Illegal Financing and Taxation – the ‘Sins of the Past’

601 Main St. (Old SWEPCO Bldg)

601 Main St. (Old SWEPCO Bldg)

Essay/Opinion: Problems with Bowie County’s financial practices first came to light when Boyd London, our bond representative on the Hwy 82 Project, reported that Hwy 82 bonds could not be sold until certain loans were taken off the county’s balance sheet. Since then there has been much controversy surrounding claims of financial malfeasance in the Carlow Administration when it came to refinancing loans and the taxation to pay off the loans.

Prompted by Boyd London’s previous discovery County Judge Lacy held a press conference in February 2014 in front of the county building at 601 Main Street in Texarkana to address illegally refinanced loans on that property. He sent information to Federal, State and Local Governments and bank authorities requesting they investigate the situation. At this time the county is waiting for official response.

This article will discuss financial transactions related to the property at 601 Main Street in Texarkana (601 Main Street). Exhibit 1, Table of Loans, and Exhibit 2, Table of Taxation, were created with information on file in the County Clerk Office and the Bowie County property tax notices published annually in the New Boston Tribune. (To simplify discussion, only the principle and not interest is listed in these tables). These tables will be used to analyze the claims made by County Judge Lacy (Lacy) and Former County Judge Carlow (Carlow).

Getting a new loan to replace the original is called refinancing. It is done on long term loans (longer than a year). Refinancing allows a borrower to obtain a lower interest rate thus reducing the loan payments. Many people have refinanced a long term home loan (mortgage) at a lower interest rate lowering their monthly loan payment.

Carlows Claim:
A local paper reported former Judge Carlows response to Lacys claims of illegally refinanced loans during Carlows Administration:

“… Carlow said the building was only paid for one time. The county paid on the initial loan annually and annually refinanced the remaining amounts.

Each year, we bid it out again to get the lowest interest rate. That’s why you see different banks,’ he said.” Texarkana Gazette, February 14, 2014

Exhibit 1 lists all the loans taken out on the property at 601 Main Street and clearly does not support Carlows claim about refinancing to get the lowest interest rate.

Exhibit 1 shows:

  • The 1st loan originated in 1998, a one year $375,000 loan with Hibernia at 4.636% interest.

  • The 1st “refinanced loan” in 1999, a one year $350,000 loan with Hibernia at 4.8% interest .

  • The 2nd “refinanced loan” in 2000, a one year $317,000 loan with State Bank of DeKalb at 5.13% interest.

  • Four times the loan was “refinanced” at a higher interest rate than the previous loan.

  • Six of the eleven refinanced loans had interest rates higher than earlier loans.

  • In 2003 and 2005 the loans were taken out for exactly the same amount of money as the loans in 2002 and 2004 respectively. Did we not pay off any principle in 2002 and 2004?

601 Main Street - Loans Table

The county never had a long term loan on this property. There was only a series of 12 one-year loans. After paying off a one-year loan nothing left to refinance. How was the amount to be refinanceddetermined?

Questions on illegally refinanced loans:

  • Why did Carlow set up a series of 12 refinanced loans?

  • Why did Carlow cover up the reason for refinancingthe loan?

  • Why were loans refinancedat higher interest rates?

  • Why was a long term note not taken out on the building?

  • Twice, the principle due was the same as the year before, why?

Is this an example of the Carlow Administrations view of Open and Transparent Government?

The Key piece of information to take away is – there was a series of 12 one-year loans for hundreds of thousands of dollars each.

Required by Texas Truth-In-Taxation the county annually publishes in a local paper a property tax notice. Contained in this notice is Schedule B, it lists the county’s active loans and the total debt service (principle and interest) to be paid that year. Central Appraisal calculates the I&S property tax rate to collect taxes that will pay the debt service from Schedule B. Remember, Schedule B determines how much money the county will take out of your pocket to pay the next twelve months debt service.

The County Treasurer ensures the taxes collected for debt service are in the proper account. Then the County Treasurer and Auditor (2 signature check) pay the appropriate lending institutions the principle and interest as listed on Schedule B.

The key piece of information to take away is – Schedule B contains all the debt service (principle and interest) the county will pay from taxes, in that one year.

The information in Exhibit 2 came from Schedule B, it lists the taxes collected to pay each year’s debt service. This schedule is prepared by the county, loans are sometimes listed individually and sometimes combined with other loans. The description for this loan changed from year to year making it difficult to look at this schedule once every twelve months and know it was the same loan. The property tax notice required by Texas Truth-In-Taxation was placed in a weekly paper with the smallest circulation and with no news stands in Texarkana. This met the letter of the law but not the spirit of the law to keep citizens informed.

601 Main Sreet - Taxation Table

Through more than a decade of illegal loan refinancing resulting in illegal taxation we have been taxed $2,275,000 and maybe as much as $3,340,000 for a property purchased for $375,000.

