Joplin Mayor: Now i"m dissatisfied with Wallace-Bajjali

Earlier today, a Turner Report post noted that as recently as July 30, Joplin Mayor Michael Seibert was defending Wallace-Bajjali Development Partners, saying that common ordinary folk (like this writer and the readers of this blog) couldn't understand what a master developer does.

Apparently, the fallout from Wallace-Bajjali's departure has changed the mayor's tune.

In an interview today with KGNC-AM in Amarillo, Seibert made it clear that he was not pleased with the former master developer:

"We spend about $1.7 million in payments backed to Wallace-Bajjali for many types of services over a 2 and a half year period," Seibert said.

He said they were already dissatisfied with the firm.

"We weren't pleased with the level of projects that they'd been able to bring forward. We had projects that we were really proud of that they were involved in and don't like what they did."

He says they have several projects in motion and will continue moving forward to rebuild Joplin.
Now let me see if I understand this. The mayor, and from the sound of what he is saying, the city council, was displeased with Wallace-Bajjali. Now when did this displeasure start? Was it after July 30 when he gave his interview to the Amarillo television station explaining why Wallace-Bajjali was doing a good job and we didn't understand how this master development business works or was it before and Seibert was shading the truth during the July interview?

The tweet that C. J. Huff doesn't want you to see

Put on a brave face, little pilgrim.

You can keep saying something over and over, but that doesn't make it the truth.

As I have noted earlier, Superintendent C. J. Huff has continually told the Joplin R-8 Board of Education that everything was going to be okay with the state audit.

Of course, that was before the exit meeting with representatives from the state auditor's office Tuesday night. I haven't heard what Huff is telling the board now, but this is what he told everyone on his Twitter account Wednesday.

You can click on the photo to enlarge it, but if you don't want to go to the trouble, it reads, "Great Board meeting last night. Thank you to the MO State Auditor's team for their closed session presentation to the board. Very helpful."

For some reason, though, C. J. Huff did not want this tweet to be seen by Turner Report readers since he blocked my Twitter account.

Now why would he not want me to know that everything well and that the audit was wonderful?

Joplin mayor on Wallace-Bajjali: People don't understand how master developers work

Less than one month after the Turner Report, using federal court documents, showed that David Wallace of Wallace-Bajjali Development Partners had failed to repay hundreds of thousands of dollars to investors and was using fees from the city of Joplin to keep his company afloat, Mayor Michael Seibert staunchly defended the firm in an interview with an Amarillo television station.

At the same time, Seibert took a shot at those who were skeptical that the city's master developer was ever going to accomplish anything, indicating that those people were not as knowledgeable as the mayor about how development projects work.

From the July 30 report from Amarillo's ABC affiliate:

The mayor of Joplin told us that his relationship with Wallace-Bajjali Development Partners is strong, and that most people are unaware of the amount of work that goes into a project even before breaking ground.

“The vast majority of people don’t understand that the bulk of the effort and time is put into a project prior to the project coming out of the ground,” said Mike Seibert, the mayor of Joplin. “People unfortunately judge the speed of a project based on when it breaks ground, and that means development gets cast in a negative light.”

Not all elected Joplin officials felt the same way. In the same interview, Councilman Ben Rosenberg was skeptical about Wallace-Bajjali.:

“He’s always looking for a co-developer and Wallace-Bajjali never seems to develop anything on their own, they always have a co-developer,” said Rosenberg.

Exclusive: Federal judge orders report on Wallace-Bajjali

Earlier today, a federal court judge ordered a report on the status of the repayment of millions of dollars investors were cheated out of by Wallace-Bajjali Development Partners and others who were involved in a scam that forced the Securities and Exchange Commission to crack down on them in 2012.

Judge Nancy F. Atlas of U. S. District Court for the Southern District of Texas ordered court-appointed receiver Thomas L. Taylor III to have the report ready by Feb. 13. Any disputes of that report must be filed by Feb. 20.

