OKLAHOMA CITY — The Jenks-based bank originally founded by Gov. Kevin Stitt will continue to receive state taxpayer funds for job creation, after a state committee composed mostly of individuals appointed by the governor approved a new state incentive contract with the bank on Thursday.
The three-member Quality Jobs Program Incentive Approval Committee voted unanimously during its regular meeting Thursday morning to approve an application by Gateway First Bank to receive Quality Jobs funds, after meeting with representatives from the bank during executive session, which is closed to the public.
However, the full details of the deal approved by the committee, such as the maximum amount of public funds Gateway could receive under the contract, were not made public on Thursday.
A spokeswoman and an attorney for the Oklahoma Department of Commerce, which administers the state’s Quality Jobs Program, said the application, though formally approved by the committee, is not a public record until the contract has been signed by all parties, which could take several days.
A spokeswoman for Gateway First Bank told The Frontier on Wednesday that the company is seeking a 10-year contract with the Department of Commerce through the program that would require the company to create 90 new qualifying jobs with an average annual salary of around $80,000 over the course of three years.
In a statement Wednesday, a spokeswoman for Stitt told The Frontier that the governor was not aware of Gateway’s application and had not been in contact with the bank or members of the committee about the application.
The state’s Quality Jobs incentive program, established in 1993, has provided hundreds of millions in public dollars in incentives to businesses to promote job growth. It provides quarterly cash payments from the state to private businesses for up to 5 percent of the business’s new taxable payroll, and mostly targets companies with payroll of more than $2.5 million. It is one of several incentive programs the state offers to businesses.
Gateway First Bank has an existing agreement with the Oklahoma Department of Commerce for Quality Jobs incentive payments that was signed in 2016, while Stitt was still managing the company, then known as Gateway Mortgage Group, LLC. Payments from the state to the company under that contract started in December 2017, after Stitt announced his run for governor, and continued through 2019, with the most recent payment coming in December.
Thus far, Gateway has received more than $876,000 from the state through the program, and is eligible to receive up to $1.8 million under the 2016 contract.
Stitt founded Gateway Mortgage Group, LLC, in 2000, and though he stepped away from management and governance of the company prior to being inaugurated as governor in 2019, he still retains ownership of the company through a family trust, which is now being administered through an independent trustee appointed early last year.
Shortly after Stitt was elected, but prior to being sworn in, the Oklahoma Banking Board unanimously approved a merger between Stitt’s Gateway Mortgage Group and Farmer’s Exchange Bank in Cherokee. Gateway First Bank was the result of that merger.
Stitt presented a separation plan from Gateway Mortgage after being elected to avoid conflicts of interest. Under that plan, Stitt stepped down as manager of the company and Stephen Curry was appointed CEO and Manager of the company. James Redman was also appointed as successor trustee for the Stitt Family Trusts, which owns Gateway.
The transition plan was reviewed and approved by Oklahoma Attorney General Mike Hunter. However, the Attorney General’s Office told The Frontier on Wednesday that the Quality Jobs payments were not included in the plan, and the Attorney General was never asked to review the payments to the company for potential conflicts of interest that may arise.
After the merger, the Oklahoma Banking Board, which is made up of governor-appointed members and regulates state banks, agreed to hand over authority to conduct examinations of the bank solely to the Federal Deposit Insurance Corporation as long as Stitt is governor to avoid the appearance of a conflict of interest.
Two of the three committee members who voted to approve the application on Thursday — Department of Commerce Executive Director Brent Kisling and Oklahoma Tax Commission Chairman Charles Prater — were directly appointed to those positions by Stitt. The third board member is Dan Ross, director of capital assets for the Office of Management and Enterprise Services.
After Thursday’s vote, Prater said his vote was not influenced by the company’s ownership, and that the company had already qualified for the incentive program in 2016, prior to Stitt being elected governor.
“It’s creating more jobs for Oklahoma. And I’m interested in seeing jobs created in Oklahoma,” Prater said. “You’re getting into kind of a politics thing saying ‘well, he’s the governor.’ It had nothing to do with that.”
Asked whether Gateway would have created the jobs anyway without the state’s incentive money, Prater said it’s likely.
“I would say they probably would,” Prater said. “But if the credit’s there, why wouldn’t they take advantage of it? That’s just good business.”
Ross said he served on the committee in 2016, when Gateway’s original application was filed, and the company qualified for the incentives both then and in the newly-approved application.
“I look at things on merit. I was here in 2016 and approved the original application way back before we knew who Kevin Stitt was,” Ross said. “They’ve met and exceeded all the qualifications to receive the credit and they’re coming back because they continue to grow and doing the things this program was built to do.”
Further Reading: https://www.readfrontier.org/stories/company-founded-by-gov-stitt-seeks-further-taxpayer-subsidies-for-job-creation/