Saturday, March 28, 2009

From Dollars to Donuts

When Mike Jones accepted an invitation from the Concerned Citizens Group and met with them on 20 January 2007 to discuss his candidacy for city solicitor, one of the questions he was asked was about the Marting building. Since 2002, the most contentious issue by far in Portsmouth has been the city’s purchase of the worthless Marting building from the Marting Foundation at an inflated price. The city intended to convert the 125-year-old leaking department store into a new home for city offices. Former mayor Greg Bauer and members of city council had involved themselves in the fraudulent sale of the building. The persistence with which our current doofus mayor, Jim Kalb, and a couple of crooked city council members have tried to waste from $7-10 millions of public dollars to make the building habitable has mobilized many citizens and particularly property owners. Because they were the victims chosen to pay for the fraudulent project through property taxes, property owners were outraged.
Marting Building

There is no single issue that more accurately reflects the judgment and the integrity of a candidate than the position that he or she takes on the Marting building. Beware of candidates who avoid or even hedge on that issue, because they are probably either dumb or dishonest, or both, and we’ve got enough of those types in public office already. So eager were they to get David Kuhn out of office that CCG members did not pay enough attention to what Jones’s position was on the Marting building. They have lived to regret it, deeply. Jones’s answer in January 2007 to the question on the Marting building was that he didn’t have a position, or at least didn’t have one that he was willing to admit to in public. Once in office Jones quickly showed his true colors, not only on the Marting building but on other issues as well. He has turned out to be, in my opinion, a politician of the worst stripe, lacking not only in competency but integrity. We may be able better understand the reasons candidate Jones would not say what his position was on the Marting building when we examine his financial situation at the time he was running for city solicitor.

On 8 June 2007, five months after not answering the question on the Marting building and five months before being elected to office, Jones and his partner completed the purchase of the Crispie Creme Donut Shop, at 1202 Gallia Street. The value the County Auditor put on the donut shop was $107,990, but Jones and his partner paid an eye-popping $325,000 for the property. Did Jones confuse Crispie Creme with the national chain Krispy Kreme? What was he thinking? I suspected there might be an error in the $325,000 figure, so I checked with the County Auditor’s Office to make sure that figure was correct. I was told it was. Granted the valuation put on property for purposes of taxation is usually less than the putative market value, but a nearly 300 percent increase can hardly be accounted for on those grounds. The $325,000 for Crispie Creme sounds as inflated as the $2 million dollars the city paid for the Marting building.

I have walked or driven by Crispie Creme at least a thousand times over the last twenty years and the question that often occurred to me was how in the world it managed to stay in business. In driving past the small building, it’s hard to tell whether it’s open or closed, because open or closed, the dimly lit interior is often empty. I’ve been told that it was a popular business in an earlier time. Customers loved the coffee and especially Mrs. Renison’s 1929-recipe donuts. But time and tastes change. Duncan Donuts and later Starbucks helped do-in old-fashioned donut shops like Crispy Creme, but concerns about diet were what really nixed donuts.

Why did Jones and his partner pay $325,000 for a walking-dead donut shop? I don’t know, but from public records I know who his enablers were, I know who made it possible for him to pay that eye-popping price. The financial institutions that granted Jones mortgages on Crispie Creme were, not surprisingly, the American Savings Bank (ASB) and the Southern Ohio Growth Partnership (SOGP). When I hear ASB and SOGP, what do I think? I think financial hanky-panky and political shenanigans. Records in the County Auditor’s office and the County Records office show that the ASB obliged Jones with a $182,000 mortgage and that the SOGP, to cover the rest of the purchase price, provided him one for $147,000.

Is it possible that the ASB and SOGP were in Jones’s corner in the city solicitor race? Of the SOGP’s involvement in local politics we have plenty of evidence, not just the Marting building; and the ASB, it is now clear, is up to its eyeballs in local politics. Robert M. Smith is the most politicized bank president in Portsmouth, and ASB Vice President Michael L. Gampp was the point man on the Progress Portsmouth Political Action Committee, which lobbied hard for the passage of the Marting ballot measure in November 2008. In spite of the fact that Clayton Johnson, Neal Hatcher, et al, made sizeable financial contributions to Progress Portsmouth, that ballot measure was soundly rejected by the voters.

