Two lawmakers asked to repay stimulus funds

http://www.mycountypaper.com/henrydailyherald/headlines/Two_lawmakers_asked_to_repay_stimulus_funds_105838158.html

 Henry Daily Herald:

Two lawmakers asked to repay stimulus funds

Ethics complaint filed over ‘disallowed’ payments

A Republican state legislator has been given a week to repay more than $25,000 in federal stimulus money he has been told he owes to Henry County. An ethics complaint also has been lodged against the same lawmaker, Rep. Steve Davis (R-McDonough), and he has 30 days to respond to that issue.

By Jason A. Smith
jsmith@henryherald.com

A Republican state legislator has been given a week to repay more than $25,000 in federal stimulus money he has been told he owes to Henry County. An ethics complaint also has been lodged against the same lawmaker, Rep. Steve Davis (R-McDonough), and he has 30 days to respond to that issue.

County officials are seeking $25,313, from Davis, who worked as a real estate agent for Henry NSP, LLC, according to a letter from the director of the Henry County Financial Services Division. County officials said in the letter that Davis was the CEO of Greenwood Crest Realty, which was hired by Henry NSP LLC to facilitate the real estate transaction process, through the Henry Neighborhood Stabilization program.

“As you are aware, Henry County’s Neighborhood Stabilization Program is subject to federal conflict of interest regulations, which among other things, prohibit elected officials and any businesses in which elections are connected, from financially benefiting from, or participating in, any activities in association with the NSP program. As an assets manager for the Henry County NSP Program, Henry NSP LLC, was bound by these federal regulations,” the letter read. Davis was considered a broker and deemed to be in violation of the federal conflict of interest rules, by state and county officials.

Another state representative, John Lunsford (R-McDonough) has been told by the State Department of Community Affairs (DCA) that he, too, has obtained $15,052 from the same federal funding –– and that must be repaid.

The county’s NSP was funded through a $6,251,265 federal grant in April of 2009, according to county spokesperson, Julie Hoover-Ernst.

Letters were sent to both Lunsford and Davis, asking them to repay “disallowed” funds, said Hoover-Ernst.

“We asked for them to repay the amount that the DCA has said they would not reimburse us, due to the fact that the DCA had determined there was a conflict of interest on those particular contracts,” Hoover-Ernst said.

“Lunsford ... has said that whatever cannot be worked out with the DCA — whatever that amount ends up being — he will reimburse the county,” Hoover-Ernst said.

However, she added that Davis has yet to provide county leaders with the same types of assurances. “He has not informed us, to date, that he intends to reimburse us the amount that taxpayers have already paid, for the sales of certain properties.”

“To date, we have not heard from Steve Davis regarding this issue,” continued Hoover-Ernst. “We will take whatever steps are necessary to ensure that taxpayers are reimbursed for that money. My understanding is that Henry NSP does not feel like there should be disallowed costs.”

Hoover-Ernst said the Henry County Board of Commissioners, in August, determined a second letter should be sent to the asset-management teams for the properties, asking for reimbursement. “That letter was mailed out on Oct. 21,” Hoover-Ernst said.

Davis did not return a phone call to the Henry Daily Herald regarding this story.

“This is the most egregious political attack that I’ve probably ever witnessed,” Lunsford said. Lunsford said the county’s version of his, and Davis’ involvement with the NSP program, is inaccurate.

On Monday, the State Ethics Commission received a formal complaint against Davis, alleging that he violated the Ethics in Government Act. The complaint was lodged by the campaign for Democrat Matt Roberts, who is seeking to unseat Davis in the Nov. 2 election.

Lunsford criticized county leaders, and the Roberts camp, for their respective actions against Davis and himself.

“What I actually told the county was, I believe you are incorrect. But, if I have done anything illegal, immoral or unethical, I will refund your money,” said Lunsford. “I never sold the county a house that was my listing. And I never listed one of their houses for sale, or was paid commission by the county.

“I did find the county some houses, some of which I sold them for free, some of which I got paid a cooperating fee from the other agent,” Lunsford continued. “But never did I collect one dime from the county government. I quit working in the program in 2009, by choice. The ruling that they’re pouting about, didn’t even occur until 2010.”

Davis’ activities within the NSP program, as an elected official, came under scrutiny by the state, in December of 2009, said Hoover-Ernst.

The county contacted the Georgia DCA, regarding “disallowed” funds paid to Davis as part of the NSP program. Davis should not have been able to purchase properties in the endeavor, added Hoover-Ernst.

“As soon as we became aware that there was a potential conflict of interest, we notified the DCA in December,” she said. “Later that month, we were informed that there did appear to be a conflict of interest. At that point in time, on Dec. 14, 2009, Henry County placed a moratorium on the purchase of additional properties, so that we did not put future taxpayer dollars at risk.”

Hoover-Ernst said a total of 57 houses in the county, as of Sept. 30, had been acquired through the NSP program, and all but one were under contract. She said at that time, Davis and Lunsford were believed to be benefiting from the NSP program.

Davis’ Democratic opponent has weighed in on the controversy.

“[I believed] Steve Davis had not disclosed all of his financial dealings in accordance with the Georgia Code of Ethics, and that he’s deceiving the Ethics Commission by violating federal and state law,” said John Cain, a political consultant, and Matt Roberts’ campaign manager.

“I know most people are going to perceive this as a campaign stunt,” he said. “But, because of my personal and professional code of ethics, I wouldn’t do that. Elected officials should uphold the very same laws they help to create, and they should be looking out for the interests of their constituents, instead of their own self-interests,” Cain added.

“He’s taking advantage of a program designed to help the economy,” Cain said.

Hoover-Ernst said the county is making changes, regarding oversight of the NSP program. “We are bringing the entire process in-house, to enable us to better manage the funds,” she said. “We believe that the NSP program is helping people to get into their homes, and to rehabilitate our neighborhoods. But we do not want to risk taxpayer dollars again.”