Rep. Greg Morris (HD 156): FDIC settlement timing sucked but not totally
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Gregory Adam Morris (R-Vidalia)
District 156 (Toombs, Appling, Montgomery & Jeff Davis counties)
On the brink of the 2016 Republican primary, House Banking chair Greg Morris agreed to settle federal charges that he and other executives of a south Georgia bank allowed a flim-flam man to run it into the ground.
News of the potential settlement came in the midst of a tough re-election fight for Morris, whose opponent came within 71 votes of unseating him in 2014.
The good news for Morris: He won the primary anyway, 54-46%, and faced no opposition in the general election. The bad news: He and 10 other members of the bank’s board wound up paying $965,000 in damages. Under the settlement, the defendants admitted no liability.
The Federal Deposit Insurance Corp.’s 2015 complaint alleged that lax oversight by Morris and others allowed an investor to swindle the defunct Montgomery Bank & Trust in Ailey, Ga., of $14.7 million. The bank closed in 2012, costing the federal Deposit Insurance Fund an estimated $75 million.
A co-defendant in the case was former board chairman Pete Robinson, a super-lobbyist and former state senator whose family founded the bank in 1926.
Montgomery Bank & Trust had suffered substantial losses on commercial loans by 2009, when bank examiners gave it the lowest possible performance rating, according to the FDIC complaint. The board responded by signing a consent order promising to supervise the bank’s financial activity more closely.
Enter Aubrey Lee Price, a hedge fund manager and former preacher, who bought controlling interest in the bank in 2010
. Price told the board he was transferring millions to a Goldman Sachs account for investment, but he actually moved it to his hedge fund, which lost much of the money in risky, high-volume day trading. The rest, the FDIC said, went to Price’s personal expenses and the fund’s investors.
Board members could have prevented the fraud if they’d asked for statements directly from Goldman Sachs, but they never did. Instead, the FDIC said, they relied on fabricated statements provided by Price that contained obvious typographical errors, inconsistent account numbers and incorrect dates.
Even if the investments had been real, they would have violated state banking regulations, bank policies and prudent banking practices, the FDIC said. For instance, while the board thought it was investing $14.7 million with Goldman Sachs, such transactions were capped at $500,000.
Morris & the board, the FDIC said, also violated the 2009 agreement by failing to regularly review investment activity and obtain compliance reports from bank management.
Morris, a bank director since 1993, served on a special committee set up to monitor compliance with the 2009 order. But it rarely met, the FDIC alleged, and didn’t convene at all in 2011, after Price launched his risky investments,
By then, Price had faked his suicide and gone on the run in Florida and Latin America. He was arrested 18 months later during a Brunswick, Ga., traffic stop, charged and sentenced to 30 years in prison.
The FDIC fined Morris $5,000 in 2011, with no admission of wrongdoing, for making improper overdrafts at the bank, a violation for which he had been cited but not fined previously. Leadership in the House expressed confidence in Morris at the time, which was shortly after he became chairman of its Banking Committee, and again in 2015 after FDIC lodged its complaint.
While timing is unfortunate as far as the FDIC settlement goes, it may have been fortuitous when Morris entered the turfgrass business 10 years ago.
Morris took a stand for Georgia turfgrass growers in February 2007, introducing legislation that would have blocked the University of Georgia from licensing its Sea Isle Supreme turfgrass, a salt water-resistant strain developed for golf courses, to growers overseas.
The measure came after the six domestic growers of Sea Isle Supreme complained that granting overseas licenses could cost them millions of dollars in sales, the Athens Banner-Herald reported at the time. One of those growers, Philip Jennings of Soperton, was a constituent of Morris’s.
Morris’s bill would have created a State Intellectual Properties Board that would decide who could license products developed by the University System of Georgia. UGA backed down, agreeing to issue no new licenses for Sea Isle Supreme until 2015, within a week of a House committee passing similar language that Morris attached to a related bill.
Morris told the Banner-Herald he stopped pushing his bill because of the agreement. “There’s no reason at this time to pursue bringing this to the [House] floor,” he said.
Contemporary news accounts, though, did not report that Morris had formed Sea Island Turf Grass Co. four months earlier in November 2006. Articles of incorporation said the company was created “to grow, harvest, produce, market and sell turf grass.” Loan records show Sea Island Turf Grass borrowed money in 2007 to buy a John Deere tractor and a 22-foot Progressive mower.
