Waste Watch: Fishy Business In Aquarium Project?

Critics on a planned aquarium say there is something fishy about the project’s funding.  The aquarium will be a key feature in the proposed Medicine Park Museum of Natural Sciences.  The project was announced in 2009 and billed as a major economic investment for Southwest Oklahoma. 

“It sounded like a good idea so i came on board as an unpaid volunteer,” said Larry Meese who lives in Medicine Park.

Meese is semi-retired and has experience in running businesses.  He says the museum’s director asked him to take more responsibility.  “I was asked to start building financial records and that is when I started uncovering things I was uncomfortable with,” Meese told Fox 25. “In that process I discovered they hadn't registered as a charitable organization in the state of Oklahoma, yet they were collecting donations.”

Meese says he saw checks written to the “Medicine Park Museum of Natural Sciences” that were donated long before the Museum ever existed on paper.  According to the Oklahoma Secretary of State’s website, the Medicine Park Museum wasn’t incorporated until February of 2010.  The group did not file to be an Oklahoma Charitable organization until June 29, 2012.  At that time the museum non-profit listed they had collected no money, spent nothing and had zero savings in the bank.

“From every financial standpoint and every record keeping standpoint I have great concerns that it is simply not being managed properly,” Meese said.

“I would say absolutely there's proper accounting for the expenditure of funds,” said Doug Kemper, the executive director of the non-profit agency created to run the museum, “And there proper mechanism for the expenditure of funds.”

Kemper’s resume includes leadership roles at zoos and aquariums across the country.  He was a founding director for the Oklahoma Aquarium in Jenks, but says he came out of his retirement when his hometown area needed help. 

“It was and is a city of Medicine Park project, they wanted something as an economic development project, something for Southwest Oklahoma to help Medicine Park become a gateway to the refuge and an attraction,” Kemper said.

Kemper says there was nothing improper about the way the museum was set up, because the non-profit agency he heads is only contracted to manage the museum project.  “The property is owned by the city, the museum is owned by the city.”

Meese says the money was held by the Medicine Park Economic Development Authority, or MPEDA.  “I have a lot of questions and a lot of concerns.  I have concerns whether those people who donated to the museum donated to their money to a good cause.”  Meese says the funds were solicited with the promise they would be tax deductible.  However, according to the website for the Internal Revenue Service, MPEDA has not filed a form 990, which sets up exempt organizations. 

“Indentured public trusts operate much like, or can operate much like nonprofit agency they are able to offer tax deductions for those donations that are made to public trust developments,” Kemper told Fox 25 outside his home in Medicine Park. 

Kemper says the aquarium in Jenks operates under a similar public trust.  According to the Oklahoma Aquarium website, the aquarium is owned by the “Jenks Aquarium Authority,” not an economic development authority as the project in Medicine Park. 

This distinction is important because according to IRS records the only public trusts that qualify as exempt organizations are ones that are “organized and operated only for charitable, religious, scientific, literary, or education purposes, or for the prevention of cruelty to children or animals.”

According to the founding documents of MPEDA, the trust was created to spur economic development, manage public works projects, and promote mass transit along with myriad of other projects.

The museum broke ground in 2011 and its website promise a fall 2013 opening.  During our visit to the mountain-side construction site, a project manager told us the museum site has not been fully leveled off.  There is no museum on site. 

Kemper says it has been difficult for the project to raise money during a down economy.  To that end, documents show the city of Medicine Park authorized MPEDA to go into debt, and take loans out to the project off the ground.  Comanche County awarded a $300,000 performance loan to the city.  “I am greatly concerned that that authority would guarantee a loan of that magnitude without any, to my knowledge, any ability to pay it back should they have to,” Meese said.

Paying that loan back may be more of a reality than some realize.  The fine print of the loan intended to create jobs says the 10-year payback period begins July 1, 2013.  The museum must prove that it is employing 20 full-time employees at $8-per hour.  Those employees must begin working by July 1 in order to fulfill the terms of loan contract or risk the city having to pay back part of the loan. 

The loan also requires the museum to have a capital investment either in cash or through in-kind donations equaling $3.6 million.  Kemper says, despite the slow start, he believes they will meet the looming deadline.  “If not any so called...penalty is just negotiating how you pay it back or extend.”