The order was issued one day after Judge Allen received a copy of a letter from investor Diane Collings of Houston to Taylor relating the recent developments with Wallace-Bajjali.

I am writing to make sure you are aware of important changes in the Wallace-Bajjali organization and to request an update on the receivership.

The Wallace-Bajjali organization appears to be falling apart. In November of last year, we were made aware of Costa Bajjali's intention to leave that organization. A few days later, David Wallace did his best to put a good spin on that situation and assured the investors there was no need for concern. It appears that the situation has degraded.

Today, we received another letter from Costa Bajjali notifying investors that David Wallace has also resigned as manager and employee of Wallace-Bajjali organization. This leaves all of the Wallace-Bajjali Funds, the Holding Company, and all related properties without any active management.

These events will no doubt impact Wallace-Bajjali Development Partners' ability to honor their obligations to the receivership and to their investors.

Were you aware of this instability in the Wallace-Bajjali organization? Did the Wallace-Bajjali organization make any substantial payments to the receivership last year. If not, would you consider those payments in jeopardy?

The SEC fined Wallace and Bajjali $60,000 apiece and ordered them to repay $1.2 million, with $450,000 of that to come directly from Wallace-Bajjali Development Partners and the remaining amount of various funds connected to the two.

Court documents do not make it clear if the remainder of the money has been paid. The records include sworn promises from David Wallace that the funds would be, but no record if they were.

The $450,000 could not be paid until his Joplin and Amarillo projects were well underway, Wallace, said. Given an original deadline of December 31, 2012, to repay the investors, Wallace was able to get that date pushed back to December 31, 2014.

Wallace and Bajjali completed paying their $60,000 fines three days before the City of Joplin hired the firm.

With all of the problems surrounding the former Joplin master developers, it is unlikely the payments to the investors were ever made, but Taylor's report should clear up any doubts.

Wallace's sworn statements, which were revealed in earlier Turner Report posts, made it clear that the former Sugar Land, Texas mayor was skating on the edge during the whole time he was in Joplin.

(From the June 25, 2014, Turner Report)
Expense reimbursements from the City of Joplin and short term line of credit advances are the only things keeping the city's master developer Wallace-Bajjalli Development Partners in a positive cash position.

That assessment of the company's financial situation comes from a sworn statement filed by CEO David Wallace as he explained the reasons why Wallace-Bajjali was not yet able to pay a $450,000 settlement the company reached with a court-appointed receiver to pay back investors who were scammed in a real estate scheme that ended up costing both Wallace and his partner, Costa Bajjali, $60,000 in fines from the Securities and Exchange Commission.

The statement was filed October 24, 2013, in a Texas federal court as Wallace tried successfully to convince the court that he needed more time to pay the company's obligation.

Court files also included a document from the receiver indicating that while he believed Wallace, going along with the extension was about the only chance the investors ever had of seeing the settlement money. The court extended the due date to December 31, 2014.

The settlement was originally supposed to be paid by December 31, 2012, according to court records. It even included a stipulation that Wallace-Bajjali would only have to pay $300,000 if it paid early.

It quickly became apparent that was not going to happen.

In an April 5, 2012, sworn statement, Wallace expressed doubt that his company was even going to land the Joplin job.

"There is no assurance that WBDP will ultimately be selected by the City of Joplin. Indeed, WBDP, development partners and the City Council involved in the selection process have expressed concerns over the negative press coverage and blog environment resulting from groundless accusations and lawsuits against WBDP." Those lawsuits, he noted, included one by disgruntled investors who were not happy with the settlement agreement.

After the City of Joplin selected the Texas company as its master developer, Wallace, in the October 2013 statement, reassured the court that everything was heading in the right direction.

He wrote of Phase One projects, "valued at approximately $112 million (that) have been formally approved by the Joplin Recovery Commission, the necessary land has been acquired, and the projects are expected to break ground in early 2014."

