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‘Newbo evolve’ vendors have few legal options

State, local authorities say
no criminal complaints made
By B.A. Morelli, The Gazette
CEDAR RAPIDS — Dozens
of Cedar Rapids police officers
worked “newbo evolve,” a
three-day festival in early
August, on foot or bike
patrol while others served as
marksmen to guard against
the unthinkable.
They did their job, but like
an untold number of other
vendors, they didn’t get paid
by the festival. Now that GO
Cedar Rapids, the tourism and no plan was publicly Henry Nathanson, a lawyer and if they made promises
organization that put on the offered to pay those who who specializes in bankruptcy they could be held responsible.
event, has folded, they may helped pull off the ill-fated with Nazette Marner Na- But individual assets probably
never. Owed $31,790, their festival, several vendors thanson & Shea LLP of Cedar would be limited.
check bounced. said last week, including Rapids, said bankruptcy is a Plus, there are other legal
“We received a check that filmmaker John Waters, who process to rid yourself of debt, hurdles to successfully suing
was deposited and then re- was one of the top acts. Many so the organization wouldn’t directors.
turned,” said Sgt. Dale Moyle, of the vendors are much need to file if it didn’t have any Nathanson said the city of
who oversees the Cedar Rap- smaller operators. assets to protect. Cedar Rapids — though it’s a
ids Police Protective Associa- Questions linger as to how “Organizations like this separate entity — could face
tion, which organizes extra those responsible could just don’t have any assets, prob- claims because it gave GO Ce-
police work for special events. walk away and what recourse ably, and if you don’t have dar Rapids $1 million a year in
After indicating for weeks it vendors may have. Several assets, all they have to do is public money and relied on it
would make good on $800,000 members of the executive close the door and there is for marketing and tourism.
owed to vendors, the nonprofit committee of the 18-member nothing for creditors to get,” “The only hope for credi-
GO Cedar Rapids closed, say- board of directors of GO Cedar Nathanson said. tors may be if they can loop in
ing it had no money. Rapids have not returned mes- Board members or officers
Vendors weren’t notified sages from The Gazette. could be sued individually, ;; VENDORS, PAGE 6A

A CAPITOL DECISION

Jim Slosiarek/The Gazette Jim Slosiarek/The Gazette

Democratic gubernatorial candidate Fred Hubbell talks to Kirkwood Community College staff Gov. Kim Reynolds delivers the Condition of the State Address to a joint assembly of the Iowa
March 9 after touring The Hotel at Kirkwood Center on the campus of Kirkwood Community Legislature on Jan. 9 at the Capitol in Des Moines. Reynolds says a report ranking Iowa as No. 1
College in Cedar Rapids. Hubbell is challenging Gov. Kim Reynolds in the midterm election. shows the state is “moving in the right direction, that what we’re doing is working.”

Democrat Fred Hubbell: Not a politician, but ‘the V O T E R
leadership experience to bring people together’ SUNDAY, OCT. 21, 2018
AN IN-DEPTH LOOK AT
By Rod Boshart, Gazette Des Moines Bureau THE CANDIDATES RUNNING
IN THE NOV. 6 ELECTION
G U I D E Republican Kim Reynolds: National rankings show
Iowa is ‘moving in the right direction’ but can do better
By James Q. Lynch, Gazette Des Moines Bureau

Fred Hubbell is working to make the most of his As governor, Kim Reynolds has many responsibilities.
“second chance.” The governor is commander-in-chief of the Iowa
The survivor of a harrowing hostage ordeal that con- Army National Guard and is charged with transacting
fronted him and his wife, Charlotte, halfway around the all the state’s executive business, making sure laws are
world in 1981, Hubbell has spent the ensuing years work- faithfully executed, granting pardons and making
ing, volunteering and contributing in ways that have appointments to courts and commissions.
served Iowa. In her 17 months as Iowa’s 41st governor, Reynolds
Now, at 67, the Des Moines business executive born has added another job to the list.
into one of Iowa’s richest and most-influential families “I’m the No. 1 cheerleader for the state of Iowa,” she
has set his sights on becoming the next occupant of the said during a “job interview” with leaders of the Iowa
governor’s Terrace Hill mansion. It’s an iconic residence Biotech Association and Iowa Technology Association,
P. .M EN

that the Hubbell family donated to the state in 1971. who previously met with her Democratic challenger in
9 7 A OP
M .
TO M RE

