This article by John Rehill of The Bradenton Times casts aspersions on Hardee County’s Economic Development Authority – the same entity that agreed to $42 million in mitigation funds for a permit to mine the S. Ft. Meade Mine Extension.
How to Take Down a Town
The Bradenton Times
Published Friday, December 16, 2011 2:20 am
by John Rehill
Hardee County is located in central Florida and has a modest population of 28,000. It is an agriculture community that depends heavily on phosphate mining revenue. Hardee’s per capita income is half of that of the state’s average and over 20 percent of its population lives below the poverty line. Hardscrabble is the first word that comes to mind, when describing the area. Such a profile is not uncommon in counties where mining is prevalent. Among all of the Florida counties that suffered from a lack of economic growth, those most troubled are mining counties.
Bill Lambert, Director at Hardee County Economic Development knows this. So when Hardee County made its last agreement permitting Mosaic Phosphate to mine 11 thousand acres within its borders, he requested the company make-up the economic hardships consequential to their operations. Mining supports fewer jobs and produces less revenue per acre for the county then other industries, so he proposed Mosaic offer the county incentive capital to put into an economic stewardship fund for compensation. They accepted.
That project was the South Ft. Meade mine, and the amount agreed upon was $42 million over a 10-year period, if the county permitted the mining operation. They did. Hardee County accepted Mosaic’s first installment of $5 million, which they deposited into the Industrial Development Authority (IDA) account.
An IDA is a declaration by the local government to recognize an independent government body for the development and financing of projects within the description of the said boundaries. In Hardee’s case, their IDA was deeded and delegated the responsibility of owning, managing and marketing the Hardee Commerce Park, as just one of their projects.
The IDA’s officers are responsible for reporting transactions, annual financial reports and for fulfulling all of the provisions required by The Sunshine Law, as is any local government in Florida. It is mandatory for the IDA to assemble an authority board. Those board members were appointed by the Hardee Board Of County Commissioners (BOCC).
In Hardee County, the local authorities and county agencies that oversee the public’s trust are the BOCC, the IDA, the EDC (Economic Development Council) and the EDA (Economic Development Authority). State law requires all to have outside audits and quarterly/annual reports for accountability.
Our story starts with a concerned citizen. His name is Hank Kuhlman, a UPS pilot and resident of Hardee County, living in Ft. Green. He and a friend, Frank Kirkland, frequent the county commission meetings. Their purpose: to protect their property from the rubber-stamping of permits for mining, landfills and industrial parks. Kuhlman and Kirkland claim that Hardee Commissioners overwhelmingly favor the interest of those applicants over the interest of their residents.
Kuhlman read a report announcing that Hardee County was looking at a solid waste project that claimed to turn all of the county’s trash into clean fuel, eliminating the need for a landfill. The project was to be built in the west part of the county where Kuhlman lived. Mr. Kuhlman wanted the full story, so he and Kirkland went to the public meeting where the promoters were selling their idea to the county commission.
The company: Waste Generated Products (WGP), and two of their representatives, president, Guy Wardlaw and treasure, Rick Fishman, were at the meeting answering questions, and making claims Kuhlman thought were outlandish. The two men alleged their technology could transfer hundreds of tons of unsorted garbage a day into jet fuel, gasoline and diesel fuel. They claimed they could operate their system off the fuel it creates, while running generators to sell power to the electric company. They marketed the process as “emission free” and at absolutely no expense to the county.
This was only the third reported time the WGP reps met with county officials. The first was Oct. 7, of 2011, when they proposed their plan. The second, on Oct. 14, was when they briefed the commission on how their operation worked. Then at this Oct. 20 meeting, WGP had returned to close the deal. EDA Chairman Bill Lambert, sat with the two WGP reps during the meeting, encouraging the board to go forward by signing a memorandum of understanding, committing the county to co-sign a $40 million loan to build the plant.
Kuhlman and Kirkland wondered, whether this three week romance might turn into a $40 million liability. According to the proposed deal, WGP would purchase a “financial instrument” or “insurance bond” to protect the county from any liability.
