Originally created 12/15/03

Board's meeting will look at bonds

Members of the Augusta Neighborhood Improvement Corp.'s board of directors will talk today about something their attorney says should have been talked about months ago.

Last week, the Georgia Insurance Commissioner's Office issued a cease and desist order against Global Bonding Co. The Las Vegas surety bond company was supposed to ensure pay and performance for completion of a Laney-Walker building project being funded by ANIC with state tax money.

Instead, Insurance Commissioner John Oxendine has said that Global is little more than a scam operation that targets minority- and women-owned contracting businesses. The company stands accused of selling insurance without a license and deceptively soliciting surety-bond business.

Had Global been researched ahead of time, it would have been clear that its bonds were not legitimate, ANIC attorney Pete Fletcher said late last week.

"I typically don't get involved in looking at bonds," he said. "But now that I look at this thing, it ain't a bond. It's not in the form it should be in. So it's a real concern."

Mr. Fletcher said he did not start looking at the bond documentation until recently - after the insurance commissioner's office launched its investigation of Global.

Now, Pat Mathis Construction of Savannah, Ga., is in technical violation of its contract with ANIC because there are no surety bonds on the project. ANIC stands ready to try and recoup its premium payments from Global - by suing, if necessary, Mr. Fletcher said.

"The bond does not comport with Georgia law, but that doesn't mean they don't owe some kind of obligation," he said. "What they sent is not what the contract documents call for."

Today's meeting is set for 5 p.m. in the board room of the Wachovia building on Broad Street.

Board members will be told that Pat Mathis has been directed to furnish an appropriate bond, Mr. Fletcher said. They also might consider adopting policies and procedures to prevent a similar oversight in the future.

It marks the first time the ANIC board has scheduled a discussion of the surety bond agreement, even though President and CEO Robert Cooks awarded $42,621 of the corporation's money toward Global Bonding's $59,820 premium earlier this year.

That change order apparently was made without the board's approval, even though the contract calls for Pat Mathis to pay the bond premium.

It is not out of the norm for a change order to be approved administratively, board member and Augusta State University President William Bloodworth Jr. said last week.

"If the building is built, and the cost is what we expected it to cost, then the only thing that would be left would be questions about why did it take so long," Dr. Bloodworth said, later adding that his only building experience has been "watching buildings go up at the university."

Board member Ed Presnell said he was relatively new to the board and didn't feel qualified to talk about the financial details of the corporation.

"In my opinion the board is doing what it's supposed to do," Mr. Presnell said.

Other board members contacted by The Augusta Chronicle - Robert Osborne, Paul Menk and Dennis Skelley - either did not return phone calls seeking comment or declined to speak about the issue.

Reach Heidi Coryell Williams and Sylvia Cooper at (706) 724-0851.


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