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Rep. Paul Battles (HD 15): Undisclosed land deals

Rep. Paul Battles (HD 15): Undisclosed land deals
October 3, 2012 --

Paul Battles’ personal financial disclosures have omitted his role as trustee for two trusts established by his wife’s late aunt and uncle. One of them — Collins Charitable Remainder Unitrust — sold 6.5 acres in downtown Cartersville to the state Department of Transportation in 2011. Battles also did not disclose that transaction or the $2.2 million purchase price, which benefited local charities. “I didn’t think I had to do one for the trusts since I get no financial benefit from that,” he said. Battles’ family business owns 6.2 adjoining acres, zoned for commercial use.

Battles retired from Crescent Bank of Jasper in 2007 but remained on its board through 2009, as examiners were beginning to sound warnings that the bank needed to tighten lending practices and oversight by its board of directors. State regulators closed the bank in 2010 at a loss to federal insurers of $280 million. The FDIC, in a 2011 postmortem, blamed Crescent’s collapse on an aggressive growth strategy, a heavy concentration of speculative construction loans and the board’s and officers’ failure to effectively manage the associated risks.

FDIC’s 2011 postmortem said the bank violated FDIC appraisal standards, failed to vet prospective borrowers or to establish loan agreements to protect the bank’s investment, and renewed non-performing loans without proper safeguards. A 2009 cease and desist order cited eight pages of apparent law and policy violations that contained in a bank examiner’s report that has not been released publicly. The bank had already responded by toughening its risk management practices, but those corrections came too late. The FDIC’s inspector general later faulted the agency for not intervening sooner and more proactively.

Battles said the FDIC told bank officials they had done everything they could to keep Crescent open. “They said that we had gone above and beyond the call of duty trying to save the bank,” he said in an interview. “By the time we were trying to adjust, the dominoes had started falling. … We were fighting a foe that was bigger than all of us.”