‘We believe we have shown laws were broken’ – No Decision in Petition to Remove Commissioners

By Jean A. Flanagan
Moorefield Examiner –

The petitioners contended Hardy County Commissioner J. Michael Teets’ ownership of stock in Highland Bankshares, the parent company of Capon Valley Bank, is a conflict of interest and he personally benefitted from the county’s purchase of the former Mathias Baker Rescue Squad building.

The petitioners contended that William “JR” Keplinger also voted in favor of the purchase of the building and is therefore culpable.

The defense contended Teets’ stock is less than one-half of one percent of the available stock in Highland Bankshares, he is not an employee, is not on the board of directors and has no decision-making authority in regard to Capon Valley Bank.

Moorefield attorney J. David Judy representing five petitioners argued for the removal of Teets and Keplinger from the Hardy County Commission The petitioners included Wendy J. Miller, John A. Elmore, B. Wayne Thompson, Ovid Need and Bonnie L. Haggerty.

Steptoe and Johnson attorney Bridget Cohee and assistant Amber Moore represented Commissioners Teets and Keplinger. Steptoe and Johnson, LLP was appointed by the West Virginia Counties Risk Pool, which insures the county commissioners.

A three-judge panel consisting of Senior Status (retired) Judge Fred Fox, Judge Robert Stone and Judge Thomas Steptoe were assigned to hear the case. Following three days of testimony and reams of evidentiary documents, the judges ordered each attorney to prepare an order which is to include findings of fact and conclusions of law. They have 20 days to submit those orders.

“I know this is a big issues, but you won’t get an opinion today,” Fox said. “The law requires us to make a decision based on findings of fact and conclusions of law.”

The petitioners contend Teets holds “substantial stake and substantially benefitted” from the county’s purchase of the former MBRS building. Teets, along with his wife and mother, own a total of 6,672 shares of stock valued at $175,000.

The defense contended that case law stipulates interest is “de minimis,” i.e. lacking significance or importance or so minor as to merit disregard, if less than 5 percent and the legal remedy for such a conflict, if it existed, is to void the contract.

The petitioners contended equipment was purchased without sealed bids, as required by state code.

The defense argued the purchase was done on an emergency basis and the commissioners were given advice from the State Auditor’s Office that such purchases were “okay.”

The petitioners contended the public was not given proper notice of the meeting in which the commissioners voted to impose the Special Emergency Ambulance Fee and purchase the former MBRS building.

The defense argued the meeting announcement was published in the Moorefield Examiner and a copy of the agenda was available for the public.

 

The Petition
In his opening remarks, Judy laid out the plaintiff’s case against the two commissioners. He argued a conflict of interest, a lack of sealed bids and lack of notice of the content of meetings constituted a waste of public funds, a violation of public trust and official misconduct.

Judy called 12 witnesses. The first was John Elmore, who is named on the petition.

Elmore testified about the public hearings held June 24 and July 15 regarding the Special Emergency Ambulance Fee.

“This room was filled beyond capacity,” Elmore said. “Everyone was vocal, against another layer of bureaucracy and the purchase of the building.”

Elmore said at the first meeting, only one person voiced support of the fee and the purchase of the building.

Judy asked if a copy of the Special Emergency Ambulance Fee Ordinance was distributed and Elmore said, “No.”

Elmore said several people asked why there was no investigation into the defunct Mathias Baker Rescue Squad. He said Teets told the group, it was under investigation.

Under cross examination, Elmore said there was no vote taken at the meeting regarding the fee or the purchase of the building.

Defense counsel also asked if Elmore knew about the federal and State Police investigation into MBRS. He said he “did not.”

County Clerk Gregg Ely was Judy’s next witness. Ely was asked to identify and verify numerous documents so they could be admitted into evidence. Those documents included public notices, agendas and minutes of county commission meetings. The documents also included deeds of trust for loans to MBRS, J. Michael Teets, Broadway Electric, Gerald Smith from Capon Valley Bank.

Ely was asked about the county commission meeting where representatives from MBRS attended to ask for $300,000 to keep operating.

He was asked if there were ever sealed bids required for the purchase of vehicles and equipment. “It would probably be considered an emergency purchase to keep the service running,” Ely said.

Under cross examination, Ely stated in addition to representatives of the MBRS, the principal of East Hardy High School and the administrator from the E. A. Hawse Nursing and Rehabilitation Center were present at the meeting and spoke in favor of continuing ambulance service.

Hardy County Sheriff Bryan Ward was called to testify about his investigation into the MBRS as requested by the Hardy County Commission in August 2013.

Ward testified that he learned Ellie Crump had documents relating to the MBRS and she provided him with access to those documents.

Ward also testified he found no evidence of embezzlement or funds used for personal gain.

“The embezzlement charges came in the form of citizens complaints,” he said. “The State Police looked at the information and found no criminal acts.”

Allen Brill, president of the Capon Valley Bank was called to testify. Brill was asked to identify various individuals and their affiliation with the bank and Highland Bankshares, CVB’s parent company.

Brill’s testimony centered around CVB’s relationship with the MBRS and it’s ultimate foreclosure.

Judy presented documents showing loans made to MBRS. Judy inferred the loans were made even while MBRS was in financial difficulties, as evidenced by their tax returns. One such loan, $1.6 million was to pay a fine imposed by the federal government for Medicare/Medicaid fraud. The MBRS building was used as collateral for that loan.

“You knew the county commission would buy that building,” Judy said.

“No, no, no,” Brill replied.

‘We believe we have shown laws were broken’ – No Decision in Petition to Remove Commissioners
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