose anonymous so I can continue in my city job.