.
O A

More at home in business settings than campaign the Nov. 6 election, Fred Hubbell.
FR LS
L
PO

venues, Hubbell is trying to step out from the shadows And Reynolds, a Republican seeking a full four-year
The Gazette

of being a backer of other candidates and taking on the INSIDE TODAY’S GAZETTE term, is convinced Iowans have plenty to cheer about.
unfamiliar role of being a self-promoter. A guide to the Nov. 6 election At the top of the list is the U.S. News & World Report
“I’m not a politician. I never have been, but I do have rating of Iowa as No. 1 in its Best States survey. Accord-
the leadership experience to bring people together and ing to the magazine, Iowa ranks first in infrastructure
get results,” said Hubbell, a Democrat who is making his first bid for public and high school graduation rates, and two-thirds of high school graduates go
office by challenging Republican Gov. Kim Reynolds in the Nov. 6 midterm directly to college, which is slightly above the national average.
election. Reynolds has repeated the rankings so frequently she rattles them off

;; HUBBELL, PAGE 10A ;; REYNOLDS, PAGE 10A

• BUSINESS 380������������������������������� 1F • DEATHS������������������������������������������7C • LIVING�������������������������������������������� 1L • RIVER LEVELS����������������������������� 10B

VOL. 136 NO. 285 • COMICS����������������������������������� INSIDE • HOME + GARDEN��������������������������� 1E • LOTTERY  � ����������������������������������������2A • SPORTS � �����������������������������������������3B
© 2018 The Gazette
• CROSSWORDS � ����������������������8D, 10L • HOROSCOPES � ����������������������������� 10L • MILESTONES��������������������������� INSIDE • TV � �������������������������������������������������� 9L
• DEAR ABBY���������������������������������� 10L • IOWA TODAY � ����������������������������������1C • PUZZLES�������������������������������������� 10L • WEATHER������������������������������������ 10B

da Vinci® | Mako™
Sunday

ADVANCED OPTIONS
IN ROBOTIC SURGERY...
© 2018 The Gazette

at Mercy, the Surgery Hospital.

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6A The Gazette ● Sunday, October 21, 2018

