Gerald Harris will remain on Plattner CID board despite federal indictment
By: Darrell Todd Maurina
Posted: Monday, March 15, 2010 8:07 am
Gerald Harris and Kevin Hillman discuss issues at Friday's Plattner CID board meeting.
SAINT ROBERT, Mo. (March 15, 2010) — While Richard DeLong is out of Mid-America Bank after a federal grand jury indictment accused him of bank fraud and bank officials issued a statement calling the bank a victim of his activities, one of the other men under indictment will remain a member of the Plattner Community Improvement District Board, at least for now.
Friday afternoon’s agenda for the Plattner CID board included an item to name a successor director, but that item was removed before the meeting began. St. Robert City Attorney Kevin Hillman, who chairs the CID board, confirmed that the successor director item on the agenda had been intended to address what would happen if Gerald Harris needed to leave the CID board.
Harris and his son Jerry Harris are both members of the CID board. The elder Harris was publicly named Feb. 17 when Federal District Attorney Beth Phillips announced to media that she has filed charges against 16 people in connection with the loans, issued by Mid-America Bank and Trust in Pulaski County between January 2005 and January 2007.
Gerald E. Harris, 68, of Edgar Springs, is the owner of Harris Land Development and Gerald Harris Construction. Projects planned by Harris include the development of nearly 300 acres of land south of the St. Robert BP gas station at Exit 159 of Interstate 44, running south to Superior Road.
According to the federal indictment, while DeLong was the executive vice president and chief lending officer at Mid-America Bank and Trust, he “allegedly made loans and issued lines of credit to nominee borrowers,” including businesses run by Harris and two other people, “in order to conceal unbooked letters of credit that he had issued in the name (of the bank).”
Those loans were for the benefit of a number of businessmen, some of whom are local such as Michael Edward Clegg, 48, of St. Robert, the president of Heintz Lighting One and Appliance, and his daughter Andrea M. Clegg, 25, of Laquey, Perris D. Rask, 67, of Licking, owner of Circle R Saloon, Inc., which ran the Rockin R Saloon and Adonia’s Steak and Seafood in St. Robert, and Lindell L. Vawter, 65, of Rock Island, Ill., owner of Vawter, Inc., which did business as A&W Root Beer/Long John Silver’s restaurant in St. Robert. The indictment says that the businesses controlled by Clegg, Rask and Vawter were all “failing businesses and had outstanding (Mid-America Bank and Trust) loans with significant past-due balances.”
Harris is only one of numerous people named in the federal indictment and charges against him are not central to the case, which focuses on the role of two Mid-America Bank officials and the manager of the Small Business Administration’s Springfield office from March 2005 to May 2007, of having “participated in a conspiracy to obtain loans from (Mid-America Bank and Trust) and to defraud the Small Business Administration” by “participating in a bank fraud scheme to fraudulently obtain loans from (Mid-America Bank and Trust) to obtain federal SBA loans “that were designed to provide financial assistance to small businesses.”
Hillman said he didn’t see a problem with Harris remaining a member of the Community Improvement District board.
“Obviously he’s innocent until proven guilty, and if he is found guilty or pleads guilty to something, then we’ll have to revisit that situation at that time, but I don’t see a problem. He still is the president of this development corporation, the one that this CID was sort of set up for, and it’s kind of tough to not have him on there, and obviously his son is still on there,” Hillman said in an interview following the CID board meeting.
“I am confident in him, I know him although I don’t know what the specific allegations are; he’s in no position where he can act on the public’s money,” Hillman said. “We weren’t sure what was going to happen; we had had some preliminary conversations… we put (the successor director agenda item) on there in case we wanted to act on it, but we talked about it a little bit before the meeting and decided we weren’t going to do that.”
Among the actions taken at Friday’s CID board meeting were to purchase a liability insurance policy with items that would protect the board from liability.
During the board meeting, Hillman asked Rich Wood of Gilmore and Bell law firm, the lawyer who represents the CID board, what the crime item in the insurance policy would cover.
“Do you know what that would cover? Would it cover theft in the office or something?” Hillman asked.
“That’s my understanding that’s exactly what it would cover,” Wood said.
After learning the price to add crime coverage and automobile liability coverage would be only $159, board members unanimously voted to purchase those optional items.
“The crime one, hopefully nobody in this room would do anything, but maybe sometime down the road somebody would. That’s happened before,” Hillman said. “You read in the news and see city clerks and courts clerks and stuff doing things like that. God forbid that would happen, but that would pay back the CID.”
Interviewed after the meeting, Hillman emphasized that neither of the two Harris family members have access to the CID checkbook and noted that three city staff members, himself, City Administrator Alan Clark, and Director of Public Works Lyle Thomas make up a voting majority of the CID board.
“The CID is a separate organization from the city, although the city obviously is involved with it. He has no connection with the city or the city’s funds,” Hillman said. “I’m not concerned in terms of him being on the board, and I don’t think he needs to be removed until there is a disposition of this case that is unfavorable to him.”
For now, the CID has minimal funds in its account. Long-term plans call for the CID to pay for transportation improvements and infrastructure to support the creation of a shopping area in the region that includes St. Robert BP, Peppers Sports Bar, and down through an undeveloped area to Superior Road.
“Hopefully, someday we’ll have a nice big box shopping center there for folks to shop in and we can use some of the CID revenue to attract that kind of business,” Hillman said.