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Investment scandal simmered all year

December 30, 2013
By TOM GIAMBRONI - Staff Writer (tgiambroni@mojonews.com) , Morning Journal News

This story was voted No. 3 in 2013 by the Morning Journal staff.

LISBON - When Columbiana County Treasurer Linda Bolon took office on Jan. 1, 2013, one of her first tasks was to correct an inherited imbalance in the investment account.

By the time Bolon was through, she discovered a number of administrative problems with how investments were handled by her predecessor, Nick Barborak, so much so that she asked the state auditor's office to take a look.

Although no money was lost, nor was there any suggestion of misconduct, the revelations and series of stories that resulted from Bolon's investigation garnered the attention of the county and state Republican party chairmen. Both GOP leaders criticized Barborak, a Democrat and the county's current state representative, and called for an independent investigation.

It all began in mid-March when Bolon, who is also a Democrat, told county commissioners an imbalance in the treasurer's investment fund dating back more than two years had resulted in the county's interest income being overstated by $118,779. She said Barborak had advised her of his inability to correct the bookkeeping problem prior to leaving office to be sworn in as state representative.

The county investment advisory board, at Barborak's suggestion, had contracted with First National Community Bank in 2010 to invest $5 million in county funds through WesBanco. A discrepancy in how the interest income was being reported resulted in the imbalance that the treasurer's office was unable to reconcile.

In the course of correcting the imbalance, Bolon discovered that eight investments were technically illegal because they were for longer periods than allowed by law. Bolon also had trouble trying to account for all of the investments due to lack of paperwork that should have included tracking numbers, even though state law and the county's own investment policy required the tracking information and other investment documentation be filed with the treasurer's office.

Barborak said he consulted with WesBanco "on general strategies, on direction, but not on specific instruments. I relied on their professional judgment ... And we trusted they were compliant with the policy and law because they were obviously aware of it and assured us they were familiar with the policy and the law."

As the stories continued, the bank notified county commissioners they were canceling the contract because of the problems that had occurred with WesBanco's management of the investment account. The bank waived its fees and pledged to reimburse the county for any losses resulting from early liquidation of the investments.

Then there was the issue of Barborak's desktop computer, which crashed in mid 2012 and was replaced. Bolon was looking for the old computer in order to satisfy a records request from Republican leaders, who wanted copies of any emails between her and Barborak.

It took awhile but the computer was located in the courthouse, but a company hired through the county auditor's office was unable to resurrect the hard drive and retrieve any of the information on it.

 
 

 

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