Vendors/Strong protections for board

;; FROM PAGE 1A
the city because they do
have assets,” he said.
Former GO Cedar
Rapids President Aaron
McCreight and director
of community events
Scott Tallman were fired
after the festival posted
a $2.3 million loss. The
board accused them of
providing false informa-
tion, leading to the
severe losses.
Some vendors have
decided to move on, con-
sidering the loss a cost of
doing business. But oth-
ers are exploring civil or
criminal processes.
“I feel like I need
to investigate the bad
check law and what
my recourse is,” said
Cathy Garcia, of CG Ac-
tivation of San Diego. “I
mean, they sent it and
it bounced, and while
the $12 bank fee I was
charged is a drop in the
bucket from what they
owe me, it’s still another
out-of-pocket fee they
aren’t covering. This
event had such a great
outcome for the attend-
ees. I just can’t believe I
may never see a dime of
my hard work.”
Garcia said she is
owed nearly $43,000 in
fees and travel expenses
after producing speaker
sessions, including talent
organization, briefing
moderators and coordi-
nating audiovisual.
GO Cedar Rapids ac-
knowledged it canceled
at least $300,000 worth
of checks made out after
the event because there
wasn’t enough money in
the bank account.
Jen Neumann of de
Novo Marketing said her
company is owed a “sig-
nificant sum” and sees
little pathway to repay-
ment. While it is a risk of
doing business, the firm
never has experienced
this in 12 years as a busi-
ness, she said.
“It is really unfortu-
nate that small business-
es are taking the brunt
of the poor decisions that
were made, and that we
have not been notified
that payment will not be
made,” Neumann said in
an email. “We also have
not had any communica-
tion from the leadership
(board or interim) about
the news of the dissolu-
tion or the intent not to
fulfill debts.”
‘INTENT TO DEFRAUD’
The city of Cedar
Rapids is owed $6,750 for
trash pickup and street
sweeping, and the city-
owned DoubleTree Hotel,
where most of the event’s
speaker series were held,
is owed $36,931.
Not included among
the vendors are people
such as Gae Richardson,
owner of The Chocolate
Shop in Marion. She’s
been a member of the
tourism bureau for more
than a dozen years and
considered her money
well spent with it.
She paid her $475 an-
nual membership at the
end of September, and
GO Cedar Rapids depos-
ited the check Oct. 2. She
also paid $750 in August
for an ad in the 2019 GO
Cedar Rapids directory.
That also was deposited
by GO Cedar Rapids.
“We are a local mom-
and-pop business (and)
we aren’t the only GO CR
members this happened
to. I think the city — who
are taking over the mar-
keting and promotion of
Cedar Rapids — needs to
address this issue. How
are we going to (be) com-
pensated? And no one
has apologized to us.”
stone,” he said. “As far believes a theft has
as criminal cases, people occurred, they should file
can make complaints to a police report,” or a civil
either the federal or state action through a lawyer.
authorities, and it would He said the agency is not
be up to them whether to investigating anything
file charges.” involving GO Cedar
Tony Morfitt, a Rapids.
spokesman for the U.S. Paul Thelen, director
Attorney’s Office in of the Larned A. Water-
Cedar Rapids, would man Iowa Nonprofit Re-
not confirm or deny an source Center, said Iowa,
investigation, but noted like many states, has
people could file a com- strong legal protections
plaint through local law for board members.
enforcement or to an ap- Board members are
propriate federal agency, protected from legal
such as the FBI. claims if a director acted
in good faith, believed
NO COMPLAINTS his or her conduct was
Bad checks can be con- in support of the orga-
sidered theft under Iowa nization or at least not
Code Chapter 714, but it opposed to it, did not
is not clear whether that believe the conduct was
would apply in this case, illegal, and the conduct
said Nick Maybanks, as- was permissible under
sistant attorney with the the organization bylaws.
Linn County Attorney’s “You have that veil
Office, adding no com- of protection for people
plaints had been filed willing to serve in this
with the office. role,” he said. “If it
The bad-check law weren’t for these protec-
requires the check to not tions, you’d have a very
cash because of insuf- tough time to get people
ficient funds or because to volunteer on these
Liz Martin/The Gazette the account is closed and boards. ... That bar is
A rainbow appears Aug. 7 over Mount Trashmore in Cedar Rapids, also that the person who pretty high, that veil of
which then still was freshly marked with the logo from the week- wrote the check knew it protection, but people
end’s “newbo evolve” festival. The festival producer has folded, would not be honored, can still file suits and
leaving $800,000 in unpaid bills. according to a descrip- you have to respond to
tion on the Sioux County it.”
Attorney’s website. De- Thelen said many or-
Bob Teig, who was an email, phone — being pending on the amount, ganizations have director
assistant U.S. attorney used to further that or it could be a felony. and officer insurance as
for the Northern District conceal it, he said. Greg Buelow, Cedar added protection in the
of Iowa for 32 years, said “You would have to es- Rapids public safety event of litigation.
federal statutes possibly tablish that there was an spokesman, said the po- GO Cedar Rapids has
could apply to fraudulent intent to defraud and not lice department has not not said whether it has
schemes carried out just that someone sent received any complaints. such insurance. While
through interstate checks that bounced,” he If it does, the complaint GO Cedar Rapids has
exchanges. said. would be forwarded to folded, the board re-
Mail fraud, which Bank fraud, which an outside agency, such mains active.
would be investigated by would be investigated by as the Iowa Division of Thelen said nonprofit
postal inspectors, and the FBI and possibly the Criminal Investigation boards have a “winding
wire fraud, which would IRS, could apply to a case or Iowa Attorney Gen- up” before dissolving and
involve phone calls or in which false statements eral’s Office, to avoid any cannot complete the pro-
emails and would be were provided to a bank appearance of a conflict. cess if claims are known
investigated by the FBI, to get a loan, he said. Lynn Hicks, a to exist.
would require both a “One thing about filing spokesman for the Iowa
scheme to defraud and civil cases, you have to Attorney General’s l Comments: (319) 398-8310;
the medium — mail, see if there’s blood in the Office, said if a “vendor brian.morelli@thegazette.com

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