Coincidence, or Conflict of Interest?
I’ve been asked by Midlothian residents about perceived irregularities in the purchase of the First Baptist Church, now home of the Midlothian Police Department and Justice Center, in February 2006.
At question is whether the city’s representative had a conflict of interest with their broker and if that could have raised the final sales price to the detriment of the Midlothian taxpayer.
What started as citizens’ concerns regarding recent city discussions, such as the building’s roof and air conditioner units, took on a confusing twist unrelated to the original inquiry.
I was told it was very difficult retrieving the correct contract regarding this transaction.
The original open records request produced a contract for $1.5 million, but two pages were missing. The $1.5 million contract was followed up with a $1.7 million contract.
The HUD Settlement Statement provided was in the amount of $1.6 million. Because the HUD document purchase price did not correspond to the contract price additional inquiries were made. The city finally provided an amendment to the $1.7 million contract, lowering the purchase price to $1.6 million.
Inquires were made of the Ellis County Assessor’s Office.
The assessor has no record of the value history of improvements for this particular piece of real estate, stating that it is because of the church’s non-profit exemption.
However, other exempted churches on the Ellis County Assessor’s Web site detail a value for the improvements (buildings).
Why is this one different?
The land value of this property in 2008 is $82,000.
This is currently the only information provided on the value of the property, leaving us to believe the city perceived the value of the buildings at over 1.5 million.
It’s unusual to have pages missing from an important legal document, but what made me question the value of the property was how this story kept unfolding like a dime novel.
Former Police Chief Steve Campbell initialed the contract for the city as the city’s representative (buyer), the person responsible for representing the taxpayers … it was his job to acquire the property at the best price for the citizens of Midlothian.
Representing our city, Campbell used William Foshea as the broker (realtor). Foshea received $36,000 in commission, according to the HUD Settlement.
Coincidence? The Texas Real Estate Commission verified that William Stephen Campbell had a real estate salesperson license and was being sponsored by licensed real estate broker William Foshea (the person who received the commission) during the course of the real estate transaction. The TREC website currently shows the same address for both Foshea and Campbell.
The city has verified the buyer’s initials on the bottom of the contract are those of William S. Campbell.
Here’s where I question the arrangement: Campbell represented the city in the transaction, and his job was to get the lowest price possible.
However, his broker was also his sponsor (boss).
The higher the price, the more the broker would make.
All the broker would have to do is talk the buyer (Campbell) into paying more, and the broker would make more commission!
While the two parties would normally "haggle" over how much to offer the church, they had a business arrangement where the buyer worked for the broker.
The potential for a conflict of interest is clear, and, if that arrangement affected the price, it would be the taxpayers who would lose.
We don’t know the answer, but we have to ask: As an employee of Mr. Foshea, did Campbell convince the city to pay more for the building than it might have otherwise?
Did Campbell receive a "back door" commission on a sale where he was the buyer – a commission that would be greater the more he agreed to pay?
I’ve phoned Mr. Foshea several times, requesting a meeting regarding this transaction.
My calls have not been returned. All I have are "unusual" circumstances. I cannot prove any impropriety.
But, if there was nothing wrong with this transaction, why won’t Mr. Foshea return my calls?
And, even if everything was perfectly legitimate, wouldn’t it behoove Mayor Whatley to avoid the appearance of potential conflicts of interest like this?
Councilman Ken Chambers