It’s unclear whether Morris’s company did business with any of the Sea Isle Supreme growers. He did not return telephone messages inquiring about the company.
A loophole in Georgia’s disclosure law gives legislators until June 30 each year to disclose their financial interests for the previous calendar year. So Morris did not have to report his 2006 business interests until two months after the 2007 legislative session had ended. (He actually filed it in August 2007, six weeks past the deadline.)
The Georgia Secretary of State’s Office dissolved Sea Island Turf Grass in 2007, 2010 and 2012 for failing to pay annual registration fees. Its status was reinstated in each case after the fees were paid. The company was dissolved again in 2015 for the same reason.
Banks and other lending institutions have thrown more than $148,000 in campaign donations to Morris by virtues of his chairing the House Banking Committee. That sum includes $100,000 from banks & credit unions, $36,920 from title-pawn and other subprime lenders and $11,800 from financial service companies.
Morris reported no campaign spending whatsoever from 2006 to 2008, not even the $800 in qualifying fees he paid to run for re-election. Other candidates reported receiving $22,200 in donations from Morris during that time frame, but it’s unclear whether those came from personal or campaign funds. Only one reported the contribution came specifically from Morris’ campaign account.
Morris’s campaign in that period reported repaying him $105,000 that he had loaned it previously.
- Served on the Toombs County Commission from 1992-95.
- Lost a 1994 race for the House.
- Elected to the House as a Democrat in 1998 with 66% of the vote.
- Re-elected in 2000 & 2002 without opposition.
- Re-elected in 2004 with 54% of the vote.
- Switched to the Republican Party in August 2005. Re-elected four times subsequently without opposition.
- Survived Republican primary challenges in 2014, winning by less than 1%, and 2016, winning 54-46%.
- Lost a bid to Rep. Jan Jones to become House Republican whip prior to the 2009 session.
- Appropriations (2003 – 2004, 2007 – present)
- Banks & Banking (2005 – present; chair, 2011 – present)
- Code Revision (2007 – present; chair, 2007 – 2010)
- Natural Resources & Environment (1999 – present)
- Rules (2009 – present)
- Economic Development & Tourism (2003 – 2004)
- Game, Fish & Parks (1999 – 2002, 2005 – 2006)
- Transportation (1999 – 2002)
Business ownership interests
- President, Morrco LLC (real estate development)
- Manager, Morris Commercial LLC
- Manager, Greg Morris Land Co. LLC
- Manager, Blue Gold Group LLC
- President, Gremo LLC (investments), dissolved & reinstated in 2011, voluntarily dissolved in May 2015.
- President, Sea Island Turf Grass Inc. (2006-15), dissolved in 2007, 2010, 2012 and 2015. Bank records show Morris owned 66% of the company in 2011.
- Morris is also listed as registered agent for a limited partnership, Cielo Grand LLLP, as well as GAAJM LLC, both formed in 2013, that he has not disclosed. GAAJM is the general partner in Cielo Grand.
- Morris is registered agent for Great Bay LLC. Morrco LLC, one of his businesses, transferred a $299,000 Atlanta condo to Great Bay in 2013.
- Morris is also listed as registered agent for Morris & Co. Management LLC, formed in 2013 and dissolved in 2016.
Other fiduciary positions
- Director, Montgomery Bank & Trust (closed 2012)
- Manager, Greenpointe LLC (2003 – 2009)
- UNDISCLOSED: CEO/CFO, The Greg Morris Foundation, created in May 2011.
Real estate holdings
- Morris’ latest disclosure no longer discloses any real estate holdings other than his residence. But his companies own an interest own more than two dozen properties, valued at $2.7 million. They are listed below.
- Personal residence in Vidalia valued at $539,000.
- UNDISCLOSED: Four properties owned by Greg Morris Land Co. in Toombs County, comprising 274 acres and including a house and stable. Total value: $605,000.
- UNDISCLOSED: Seven houses owned by Blue Gold Group in Toombs County, valued between $87,000 and $170,000. Total value: $842,000.
