On Wednesday, May 13, 2020, the Ocean Pines Association Board of Directors issued a press release stating the board had met in closed session and voted unanimously to "keep the $1.143 million loan granted through the federal Paycheck Protection Program (PPP) last month."

One might reasonably ask why the board felt it necessary to vote to keep the money, money already in OPA's bank account. The answer is wrapped up in two issues -- the moral or ethical, and the legal. On the moral or ethical front, respected community members Dale and Charlotte Cathell wrote eloquently to express their embarrassment over what they view as OPA's greed. A poll on OceanPinesForum.com indicates some 77% of over 400 voters believe OPA should return the money.

As for potential legal problems, there are several.

The loan application form required OPA to certify to the Federal government that "Current economic uncertainty makes this loan necessary to support the ongoing operations of the Applicant." The problem is this certification signed by Doug Parks and Steve Phillips for OPA is essentially questionable at best. OPA's ongoing operations could have continued without the $1.143 million from the government. We know OPA could have continued ongoing operations without the loan because OPA continued ongoing operations when it lost $1.6 million on operations a few years ago, a loss due totally to Board and management incompetence.

Now, let's take a look at the timeline and legal authorizations made by OPA in obtaining the loan. The loan application form was signed on April 7, 2020 by OPA President Doug Parks and OPA Director of Finance Steve Phillips. Neither had authority from the Board of Directors to sign that loan application document on April 7, based on information from at least two board members. Thus, Parks acted unilaterally, without formal board approval, in violation of OPA bylaws, not the first time he has done so.

OPA received the cash from the loan during the week of April 19, 2020, as announced in an OPA news release of April 28, 2020. Just prior to the actual transfer of the money to OPA, Doug Parks, on April 16, 2020, sent a letter to the Bank of Ocean City stating, "The Board of Directors of the Ocean Pines Association has authorized the General Manager to apply for funding associated with the Payroll Protection Program. As President of the Ocean Pines Association I will be the signatory authority on the paperwork required to process the application."

The letter from Parks to the Bank of Ocean City on April 16, 2020 presents a major problem. The Board of Directors never took the action Parks says it took at the time of his letter. The Board never voted to authorize the General Manager or anyone else to apply for the loan. The letter was apparently a falsehood in that regard. Board member Colette Horn, when asked if the board had approved the General Manager to apply for the loan, replied, "No comment." Two other board members say the board never voted to authorize anything at the time of Parks' April 16, 2002 letter to the bank.

Fact is, the board never approved anything related to the loan until May 2, 2020 when it voted to formally approve the loan, well after the money was already in the bank. Parks left the board with no choice.

Returning to the most recent OPA news release of May 13, 2020, Parks is quoted as saying, "Ocean Pines' governing documents prevent the Association from using reserve funds for operations, such as payroll." This is yet another incorrect statement by Parks. Bylaws Section 8.03. Reserves states, "Reserve funds shall not be expended or transferred for purposes other than those for which the fund was established unless approved by a two-thirds majority vote of the entire Board at a regular or special meeting after notice of the proposed expenditure or transfer." After years as OPA President, Parks failed to accurately reference the bylaws of the association in an official press release... and OPA's Treasurer seemed to agree with Parks' obviously incorrect statement.

Then Frank Daly, again in the May 13, 2020 news release, states, "We have applied for a Paycheck Protection Plan loan. The attorneys, the bank, and the Small Business Administration have all said what we did was in full compliance the day that we applied." Left unsaid is that no OPA attorney and no bank told the Federal government that OPA's application was factually correct in regard to the required certifications on the application. That burden lies solely with OPA and Parks certified the loan was necessary to support the ongoing operations without board authorization. SBA had no way to know if OPA was truthful or not when the application arrived. The SBA took OPA's word for it, as did the bank.

In summary, it appears:
1. Doug Parks made a material misrepresentation to the Bank of Ocean City in his April 16, 2020 letter.
2. Doug Parks signed a loan application without board authority.
3. Doug Parks misrepresented the ability of OPA to use reserve funds.

Will there ever be any consequences? Not likely at all. What should be done is for the board to appoint a new President, or at a minimum censure him under the board's Code of Conduct. Parks failed miserably to comply with the Code of Conduct that requires all board members to "act within the authority given to them (board members) by the Association By-Laws and Resolutions and the State of Maryland."

Nor are any consequences likely for OPA as a result of any Federal government review. The Treasury Department recently stated that it will assume all loans under $2 million were made in good faith. Welcome to the even braver new world of government money give-aways with zero oversight, zero review, and zero accountability. The government decided it would just shell out loans under $2 million even if businesses did not prove they needed the loan to continue operations.

Everything involved here represents a sad and sordid tale of leadership, from OPA right up to the Federal government. Regardless of any association member's opinion about the federal loan to OPA, every OPA member should be disgusted when our elected board members simply ignore the bylaws of the Ocean Pines Association, and especially concerned should a corporate officer make a material misrepresentation in a letter to the bank.

Like Dale and Charlotte Cathell, every responsible association member should be embarrassed by OPA actions in this matter.