Warren County has contracted an attorney to represent the Board of Supervisors regarding certain issues with the Front Royal-Warren County Economic Development Authority in the event that any conflicts of interest arise for County Attorney Dan Whitten.
The county entered a contract with attorney Robert T. Mitchell, who County Administrator Doug Stanley said over the phone will be paid $275 per hour.
Mitchell, a partner in the Hall, Monahan, Engle, Mahan & Mitchell law firm, will represent the county relating to accounting and debt service issues with the EDA, according to a county news release. The release states his local government experience spans decades and includes serving as counsel for Clarke County.
He would fill in for Whitten, who also is the EDA’s attorney, if any conflicts of interest arise. Such a conflict, Whitten said, would occur if the county takes legal action against the EDA.
Whitten said there have been no such conflicts yet as the EDA and county are working toward the same goal. He added that Commonwealth Attorney Brian Madden has stated that it is not a conflict of interest for him to represent the EDA and county.
Whitten said if the county and EDA are not "adverse parties," it is not a conflict for him to represent both. He said the most likely scenario is that the EDA and county will continue working together and “try to investigate this matter together.” He said he does not think the county will take action against the EDA board.
Whitten said the only work Mitchell has done was being briefed regarding the situation.
Stanley states in the release that the county values Mitchell’s knowledge and experience, and “time will tell how much his services will be needed on this matter.”
The exact nature of the investigation into the EDA’s finances has not been revealed.
It was discovered by Front Royal officials in May, however, that the town is owed at least $291,000 by the EDA stemming from overpayments relating to debt service.
The county has not revealed if it is also owed money by the EDA.
When asked if returning the $291,000 back to the town would be as easy as cutting a check, EDA Chairman Gray Blanton previously said it may not be as simple as that. He has also noted that attempting to fix the EDA’s QuickBooks accounting program was difficult.
The Town Council, Board of Supervisors and EDA have all gone into a variety of closed sessions over the past several months to discuss accounting, loan programs and debt service.
In the midst of some of those closed sessions, former EDA Executive Director Jennifer McDonald resigned on Dec. 20 from her position of 10 years.
The EDA on Dec. 14 approved new rules allowing just Treasurer Tom Patteson to access bank records, deposits and withdrawals, set up new accounts and transfer money. Whitten said those actions could previously be carried out by both the treasurer and the executive director.
At that same meeting, the EDA reduced the Leach Run Parkway debt from about $7.2 million to $933,417; increased the Ressie Jeffries renovations debt from about $5.4 million to about $5.7 million; and increased the Avtex restructure loan from about $1.2 million to about $3.3 million.
While Whitten would not represent the county if it took action against the EDA board, he said he could represent the county if it took action against McDonald because she is a former employee.
Expenditures so far
Whatever the county pays Mitchell will be added to the up to $260,000 the county has approved for the ongoing probe into the EDA’s finances. That includes up to $100,000 that may be paid to the Sands Anderson law firm to represent the EDA.
The county also paid a $10,000 down payment in September to an unrevealed financial consultant that is working on the EDA audit. That same firm was paid $90,000 in December and $60,000 this week.
If money was stolen, Whitten said the hope is that the county would be able to recoup money spent on fees for legal representation and the financial consultant. He added that he could not discuss whether he thinks money was stolen.
At the financial consultant’s request, Whitten said that all EDA board members, supervisors, Stanley and Mitchell have signed confidentiality agreements.
Whitten said those who signed the agreements cannot reveal anything the financial consultant has discovered. He said signing a nondisclosure is normal “just to protect everyone” because “there is a lot of sensitive information.”
Whitten said the firm does not want any leaks until a final report is ready and if “any people need to be held accountable, we can do that at that point.” He said whatever information the investigation reveals will be made public, which will hopefully be in the next month.