Our investigation uncovered that the construction project itself was operating outside the law.  The Oklahoma Department of Environmental Quality says ever construction project that large has to have a “storm water protection plan,” but the museum’s permit from the DEQ expired in August of 2012.  No one renewed it.  The DEQ says any active construction project would need that permit to continue.

Our visit also came after a rain that left chunks of mud and rocks covering part of Highway 49.  The museum’s driveway cuts into the highway.  If you cut into a public highway you are required to get a permit from the Oklahoma Department of Transportation to do so. 

Kemper told us he not only had permits from the DEQ, but also ODOT and that both agencies had visited the construction site.  When we called ODOT they informed us that Medicine Park had no permit to cut into highway 49, though they knew such a permit was required.  The city requested the forms, but they were never completed.  ODOT says the permit is free and they are working with the city to make sure proper permits are in place.  ODOT says there will likely not be a penalty for operating illegally for nearly two years because they have no enforcement procedures in place and instead work to bring projects into compliance.

The Medicine Park project may never have broken ground had it not been for a major donation from a philanthropic foundation.  However that contribution was only made possible thanks to a final $25,000 push in donations that came via the Oklahoma Department of Agriculture.  The money was included in last year’s budget at a time when many agencies saw little increase or even cuts in appropriations.

“It seems to me there is much more too this than meets the eye,” said State Representative Mike Reynolds a Republican from South Oklahoma City.  “It makes me feel like I’ve caught someone with their hand in the cookie jar as a matter of fact.”

Reynolds says he became concerned about the Medicine Park grant from the Department of Agriculture after the House Republican Caucus met in Medicine Park in December.  “There were some rumors going around the capitol that we hadn't bothered to pay for the facilities.”

Reynolds says the town clerk told him the caucus did not pay for the use of the community center and one meal that was provided by MPEDA, the same agency that got the $25,000 grant from Republican leaders.  “It’s stunning to see how much money leaders in the state are pouring into a town that only has, I think, 255 registered voters,”

“I offered to reimburse them for the payment of the facilities and a couple of meals they paid for and they said no no, no…Representative (Don) Armes takes real good care of us and you guys just don't need to reimburse us.”

“There was no free food, lobbyists paid for all the meals at the Republican retreat,” Representative Don Armes told Fox 25.  Armes is from Southwest Oklahoma and says he is an unwavering advocate for rural Oklahoma.  However he says the town clerk was mistaken because he organized the caucus meetings and could name all the lobbying groups that paid for each meal during the three-day retreat.

“I think a lot of people get really nervous about lobbyists,” Armes said.  He added that the Republican and Democratic retreats are often funded by lobbyists and no rules were broken.  “I think there is a misperception, or an untrue perception, maybe by the public that it is an evil thing and I don't think it is, but I understand how people have heartburn with things like that.”

Armes says he did work to make sure the museum project received the money they were lacking in order to get a matching grant, but it had no impact on the decision to use Medicine Park as a backdrop for the GOP retreat.  “Probably had we not gotten the appropriation we would still have had the retreat at Medicine Park and it would have ran exactly the way it ran lobbyists would have covered the meals for the caucus and everything would have been just the same.” 

As for the $25,000 grant, Armes says it was handled properly through the legislative process.  He believes in the project and what it will do for Southwest Oklahoma.  “These are public dollars going to really good projects that i think are worthy of state dollars,” Armes said, “This project gets off the ground and it will be a tremendous educational boost to this area.”

Lawmakers like Reynolds say it is an earmark in the state’s budget that Republicans have opposed in the past.  “They across the board say it's wrong but they demonstrate it is not wrong if they can get it themselves.” 

Armes disagrees and says some earmarks are necessary, like the ones that support both Tinker Air Force Base and Fort Sill.  “When you start talking about how evil those things are you have to remember we've been the beneficiary of a lot of earmarks in the federal deal.  Where a lot of people think they are evil, you take away Tinker and we'll have a lot of people crying about that.”
Waste Watch: Fishy Business In Aquarium Project?

Posted: Wednesday, February 20 2013, 10:14 PM CST