I was familiar with these instruments, aka “derivatives,” as well as the “gasification” process technology WGP would use to perform their claims, Kuhlman and Kirkland contacted me to see if I could help them find out the story. They thought WGP was a shell company and that it had just incorporated in Florida, May 17, 2011. They couldn’t find any history that coincided with any of the claims WGP made at the meetings and pointed me to county posted videos to those meetings on the internet. I reviewed all three (in keyword – type “waste generated products”)
There are various legitimate claims to the variety of sciences supporting this process, but I know of none that equal the assertions both WGP reps made in the videos, which clearly would be global game changers. I also didn’t find any of the projects both men claimed they currently had in operation in New York, Michigan and London. I called the Massena N.Y. (the town WGP reps claimed to have operations) Solid Waste manager to see how it was working out for them. They had never heard of WGP.
In WGP’s Hardee proposal, they referenced LBO Capital Corp. and U.S. Quest as “strategic partners.” I couldn’t find anything on U.S. Quest, (who reps proposed would handle their licensing), and LBO Capital was a non-active stock that had a $.02 value and had been flat for years (no action). I was wondering, are the only ones vetting these guys the aforementioned two local citizens and one local reporter? Then I remembered that the IDA treasurer, Michael Douglas Manley, had just been arrested for misappropriations of funds. So surely the authorities were looking at the commission and would soon know about WGP, right? Like many things, the answers are never quite that simple.
I decided to go to Venice, FL, where WGP’s “Global Headquarters” is supposedly located. At their address, there was a duplex. The door on one side had a 12″ sign: “WGP, Global Headquarters.” The other side was Pro-Health Products, but no sign of anyone there. I knocked and a man who identified himself as Guy Wardlaw (the same WGP rep in the video) stood in the doorway and asked me what I wanted. I told him I was a reporter for TBT and was doing a story on alternative solid waste disposal methods, heard about his company and wanted to ask a few questions. Each question I asked was answered with a “go to our website.” I asked if I could come inside to chat and after a reluctant pause, he let me in.
Inside it was completely dark with no sign of electricity and he walked me to a nondescript backroom that had some windows and two chairs. I asked for some brochures or any printed info to describe their process. Wardlaw said he didn’t have any and all that wasn’t “proprietary information” was on the website. He told me they do work for the government and there were things he couldn’t tell me. He added that some of their technology was used by Boeing, the U.S. Navy and Department of Homeland Security.
I asked about other projects in other towns or cities, and Wardlaw responded, “We have ongoing projects in Oklahoma, Texas and in Michigan.” He never mentioned Hardee County or the town of Massena. I asked, ” How much fuel can you get from garbage?” He replied after some consideration, “We can get a gallon of fuel from 10 lbs. of garbage.” I knew that was a bogus claim and that something wasn’t quite right, so it was time for me to leave.
I kept looking for anything that could validate what I had heard on the videos or at their office, and decided to call Hardee’s Bill Lambert, the EDA Chairman who was also once administrator and commissioner. Lambert was on a couple of the videos telling the commission how wonderful this project could be for the county.
When speaking with Lambert, I mentioned that I had contacted Massena and that they claimed to have never heard of WGP. I asked him if he had vetted the company, adding that I had and couldn’t find anything. He said not to worry, that all of that would be done before anything was signed. Lambert didn’t know that while I was sitting there on the phone, I was looking at copies of the signed documents. They were signed by Lexton H. Albritton, Hardee County Manager and EDA Administrator, and by Minor L. Bryant, chairman of the board of county commissioners.
Lambert also didn’t know that I had in front of me a copy of a Nov. 9, 2011 certified letter from the Office of the Governor’s Joint Legislative Auditing Committee, in Tallahassee, stating:
The Joint Legislative Auditing Committee is in receipt of correspondence and documentation from a concerned citizen of Hardee County, regarding: (1) the Hardee County Industrial Development Authority (Authority) and (2) the County’s Development Agreement with Mosaic Fertilizer, LLC (LLC), dated August 14, 2008, in which the “matching payment” from the LLC is being paid directly to the Authority.
The referred to “authority” has been in existence since 1996 and had never submitted a financial report or an audit. This is the authority that received Mosaic’s $5 million check. It is unlikely the letter was connected to Manley’s arrest, but feasibly may later be connected through related issues.
Kuhlman had prepared 30 questions to be submitted on paper and three orally for the December 1, commission meeting. His flying schedule changed, so his wife Dorothy attended, taking his place. After asking the questions, she then passed a copy of the Legislative Auditing Committee document to the commissioners.
