Tuesday, August 18, 2015
Auditor refers Woolston's actions to feds, Jasper County prosecutor
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.