- UNDISCLOSED: Twelve homes owned by Morrco LLC in Toombs County, valued between $62,000 and $136,000. Total value: $1.06 million.
- UNDISCLOSED: Two unimproved lots owned by Morrco on St. Simons Island in Glynn County valued at $212,000.
Payments from state agencies
- None disclosed.
Friends and Family
- Miller “Pete” Robinson chaired the board of Montgomery Bank & Trust while Morris served on it. A former state senator from Columbus, Robinson is chairman of lobbying firm Troutman Sanders Strategies and has more than two dozen active clients. The firm is Morris’s top campaign donor.
- Morris has paid $675 in late fees for missing seven filing deadlines for financial disclosures.
Morris has raised more than $580,000 in political donations since 1994. The breakdown by election cycle:
- 1994: $17,080
- 1998: $31,942
- 1999-2000: $2,700
- 2001-02: $9,350
- 2003-04: $65,895
- 2005-06: $51,002
- 2007-08: $43,535
- 2009-10: $14,609
- 2011-12: $55,050
- 2013-14: $127,875
- 2015-16: $161,400
- Reported cash on hand (Jan. 2017): $25,371
- $75,650 House Speaker David Ralston & other legislators
- $20,800 Troutman Sanders LLP & lobbyists
- $15,600 Georgia Bankers Association
- $14,750 Montgomery Bank & Trust, Ailey, Ga., & executives
- $14,984 Duncan A. Morris, the lawmaker’s late father, Vidalia, Ga.
- $12,750 TitleMax, Savannah, Ga., title pawn lender
- $12,500 Select Management Resources LLC, Alpharetta, Ga., title pawn lender
- $11,500 Fiber Optic Communications Inc., Vidalia, Ga., owner Wade O’Neal & family
- $9,000 SunTrust Bank
- $8,850 Georgia Apartment Association
- $8,050 Community Bankers Association of Georgia
- $7,000 Robert L. Moore Jr., Lyons, Ga., CEO Lark Builders Inc.
- $6,500 Georgia Credit Union League
- $6,000 Synovus Financial Corp.
- $5,750 Altria / Philip Morris USA
- $5,750 Mortgage Bankers Association of Georgia
- $5,300 Georgia Association of Realtors
- $5,000 Associated General Contractors of Georgia
- $5,000 Community Loans of America Inc.
- $5,000 Total Systems Services Inc., Columbus, Ga., credit-card processor (a spinoff of Synovus)
- $4,751 Georgia Automobile Dealers Association
Candidates may make political donations with campaign funds, allowing prolific fund-raisers to share their contributions with other legislators or candidates. Some advocacy groups believe such transfers should be limited to an aggregate of $10,000 per election cycle. Morris’s committee made these political donations:
- 2001-02: $3,200
- 2003-04: $1,000
- 2009-10: $20,700
- 2011-12: $13,000
- 2013-14: $750
- 2015-16: $0
Lobbyists have reported paying for meals and other gifts for Morris valued at more than $13,000 since 2006. The big spenders:
- $1,573 University System of Georgia
- $828 Total System Services Inc.
- $700 Community Loans of America
- $669 Troutman Sanders Strategies
- $593 Georgia Association of Convenience Stores
- $587 Fiveash-Stanley Inc., lobbying firm
- $409 Synovus Financial Corp.
- $406 Georgia Power Co.
- $388 Georgia World Congress Center
- $377 AT&T
Committee days & travel expenses
When out of session, legislators may collect $173 per day plus mileage for official business. (Per diem was $127 until 2007.) Those living within 50 miles of the Capitol are taxed on these payments, originally intended to cover out-of-town members’ food and lodging.
- 2001: $597 (4 days)
- 2002: $671 (4 days)
- 2003: $7,217 (44 days)
- 2004: $3,071 (21 days)
- 2005: $2,315 (15 days)
- 2006: $920 (6 days)
- 2007: $7,960 (22 days)
- 2008: $1,376 (5 days)
- 2009: $14,558 (56 days) #9 in House
- 2010: $3,809 (15 days)
- 2011: $8,137 (40 days) #18 in House
- 2012: $2,616 (11 days)
- 2013: $3,114 (18 days)
- 2014: $4,498 (26 days)
- 2015: $5,559 (31 days)
Updated Jan. 24, 2017