Rogues Gallery of Ethical Lapses

The Fort Dupont Redevelopment and Preservation Corporation (FDRPC) is a Public Private Partnership (PPP) popular in Delaware with both Governors Markell and Carney. While these partnerships sometimes generate significant benefits, the melding of sectors can reduce public accountability leaving these arrangements notoriously vulnerable to corruption. The appropriate remedy is the establishment of a robust oversight structure as an integral part of PPP formation. Unfortunately, that didn’t happen with FDRPC.

The Grassdale sale was not part of the Fort DuPont Master Plan. This initiative emerged a few years later and was engineered by three FDRPC staff members operating in secrecy. They worked on the Grassdale sale for several months before the agreement was discussed in Board Minutes. This deal involved both conflicts of interest and ethical lapses.

Jeffery Randol’s Compromising Background

More than $4 million in Tax Liens and Judgements

Jeff Randol was hired in 2015 to serve as Executive Director of the FDRPC for an annual salary of $110,000. An online background check revealed that Mr. Mr. Randol had 18 tax liens for the years 2014—2018 totaling $2,741,194. A tax lien is the government’s legal claim against property when a tax debt has not been paid. He also had two civil judgements in 2009 and 2010 totaling $1,355,499. The combined tax liens and judgments exceed $4 million.

Environmental Violation

On May 1, 2021, Mr. Randol was personally cited by DNREC for an Environmental Violation resulting from mismanagement of FDRPC’s Sediment and Stormwater Regulations. Over several months the site of this mess expanded to approximately an acre. The Violation was drafted by Bonnie Arvay from DNREC’s Sediment and Stormwater program and cited:

Multiple violations of the Sediment and Stormwater Regulation, Construction General Permit, Erosion and Sediment Control Handbook and approved sediment and stormwater management plan including failure to stabilize sediment basins and disturbed areas; failure to install and/or maintain perimeter controls, stabilized construction entrances, stockpile controls, and storm drain inlet protections; and improper management and/or disposal of mixed construction and demolition debris containing concrete, metal rebar, piping, asphalt, geotextile, and trash.

Grand Home Below Fair Market Rental

Jeff Randol selected 1303 Officers Row as his personal residence. FDRPC has spent $683,000 renovating and landscaping this house which is the largest and most valuable home in Delaware City. On December 1, 2017, the Randols signed a lease for $2,000 monthly which is reduced to $1,800 by an employee discount. FDRPC charges $$$ for a townhouse, so this is way below fair market for this magnificent house. In January 2021, Valerie Longhurst and Nicole Poore introduced HB 85 which would require the Executive Director to pay a fair market rental and includes other reforms as well.

Max Walton’s Conflicts of Interest

Max Walton had deep roots in the FDRPC initiative. He became Delaware City Solicitor in 2011, and authored an early draft of the FDRPC enabling legislation.  Mr. Walton had two conflicts of interest related to FDRPC:

Serving as Counsel for both Delaware City and FDRPC

In 2014, Max Walton became FDRPC Counsel while serving as Delaware City Solicitor until September 2020. He continued as FDRPC Counsel until August, 2021. The interests of Delaware City and FDRPC were not aligned.

As Delaware City Solicitor, Mr. Walton advised Mayor and Council, Planning Commission and the Board of Adjustment. He was deeply involved in advising these City agencies as they annexed and rezoned portions of the Fort Dupont Complex to implement the Fort DuPont Master Plan.

This created a serious conflict of interest. The multiple agencies of the Delaware City government were making decisions which determined the division of responsibility with FDRPC for providing services, infrastructure, and flood mitigation for the evolving community.

Following Mr. Walton’s resignation as FDRPC Counsel, the possibility of selecting a new Counsel from Mr. Walton’s firm (Connolly Gallagher) was discussed by the Board. Delaware City Manager, Dave Baylor, made the following statement recognizing the conflict of interest between Delaware City and FDRPC:

Mr. Baylor stated he believes there could be a conflict with the firm if FDRPC were to keep Connolly Gallagher (Mr. Walton’s firm), and that the city might have concerns. Mr. Baylor also stated that he is in a precarious position with being both City Manager as well as a Board Member and that his decisions must first consider what is best for Delaware City.

Conflict with Todd Burbage and Blue Water

These minutes from a Bethany Beach Council meeting document that Max Walton was representing Todd Burbage and Blue Water Development in August 2013. (Max Walton opens the discussion on two zoning amendments at the top of page 4. Todd Burbage is mentioned at the bottom of page 7.)  Mr. Walton refers to two prior public meetings where he also represented Blue Water.

Starting in 2014, as FDRPC Counsel, Max Walton worked for years orchestrating the annexation of Grassdale into Delaware City and the rezoning of the property in preparation for the Grassdale sale to Blue Water. The Board minutes include frequent reports of his progress.

In early 2018, he began to focus more specifically on the Blue Water Agreement drafting both the March 8, 2018 Castagno Memorandum of Understanding and the October 22, 2018 Blue Water Letter of Intent. FDRPC never issued an RFP for the RV Campground, and there is no indication that anyone from FDRPC ever met with a competing company while Max Walton was developing this contract for his former client.

The FDRPC Board Minutes report that Max Walton recused from the Blue Water Agreement on September 16, 2020 with no reason stated.

So, following approximately six years of energetic effort engineering the Grassdale sale, Max Walton finally recused from the Blue Water Agreement on September 16, 2020. The original purchase agreement was signed on December 30, 2019, and the First Amendment was executed on June 10, 2020, so the agreement was essentially completed before Mr. Walton recused.

Recusal is a potential remedy for conflict of interest. However, this remedy depends on recusing prior to engaging with a conflict. An after the fact recusal does not resolve a conflict of interest.

Christopher Castagno’s MOU

On March 8, 2018, Chris Castagno signed a Memorandum of Understanding (MOU) with FDRPC. The MOU stated that Mr. Castagno would be engaged as an independent contractor “to market the Property and to recruit tenants, buyers and /or partners to the Property”.

The agreement stated that “FDRPC recognizes Chris Castagno as a representative of FDRPC, reporting to Jeffrey D. Randol, Executive Director of FDRPC for purposes of the activities contemplated hereunder.”  The commission schedule included in this MOU would net Mr. Castagno $150,000 from the Grassdale sale. A few months later Mr. Castagno delivered the Letter of Intent for the Blue Water Agreement.

Mr. Castagno is currently under investigation by the Public Integrity Commission for a Conflict of Interest. He was representing the Trustees of the New Castle Common as a real estate agent while serving as a Trustee. He also has a criminal record.