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Greenwood Convention and Visitors Bureau board loses its insurance in fallout from racial discrimination lawsuit

Friday, March 24, 2023, 5:35 pm News Flash Archive

The Greenwood Convention and Visitors Bureau (GCVB) board members were not pleased to discover, at the beginning of its monthly board meeting on Monday, March 13, that it had lost its insurance policy that covers liability for its officers and directors.

Mr. Randy Clark, of Clark Insurance Agency, appeared to bring the bad news, and to explain why it happened.

GCVB had been carrying directors and officers (D & O) insurance for some time with Clark Insurance, to cover the board members and officers of the commission. This insurance provides coverage for board and officers in the event that they are sued.

Clark told the board that the policy was "non-renewed" by the underwriter, which means that the underwriter declined to renew the policy at the end of the present term.

The coverage lapsed that very Monday.

Clark explained:

What this coverage is, is coverage not for the Tourism Commission, it's your insurance, for the decisions that you make, or don't make.

The policy was for a million dollars in coverage, which was shared between all the members of the board. The amount of the annual premium was not mentioned at the meeting.

The policy came into play when Ashley Farmer filed a racial discrimination lawsuit against GCVB. She accused the board of refusing to select her as executive director because she is white.

That lawsuit was settled on confidential terms in mid-February, after the board relented, and voted to make Mrs. Farmer executive director. To read our coverage of the settlement and what came before, see here: Ashley Farmer, Greenwood Convention and Visitors Bureau settle federal discrimination lawsuit

But the insurance underwriter was not pleased with the litigation. Clark went on:

The company that you've been with, Great American, had been with for years, is not confident that this board as it was made up at the time, could go forward and make decisions that were in the interest of the community. I think they feel that there were some other agendas involved, and there were some decisions made that . . . .

Board member and vice-chairman Cyndi Long then interjected, "put us at risk."

Clark went on to mention the incident in late 2021, when the State Auditor required several board members to pay back money illegally expended to give a retroactive raise to the interim executive director. "Several people got fined by the state," Clark reminded the board. He continued:

You're not covered if you violate the law, which they [certain board members] did, and that's why they all had to pay back some things that you paid . . . .

In other words, you're not going to be able to operate and just vote any way you want to, and expect that some insurance company is going to step in and protect you from stupid decisions. . . .

Clark told the board that it might decide to purchase the insurance from somebody else, if they can get it. His company was still trying to obtain the insurance for the board, but the prospective underwriters are asking for details about the discrimination lawsuit.

Notice of the non-renewal was sent by the underwriter to both Clark Insurance and to the GCVB office address in mid-December, but the staff and board members stated they never received the notice.

One board member asked whether an appeal could be made, to which Clark responded:

We already have. They ain't interested.

And I'm not having any luck finding anybody else that will write it, unless we can get some assurances that decisions are going to be made, how shall I put this, not on a racial basis.

Board president Andrew McQueen then told Mr. Clark:

It hadn't been proven. . . . I'm just saying it hasn't been proven nowhere.

Apparently, McQueen was referring to the fact that, because the lawsuit was settled, neither the judge nor a jury ever got a chance to rule on whether the board had engaged in racial discrimination or not.

Mr. Clark responded to Mr. McQueen's statement:

All right, that's what I needed to hear.

Y'all need to get it from somewhere else.

Thank you.

Clark then immediately left the meeting.

Several board members argued over why Mr. Clark left the meeting. McQueen asked, "what are you all gonna do?"

Cyndi Long replied:

Well, you just ticked Randy [Clark] off because of what was just said, and he left.

Mr. McQueen responded:

I did not say anything that could have pissed him [Clark] off, I just asked him a question. . . . where was that proved [that the board made race-based decisions]?

Cyndi Long explained that the insurance company was concerned that the GCVB:

. . . did settle on the claim, and paid out on the claim. So I'm sure they [the underwriter] paid out a quite hefty fee, they would have paid two sides of an attorney fee, plus maybe there are damages, we don't know because we don't want to know, it doesn't matter to us, but they dropped us.

Long pointed out to the board that, when they apply for new insurance, the underwriter is going to want to know if they've ever been cancelled, and the details as to why.

Farmer and several board members were going to check whether insurance was available elsewhere.

The cancellation of the board's D&O policy does not affect the liability policy that the GCVB has for its events and other property losses.

Long explained to the new board members about the prior incident, where the State Auditor made demands on some board members for illegal expenditures to pay a retroactive salary increase:

There was a fine levied . . . the insurance company didn't have to pay that.

There were seven of us I think that had to pay something out of our pocket.

We made a decision based on what the city attorney told us we could do.

The city attorney was wrong, and he gave us incorrect information that the state auditor's office said, you shouldn't have asked your city attorney, you should have asked us instead.

Some board members still questioned why Randy Clark left the meeting, as they had questions they wanted to ask.

But it is clear that Mr. Clark came to the meeting in order to ascertain whether the board was willing to make a commitment not to repeat what had happened that led up to the discrimination lawsuit. When some of the board appeared to deny that anything wrong had been done, or that it was not proved, Clark realized he could not honestly provide the underwriters with the assurances that they required about the board's future conduct.

The GCVB board voted to search for a new D&O policy.

Video of the GCVB board meeting may be viewed here: GCVB Board Meeting, March 13, 2023

The discussion of the insurance begins at the 2-minute mark.

As of Friday evening, we were unable to find out whether or not the board has found a replacement insurance policy.

John Pittman Hey
The Taxpayers Channel

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