Couple behind Issue 7 in Columbus have history of bankruptcies – The Columbus Dispatch

Posted: November 1, 2021 at 6:49 am

While the people behind the Issue 7green-energy initiative on Tuesday's ballot haveremained largely secretive, court records reveal that two of their leaders have been mired in majorpersonal financial problems that have doggedthem for the past 14 years.

John A. Clarke Jr. and his wife, Irene Gil-Llamas,the married couple who are the key players behind the ballot measure,filed an unsuccessful multimillion-dollar bankruptcy duringthe 2007 housing crash. Court records from U.S. Bankruptcy Court, Southern District of Ohio, show the couple being hit with more than a dozen foreclosure cases on properties they owned, including on their 5,500-square-foot, historic home on the Near East Side.

Issue 7 in Columbus: Murky 'green energy' ballot initiative would take millions from Columbus budget

The current status of the debt at one time listed in bankruptcy court filings at almost $2.3 million remains unclear. The couple'sChapter 11 bankruptcy cases were dismissed twice in federal court in 2008. The second time the dismissal was"with prejudice" after they had failed to show up at court-scheduled hearings and provide requested disclosures, court records show.

Without the protection of bankruptcy reorganization, foreclosure cases against the couple stretched into late 2011,months before they began their quest to control tens of millions in taxpayer dollars through what they have called"green energy" initiatives, first at the state level, and now in Columbus.

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If approved by voters Tuesday, Issue 7 would take a total of $87 million, or about 11%, fromthe city of Columbus general fund and put it in the control of a five-member group that calls itselfProEnergy Ohio.The group proposes to use $57 million of it for a "Clean Energy Partnership Fund" to subsidize electric rates for city residents through green energy, but at ProEnergy's discretion.

The initiative also says it wouldestablish three funds which would becontrolled by a majority of the petitioners on the ballot. One would be for education, one for clean energy education and training and one for minority business enterprise. Each fund would get $10 million ofcity taxpayer money, held by an unnamed entity the group would designate.

But the group's petition contains few specifics, and committee members and one of their attorneys have declined or failed to respond to repeated opportunities offered by The Dispatch to explain their plan and their intentions. There is no evidence that they have the experience or staffingto manage the funds or the programs listed in the ballot initiative.

One thing the petition does spell out is that ProEnergy Ohiowould have unregulated control over the city money.Fees the group could charge to administer the $87 million in funds are not capped.

From the Dispatch Editorial Board: Weaselly 'green energy' group tries to con Columbus voters out of $87 million

Bankruptcy records show that mortgage documents executed by Clarke and Gil-Llama also show a lack of controls that reflect the hallmarks of what eventually led to the nationwide housing market collapse that began in 2007: "cash-out" mortgages,open-ended mortgages, second mortgages, strict prepayment penalties, interest-only adjustable borrowing plans that started out at 1% but could increase up to 14.5%, anddebt payments that could increase by up to 7.5% per month.

The couple used these risky lending devices to assemble aninventory of rental properties, buttheir plan suddenly went belly-up with plunging property values, documents indicate. They listed "secured liabilities," or debt backed by collateral,of more than $2 million, which included mortgages on11 properties whose resale value had plunged to roughly half the amount they had borrowed.

Ten of the properties were rentals, their bankruptcy filing said, and listed 11 already "closed" foreclosure cases, and four properties that had been repossessed by creditors.

According to a motion in bankruptcy court that Clarke and Gil-Llamas filed,tenants and Legal Aid lawyers in Licking County had filed a lawsuit against them that caused the economic failure of the real estate investments debtors made in Newark, Ohio. Mortgage lenders have pursued foreclosure actions to gain control of the Licking County real estate owned by debtors.

Records show the couple paid $72,000 for aNewark apartment building in 2005, but declared its value at $20,000 just two years later. It has since been torn down.

According to the Licking County Clerk of Courts office, 10 foreclosure actions were filed against the couple in that county alone from February through April of 2007. All those cases are closed.

Atotal of $18,413in credit card debt also was listed in the bankruptcy case.A 2008 filing in the case said Gil-Llamas received credit counseling that outlined the opportunities for available credit counseling and assisted me in performing a related budget analysis.

More recent filings in Franklin County Common Pleas Courtagainst the couple were by the city and state for unpaid income taxes.

The Dispatch visited the Clarke and Gil-Llamas home on Wednesday. Clarke was not there, but Gil-Llamas was. Asked for details about the Issue 7 initiative, she said the ballot language speaks for itself.

Were trying to do what the legislation says, Gil-Llamas said of Issue 7. Were trying to help minorities get a head start, help with energy efficiency, install monitoring devices.

Asked about another green-energy ballot initiative ProEnergy Ohioinitiated last week with Columbus for a future election, even before the current Issue 7 is even decided, Gil-Llamas said she didnt know anything about the larger $107 million efforteven though her name is on the petition documents.

Gil-Llamasended the conversation before answering any questions about her and her husband's financial troubles, saying she couldn't talk further because they weregetting ready for Halloween.

Daniel van Hoogstraten, spokesman for the campaign trying to defeat Issue 7, said the couple's financial history is a big red flag.

"John Clarke's sketchy financial dealings and legal troubles are even more reason he and his company have no business controlling city resources," van Hoogstraten said in an email. "Every Columbus voter should understand that Issue 7 is a scam it would cause devastating cuts to city services and hand that money over to John Clarke and his corrupt cabal."

More: Opinion: Voters should reject issue 7; lawmakers need to ensure this never happens again

Nana Watson, the executive director of the NAACPs Columbus chapter, said Clarkecalled her on Wednesday morning, asking about her organizations thoughts on Issue 7, and told her the initiativewould help minorities.

We are telling people to vote no, she said she told him.

We think its a bad idea, because we dont know whos behind it, Watson told The Dispatch.Its problematic. Youre hiding something because you wont give us full disclosure. How is this going to help Black people?

In December, a Franklin County grand jury indicted Clarke on four felony counts related to the running of the Issue 7 campaign, charging that in July and August of 2019, Clarke did knowingly state falsehoods in a state campaign finance report as to the source or amounts of contributions, and also that he altered campaign finance information already filed.

Former Franklin County Prosecutor Ron OBrien said in December that investigators found that five people listed on the campaign finance report, one of whom was listed as contributing $13,000 and the other four listed as contributing $10,000 each, actually had given nothing.

Clarkes trial was scheduled for Tuesday, but was continued to Jan. 31 under an order signed byFranklin County Common Pleas Court Judge Chris Brown.

Todd Helpbringer, president of Helpbringer Mortgage Services, said Clarkes and Gil-Llamas financial situation is emblematic of the 2007 housing implosion, which economists say was the major factor leading to the Great Recession in 2008.

The market was just flushed with what I called silly financing. I wouldnt allow that. I couldnt understand that, Helpbringersaid.

If a person cant pay, are we really helping them? All those foreclosures, all those bankruptcies, he said.

Despite theirfinancial history, Clarke and Gil-Llamas have managed to hang onto their primary residence, though it has traded ownership several times since 2012 before landing back inGil-Llamas' name in 2018 for $464,000.

In September 2020, the couple took out a $500,000 line of credit on their home, records show. That's almost the entire $503,800 value that the Franklin County Auditor's office places on the 121-year-old house.

Dispatch reporter Jim Weiker contributed to this report.

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Couple behind Issue 7 in Columbus have history of bankruptcies - The Columbus Dispatch

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