Not all of Hardee’s officials must have seen the letter, addressed to Minor L Bryant, BOCC Chairman and Ken Evers, BOCC Attorney, because when the Honorable Hugh Bradley, Clerk of the County Court, viewed it, he announced he was appalled to hear of such conduct and called it “criminal,” adding that he would have nothing to do with the Director’s conduct. He vowed to hold back the next IDA check from the county, for the amount of $530,000, until the matter was settled.
County attorney Kenneth B Evers, blew it off, saying that was just an oversight. Evers is not only the attorney for the county, but also for the commission, the IDA, and the EDC. Rick Justice is now the chair for the IDA and sits on the board of the EDC. Joe Albritton is the chair at the EDC and sits on the board of the IDA. Mike Manley was the treasurer for both the IDA and the EDC, but after his arrest on November 14, they had to shake things up a bit. Authorities said his charges for misappropriation of funds was of an amount exceeding half a million bucks.
It appears that between Lambert, Evers, Albritton, Justice and Manley, there was tight control over Hardee County’s money and very little oversight. There is also a holding company, “First Hardee Holdings” that connect Lambert, Justice and Manley outside the county government, that certainly could use a closer look. I imagine authorities will be taking a closer look at everything including the IDA’s recent $2 million dollar start-up investment deal with David Brown’s “Lifesync Technologies.” Lambert recently endorsed using IDA funds. The Authority was funding a company that Mr. Albritton has ties to.
This is so complex, so convoluted and so under the radar, that we can only hope state and federal authorities do their job and take a fine-toothed comb to this tangled mess. We can thank concerned citizens, Kuhlman and Kirkland, whose suspicions might save the residents of Hardee County millions dollars by putting the brakes on another rubber stamp, destined to fail.
What could have happened had this ill fated venture not have been exposed? WGP surely would have failed; the Wardlaw brothers, Guy and David, Rick Fishman and James E. Johnson (the only four that make up WGP) could have spent only a fraction of the money before WGP went belly up and disappeared. The county WOULD have been stuck with the $40 million note, (the instrument would have been challenged – canceled, and then the co-signer would pay). Municipalities are easy and prime targets for these derivatives.
Why are banks so willing to accommodate these seemingly designed-to-fail deals?
Prime example of the answer: Harrisburg, Pennsylvania – 40 years ago Pennsylvania’s capitol borrowed $12.3 million to build an incinerator that would generate electricity. The first plan failed. Most of the money was spent, but the debt the city incurred was reason enough to continue the pursuit to make it work. The bank is more than happy to refinance with a derivative called, “Interest Rate Swaps” (unregulated and capable of skyrocketing).
The bank knows to cover this new, larger, more expensive note, the legislators only need to raise the millage rate on their residents – and by a fairly unoticeable amount in some cases. More projects are adopted, the new money blankets the first debacle, (as in Harrisburg’s case) and the incinerator again continues to fall short of completion. Then another IRS is needed, much like a ponzi scheme. It is not uncommon and many municipalities around the country are held hostage to this practice.
Over the years, Harrisburg renewed their IRS’s 11 times, and a debt that started as a $12.3 million loan is now $300 million, and that is why it’s said Harrisburg has the most expensive incinerator in America. The city’s recent bankruptcy attempt was denied.
Jefferson County, Alabama, did the same thing, borrowing $250 million to start a sewer project that began in 1979. That influx of funds spawned many other projects, feeding jobs to the cronies and friends of legislators, soaking up the money flow. Jefferson County was forced over the past 25 years to re-up their IRS’s over 20 times and now that debt has climbed to $5 BILLION! In those years, sewer bills have risen from $14 a month to over $100. They have already filed bankruptcy and 11 of their commissioners have gone to jail for their malfeasance. Auditors say 2 of the $5 billion are fees and interest. These municipal derivatives are a huge profit center for the banks, and this is also why so many cities are facing default and foreclosure.
For Bill Lambert and Ken Evers to ignore the lack of credentials, knowledge, experience and traceable background that representatives for WGP displayed, and not be alarmed or even ashamed, is egregious and irresponsible. To go forward with the idea of any agreement for the amount of $40 thousand let alone $40 million, with the knowledge they now have, would be criminal and indictable. There is no “bond,” no “policy,” that can protect Hardee County officials from such obvious mistakes. Both Lambert’s and Evers’ actions should be investigated to determine whether there was more than just incompetence at work.