Hoppel: No record investment issue raised before board
LISBON – County Commissioner Jim Hoppel said the county investment board was never advised of any problems with an investment account, nor did they urge the former county treasurer to hire the firm later found to have illegally invested county funds.
“The board of commissioners and investment board first learned of this through the work of current Treasurer (Linda) Bolon in January,” Hoppel said, in a prepared statement read during Wednesday’s weekly commissioners’ meeting.
Hoppel announced two weeks ago he was reviewing investment advisory board meeting records because of comments about the investment controversy made by Nick Barborak, former county treasurer and current state representative for Columbiana County. As treasurer, Barborak served as chairman of the investment board, which includes all three county commissioners and the county clerk of courts.
Several weeks ago, Bolon reported a discrepancy in how interest income earned from investments was being reported to the county, resulting in interest income being overstated by $118,779. Bolon was told of the problem by Barborak before taking office on Jan. 1, and during the course of trying to correct the problem she discovered at least two of the investments made by WesBanco violated state law.
Barborak sent investment board members a letter on March 14 explaining how they came to contract with First National Community Bank (FNCB) to invest $5 million in county funds through WesBanco starting in March 2010.
In the letter, he stated that beginning in 2009 the board had “expressed interest in further diversifying the county’s portfolio. At the same time, the treasurer’s office was being solicited by First National Community Bank to utilize their relationship with WesBanco to manage a portion of its funds. The board subsequently urged me, as treasurer, to direct a limited amount of funds to WesBanco, which I did.”
Hoppel, who was the only current commissioner on the investment board at the time, said before that although he recalls Barborak was authorized to contract with the bank, it was his idea to do so and not the board’s. Hoppel said his review of the meeting records confirms his recollection of the meeting and others leading up to it.
“There is not one instance of any member of the committee at the time urging the hiring of this firm as stated in his letter. In fact, the dialogue from these meetings was initiated by Mr. Barborak regarding their hiring,” he said.
Hoppel pointed out he also abstained from the vote because he owned stock in the bank.
Barborak was contacted for this story, and he clearly remembers Hoppel asking him about diversifying their investment portfolio because interest rates had plummeted during the 2008 recession. He said the conversation might have occurred outside a meeting, and they even talked about possibly using FNCB.
“I don’t know that it was in the context of a meeting … but I remember it vividly,” Barborak said of the conversation with Hoppel.
Hoppel also disputed other comments Barborak made to this newspaper indicating the investment board was made aware of the discrepancy problem with the interest income and that it was noted in his reports to the board.
“Apparently, Mr. Barborak did tell Ms. Bolon as she was taking office, but nowhere is this reflected in any of the tapes listened to during the two-plus years that the account in question was out of balance,” he said.
Barborak believed he mentioned the problem to the board. “It seemed to me that I would have done that. I know for a fact I provided them with copies of all the records I had,” and the discrepancy could be discerned from reviewing those records, he said, adding the discrepancy issue was noted in the county’s state audit report for 2010.
Hoppel said it was Barborak’s duty, as board chairman and the one directly responsible for investments, to make them “aware of any matters that reflect any inconsistencies with the finances of the county.”
Barborak has said he was unaware of the two illegal investments, saying neither the bank or WesBanco provided him with details about investments. Barborak was aware of the interest income problem in 2010 but was unable to resolve it before leaving office, which is why he informed Bolon. He also advised the state auditor’s office, which is looking into it as part of the a current audit of the county’s books for 2012.