Meet Georgia State Senator Jack Murphy, R-Cumming of Georgia, co-author of odious state immigration legislation SB-40 based on Arizona’s immigration law and Chairman of the state Senate Banking Committee. These are his committee memberships (links to his official website):
Appropriations
Banking and Financial Institutions
Economic Development - Vice Chairman
Insurance and Labor - Ex-Officio
Public Safety - Chairman
Regulated Industries and Utilities - Ex-Officio
Retirement - Ex-Officio
Transportation - Ex-Officio
Veterans, Military and Homeland Security - Ex-Officio
As state chair his duties include: jurisdictions of financial institutions, real property finance, and corporate securities law. In January 2011, Murphy was appointed chairman of the senate panel for banking law regulation and modification.
Murphy has been on the Banking and Financial Institutions Committee since 2003.
Murphy has been on the Board of Directors for Integrity Bank from 2000 to 2008.
Georgia took the national lead in 2008 for failed banks. To date, there have been no investigations into why Georgia’s banks are failing.
Integrity Bank was investigated and sued by the FDIC in a 56-page lawsuit for
…The FDIC announced January 18, 2011 that state Sen. Jack S. Murphy, a Republican from Cumming, and other executives from Integrity Bank are accused of gross negligence and breaching fiduciary duty. The FDIC seeks more than $70 million in damages for a series of loans made from 2005 to 2007...
The FDIC brings this lawsuit in its capacity as Receiver of Integrity Bank of Alpharetta, Georgia (“Integrity” or “Bank”), to recover over $70 million in losses the Bank suffered on twenty-one (21) commercial and residential acquisition, development and construction loans approved by the Defendants between February 4, 2005 and May 2, 2007 (“Loss Loans”). The approval of the Loss Loans as well as numerous other acts of negligence, gross negligence and/or breaches of fiduciary duties and/or other legal duties by the Defendants were the direct and proximate cause of the Bank's losses.
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Integrity is a Faith Based bank created in 2000 that featured copies of the Ten Commandments in all its branches. It was also the first and largest bank failure in Georgia in 2008 with approximately $211 million dollars in FDIC claims. Murphy owned 340,000 shares of integrity stock.
Now he’s in foreclosure. Murphy bought property in 2005 with a loan of $228, 000 by the same Integrity Bank. Murphy has also had previous defaults on other bank loans, including a $193,000 loan with Silverton Bank. Silverton bank, which has since been eaten up by the FDIC because of its failure in 2009, still has a case pending in Federal Court.
April 2003: Murphy took out a $247,650 loan in from the Bankers Bank of Atlanta, later known as Silverton Bank. He put up as collateral 30,000 shares in Integrity stock.
July 2007: Murphy acquired another $75,000 loan from Birmingham-based Nexity Bank backed by an additional 20,500 Integrity shares.
Integrity collapsed in August 2008
Nexity Bank shows Murphy failed to make payments on his loans for 4 months, from July 2009 to October 2009, triggering the default. Now Murphy’s property that he bought in 2005 is listed for foreclosure July 5, 2011. He claims he had, “plans to build an office building but its value has since dropped to 35 percent of the purchase price.” This is what’s known as a strategic default in big business and Wall Street thinking. When the value plummets, get rid of it. It may be a smart investment move to dump under performing stock, but in this case it’s real property with real value and real consequences to Main Street USA.
What does State Senator Jack Murphy have to say about all this? “Lawsuits involving loan defaults have nothing to do with his role as a legislator” and “were business related, rather common in the business world and have nothing to do with my role as a legislator”. What do his republican friends in the senate and house have to say about this?
"Sen. Murphy is like many other people that have banking connections. They're all suffering, which is a tragic situation," said Sen. Jeff Mullis, R-Chickamauga, a member of the Committee on Assignments that appointed Murphy to lead the Banking Committee. "I stand by Sen. Murphy."
Sen. Cecil Staton, R-Macon, also a member of the Committee on Assignments and the Banking Committee, said, "This is a civil lawsuit, it's not a criminal suit," "Sen. Murphy, like any American, deserves the right to defend himself."
Senate President Pro Tem Tommie Williams, R-Lyons, Majority Leader Chip Rogers, R-Woodstock, Lt. Gov. Casey Cagle have all expressed confidence in Murphy, along with all Senate leaders, stating that the lawsuit has no impact on Murphy’s ability to lead committees that oversee banks, financial institutions, real estate finance, corporate securities laws along with other financial institutions.
Mullis would have us believe Murphy is suffering and would like us to have sympathy for the man who: says a state law banning landfill near aquifers is unnecessary and out of date as a landfill leaks into the groundwater, requiring a $1 million clean up effort; says immigration law enforcement should, “Shoot to kill them” about undocumented immigrants; tabled GA Senate Bill 123, that amends mortgage fraud laws which was sent to his committee for review and has languished on his desk ever since; has stonewalled investigations into widespread mortgage fraud by banks; faces mortgage fraud charges. Murphy blames the FDIC for Integrity Bank’s failure and has more charges pending.
Tony Plath, a former banker and professor of finance at the University of North Carolina at Charlotte, said that if the allegations are true, Murphy couldn’t claim ignorance about unsafe banking practices, given his role on several important bank committees and knowledge of banking law.
Murphy isn’t alone in being involved in the Georgia banking industry committees. State Rep. Greg Morris, R-Vidalia, the chairman of the House committee, has been a director of Montgomery Bank & Trust since 1993 and State Rep. Calvin Hill, R-Canton, is a founding director of Cherokee Bank which was forced improve capital positions and management of portfolios in 2009.
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