The same loan program cost the city more than $50,000 in lost interest payments after invested incentive money was left to languish in low-performing CDs, grand jurors said.

The special grand jury's eighth presentment in 2 1/2 years studied the city's Minority Link Deposit Program, which is supposed to make low-interest loans available to small businesses and minority- and women-owned businesses that normally would not have access to high lines of credit. Loans are based on the awarding of government contracts, and government deposits are used as an incentive for banks to administer the program.

No taxpayer money is actually loaned to any businesses.

The program, which was started in 1991 under the former county government with money from the special purpose local option sales tax, has never been administered adequately or advertised, special grand jurors wrote in their presentment.

"With all the years of neglect, our economy lost a great opportunity," the presentment states. "Many companies would have benefited from just such an incentive program."

The only companies to acquire any loans through the program, grand jurors wrote, were those tied to elected officials: one owned by a former colleague of Augusta Commissioner Lee Beard, and the other owned by the son of state Rep. Henry Howard.

According to bank records subpoenaed by the special grand jury, three loans were awarded in three years: two to Howard's Uniforms Unlimited, which is owned by the son of Mr. Howard; and one to By-Lib Corp., owned by Charles McCann, a former business partner of Mr. Beard.

Mr. Beard did not return phone calls to his home seeking comment, and Mr. McCann is out of town until Monday.

According to bank records, By-Lib was awarded a $6,081 loan in 1996.

Howard's Uniforms Unlimited received two loans through the program: one for $17,561 in 1996 and another for $50,000 in 1999, grand jurors reported.

Both the elder Mr. Howard and his son Henry "Wayne" Howard say the grand jury report distorts the truth.

"I wouldn't put (the loan) in the category of politically connected at all," said the junior Mr. Howard, adding that he secured the loan through a bank he was already using. "It has to do with how much business the city was doing with minorities, period. If there was very little or none (being done), then there would be very few requests or no requests."

He said he learned of the program through the city's purchasing department, not through his father or any other elected official. Purchasing Director Geri Sams was out of the office Thursday.

"In the early '90s, there was not even much of a chance to get business as a minority," Mr. Howard said. "(Link Deposit) is to give you the financials you need to purchase items because as a small business you don't have the credit leverage to go in and buy from major manufacturers."

Mr. Howard's father was not as diplomatic in his reaction to the report.

"This shows how dumb (grand jurors) are," the elder Mr. Howard said. "They should find things out before they get involved in them."

The state representative said he has had no involvement in the company for 12 years, although the grand jury report says he still owns it with his family.

In their report, grand jurors also criticize the program's administration, saying guidelines for qualified businesses have never been clearly defined.

"There was no written policy, no widespread advertising, and no proof it was a benefit to (Augusta-Richmond County)," the presentment says.

Those involved in administering the program "showed a vague and incomplete recall" of it, grand jurors wrote.

They added that because the city didn't keep track of its money and didn't secure competitive bids from financial institutions, it lost thousands of dollars each year in interest.

The report notes that Cedric Johnson, who was a Link Deposit coordinator at Regions Bank, is the nephew of Mr. Beard. Mr. Johnson falsely reported to commissioners in April 2000 that up to a dozen loans had been granted, not just three, grand jurors wrote.

Mr. Johnson did not return a phone message left at his home Thursday evening.

In their report, grand jurors recommend assigning a finance department employee to oversee the Link Deposit Program and to work with participating banks and businesses. They also suggest advertising the program to the business community through bid announcements and specifications.

"Since our government is going to be involved in such incentive programs, it must act in a clear and defined manner, ensure easy, non-biased access to all potential users and take a more active role in defining the parameters of the program," the report states. "When taxpayer money is used for such programs, it should be for clear purposes and benefit all who are entitled to it."

"With all the years of neglect, our economy lost a great opportunity. Many companies would have benefited from just such an incentive program." - Grand jury report

Reach Heidi Coryell Williams at (706) 823-3215 or heidi.williams@augustachronicle.com.