The key piece of information to take away is – the Carlow Administration received millions of dollars of illegal taxes to do with as they pleased, with no accountability.


Carlow said the building was only paid for one time. The county paid on the initial loan annually and annually refinanced the remaining amounts. (Texarkana Gazette, February 14, 2014)

Actually… the county paid for the building one time, $375,000.

But… Bowie County citizens paid for the building six to nine nine times, $2,275,000 to $3,340,000.

Each year, we bid it out again to get the lowest interest rate. That’s why you see different banks,’ he said.” (Texarkana Gazette, February 14, 2014)

The 1st refinance was at a higher interest rate, same bank.

The 2nd refinance was at a higher interest rate. different bank.

Four times the loan was “refinanced” at a higher interest rate than the previous loan.

Six of the eleven refinanced loans had interest rates higher than earlier loans.

Carlow and his administration worked a system to defraud (illegally obtain money by deception) Bowie County citizens out of millions of tax dollars. It took more than one person inside the administration to illegally finance loans, illegally tax citizens, and illegally move money. They worked this system for over a decade, and into the next administration. Why would they stop? Carlow’s administrative people were still there to do the work and he planned to retake his position as County Judge in four years.

The county passed a bond election on the Highway 82 Project. Our bond advisor, Boyd London, performs his due diligence and discovers illegal debt on the county books. He informs Judge Lacy and County Auditor Tye of his findings and states the practice that put the debt on the books must stop and Highway 82 bonds cannot be sold to the public until the illegal debt is removed from county books. This was done.

With the illegal flow of money cut off, the county was in trouble. It did not have sufficient funds to pay for continuing operations.

Judge Lacy went to the public and disclosed the financial scheme of the previous administration that caused the county’s financial problems. He was ridiculed and his claims ignored by the press, fellow commissioners and, more lately, the county’s Financial Advisory Committee and an unruly group of citizens at Commissioners Court meetings who want Carlow back in office.

This article is merely an overview of all that happened and the years it took to understand how the system to defraud the public worked. If you want to know more, go talk to Judge Lacy. He has been telling those who have ears to listen for some time now. And some of us have been listening and checking the information. That’s why you have this article.

Citizen, what will you do with this information? Local press, will you investigate and report? Bowie County District Attorney, will you investigate the known defrauding of the public for over a decade? Who else within the administration was necessary to pull this system off? Who brought it forward into the new administration? Jim Allison, Bowie County’s outside attorney, said, “Additional investigation will be required to determine how this erroneous practice occurred.”

Lacy ran in 2010 on a promise of open and transparent government. He worked hard to fulfill that promise. This is part of it. What else has he done? Ask him.

This essay is the collaborative effort of several members of the Bowie County Patriots.

0 thoughts on “Illegal Financing and Taxation – the ‘Sins of the Past’

  1. Add this research to the well known fact that 2 requests from the Judge, and 1 request from the Sheriff’s Dept. requesting and investigation into this, and other problematic money dealings with the Courthouse security fund money, went unanswered by the District Attorney, except to say in the Gazette he’s not participating in a witch hunt, and he never got any requests for investigation from anyone.

  2. I got my tax bill on my home today it was $350.00 more than last year. If Lacy is so good why is Bowie county one of the highest taxes county’s in Texas. With nothing to make people want to live here. A town can have only so many banks,restaurants & hotels without industry you will loose people. I am looking to sell my home & business so that I can move to a county with lower taxes and has industry.

  3. Bowie county has been the most taxed county per capita for more then 20 years my friend this isn’t a new problem! The rich get richer and the poor get poorer! That’s what happens when you let democrats run your local government or rino in our case! As a good friend of mine says Carlow was born a democrat and will die A democrat! Mr Joe Dike stew on that awhile Mr liberal!

  4. I’m trying real hard to get this in my mind. Does the man ( Lacy) not know how to read a profit and loss statement? Does he not know how to reconcile a bank statement ? Does he not understand what refinancing a loan is all about? I do not understand how a person does not understand simple business procedures and be the Judge of Bowie County in the state of Texas . Something is wrong. We need a businessman back in as Judge, not a

  5. ALL I can hear is the same old broken record from the RHINO Democrats Lacy Lies Lacy Lies , when Judge Lacy has the facts and has put up very well with the Carlow regime still in power in Bowie County known as Commissioners , wake up is a good phrase , indeed

