Anthony Westbury: Bank founder’s name on college campus irritates some

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Dozens of St. Lucie County investors lost millions when Riverside Bank crashed and burned in 2010. So how do those people feel when they see bank founder Vernon Smith’s name still emblazoned on two buildings at Indian River College?

Not too good.

Not all of those who lost life savings or retirement nest eggs were wealthy. Plenty of Riverside Bank employees lost everything, too.

Yet, despite a new report from the Department of the Treasury Office of Inspector General that revealed more insider dealings at the bank in its final months, college officials remain tight-lipped about making changes to the Vernon Smith Treasure Coast Public Safety Complex, or the Vernon Brenda Smith Center for Medical Education on the main campus in Fort Pierce.

Paying big money for naming rights for public buildings is relatively new on the Treasure Coast, but it’s a trend that IRSC has encouraged for a while. The main campus boasts the high-tech Kight Center for Emerging Technologies, named after Lon and Audrey Kight; the McAlpin Arts Center; and several rooms at the Schreiber Center at the St. Lucie West campus. The latter was named in honor of former Tribune columnist Strelsa Schreiber without donations for naming rights.

Under construction are two more buildings: the Brown Center for Innovation Entrepreneurship and the William Helen Thomas Science, Technology, Engineering Mathematics Center.

The collapse of the housing and financial markets in 2007 caused serious hiccups in the flow of big donor money to other educational institutions.

Take Florida Atlantic University, for example. FAU courted investment guru Barry Kaye for years to endow a number of buildings on its Boca Raton campus.

Kaye and his wife, Carole, wrote large checks to have their names engraved on the Carole and Barry Kaye Performing Arts Auditorium and on the Carole and Barry Kaye Great Hall in FAU’s alumni center.

Then in 2007, FAU announced a $16 million pledge from Kaye, a self-made insurance mogul and author of the book “You Buy, You Die, It Pays.” It was the largest pledge in school history. With state matches, giddy school officials announced, the $16 million could grow to $32 million.

Not surprisingly, FAU decided to rename its business school the Barry Kaye College of Business. Yet by 2009, serious doubts began to set in about Kaye’s ability to honor his pledges. His lucrative life insurance business had fizzled. Kaye told FAU officials he would have to downsize his contributions.

Nevertheless, school officials accepted a smaller check for $3.9 million. However, by August 2009, Kaye had missed a payment and FAU trustees decided to strip his name from the school of business.

It should be noted there’s no indication that Vernon Smith has stopped paying for naming rights at Indian River State College. Yet some investors who lost millions in Riverside Bank’s collapse feel Smith’s name on a college nameplate is inappropriate.

Joey and Annette Miller, who own St. Lucie Battery Tire, feel betrayed by Smith, a former friend.

A recent federal government report on the bank’s final months accuses Smith and high-ranking bank officials of poor investment choices and writing off loans to the board and their family members.

While the bank struggled in the summer of 2009, the bank asked Miller to put up real estate as collateral for loans. Meanwhile, Smith sold 4,000 shares for $1 million, $250 per share, to R. William Becker and Mary Ann Becker from May 2008 to July 2008, according to a pending civil suit.

In a separate case in 2010, the Florida Office of Insurance Regulation ordered Smith to repay $600,000 to an insurance company for Riverside stock later determined to be worthless.

Ann Decker, executive director of the IRSC Foundation, did not reveal the size of Smith’s pledges to the college, or whether they were up to date. She alluded in a written statement Friday to the need for IRSC to foster private support for its operations.

“College facilities are named to recognize donors and supporters who have made significant and lasting contributions toward the enhancement of the College, including facility construction and expansion, instructional and technology innovations, student scholarships and other improvements to benefit students. State funding simply does not meet all of these needs, and private support makes the difference between mediocrity and excellence at IRSC, while also helping to keep tuition and fees affordable for students.”

IRSC spokeswoman Michelle Abaldo added, “we respect the exemption on disclosure of donor information according to state law.”

Translation: We don’t have to tell you how much Smith donated, and we need the money anyway because of state budget cuts.

It’s interesting to note on the IRSC Foundation website that naming opportunities “permanently link your name to one of IRSC’s facilities.” I wonder if that was written before the recession?

I hope those explanations from the college satisfy angry investors and former bank employees who lost everything. They must be burned up every time they drive past those names on the wall.

I know I would be.

Anthony Westbury is a columnist for Scripps Treasure Coast Newspapers. This column reflects his opinion. For more on St. Lucie County topics, follow his blog at TCPalm.com/westbury. Contact him at (772) 409-1320 or anthony.westbury@scripps.com.