City Council Outraged, No Contract for $750,000 Museum Loan
Greensboro Mayor Nancy Vaughan said, on Friday, Feb. 14, that the City of Greensboro had given the International Civil Rights Center & Museum $750,000 as a gift on October 23, 2013, by issuing a check to the museum without a signed contract.
All hell broke lose at the Feb. 14 Greensboro City Council work session when the councilmembers discovered that the museum had been given the money without a signed contract.
The $750,000 was half of $1.5 million the City Council had voted to loan the civil rights museum in September 2013.
Councilmembers Mike Barber and Zack Matheny called issuing the check malfeasance and misfeasance.
At the end of the work session dealing with other matters, Vaughan dropped the bombshell. Before the work session, councilmembers had been given an unsigned loan agreement between the city and the civil rights museum.
Matheny asked when the agreement “we just got” had been executed. Greensboro City Attorney Mujeeb Shah-Khan responded only that the City Council had approved the loan early in September and that negotiations with the civil rights museum had been very long. That didn’t answer Matheny’s question.
Vaughan said, “I want to say that I’m extremely distressed that any check was cut without a signed contract ... and the fact is they’ve gotten three or four checks without a signed contract, and the biggest stick that we had was that they wanted the money and that we didn’t have to give it to them until they came to the table and signed the contract. This is just extremely distressing that it didn’t follow through.”
Vaughan’s statement elicited anger and disbelief from other councilmembers. The civil rights museum has had ongoing financial troubles, and the city had told the public that the loan had been approved under strict conditions.
The contract given to the councilmembers contained strict conditions. But it was clearly not a contract executed between the city and the civil rights museum. Aside from being unsigned, it had City Manager Jim Westmoreland’s name typed in below where the signature should have been, and referred to Denise Roth as the “former city manager.” Westmoreland became city manager on Feb. 1, so the contract could not have been prepared before them.
Councilmember Tony Wilkins seemed stunned.
Barber said, “There are rules, and I dare say laws, that prohibit conveying money for a government entity without an agreement that has been accepted by all parties.”
The unsigned contract contains all sorts of provisions protecting the city money, including, according to Vaughan, using the museum’s exhibits as collateral, performance targets and the ability for the city to take back the money from the bank account in which it is deposited.
None of those provisions apply if the contract was never signed.
Matheny exploded. “We all believe in the civil rights museum,” Matheny said. “Take that story away and just look at how we’ve jumped over backwards on this. The 30-day extension, the not having the contract, we’ve done everything. It’s is insane for us to be treated like this for a city, and I don’t understand how this could have been done.”
The 30-day extension was one that city officials have said Roth gave the civil rights museum to file its latest audit. The audit was required to be submitted to the city by Dec. 31, but councilmembers said Roth had given the museum a one-month extension to Jan. 31.
Roth, contacted by phone, said she hadn’t given an extension, and said she couldn’t explain the claim that the contract hadn’t been signed without talking to the city attorney’s office.
“I’m just at a loss,” Roth said. “I remember council doing the resolution saying we could do the funding and the city attorney’s office saying they would work out the details.”
The draft contract clearly anticipates that it would be signed by the city manager. Roth said she didn’t know whether or not she had signed a contract with the civil rights museum.
“I don’t recall as I’m talking to you if I did or didn’t,” Roth said. “I’ve signed many contracts over time.”
Councilmembers questioned the legality of giving the money away without a contract.
Roth said, “I haven’t done anything illegal, and anything I did was in line with what I was told to do by the City Council.”
Vaughan said she hopes the city can recover the money. She said, “We need to look at what clawback provisions we have at this point because we still don’t have a signed contract.”
“Right here is what we’ve got,” Wilkins replied, waving the draft contract. “It doesn’t have a signature on it.
The board of directors of the civil rights museum is scheduled to meet on Monday, Feb. 17, and is expected to elect a chairman of the board to replace George Clopton.
Clopton, who was named chairman of the museum’s board in October 2013, after longtime Chairman Skip Alston stepped down, is vice president of distribution operations for Ralph Lauren Corp. in High Point.
City officials have said that Clopton will soon leave the board to direct a major Ralph Lauren Corp. expansion in High Point. Sources said Guilford County Board of Education member Deena Hayes, who is a member of the museum’s board, was expected to be elected to succeed Clopton as chair at Monday’s meeting. Clopton did not respond to repeated requests for interviews.
Vaughan and Councilmember Yvonne Johnson said that they knew that Ralph Lauren Corp. had limited the period of time Clopton could remain chairman. But that wasn’t announced at the time he took the post, and Matheny said he hadn’t been told so.
Matheny said he was told only that Clopton was chairman.
Matheny said, “I would also like documentation that George was only part time.”
BY Paul C. Clark
February 14, 2014 7:50pm
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