GBIC AUDIT: EVERYTHING AT ARM'S LENGTH, NOTHING ILLEGAL; GLOSSES OVER LOSS OF 600, $75,000 A YEAR JOBS

 "Based on our review procedures, nothing came to our attention to indicate the purchase of the land was not at arm’s length or that it was in any way a transaction between related parties. We have no knowledge or information that would suggest that the price paid for the purchase of the three tracts of land was significantly at variance with market value, when considering the appraisals of the three tracts of land...(Click on graphic to enlarge) 

FROM THE AUDIT REPORT:

"The land was acquired in connection with a discussion GBIC was having with Steel Dynamics, Inc. (SDI) for a project related to proposed construction of a steel mill. Interest by SDI in Brownsville had developed because of the signing of an option agreement between Big River Steel (BRS) and the Port of Brownsville for a $1.6 billion steel mill and distribution facility.

SDI would, excluding any work created by their construction of the steel mill and related apparatus, bring to the area 600 jobs at an average annual salary of $75,000 each.

Rene De Coss was the attorney representing GBIC in connection with the April 2019 acquisition of the three tracts of land (Shades/Orestes). Mr. De Coss was also the attorney for the City of Brownsville at the time. 

According to Mr. De Coss, “What I do know is that when GBIC started trying to negotiate the purchase of tracks of land surrounding its property, they found out that land speculators had already entered into options with many of the land owners and GBIC was forced to negotiate with them to acquire the tracts.” 

 QUESTIONS THAT WERE NEVER ASKED:

"Another factor in SDI moving on was securing industrial zoning. GBIC had not been successful in its bid to get approval to zone the properties as heavy industrial."

And guess who was on the Planning and Zoning board and who suggested that the plant be moved closer to the port (where he and confederates had property to sell)?

Would you believe board member Abraham Galonsky, of the $2.3 million sale of Casa del Nylon infamy?

Why didn't the audit list the name(s) of the "land speculators" who had acquired options on the three properties? Why didn't they say that it was none other than Patricio Sampayo who had purchased the options? Sampayo is the president and Cowen is the director of the Brownsville Housing Opportunity Corporation. Cowen was then  a board member of the GBIC and requested and received at least two individual reports on the three parcels from then-GBIC CEO Mario Lozoya.

Why didn't the auditors ask Sampayo where he had found out the GBIC was interested in those particular three parcels? If the GBIC had agreed to buy the lots from Sampayo at his asking price (at $25,000 or more per acre?) that would make it 142 x $6,000 to pocket a neat $852,000 based on insider information.

It never got to that point because Sampayo insisted on negotiating directly with the plant's represenatives, a clear violation of the Non-Disclosure Agreement signed by the GBIC and SDI.

In the end, however, SDI elected not to extend its letter of intent, which expired on March 6, 2019. Among the reasons given was the time it was taking to aggregate the land. GBIC never bought he land from Sampayo and waited until his option on the land expired. It now owns the land that it purchased from the original sellers. 

Because of the insider trading, the city lost 600 jobs at $75,000 and lost a doubling of its property tax revenue.

Instead, the audit focuses on recommendations of procedure which the city commission recently adopted. Cowen is now the chairman of the GBIC. “That transaction wasn’t properly vetted and executed in my opinion,” Cowen piously told the Brownsville Herald.

“Those types of things raised are big red flags in terms of the expectations that we have as a commission,” he said. “We want things done right, and that transaction never came to the commission either for approval. That’s law. We need to approve those. Whenever GBIC expends funds, the commission has to approve it. We approved their budget and that transaction was not in their budget. It needed to come to the commission.”

Cowen said he referred the matter to the Cameron County District Attorney and federal law enforcement. Will he include evidence of the insider trading that gave his pal Sampayo control off the land the GBIC needed to foster the economic development the residents of our city so baldy need?

We highly doubt it. Cowen should be careful for what he asks. We have a slight suspicion that the DA's Office will be asking these very questions, if not many more than that.