GRAND ISLAND, Neb. (KSNB) UPDATE Friday March 13, 2020
The Nebraska State Fair Board was set to have their monthly meeting Friday, but as board members arrived they found the meeting had been cancelled. They found out the Fair Board attorneys were given a recommendation by the Attorney General to cancel the meeting due to COVID-19 concerns.
The Board had a full agenda with two executive sessions. One item included an action item to address the employment contract of the Executive Director. While a vote did not take place, some board members were against it.
Jeremy Jensen shared in a written statement that he believes the board has been violating the Open Meetings Act with a lack of transparency. Jensen stated he believes votes have been counted in secret to stack against Executive Director Lori Cox.
After the meeting was canceled, Cox, attorneys, and a few members of the board met behind closed doors. The press was not given information on what was being discussed.
The next board meeting is scheduled for April 10 but it has not been decided if it will take place.
The Nebraska State Fair Board has released an official statement regarding the inquiry into lost finance information. The official statement reads as follows:
"As part of an internal review of finances, the Nebraska State Fair Staff,under direction of the Executive Director, has discovered activity that is suspicious in nature and warrants further investigation. The Nebraska Fair Fair Board has alerted all appropriate state agencies, who are coordinating further investigation. Additionally, The Board has engaged a private firm to conduct further forensic review of the Fair's banking and financial transactions. The process will take time, not only to complete the investigation, but also to analyze the results. The Board is cooperating fully with the investigation, closely monitoring the Fair's finances, and will provide updates to the public as appropriate. The Board feels positive about the future and the new safeguards being introduced and is confident this investigation will have no negative effect on preparations for the 2020 Nebraska State Fair."
There is a planned monthly State Fair Board meeting set to be held Friday March 13 at 1 pm on the fairgrounds. Local4 will be following up on the investigation and the future of the Board.
The Nebraska state Fair met in Lincoln Friday to elect new officers and discuss their on-going finance concerns. Many members called for more checks and balances.
This meeting comes after the board claimed they were a not-for-profit private corporation and did not have to follow open meetings laws. But despite that the meeting was open to the public and the board made reference to following the proper rules.
The meeting started off with the election of a new board chair, vice chair, secretary, and treasurer. Beth Smith won the chair vote by one vote against Jeremy Jensen. Smith said she wants to continue to have open meetings and wants to get the fair back to what it used to be.
“It's been such a positive experience in Grand Island and I feel like we can go back to running the fair during those years where we did make a profit,” Smith said.
Another focus of the meeting was figuring out where some checks have been going. Executive Director Lori Cox brought up concerns of some vendor payments potentially not being legitimate.
“Frankly, I want to know the dollar amounts that we're paying for legitimate services and make sure we're not being taken advantage of because I'm telling you it's happening,” Board Member Jeremy Jensen said.
Jensen has called for a review of checks made from July 1 through November over the cost of $250. He also wants to see they are getting the best price for some services and says the fair can "go somewhere else" if they don't see vendor prices as fair.
A topic brought up multiple times was a hard drive that was wiped clean after the former CFO quit and claimed the board was going bankrupt. They still have yet to recover all the files.
“It gives me great heartburn to know that the day the announcement was made we were going bankrupt that people's hard drives got wiped clean,” Jensen said. “I'm not in any way shape or form trying to cast guilt on anyone. But I also need full assurances that everything has been done appropriately.”
The new board chair said she also wants to make sure everything is being done to recover the files.
“You know, I need to find out more about it and dig into it. I would hope that that information could be recovered and that there was no malicious intent. we're going to pursue that see what we can find,” Smith said.
A member of the foundation stated the way finances have been reported by accruals was changed in November and December. Which he believes has led to inaccurate finance reports. Smith said the board will also take a closer look at the reporting styles and see what can be done to fix the inconsistencies.
The next board meeting in march will be back in Grand Island.
Arguing that it is a not-for-profit private corporation, the Nebraska State Fair Board denied that it's violated Nebraska public records law or the state's open meetings act.
In December, a Grand Island based radio station group sued the Nebraska State Fair board for breaking the state open meetings law and for withholding public records.
Legacy Communications LLC filed a complaint in Hall County District Court against the board. Legacy also operates under the trade names Hometown Family Radio and GI Family Radio. Its properties include Grand Island radio station KRGI.
In their complaint, Legacy said it filed three public records requests on September 30, November 27 and December 10 of 2019. They allege that the fair board did not adequately respond to those requests.
“We have had nothing but a fight to have transparency and get the information that is owed to the taxpayers and the citizens of the state of Nebraska,” GI Family Radio CEO Alan Usher said.
The complaint also documents Legacy's request to see the minutes from a series of meetings the board held during the 2019 State Fair between August 24 and September 3. Legacy CEO Alan Usher was told he could look at the draft minutes for those meetings, but that he could not make photos, video recordings or copies of those minutes. Usher was allowed to see those draft minutes, but was watched to ensure he did not photograph, film or copy the minutes.
Legacy also accuses the state fair board of misusing executive sessions. The November 22 meeting agenda listed an item stating that the fair board intended to go into executive session to discuss budget issues. When a news reporter objected, the board amended its motion and voted to go into executive session to discuss personnel matters. At the end of the executive session, the board resumed open session and voted on the budget without discussion. Executive Director Lori Cox said they were discussing the personnel they were going to let go, which is allowed to be closed door.
Legacy's complaint contained a partial transcript of an interview with executive director Lori Cox by KRGI News Director Tyson Havranek in which she appears to confirm that budget issues were discussed in executive session, saying in part, "It was exactly as stated that budget and personnel issues were discussed in executive session".
The complaint also accused the board of failing to state its reason for executive session on four separate occasions.
The complaint also accused the fair board of breaking a law which requires that minutes of public meetings be made available within ten days of a particular meeting.
Legacy asked a judge to order the board to produce any requested documents in its possession or to give a valid reason for denying the request.
Legacy also wants the court to void the state fair board meetings held between August 24 and September 3 as well as meetings held October 11 and November 22.
A response to the civil suit prepared for the fair board by the Lincoln law firm Baylor Evnen argued that the board "is not a public body subject to Nebraska Public records law." The fair board also argued that, while it did provide some of the documents requested by Legacy, it was entititled to withhold documents that were not required to be disclosed under Nebraska law.
The board asked that the court dismiss the Legacy lawsuit.
State law and previous court filings are unclear about the state fair board's status as a public or private entity.
A state law enacted by the legislature makes specific reference to a requirement that "all meetings of the board shall be conducted in accordance with the Open Meetings Act."
However that same statute also indicates that the Nebraska State Fair board was formerly known as the State Board of Agriculture. The statute also contains an annotation which states that the Nebraska State Board of Agriculture was "essentially a private corporation possessing no exemption from suit or liability."
But, in a response to a 2017 lawsuit prepared on behalf of the State Fair Board by the Omaha law firm Pansing, Hogan, Ernst and Bachman, the language read as follows: "Defendant denies the Nebraska State Fair Board is a private corporation. Defendant states it is a non-profit created by state statue section 2-101 and a quasi-state Agency."
Court records indicate no future court date or timeline for future hearings or decisions on the civil suit.