On Thursday, the Oklahoma Department of Commerce’s Quality Jobs Program Incentive Approval Committee is scheduled to consider an application by Gateway First Bank to receive state incentive payments through the state’s Quality Jobs program.
According to the agenda for Thursday’s meeting, which is to be held at 10 a.m. at the Department of Commerce building in Oklahoma City, representatives for Gateway First Bank will be invited into an executive session of the committee, which is closed to the public, prior to the committee taking a public vote on whether to approve Gateway’s application for incentives.
The exact details of Gateway’s Quality Jobs program application pending before the committee were not fully clear as of Wednesday — Leslie Blair, public information officer for the Oklahoma Department of Commerce declined to provide a copy Gateway First Bank’s pending application, stating it is exempted from the Oklahoma Open Records Act.
However, a spokeswoman for Gateway First Bank said the company is seeking a 10-year contract through the Quality Jobs 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.
Gateway First Bank already 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.
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, though some companies that have received the incentives in the past have been accused of gaming the system.
The program provides quarterly cash payments from state’s coffers 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.
The three-member Incentive Approval Committee that will consider the application is made up entirely of individuals appointed by Stitt or their designees — Brent Kisling, who was appointed as executive director of the Department of Commerce last January, Dan Ross, a designee by Stitt’s director of the Office of Management and Enterprise Services John H. Budd III, and Charles Prater, the chairman of the Oklahoma Tax Commission who was appointed by Stitt in February.
Blair said Tuesday that Kisling had not spoken with Stitt about Gateway’s new application, but saw no conflict in considering it.
“Director Kisling has not had a conversation with Governor Stitt regarding Gateway Bank’s application,” Blair said. “The Governor has divested himself from this company, and he does not feel that there is any conflict with the consideration of this application.”
Stitt and his family still retain a financial interest in the company through a trust, though Stitt stepped away from his management and governance duties at the company after being elected governor and appointed an independent trustee to manage the family trust while Stitt is governor in an effort to avoid conflicts of interest.
Stitt’s spokeswoman, Baylee Lakey, said in a statement to The Frontier that Stitt was unaware Gateway was applying for further subsidies from the Quality Jobs program, and that the matter was not discussed prior to his separation from the company in January 2019.
“The governor has not communicated to Gateway or the Committee members about this matter,” Lakey said. “He would encourage any board member to make a decision based on the merits of the application and the framework of the law established by the Legislature.”
Shortly after Stitt was elected, but prior to being sworn in as governor, 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.
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.
As first reported by Oklahoma Watch, 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.
“Upon winning the Oklahoma Governor’s race, Kevin Stitt was removed from Gateway First Bank’s governance structure,” Gateway spokeswoman Melissa Bogle said in a statement to The Frontier. “The Stitt Family Trust has an independent trustee and Kevin Stitt is not making decisions or involved with the daily operations of Gateway First Bank.
Stitt’s transition plan, which was reviewed and approved by Oklahoma Attorney General Mike Hunter, does not mention the Quality Jobs payments to Gateway.
Alex Gerszewski, spokesman for the Attorney General’s Office, said the Quality Jobs payments to Gateway were not included in the transition plan, nor was the Attorney General’s Office asked to review any matter regarding Gateway receiving Quality Jobs money.
In June 2016, Gateway Mortgage Group signed a 10-year deal with the Department of Commerce to receive Quality Jobs payments from the state in exchange for creating new jobs.
The agreement requires Gateway to create $2.5 million in new gross taxable payroll in the first five years of the contract in exchange for payments equal to five percent of the gross taxable payroll for new direct jobs per-quarter. The maximum amount Gateway is eligible to receive under the contract is around $1.8 million. The agreement also requires that the new jobs pay at least $32,264 annually, and sets a “baseline” employment — the number of jobs above which the company receives incentive payments for — of 202 employees.
The agreement was amended in May 2019 to reflect the name change to Gateway First Bank, to increase the baseline to 237 employees after the merger with Farmer’s Exchange Bank.
In the contract, Gateway predicted it would create at least 61 new jobs over a 10-year period. However, as of October 2019, it had created 129 new qualifying positions under the contract, Gateway Chairman and CEO Stephen Curry said in a statement to The Frontier.
“Gateway has experienced phenomenal growth and success the past three years,” Curry said. “When we committed to the State of Oklahoma that we would be adding at least 61 qualifying, well-paying jobs as a part of a 10-year contract under the Oklahoma Quality Jobs tax reimbursement program, we were intentionally conservative. We wanted to exceed all expectations. The fact that we have more than doubled the number of qualifying positions and doubled the overall number of Oklahoma employees in less than half the time is extremely gratifying.”
The company had a total of 401 Oklahoma employees as of Jan. 1, 2019, Bogle said.
According to Oklahoma Tax Commission records, Gateway First Bank received its first two Quality Job Incentive payments from the department in December 2017, when Stitt was still at the company’s helm and after he announced he was running for governor that summer.
The latest Quality Jobs payment to Gateway First Bank — $105,976.28 — was made in December 2019, according to tax commission records.
In total, Gateway has received 15 payments totaling $876,968.97 in taxpayer funds since December 2017, the Tax Commission’s records show.
In a statement to The Frontier, Bogle said that Gateway submitted the new application to the Quality Jobs program on July 1, 2019, seeking another 10 year contract under which 90 new qualifying employees would be added. Since July, the company has already added 57 employees who would qualify the company for the rebate under a new contract, Bogle said.
In addition, while the average wage for qualifying positions in the previous contract is around $58,000, under the new contract the average wage for new qualifying positions would be around $81,000, Bogle said.
“Oklahoma is our home and our headquarters,” Curry said. “We are committed to helping make the state a great place to work and live. We are doing that by offering well-paying jobs with exceptional benefits, in addition to providing outstanding mortgage and banking services to our neighbors and friends.”
According to a media release last week from Gateway Mortgage Group, which is a division of Gateway First Bank, the company opened 34 new mortgage centers across the country last year. The company stated it originated more than $7.5 billion in mortgage loans last year, and expected 2019 to be “the best production year on record for the company.”
“We are outperforming our competition and delivering for our clients faster than ever,” Stephen Curry, chairman and CEO of Gateway, said in the media release. “Our momentum is a testament to our team members’ persistent focus on hard work. I look forward to seeing Gateway continue to expand our footprint across the nation for our clients and the success of all of our team members.”
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