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Bonus recovery effort to cost Fulton County $40K

Supervisors approve funding for legal expenses

Wednesday, March 13, 2013
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— At its regular meeting Monday night, the Fulton County Board of Supervisors echoed the common saying: You have to spend money to make money.

In the hopes of retrieving over $3 million in questionable bonuses, the board allotted up to $40,000 to the county Center For Regional Growth to aid in its legal efforts against two past executives.

From 1999 to 2009 Jeff Bray and Peter Sciocchetti, vice presidents of the county Economic Development Corporation and Crossroads Incubator Corporation, respectively, set up about $3 million in bonuses for themselves.

They were both fired in 2010, with officials from each agency claiming they knew nothing of the bonuses. County agencies have been embroiled in civil litigation since then.

“We believe, and I think many in the public believe, that money should be recovered and returned to the economic development effort in the county,” said Fulton County Administrative Officer Jon Stead. “It would be very important to us.”

But lawsuits cost money. According to the resolution passed by a narrow margin Monday night, the CRG gathered a lot of information on its own, but needs to “hire specialized attorneys and specialized accounting professionals to pursue the case further.”

Stead said the money would reimburse legal costs incurred in civil suits against the two past executives and the Bonadio Group, the agencies’ accounting firm.

CRG Chairman Dusty Swanger couldn’t make extensive comment on the legal developments but said: “The process is very slow, but we haven’t given up interest in coming to some resolution.”

The help the CRG is getting from the county to retrieve the bonuses may complicate another legal case the CRG is tangled in.

Back in 2008, the state Authorities Budget Office, responsible for enforcing transparency in public authorities, tried to exercise its own authority over the EDC and CIC. Both were independent agencies collecting public money to aid the county’s economic development effort. According to budget office Director David Kidera, that public money gave his office the right to do audits and gave the public the right to attend agency meetings.

Instead of complying, both agencies sued the budget office for the right to secrecy. Litigation has been under way ever since, but recently, EDC and CIC directors formed the Center For Regional Growth.

“We’ve been trying to sort of collapse [EDC and CIC] into the CRG,” Swanger said, adding that one agency will have an easier time communicating with county officials.

The new agency has basically the same structure as the old ones, but hasn’t been around long enough to generate legal conflict with the authorities budget office.

However, the money allocated Monday gives Kidera legal leverage to demand openness from the CRG.

“When we heard about the $40,000 we sent a letter the to CRG telling them they fell under our oversight,” he said, “They’ll have to either comply or sue us again.”

Swanger argued a economic development agency by its very nature needs some privacy. Kidera disagreed, citing the missing $3 million.

“If we had gone in and found million-dollar payouts with no record of board permission,” he said, “this thing would have come to light much sooner than it did.”

 
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