One way Johnson and Smith could help Jones, in addition to providing him with $329,000 in mortgage money, would be to patronize Crispie Creme, which is in sore need of customers. Rumors currently circulating about Jones being in dire financial difficulties are just that—rumors, but with the financial meltdown and business recession that have occurred since he acquired Crispie Creme in the summer of 2007, it would not be surprising if Jones was in a financial deep fry, and that he soon may be toast. Even the national chain Krispy Kreme, according to Yahoo! Finance, may be out of business before 2009 is over.
House Money

Who knows why the SOGP makes loans or provides mortgages to the people it does? Someone wrote in an email, “Jones was bought and paid for from the beginning.” I don’t know about that, but like the AIG and other free-wheeling financial entities, the SOGP has pretty much had Portsmouth public officials in its pocket for quite a spell. The SOGP, with its offices in the pork barrel Welcome Center, has been able to do as it pleases in River City. It has no accountability to voters and little to regulators. The SOGP is Portsmouth’s shadow government, wheeling and dealing while playing with house money, doling out millions of dollars without much oversight. The ASB is not much better. In 2005, to avoid the paper work and scrutiny that goes with being a publicly held company, ASB went private, buying out its shareholders. Since then, as a private company, its financial operations have become somewhat inscrutable, like they were at AIG, Bear Stearns, and Lehman Brothers.

Why, for example, would ASB grant a $187,000 mortgage to a business that appears to have nothing going for it but donut nostalgia and a return to those filling days of yesteryear, before our deep-fry diets caught up with us in the form of artery-clogging cholesterol and ass-over-the-stool obesity? It’s not just assets that can be toxic. The website claims that donuts are among the six unhealthiest foods in America. When it comes to diet, according to a nutritionist at the New York Obesity Research Center, the only healthy thing about a donut is the hole.
Is it too much to hope that the SOGP and ASB might in the future be held more accountable not only for their financial but also their political activities? Can we be assured that they are not making the equivalent of sub-prime loans to customers whose failing businesses they are subsidizing and whose political support they are currying? Can the citizens of Portsmouth be assured that the chief legal officer in city government is not being held hostage by his indebtedness, that he does what is best for the city, and not just for the influential and wealthy individuals to whom he might be beholden for $329,000 in mortgages and his $60,000 a year part-time job?

Closer to Home

Unfortunately, Jones’s indebtedness is not confined to his business. He appears to have financial problems closer to home. In April 2005, two years before taking out the two mortgages on the donut shop, he bought a home in Portsmouth, on “the Hill,” at 2828Willow Way, for $192,000. Yes, Jones lives on the Hill, but can he afford to, not only financially but ethically? Were the decisions he has so far made as city solicitor influenced by his being mortgaged to the hilt? Would he have favored renovating the Marting building if he was not obligated to the SOGP and Clayton Johnson? Would he have brought Harold Daub to trial on trumped up charges if Daub wasn’t enemy number one to the rich white trash who control Portsmouth economically and politically? And would Jones have tried to fire Police Chief Charles Horner in the rush-to-judgment, undocumented way he did if Horner had not been disloyal to his bosses, first to Mayor Bauer and then to Mayor Kalb, accusing them of illegal actions in connection with the purchase of the 15th Street Viaduct property and the Marting building?

Is there a more highly leveraged office holder in city government than the City Solicitor? If the City Solicitor is no better at handling the city’s legal problems than he is at handling his own finances, his term in office may seem even longer to the citizens of Portsmouth than it will to him. The prayer of Alcoholics Anonymous goes, “God grant us the serenity to accept the things we cannot change, courage to change the things we can, and wisdom to know the difference.” Is Portsmouth one of those things that cannot be changed? Should the Concerned Citizens Group change its name to the Serene Citizens Group? Should they wear a toga and do yoga? Should they, like Alfred E. Newman, stop worrying? Questions and more questions! When a Greg Bauer is replaced as mayor by a Jim Kalb, and a David Kuhn is replaced as city solicitor by a Mike Jones, when we go from the deep fryer into the fire, it is enough to drive a teetotaler to drink or, even worse, to donuts.