Marion County Prosecutor Carl Brizzi said he agreed this fall to serve on the board of Tim Durham’s Fair Finance
Co., but changed his mind several weeks later after Durham told him a newspaper was working on an investigative story about
“The whole point of being on the board was to get an education on how this stuff works,” Brizzi said Tuesday morning, several hours before FBI agents conducted a surprise raid on Fair’s Akron headquarters and the headquarters of Obsidian Enterprises, Durham’s Indianapolis-based leveraged-buyout firm.
“It seems from the article you wrote that it is more complicated than I have time for right now. So I decided against it.”
Brizzi said that Durham told him, “This stuff is going on. You probably don’t need to be in the middle of all this.”
The investigative story, published in IBJ Oct. 26, raised questions about whether Fair Finance had the financial wherewithal to repay Ohio investors who had purchased nearly $200 million in investment certificates.
The story reported that, since Durham bought the consumer-loan business in 2002, he had used it almost like a personal bank to fund a range of business interests, some of them unsuccessful. The story noted that he and related parties owe Fair more than $168 million.
Michael S. Welch, FBI special agent in charge in Indianapolis, said the agents who converged on the companies were executing search warrants. But he said those warrants are sealed and that the FBI would not provide additional comment.
John Tompkins, an Indianapolis attorney representing Durham, said today that FBI agents questioned Durham yesterday at the Los Angeles offices of National Lampoon Inc., one of several companies he leads. Tompkins would not reveal what the agents discussed.
“I will say generally that he is cooperative and will continue to be cooperative,” Tompkins said. He added that Durham believes he has done nothing wrong.
A proposed securities offering that Fair filed with the Ohio Department of Commerce’s Division of Securities on Oct. 29 says Brizzi “was elected” a director in 2009. However, Brizzi said he didn’t think he actually became a board member. And if he did, Brizzi said, it was only for a few weeks, and he did not attend a board meeting or take any official action.
Brizzi said he agreed to serve on the board because he was interested in learning more about finance from Durham, whom he described as “a buddy.” Durham also has been a major campaign contributor to Brizzi, who is in his second term as prosecutor. Campaign finance records show that Durham and his companies have donated more than $200,000 to Brizzi campaigns.
Brizzi, a Republican, would have served as one of Fair’s independent directors. One of the duties of independent directors is to decide whether to approve loans to Durham and other insiders.
Brizzi acknowledged he wouldn’t have been ideal for that role.
“If you are relying on your friends to educate you along the way, you probably are not as independent as you should be,” Brizzi said.