Sunday, March 20, 2011

The Shakespearean Tragedy of Bobby Lowder

If William Shakespeare lived in the modern day state of Alabama, he would certainly be penning one of his greatest masterpieces—the tragedy that has become Bobby Lowder. It’s the tale of a man who rose to greatness and commanded a multi-billion dollar empire. A man who controlled the levers of power at one of the state’s two largest universities. A man who lost his closest, most beloved adviser to an untimely and painful death and a man whose misplaced trust led to the collapse of his empire, all due to a tangled web of fraud, deceit and betrayal.

image For nearly three decades, Lowder built Colonial into a regional, then a national banking and mortgage powerhouse. At the height of its run, the bank was worth more than $26 billion. But on a hot, Alabama summer day in August 2009, federal and state banking regulators seized the banks assets—including somewhere around 350 branches in four states—and turned them over to BB&T.

In June 2010, Lee Farkas, the flamboyant CEO of Taylor Bean & Whitaker, was indicted on 16 counts of wire and bank fraud in connection with the failures of Colonial and Taylor Bean. Earlier this year, four have pleaded guilty to federal charges for their roles in the scheme and have agreed to cooperate with the prosecution. Every serious legal observer of the Farkas and Colonial cases believe that the feds are slowly but surely closing in on their biggest target—Lowder himself. Sometime this summer, the last remaining assets of Colonial will be liquidated in Chapter 11 bankruptcy, and Colonial will be no more.

But all of the documents and evidence relating to Colonial’s final, nefarious dealings will finally see the light of day, no longer enjoying the shield of attorney-client privilege.

In October 2010, Lowder’s close friend, political ally and Colonial boardmenber, Milton McGregor was indicted allong with ten other defendants on charges of bribery, fraud, money laundering, extortion and conspiracy. The key evidence in that case consists of approximately 13,000 recordings of phone calls between McGregor, alleged co-conspirator and Auburn graduate Robert Geddie and other lobbyists and legislators caught in a web of corruption and scandal.

In Jaunary 2011, the federal government revealed in court documents that their investigation had expanded beyond the original scope of the indictments handed down last fall. While there is no knowing who or what the feds are after in the expanded probe, there is more than enough speculation that other individuals with Auburn ties—perhaps even Auburn officials themselves—may be under the intense scrutiny of the FBI.

In November 2010, ESPN and other media outlets revealed that the father of then Auburn star Quarterback Cameron Newton had been shopping his son’s services around during his recruitment in late 2009. He first approached Mississippi State University in November 2009 and asked for “$100,000 to $180,000,” according to news reports. Newton later signed with Auburn University, won the Heisman Trophy and led the team to its first ever BCS National Title.

That title was a rare moment of pride and joy for Bobby Lowder, especially in light of the recent setbacks and tragedies. But will that be like everything else he has seen crumble around him?

THE MICROMANAGER

When the Southern Association of Colleges and Schools (SACS) placed Auburn on academic probation in 2004, the accrediting organization denounced the “micromanagement” of the school’s day-to-day affairs by the board of trustees, a board dominated by Lowder and his allies and controlled through complicated relationships and business dealings. Another report indicated that former Birmingham Mayor Larry Langford—now serving time in the federal can for bribery and corruption—had a $50,000 loan from Colonial. When the former mayor came up 14 days late on a payment, he was said to have received a call from Bobby Lowder himself. Why does the powerful CEO of a $26 billion bank holding company call a debtor about the status of a loan when it’s not even 30 days past due? 

He does it because that’s what micromanagers do.

In an October 2009 report in Fortune Magazine, former Sun Microsystems president Owen Brown—an Auburn graduate—withdrew a $2 million donation to the school, in protest of Lowder's constant meddling. "I don't think Bobby knows how to debate something logically," he said. "He's either in control or he's down your throat."

When the ESPN story on the Newton recruitment was released, attention was immediately focused on Auburn and whether, after asking for six figures from one school for his son’s services, Cecil Newton allowed his son to enroll at Auburn for nothing. The question of the day: “The price to play at State was one-eighty large, but he went to Auburn for… no extra charge?”

If Auburn did indeed make a financial arrangement for the services of Cam Newton, Bobby Lowder the micromanager would certainly not only be aware of it, he would be in control of it. The NCAA is currently investigating the recruitment of Cam Newton and news reports indicate that the investigation has expanded to involve the recruitment of others in Louisiana, Texas, Arkansas and Georgia.

