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Company that received state loan exhibited signs of financial trouble

Company that received state loan exhibited signs of financial trouble

From the WEDC under fire series
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BCI's corporate plane

Business Committee Inc.'s corporate jet was seized in 2012 after the company failed to make loan payments and pay bills associated with the seven-seat Cessna.

In the months before and after William Minahan secured a $500,000 state loan for his company, Building Committee Inc., there were signs that the 30-year-old company that specialized in designing and building bank and credit union buildings was in financial trouble.

Longtime salesman El Sellers said the state of BCI was “very shaky” during fall 2011 when the Wisconsin Economic Development Corp. awarded it a loan to retrofit bank and credit union buildings for energy efficiency.

“Most of the people there — 90 percent of the employees who were left — were on half-pay, and they had been on half-pay for a long time — almost two years,” Sellers said. “The company credit card would work one day and not the next. Expense checks would stop coming.”

In mid-2011, subcontractors on the site of a new Tulsa Teachers Credit Union building demanded a total of $131,800 for work that BCI had not paid for, according to Jerry Hoopert, chief administrative officer for the credit union.

Hoopert, whose company had a long and successful relationship with BCI, said the credit union paid the debt after the subcontractors threatened to file liens against the new building.

When he finally got Minahan on the phone in November 2011, Hoopert said the BCI owner assured him the company would pay the money back, plus interest.

“He (Minahan) called me and said that he had been awarded a grant from the state of Wisconsin for an energy project. He told me he got a $4.3 million grant,” Hoopert recalled, reviewing notes from that time period. “He told me our funds got commingled with an energy project. I said, ‘I don’t really care. I want my people paid.’ ”

In fact, while Minahan and top aides to Gov. Scott Walker had pushed for a $4.3 million forgivable loan to BCI, the state ultimately loaned the company $500,000.

Hoopert said when Minahan still failed to pay, he contacted the FBI office in Tulsa in December 2011. Sellers also said he reported the same activity to the law enforcement agency. A spokesman for the Oklahoma FBI office said the agency’s policy is not to confirm or deny such contacts.

WEDC extended the loan in December 2012, after the company reported to the agency that it no longer had funding to continue the project, according to a staff review.

WEDC spokesman Mark Maley said the agency amended terms of the loan “because we wanted to give the company every chance to succeed before defaulting on the loan.”

He said all amendments go through the same underwriting process and scrutiny as the original loan agreement.

But by then more than half a million dollars in money judgments had piled up against the company.

Hallease, a Milwaukee company that leased cars to BCI, sued in August 2012 for $220,000, including $108,455 for the 2010 Maserati Quattroporte that Minahan drove, according to The Daily Reporter, a Milwaukee-based news service covering the Wisconsin construction industry.

BCI was ordered to be evicted from its office at 757 N. Broadway in April 2012, The Daily Reporter found, and the owner of the company’s downtown Milwaukee office sought $170,840 in unpaid rent.

BCI’s seven-seat Cessna 421 airplane also was seized in 2012, court records show. John Lotzer, owner of Gran-Aire Inc. of Milwaukee, which had placed a lien on the plane for unpaid bills, said his company likely will lose $50,000 to $60,000 on the aircraft, which it’s trying to sell.

In February, BCI was administratively dissolved, according to the state Department of Financial Institutions.

Bob Dunn, who worked for Minahan for 19 years covering the eastern U.S., said he left the company in April 2012 after working for many months on half pay and the final four months with no pay. Dunn figures Minahan owes him between $25,000 and $35,000 in unpaid commissions and unreimbursed expenses, not counting missed salary.

Sellers, who once considered Minahan a friend, said in addition to Tulsa Teachers Credit Union, two of his other customers suffered losses because of their dealings with BCI.

Sellers covered the Southwest for BCI.

“He left me out to dry for $15,000 in expenses, unpaid salary and unpaid commissions,” said Sellers, who worked for Minahan for 13 years. “In my opinion ... it was not because of the economic downturn. This was greed.”

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Irresponsible loans, a lack of oversight and personnel problems have plagued the Wisconsin Economic Development Corp. since its creation by Go…

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