Audit Finds Millions of Dollars Mismanaged After Joplin Tornado

An audit of Joplin found enough mismanagement over its hiring of a master developer following a May 2011 tornado that devastated the southwest Missouri city that the findings have been turned over to authorities, the state auditor said Tuesday.

The city entered into master developer agreements with Wallace Bajjali Development Partners, of Sugar Land, Texas, after the 2011 tornado that killed 161 people and destroyed much of Joplin. Missouri Auditor Nicole Galloway said “key selection and agreement documents appeared to be written to benefit the company, and did not adequately protect the city” and resulted in nearly $1.5 million spent by the city with no real estate redevelopment services provided.”

She said her audit found “mismanagement and questionable business practices” in Joplin and earned the municipal government a ‘poor’ rating, The Joplin Globe reported.

“The audit finds examples of the waste and mismanagement that occur when city leaders blur the lines between private business dealings and government service,” Galloway said in a statement. “This leads to a distrust in the system, and a distrust in the people who are elected to represent our own best interests.”

The 101-page audit also found violations of Missouri’s open records and meetings law and noted that the Joplin City Council held at least 10 closed meetings and 10 work sessions where notes were not properly taken or provided to the public, which is prohibited by state law. Joplin residents had petitioned for the audit.

The auditor’s office, citing a lack of “critical city records” to explain Joplin’s decision-making process regarding the master developer, issued subpoenas to compel testimony and records. After reviewing those records, the auditor’s office notified law enforcement agencies “of facts in our possession, which pertain to possible violations of state and/or federal statues and possible malfeasance, misfeasance or nonfeasance.”

A lengthy city response included in the audit findings said some of the auditor’s recommendations have already begun to be implemented and that it’s “well established that the contract with Wallace Bajjali, the predevelopment agreement, did a poor job of protecting the city.”

The city response also said Wallace Bajjali developed the agreements and “applied tremendous pressure on previous city administration to rush this process. City staff was not allowed sufficient time to properly review the agreements.”

“Additionally, recommended changes to the agreements to help protect the city were not approved by Wallace Bajjali. Therefore, the city will ensure future contracts protect city interests,” the city response said. “The city will also implement new policies to better monitor the progress of contracts to ensure that compliance and deadlines are properly enforced.”

A working number for Wallace Bajali could not be found Tuesday evening so that it could comment on the audit and the city’s response.