Grants, loan to Crowley unaffected by state suit
The $245,000 in matching grants and loans awarded to a new business of a former member of the Woodford Economic Development Authority (EDA) is not in jeopardy, despite him being sued by the state for back wages owed to ex-employees of a company he heads. That's according to Bill McCloskey, deputy executive director of the Governor's Office for Agricultural Policy, and Adam Probst, UK's Cooperative Extension Agent for Agriculture in Woodford County. Ed Crowley, CEO of Photizo Group, stepped down from his unpaid post as the city of Midway's EDA representative in March of 2016 after serving for about three years, according to EDA Chair John Soper. On March 2 of this year, the Woodford County Agricultural Development Board voted to award a $20,000 matching grant to Crowley's Mill, according to Probst. On April 21, the state Agricultural Development Board voted to make Crowley's Mill eligible for a $245,000 loan through the Kentucky Agricultural Development Fund. The grants and loan use funds from the 1998 Master Settlement with tobacco companies, in which Kentucky was given $93 million. Crowley's Mill was also awarded matching grants worth $37,000 from other county agricultural boards. With a total of $114,000 available in grants and Crowley's own funds, the start-up is eligible for a $131,000 loan from the state. Crowley has until Oct. 31 to secure funds from other counties, which would reduce the amount of the state loan. On its website, Crowley's Mill, which is located on Preston Court in Versailles but is not yet operating there, is described as a business that can process wool fiber "in days instead of months." Exhibits in the state Labor Cabinet's suit against Crowley include January emails from Crowley to two laid-off employees acknowledging he owed them a total of more than $55,000 and offering repayment plans. Days later, the former employees filed a complaint with the state Labor Cabinet. On May 24, the Labor Cabinet found in favor of the ex-employees and assessed a civil penalty of $500. On Aug. 15, the cabinet filed a lawsuit in Fayette Circuit Court on their behalf. Monday, one of the former Photizo employees represented in the suit said a date in Fayette Circuit Court had not been set. McCloskey told The Sun that he and others in the Governor's Office for Agricultural Policy read the Aug. 31 Sun article about the lawsuit, but knew of no "clawback" procedures that could lead the state or local boards to revisit their decisions. McCloskey said the state board made the April 21 loan decision after an effective presentation by Crowley showing how Crowley's Mill could benefit area farmers. ". I think that's why the board was interested in this product, (which) is giving farmers in Kentucky . that are in the fiber production side a market opportunity. Otherwise, they have to send the product out of state or they don't even get a chance to market their fiber," McCloskey said. "We're going to insure that the money he receives from us goes into the specific project, and that's who we have a legal agreement with, is between the Kentucky Ag Development Board and Crowley's Mill, or Ed Crowley. So that legal agreement is very specific to that project." Asked whether a businessman being sued by the state for unpaid wages should receive state benefits, McCloskey reiterated that the state funds are available only to Crowley's Mill. "Our money's specific to the project, and he's going to have to show documentation. You're talking about a project or a business that's separate (from the business) Ed Crowley has some ownership in, and that business or any other businesses he has are not part of this project," McCloskey said. "I think the information you provided in your newspaper article is a concern. We, the staff (and) myself, did go out and visit with Ed last Friday to inspect the building where he does have some of the equipment relocated from the Northeast . and make sure the business is ongoing as spelled out in the legal agreement." McCloskey and Probst said their respective boards were unaware of the complaints by the former Photizo Group employees when they voted. "I'm not aware of anything that says we can come back and say just because he (Crowley) was found guilty of owing these back wages that we can essentially renege on that and not give him the money that we had appropriated for him," Probst said. "Essentially, any money that we put into this project, it's all really on a reimbursement basis, so he has to incur an expense and submit those receipts in order to be able to get any money back for the mill," Probst said. The only thing that might cause the local board to reconsider its decision would be if a grantee was convicted in criminal court, Probst said. "We've had several instances where we've done some cost-share money for farmers and that sort of thing and some other programs and because they've gone bankrupt 10 years ago or . a couple of years after you've provided some assistance to them - that stuff kind of happens and you can't really fault them for some poor business decisions, necessarily," Probst said. "If he had criminal charges brought against him or something and there are still deadlines he has to meet and he can't meet those, then a lot of the money that he was appropriated would become null and void and would go back to the county board."