FRONT ROYAL – Officials have not been able to answer who requested an unnecessary $1.1 million draw from a United Bank loan on Jan. 30, which was over a month after the resignation of Jennifer McDonald, the EDA’s former executive director who has been charged with alleged illicit financial conduct.
The United Bank loan obtained by the EDA is for funding construction on the Front Royal Police Department’s headquarters.
Town Finance Director B.J. Wilson previously explained that the $1.1 million was not needed because the EDA had received a $2.8 million draw on Jan. 8.
He said the Jan. 8 draw exceeded what was needed by $1.4 million, meaning the EDA did not need the $1.1 million on Jan. 30.
County and EDA Attorney Dan Whitten said once the EDA learned that it already had an unused draw, the money was kept to pay future invoices instead of sending it back to the bank.
Whitten said on Wednesday he knows McDonald requested the Jan. 8 draw before her resignation but not who requested the Jan. 30 draw. On Thursday after the EDA Reform Committee’s meeting, Whitten and several EDA board members said that while the authority intended to request a $1.1 million draw, no one actually asked for it but the money still was sent to the authority.
This is despite a Jan. 30 United Bank draw notice, which is addressed to Whitten, that states: “Per your draw request,” the EDA will receive the $1.1 million.
Whitten, however, said he did not make the request and the only people who had the authority to do so were EDA Treasurer Tom Patteson and former EDA Interim Executive Director John Anzivino.
“It is interesting; it does say ‘per your draw request,’ but I didn’t have authority to make a draw request,” Whitten said. “I don’t know if [the bank] didn’t have Tom Patteson or John Anzivino’s email address but technically I didn’t even have authority to make the request and I never made the request.”
Whitten pointed to a Jan. 23 email to United Bank in which he stated: “Let me know if you have a form you want Tom or John to sign that goes with each of the invoices.” This, he said, indicates that he never requested the draw.
Asked if he requested the $1.1 million Jan. 30 draw, Patteson said over the phone: “absolutely not.”
“I didn’t know about it until really springtime I guess, to be honest. If it came up, I don’t recall it,” he said.
Anzivino said over the phone that he did not make the draw and does not know who did.
“I can tell you that I do not recall making a draw request...the only financial documents that I signed were near the end of my term...when we extended the First Bank and Trust line of credit,” he said.
Anzivino, who began his interim role in January, said the decision to make a draw “was probably within the purview of the treasurer and the board, more or less handling those things, working with Dan with his advice as I was transitioning in.”
“There should be some documentation. Well, Dan’s got the documentation, it says he requested it,” he said.
Town Attorney Doug Napier agreed, pointing to the notice addressed to Whitten.
“I can’t imagine that the bank just made this up out of thin air,” Napier said.
Regarding the Jan. 8 $2.8 million draw, Whitten said he did not know about it because the only people with access to bank records at that point were the EDA’s treasurer and accountant.
On Jan. 11, Whitten said requisitions for the police headquarters were sent to United Bank and the EDA learned that one of those requisitions — totaling $26,468 — had been paid via the Jan. 8 draw.
This, Whitten said, was the first he learned that the Jan. 8 draw had been made. He added that he was not informed the draw was for $2.8 million and assumed the draw was for $26,468.
Whitten said the question regarding the Jan. 30 draw is: “Why did whoever was looking at the money coming in, why did they not say ‘hey, we already got this money?’”
Patteson said he is not sure when he learned of the $2.8 million draw.
Asked how he did not notice the two draws being in the EDA’s books, Patteson said “I can’t answer that.”
“I think you best ask Dan Whitten about that. He can give you the best answer,” Patteson said.
Whitten said that United Bank representatives have stated the bank sent him a notice of the Jan. 8 draw but “the interesting thing is... I never received the notice.”
“I looked through all of my emails...never received that notice...It’s interesting that they have in their records that they emailed me the notice on January 8th,” Whitten said.
He also wondered why the bank would approve a draw requested by McDonald and why the bank would not inquire why the EDA needed two big loans in a short time frame.
Peter Warren of United Bank, who handled some of the draws on the loan, did not respond to a phone message.