Those projects included the independent senior living facility, a senior assisted living center, two loft-over-retail shopping centers, one at 20th and Main and one at 26th and Main, and the Joplin Public Library/movie theater.

'"WBDP expects to earn approximately $5 million in development from these projects in 2014.

But the Joplin project was not the only source of revenue that Wallace-Bajjali would produce during 2014, Wallace said, indicating that work was progressing on an initial public offering of Wallace-Bajjali stock.

"WBDP has been working diligently towards its goal of becoming a public company," Wallace wrote. "In June 2013, David Wallace, Costa Bajjali and members of the WBDP management team met with Mr. Andrew Hall, managing director of new listings for NASDAQ."

That meeting not only concerned what the company would have to do to get listed on the exchange, but also if the listing could be derailed by the problems with the SEC. They were assured there would be no problems.

Encouraged by this meeting, Wallace said, the company hired a financial advisory firm, TriPoint Capital Advisers in September 2013 "to assist in IPO readiness activities." TriPoint initiated an audit of Wallace-Bajjali, which was scheduled to be completed in spring 2014.

"Notwithstanding the audit," Wallace said, "TriPoint notes that the most important factor
in a successful IPO is the performance of the underlying business, in this case, the success of the Joplin and Amarillo projects. To that end, it is expected that the Joplin and Amarillo projects must be solidly underway, with vertical construction and monthly revenues flowing to WDBP before completion of the offering."

This would put the IPO at mid-2014 or beyond, Wallace said.

The IPO would help WBDP resolve a portion of the settlement, he added. "Once the IPO closes, the equity and debt holders will receive shares."

That timetable for the IPO was dependent on construction being underway in Joplin and Amarillo, something Wallace said would commence in March 2014. "Assuming that vertical construction in those cities commences," he added, the cash would be flowing.

"The development fees anticipated from Joplin and Amarillo are the most significant sources of funds for WBDP in 2014, totaling an estimated $5,019,990 (in Joplin) and $591,666 (in Amarillo)."

Even with the money coming in, Wallace said, it would take months before anything could be put toward the settlement since the company's line of credit "was directly tied to Joplin" and had to be used on Joplin projects.

No money would be available for the settlement until "the fourth quarter of 2014."

Stanley on Wallace-Bajjali departure: Things are not that bleak

Ryan Stanley, who was not on the Joplin City Council when former master developer Wallace-Bajjali was hired, offers some positive thoughts in this interview with KSN:

Stanley says the future of Joplin is bright and that he is very proud of the work being done on the new Mercy Hospital and the new Joplin High School. He says he feels confident in the projects the city is working on. He wants to make sure we can find a way to get them completed on their own.

"It's easy to look back and say, 'should never of hired Wallace Bajjali.' I think, if we can go back and make that decision over again, we probably would not have hired them. We certainly would've signed the agreement," said Stanley.

Stanley says despite this, he feels good about the future.

"I feel confident in our position. I wouldn't have chosen it, but I don't think we aren't as bleak or frustrated as maybe people think we are," said Stanley.

Schweich to run for governor, vows to clean up corruption

(From Tom Schweich)

This afternoon I had the honor to join my friends, family, and supporters to announce that I am a candidate for Governor of Missouri. My administration will be about leadership. My administration will be about realizing our full potential as a state, and healing our wounds.

Most of all, my administration will be about cleaning up the rampant corruption in Jefferson City.

Since I became your State Auditor I have worked tirelessly to expose public officials, government departments and agencies stealing, wasting, and misusing your taxpayer money. My office has helped uncover over 30 corrupt government officials embezzling millions of your taxpayer dollars, and has identified tens of millions of dollars in waste and abuse in state and local government. However, it’s time to take the next step.