RELATIONSHIPS, TRAGIC LOSSES AND BETRAYAL

Bobby Lowder has controlled Colonial and Auburn through complex relationships, some professional, some financial, some personal. Before governor Bob Riley replaced Lowder allies with independent Auburn voices with no Lowder ties, virtually ever member of the school’s board of trustees had some kind of relationship with Lowder, usually in ways that would allow him to exert his influence and get things done that he wanted done.

One of Lowder’s most trusted and beloved allies and advisers was the brilliant super lawyer Jack Miller of Miller Hamilton Snider & Odom. Lowder and Miller’s friendship was decades in the making, and Miller served as chief outside counsel for Colonial and at one time had been the company’s vice chairman of the board. He was not only Lowder’s right hand man, he was said to be Lowder’s right brain. But the relationship is somewhat unusual in that most of Lowder’s innermost circle consisted of women. In the Fortune piece, Senior Editor Brian O’Keefe notes:


At Colonial, Lowder surrounded himself with attractive, well-groomed women in high-ranking positions. "One of the great things about working for Bobby Lowder was that he encouraged the females that worked with him to grow within the company," says one former longtime female employee. When he retired, the CFO, COO, and chief credit officer at Colonial were all women.

"I asked him about that once," says another woman who worked closely with Lowder at Colonial. "He said, 'In my experience it's always been men that betray me. Women are more loyal.'" His current wife was once his trusted secretary.


image The irony of this would make Shakespeare tremble. Of the four guilty pleas in the wire, bank and securities fraud cases surrounding the Colonial and TBW failures, three of the defendants to plead out have been women. Desiree Brown, Catherine Kissick and Teresa Kelly are three women with major roles in the alleged fraud scheme. Brown was a TBW employee, but both Kissick and Kelly worked for Lowder at Colonial. Lowder mistakenly believed that these women wouldn’t turn on him, but it appears that they did just that, and they are now singing like canaries to federal investigators.

In July 2009, Jack Miller lost a lengthy, painful battle with cancer and passed away. But Miller’s death was not the only tragedy to befall Bobby Lowder. In recent  years, his 93-year old mother passed away and his bright son—some say the heir apparent to the throne—died suddenly of a brain aneurysm. Such heartbreaking tragedies would make the bard himself weep as he penned Lowder’s anguished soliloquy.

IRONY OF IRONIES

Biographical sketches of Lowder assert that besides his family, the man has had two great loves in his life—the Colonial financial empire and the land grant university in Auburn, Alabama. Those biographical sketches also paint the man as the consummate  micromanager noted earlier. O’Keefe’s Fortune story notes that his microscopic focus extended even to the clothes worn by his colleagues and employees. You dared not show up to a meeting in a cheap suit or attire he deemed poorly chosen. If you did, you heard about it.

In the months before Colonial failed, Lowder and Farkas were alleged to have been working feverishly behind the scenes to concoct what federal securities officials believe was a fraudulent scheme to secure funding from the US’ Troubled Asset Relief Program—TARP. SEC filings in the Farkas case allege that Farkas conspired with a “Senior BancGroup Officer” to conceal their fraudulent scheme to obtain TARP funding. That “Senior BancGroup Officer” is almost certainly Bobby Lowder, CEO and micromanager.

If there is a pay-for-play, improper benefits scheme going on with the Auburn Athletic Department, the micromanager knows all about it and like O’Keefe notes, he is either in control of it or he’s down somebody’s throat. And if the scheme is as broad as many believe it could be, the consequences for Auburn could be devastating.

And therein lies the greatest irony of them all.  Bobby Lowder’s two great loves were Colonial and Auburn. But through constant meddling and micromanaging; by relentlessly interfering with the day to day operations of both, Bobby Lowder may be the reason for their destruction.

Shakespeare would relish penning the story of a man who has everything—wealth, power, prestige, influence—and loses it all through by his own ruthless meddlings. Along the way, he also loses those he loves most and is betrayed by those he trusted most.

This is a tale that would make the bard himself weep.

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1 comments :

bluefake1949 said...

Have you got a link for Texas and Arkansas?...I mean other than a blog

The NCAA is currently investigating the recruitment of Cam Newton and news reports indicate that the investigation has expanded to involve the recruitment of others in Louisiana, Texas, Arkansas and Georgia.