  6. Joe Dike are you serious. You read this article, that has to do with millions of dollars of My and Your tax dollars and everyone else in Bowie County’s possibly misused money….and the first thing you say is basically “Let’s forget about the past and focus on the present” REALLY…..wait REALLY. I think that it appears Lacy is dealing with the present and dealing with reality. Something you in your hate and bitter disdain have lost contact with. That’s the world we, tax payers live in now. This is what’s simple…and simply obvious, you are a Bully making character assassinations full of vile. You are faulting a Judge for “constantly debating what’s legal,moral, and right in his own twisted biased mind. He has no actual skills just ideas. His getting elected is a fluke.He will lie cheat…” That what a Judge swears in for, go back to the ABC’s man. You post, goes on and on, well guess what VOMIT in my mouth is what reading you crap sounds like. You are so full of poison. Wake up and look in the mirror and ask yourself why you are doing what you’re doing. You read all that was posted based on facts and you say “Steve Oglesby writes twisted stories” well let me tell you… I’m sick of your bullying and you need to keep your little big mouth shut on attacking good everyday people. Just because you may pay people or get paid to write twisted nonsense or you do it for free, you NEED to slow down, that hate finger typing you do so fast. I don’t like Jerks like you and I never have. I think YOU are a coward and are accusing people that have way too much class to even waste their time replying to your ridiculous opinions. You act like an internet stalker blowing them up every chance you get. I read your post regularly and think what’s wrong with this guy??? I have NEVER seen any personal attacks like the ones you are making right now from either Sterling Lacy or Steve Oglesby. I read both groups post because I am a simple concerned citizen that pays taxes and operates multiple businesses in the community. Grow up an and grow a set and stop being a FB Vigilante jerk-wad character assassinator….Post, Post away , but get some class man.

  7. I will continue to blow them up until Lacy is exposed for the fraud he is. I agree you are a simple citizen.

  8. Doug Williams…Nice word of the day. It appears that the article is full od facts, lie years, dollars amounts and even interest rates. These SIR and considered truth and fact and not opinions…that would more like….”over the years, they refinanced and bunch of money and the kept fefinancing for a little more each time” Well this sir is an example of opinions, the trith and facts were typed out plainly, you may want to reread. To say there is “no sins of the past” would make you all knowing, which I disagree with, that would be an opinion sir. Thank You for wasting a comment space in this feed.

  9. Doug Williams…Nice word of the day. It appears that the article is full of facts, the years, dollars amounts and even interest rates things….. These SIR and considered truth and fact and not opinions…opinions would more like….”over the years, they refinanced and bunch of money and the kept fefinancing for a little more each time” Well this sir, again, is an example of opinions, the truth and facts were typed out plainly, you may want to reread. To say there is “no sins of the past” would make you all knowing, which I disagree with, that would be overestimated opinion of yourself sir. Thank You for wasting a comment space in this feed.

  10. The timing of this article is brilliant ( for Lacy), but it failed to point out how the county failed to decrease spending as revenue decreased. Fiscal responsibility would have one decrease spending in line with revenue, not increase as pointed out in this years budget. Failing to do that is the definition of debt. Just saying.

  11. It seems simple….if you charge a credit card, and charge, and charge….eventually you have to pay the bill…even if you cant find what you bought, or no longer like it. Increased taxes are a normal part of a growing and thriving community. Services and benefits are not free….the people recieved both, now want to complain about paying for them….? I would highly recommend people complaining about the extra tax take the time to research and understand why the extra tax has been implemented. It is not from a couple bad decisions on any one person…. I would be very cautious of voting for any official because of what others say about them. Take the time to know the facts, invest in educating yourself, dont just follow hype or propaganda.

  12. Your uncivil tone has convinced me never to buy anything from your place of business and I will never give a recommendation to my friends.

  13. He seemed really mad at me. I don’t know him personally but I USED to buy a lot of plants and rocks from him.

  14. I would like some clarification. Is the author saying there is $3,340,000 of existing debt on a $350,000 purchase? Or is the author saying the county took out a series of one year notes secured by the same asset that if you added up all the notes they add up to $3,340,000. There is a huge difference. If it is the later, I do not see an issue unless the expenses of securing the note exceeded the benefit received of interest savings (measured either at the original purchase date or at each renewal). It appears to me the debt was paid down from $350,000 to $140,000.

    Now to judge the decisions of a prior Court, you need to know the interest rates of longer maturity options. Historically, the longer maturities carry higher interest rates.

  15. Like Akin, Lacy, and the rest of the tea nuts, the Four States News is fake. Can you people ever deal in the truth, facts, and common sense?

  16. Tell me if I misunderstood.
    The independent auditors lied.
    The County auditor lied.
    The financial advisory committee lied.
    Only one telling the truth is the current County Judge.

  17. As I read it, the author is saying niether. I see two tables. The first shows the former court did not refinance the loan for a lower interest rate the first two times the loan was refinanced and a few more times after that. So the quote, “I refinanced to get a lower interest rate” does not match the actual refinancing. The second table does not concern financing, it shows $2,275,000 certaina f taxes collected from Bowie County tax payers to buy a $375,000 building.

  18. I’ve never been so appalled by the “Republican” party than I was during the Bowie County judge election and this recent turn of events by many of our elected Republicans in the nations capital. Lies and liars are becoming the norm and demoralizing the party base. I have never been more passionate and on fire to become an active Tea Party participant like I am now. May God strengthen my hands for battle and may my arms bend a bow of bronze according to God’s word and will. God save America.

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.