As a state, we are facing some very serious challenges. We need stronger leadership and more honest government. We need fairer economic policies, and we need to improve our struggling schools. Twice now you have put your trust in me to lead the state as Missouri’s official taxpayer watchdog. Now I am asking that you stand beside me as we fight to make Missouri government more accountable and transparent by putting a true anti-corruption expert in the governor’s mansion.

As we embark on this journey together I encourage you to explore my new website and learn more about me, my positions, and connect with us on social media to discover how our grassroots movement is fighting to make Missouri’s government more accountable to all six million of it’s citizens.

Lobbyists pay for telecommunications dinner/hearing at country club

Students escape injury as gunfire hits KC school bus

Graves: Obama's State of the Union recycled failed policies

(From Sixth District Congressman Sam Graves)

Ahead of last November’s election, President Obama stated that “these [Obama’s] policies are on the ballot. Every single one of them.” On this, I agree with him. His policies were on the ballot, and millions of men and women throughout the country went to their polling places to pull the lever in opposition to bigger government, more spending, and unconstitutional executive orders.

This year, President Obama delivered his sixth State of the Union Address. Like many Americans, I was hopeful that the President would outline a vision for our country that reflected the will of those we are here to represent. Unfortunately, he once again showed that he plans to ignore the message sent by the American people last November, pushing ahead with his big government agenda.

The American people sent us here to forge a new direction in finding solutions to the problems facing our nation – not to recycle the failed policies of the last six years.

While it is clear that President Obama did not hear this message, the House of Representatives did. In the opening weeks of the new Congress, the House has passed common sense legislation to promote economic growth, address rising energy costs, remove job-killing regulations found in Obamacare, and reverse the President’s executive order on amnesty.

Common sense solutions are needed to ease the squeeze on middle class Missourians and I am confident that with a new Congress that is exactly what we will have. While his State of the Union speech has left doubt, I am hopeful that President Obama will join with us in promoting bold, new solutions on behalf of the people of north Missouri and across America.

Joplin Globe editorial: We're better off without Wallace-Bajjali

We can all rest easier now.

The Joplin Globe Editorial Board says we're better off without Wallace-Bajjali.

The spirit of Joplin will prevail and it won't be long before we forget the con artist that Councilman Bill Scearce so accurately describes as "a snake oil salesman."

While council members, including Scearce and Ben Rosenberg, were early skeptics about the former Sugar Land mayor's ability to attract $894 million in development to this tornado-ravaged city, the Joplin Globe donned its cheerleading outfit, shook its pom-pons, and brought out the heavy artillery for anyone who dared question this company, which was recommended by a citizens advisory team that sometimes seemed more intent on pushing a vision of Joplin its well-heeled leaders had sought for years than in easing the day-to-day recovery of the thousands who were affected by the events of May 22, 2011.

If the Globe ever investigated Wallace-Bajjali its results never made its pages. The sole extent of its mention of the SEC fine against Wallace and Costa Bajjali made it appear that the two were innocent victims of an unscrupulous businessman, when the SEC documents and information that has been filed in lawsuits in both state and federal courts makes it clear that Wallace-Bajjali was violating SEC regulations and pushing a highly questionable investment scheme.

And not once did the Globe ever mention David Wallace's involvement in at least seven bankruptcies.

Not once did the Globe ever mention that as part of the SEC settlement with Wallace-Bajjali, it was required to repay its investors $450,000 by December 31, 2012. They were unable to do it. The deadline kept being pushed back until it was finally set at December 31, 2014. The investors who put their faith in Wallace-Bajjali years ago to this date have received the same amount of money the city of Joplin has received- not one penny.

None of this was reported in the pages of the area's newspaper of record. All we ever heard from the Joplin Globe was a Rohr of approval for Wallace-Bajjali.

And now the Globe is editorializing, without a single mention of its role in propping up Wallace-Bajjali.

Probably more troubling than the money spent is the waste of momentum and the waste of time that Joplin will never be able to get back. The loss of public confidence is also a concern.

If there is anyone who should know about the loss of public confidence, it is the Joplin Globe.