TEDA takes a u-turn in exec search

Revelations regarding past financial hardships of a top candidate for the Terrebonne Economic Development Authority lead executive position prompted the organization’s search committee to withdraw his name as a recommendation for hire, and led the TEDA board of commissioners on Monday to reevaluate its CEO search process that began six months ago.

Nicholas Johnson, 35, an economic development coordinator for the Texas Association for Regional Councils, had been the search committee’s hands-down favorite to fill the TEDA CEO position until a published report revealed that in 2007, Johnson had filed for bankruptcy protection when the real estate market crashed.

It was also reported that Johnson had filed for bankruptcy protection prior to that, in 1998, while a 23-year-old soldier with a family making $1,500 a month. He also had a bad check charge against him before that bankruptcy that resulted in a $140 fine, court costs and an overdraft fee.

“This is so disappointing,” said TEDA board and committee member Ken Jenkins during a search committee meeting on Friday. “This guy was so over-the-top qualified. He had ideas and was willing to be put in place to bring TEDA to the next level.”

“I have real mixed feelings,” added board committee member Lori Davis. “I believe [Johnson] is sincerely trying to change his life. I’m going to look at it from a personal standpoint when you think about life challenges.”

Six of the seven search committee members were present for the Friday meeting and seven of 14 full board members were present Monday when a recommendation to not select Johnson as CEO received unanimous support.

TEDA Board Chairman Don Hingle confirmed that support of Johnson was withdrawn in part because of perceptions regarding someone hired to handle public funds after having trouble with personal finances.

“What bothered me the most was that we would have had a hard time presenting Nicholas to the community with a bankruptcy,” Hingle said.

In search committee and board sessions, desire was expressed to have more specific guidelines of expectations regarding candidate background checks and what they wanted from their contracted search firm.

The board also approved hiring an interim office manager to oversee day-to-day operations for TEDA. Board member Graham Douglas said he would prefer seeing a current TEDA staff employee to take on that temporary position so as to exercise inside understanding of the organization and continuity of operations.

“I suggest in the process we clearly define what we want [the interim manager] to do,” board member Clarence Williams said during the committee meeting.

An area of discussion that the committee and board agreed required immediate modification was its expectations of executive search consultant Chloe Johnson and her firm Johnson and Associates of Austin, Texas.

While some board committee members said they thought she should be responsible for credit and background checks of candidates, others said that there is no clear method or procedure in such executive searches.

“I was disappointed with Chloe,” board member Colin Siebert said during the committee meeting. “She said she didn’t typically do [background checks]. You expect [background checks] in this day and age.”

Johnson and Associates had established an executive search contract with TEDA that specified compensation being at $12,000 plus candidate development expenses.

Expenses were specified to not exceed $7,000 without written approval and carry an overall cap of $19,000. Johnson’s contract also specified that she would guarantee a hire or continue to work without added compensation.

“Under her contract she is obligated to work with us at no charge,” Hingle said. “She has already maxed out her expenses so it won’t cost us any additional costs.”

Hingle was not certain of a total dollar amount paid to Johnson and Associates or the expenses incurred to bring three candidates to Houma for interviews and cover their expenses during May 19-20. A TEDA staff member in charge of those records was out on vacation and in turn unavailable to provide that information by press time.

Telephone messages left for Chloe Johnson at her firm were not returned and email inquiries came back as undeliverable.

Nicholas Johnson told the Tri-Parish Times in a telephone interview, once the revelations were made regarding his past, that the published report did not accurately represent his situation and implied that it made him sound like he was living a criminal life.

The bad check situation, he said, was due to a direct deposit that was not posted in his bank as expected, and he in turn writing a check thinking he had the money to cover it.

The state of Texas has stringent bad check writing laws and Johnson said a Class B misdemeanor charge for issuance of a bad check implied something different than the reality of his situation. “You don’t get only a $140 [fine] for going out and spending $10,000 on items you cannot afford,” he said. “There was no major scandal.”

Johnson said his Chapter 7 bankruptcy was a case of not having enough cash flow to raise a family and buy a home on a limited income. The second, Chapter 13 bankruptcy, he blamed on his inability to cover overall economic conditions at the time and having an adjustable rate mortgage that skyrocketed overnight outside his ability to pay.

Johnson said the report’s statement that he had “failed to comply with a court-mandated repayment plan under the second bankruptcy” was inaccurate. He offered documentation showing that after two years of paying on the Chapter 13 plan, creditors were satisfied with what they had recovered and, with an appeal, Johnson was released from further repayment obligations. “It was filed and discharged in accordance with the appropriate laws,” Johnson said.

“We were never in default,” Johnson said. “This is really upsetting,” he said once the financial woes of his past were brought into the public spotlight. When asked why he did not disclose that information up front to TEDA members, Johnson said because it was in his past and he did not think it was a concern.

“Yeah, he was wrong not exposing everything,” Davis said. “But in the process, I also believe the people we hired to present him to us should have known.”

Board member Morris Hebert, who is also on the search committee but was absent during it’s Friday meeting, said he wanted to go on record as supporting Hingle’s efforts during the process. “I really appreciate your leadership,” Hebert said at the Monday meeting.

“I’m dismayed,” said board committee member Mike Voisin, who was not present for the final board vote. “I’m saddened by the point we are at. This is a bump in the road for TEDA.”