Former ag director indicted in connection with NRMC loan

By Adam Koob (Contact) | The Natchez Democrat

Published Tuesday, September 30, 2008

NATCHEZ — A loan to Natchez Regional Medical Center, which never came to fruition, has led to the indictment of a former official at the U.S. Department of Agriculture.

Nick Walters, former state director of Rural Development, was indicted last week for his role in attempting to secure a loan for NRMC while having a personal interest in a company that would have benefited from the loan.

The indictment also alleges Walters lied to USDA officials about his role in the matter.

Prior to his work at USDA, Walters was chief of staff at the Mississippi Public Service Commission, worked in a number of Republican campaigns in the state and was the Republican nominee for secretary of state in 1999, losing to Eric Clark.

The three-count indictment maintains in March 2006, Walters was working with NRMC to obtain a Rural Development funds loan for the hospital while Walters “had an arrangement concerning prospective employment with Kidwell (and Company), who was representing the Natchez Regional Medical Center.”

The indictment also maintains in August 2004, Walters was trying to pursue the loan “at a time when he was employed by Kidwell and Company and acting on behalf of Natchez Regional Medical Center.”

Prior to the Rural Development incident, Kidwell and Company acted as a financial advisor for NRMC when the hospital secured an $18 million bond from the Mississippi Development Bank.

Hospital board attorney Walter Brown said that agreement netted Kidwell and Company approximately $425,000 as a fee. The bond work was unrelated to the USDA loan application, but Kidwell and Company, an investment banking firm with offices in Jackson and Brentwood, Tenn., worked on both for NRMC.

The final count of the indictment maintains that in late August 2006 Walters told another USDA official that he was leaving the department to work for the Lincoln Group and that he had no client relationship with NRMC before he left Rural Development “while in truth and fact the defendant (Walters) had entered into an employment contract with Kidwell and Company who did have a relationship with Natchez Regional Medical Center before he left the employment of Rural Development.”

A representative from the U.S. Attorney’s office said the case could not be discussed but that Walters’ arraignment should be scheduled soon.

Andy Taggart, Walters’ attorney, said his client is innocent of the charges in the indictment.

“The charges against Nick arise out of allegations that he did not properly separate out his role in his official capacity from his role in the private sector once he left government service,” Taggart said in a prepared statement.

Brown said the loan Walters was attempting to help the hospital secure, an approximately $10 million loan, was scheduled to be used for capital improvements at the hospital.

And while the loan never actually came to fruition, Brown said the hospital board had already started the necessary paperwork to obtain the loan.

“It became apparent the loan was not going to happen,” Brown said. “And it got dropped.”

Current hospital CEO Scott Phillips said he believes Walters’ indictment will not have a negative impact on the pending sale of the hospital.

“It does not impact the buyer community or the their view of the hospital,” Phillips said. “Since the loan was not consummated it has no impact on the sale.”

Phillips is currently managing the restructuring effort at NRMC and was not working with the hospital during the time the loan was pursued.

After it was learned earlier this year that the hospital was experiencing financial trouble, Phillips was hired to manage the restructuring, and ultimate sale, of the facility.

Phillips also credited Brown and former Adams County Board of Supervisors attorney Bob Latham for writing Kidwell’s contract, with the Rural Development loan, in such a way that Kidwell was not paid since the loan never actually closed.

However, Phillips said that has not stopped Kidwell from attempting to collect from the hospital.

Phillips said as recently as six-weeks ago Kidwell sent the hospital a bill for $150,000 for services rendered in relation to the Rural Development loan.

In a prepared statement, Larry Kidwell, President of Kidwell and Company, said he was contacted by law enforcement authorities concerning Walters last year.

“The authorities advised me that neither I nor my company was a target of any investigation,” he said. “I cooperated fully with the investigation by providing documents and truthful information in response to their questions.”