The Wilkes-Barre/Scranton International Airport board has scrapped a controversial plan to move its multimillion-dollar banking business to a bank where an airport board member is a founding director and shareholder.
That same board member, Robert Cordaro, appears to have violated the state Ethics Act by failing to disclose on a state ethics form that he sits on the banks board of directors.
Luzerne County Commissioner Todd Vonderheid, who chairs the airport board composed of the members of the boards of commissioners for Luzerne and Lackawanna counties said Monday that the airport board should not have changed banks from Wachovia to Pittston-based Landmark Community Bank without approval at a public meeting.
It is a contract, and it does need to be ratified and done publicly, Vonderheid said Monday. At the next meeting, Im going to ask the staff to do a (request for proposals) from different banks, and were going to have a conversation about the process.
Vonderheid said he received the legal opinion from Luzerne County solicitor James Blaum, who also serves as an airport board solicitor.
He said the airport board did not intentionally attempt to deceive the public by switching banks without a public vote.
It looks more like a conspiracy than it is, Vonderheid said. Now, its just a matter of cleaning up what was probably an administrative error and oversight.
A quorum of the airport board met privately two weeks ago to sign signature cards for Landmark, essentially finalizing the bank switch that airport Director Barry Centini called an administrative decision.
Centini said he made the decision to switch banks after Landmark pitched a deal that he claims would save the airport about $30,000 a year.
Critics of the deal, however, complained that the change should have been made with a board vote during a public meeting. They noted that airport board member Robert Cordaro owns stock in Landmark, creating a conflict of interest.
Airport board member Michael Washo, who is the minority Lackawanna County commissioner, said he believes the Landmark deal was definitely an inside arrangement.
Its a bad situation, Washo said last week. We should be doing this stuff with full disclosure. I think this is much more than an administrative misunderstanding.
Cordaro, who is also chairman of the Lackawanna County commissioners, disclosed his stock holdings to his fellow airport board members but failed to disclose on a state ethics form that he is a member of the banks board of directors an apparent violation of the state Ethics Act.
According to the law, any office, directorship or employment of any nature whatsoever in any business must by reported on the Statement of Financial Interest.
Cordaro said last week that he was not required to disclose his ties to the bank because it didnt meet the states income threshold for reporting it.
Its not a source of income; thats why its not on there, he said last week.
But, minutes later, he acknowledged that he does receive $100 per meeting as a Landmark board member. The Landmark board meets monthly, earning Cordaro $1,200 a year for his director position.
He correctly noted that $1,200 falls below the states threshold of $1,300 for reporting outside income to the state Ethics Commission.
In addition, Cordaro acknowledged owning 1.8 percent of Landmarks outstanding shares and claims to be one of the smaller shareholders. Cordaros holdings are below the states reporting threshold of 5 percent of companys assets.
Its worth nothing now because the stock isnt traded. It does not change hands, Cordaro said. I have not made any money on this bank. I do anticipate making money on it at some point. Im a patient investor.
Cordaro bought the stock in 2000 a year before Landmark was chartered in 2001. He refused to say how much he paid for his stocks or how much they are worth today. In February 2000, Landmark held a public offering of 460,000 shares of common stock at $11 per share.
The Airport stopped advertising with the Times Leader over the newspaper's coverage of a controversial plan to switch banks.
Airport officials switched millions of dollars of business to a bank where the vice chairman of the airport board sits as a director.
The switch of millions of dollars of Wilkes-Barre/Scranton International Airport business to a bank where an airport board member is a director should have been done at a public meeting, said...
Airport officials reconsidered a deal to switch banks and decided to advertise for a financial institution where it will deposit its money.