Election Central: Debate Spotlights Financial Issues

    Mayoral candidates Dave Freneaux and Junior Shelton squared off in a head-to-head debate last Thursday televised on Cox Channel Metro 21, with a rebroadcast scheduled for March 14 at 7 PM.  
    The candidates weighed in on topics ranging from a City Center to support for Central’s incorporation, but the issues that separated the candidates were their opposing views on bigger government and Shelton’s failure to disclose his almost $2 million bankruptcy to voters while running for political office.

    Shelton avoided direct questions about the cause of his financial failure and the impact it had on those business partners he never paid.  Rather, he simply alluded to the bankruptcy as lessons learned in tough times.
    Freneaux said Shelton was not right to hide his $2 million bankruptcy from the voters while at the same time telling them in his campaign material that he is a “fiscally responsible businessman.” 
    Freneaux explained he understands businesses encounter tough times, but it’s not right to hide that from the voters.  Freneaux said he has an accounting background, including experience in governmental accounting, and he successfully manages a family-run transportation business that is in good standing with its business associates. He said he is qualified to responsibly manage the city’s $6 million annual budget.
    Money was also at the heart of the candidates’ discussion on the size of the city council. 
    Shelton said he wants to increase the size of the council from five to seven seats, with a price tag of $20,000 per year.  He said the move would offer “better government,” and more easily allow for committee meetings.  Shelton said the increased cost could be offset with cuts in other areas.  
    Freneaux countered that any increase in the size of government is something he would oppose as mayor.  He pointed out that the average council meeting lasts less than an hour.  Freneaux maintained that if cuts could be made, then that should be a separate issue and not a reason to spend the savings on increasing the number of public officials.
    Freneaux stated that Shelton’s bankruptcy calls into question Shelton’s ability to manage the money of Central’s taxpayers, but the bigger problem is the lack of transparency and openness that would allow Shelton to claim fiscal responsibility while in the midst of a $2 million bankruptcy.  Freneaux showed a political mailer that had been sent out by Shelton that week that told voters, “Don’t Believe the Lies,” but also had on hand stacks of court documents that validated the fact that Shelton did indeed file bankruptcy.
    Since the debate, Shelton has admitted to filing bankruptcy in a post on his campaign’s FaceBook page.  Central Speaks reviewed the public documents of Shelton’s bankruptcy petition, which reveal the following timeline of events:

Junior Shelton – Candidacy & Bankruptcy Timeline:
October, 2009 – Shelton signs $540,000 personal guarantee with American Gateway Bank
December, 2009 – Shelton closes his 56-year-old family business, Shel-Boze, LLC. 
December, 2009 – Shelton’s business partner declares bankruptcy to protect himself from $2 million of company debts
January 23, 2010 – Shelton announces candidacy for Mayor of Central, promising to be “fiscally responsible.”
January 25 through April 7, 2010 – Junior Shelton contributes $6,100 of his personal funds to his political account
February 6, 2010 – Questions about Shelton’s closed business evokes Shelton to make a public statement: “We peacefully closed our business rather than continue in an economy that has led many businesses to take bankruptcy, which we did not do.” 
February 6, 2010 – Shelton cites his business experience as a primary qualification for running for mayor: “Because of my 37 years as a private businessman… I know I have the skills to run Central as a business.” 
March 27, 2010 – The voters of Central go to the polls unaware that Shelton is almost $2 million in debt and that Shelton will file bankruptcy 46 days later. 
April 12, 2010 – I.M. “Junior” Shelton files for Chapter 7 personal bankruptcy, stating that he owes almost $2 million in unpaid debts.
May 25, 2010 – Shelton files “Statement of Financial Affairs” with the U.S. Bankruptcy Court.  Section 11 (pictured above) requires the disclosure of all “Closed financial accounts”.  Shelton does not disclose the existence of his political account in which he deposited thousands of dollars of personal funds.  The U.S. Bankruptcy Court has ruled that funds in an unincorporated campaign account cannot be excluded from the estate of the debtor.  
August 3, 2010 – The U.S. Bankruptcy Court discharged I.M. “Junior” Shelton’s $1,989,899.57 in debts, meaning that persons whom he owed could not collect their money from him.