Heartland BancCorp, an Ohio-based community bank, is at the center of a controversy after adding the Buckeye State’s lieutenant governor to a paid position on its board of directors.
Lt. Gov. Jon Husted began a term on the board last week, according to a company announcement. Husted, a Republican who is seeking a second term as lieutenant governor, was also elected in March to the board of the company’s banking subsidiary, Heartland Bank, the release said.
Heartland BancCorp, which has $1.5 billion of assets, did not say how much Husted will be paid as a director. But it is a paid role, and whatever compensation Husted receives will be reported on his financial disclosures, Hayley Carducci, a spokesperson for the lieutenant governor, confirmed in an email Tuesday.
Husted’s new gig raises questions about potential conflicts of interest and the perception of conflicts of interest, particularly when it comes to the financing of economic development projects in the state, said Catherine Turcer, the executive director of Common Cause Ohio, a state watchdog group.
Husted “has insider knowledge of development projects and insider knowledge of Heartland Bank and sometimes when you have insider knowledge to both, conflicts arise,” Turcer said.
Earlier this year, Husted purchased shares of Heartland stock, Carducci said. She declined to say how many shares Husted currently owns, but she noted in the email that Husted “regularly reports his personal investments as part of the state’s financial disclosure process.”
Husted, whose role on Heartland’s board was
Between 2000 and 2011, Husted was a member of the Ohio State Legislature, first as a member of the state House of Representatives and later as a state senator, according to his profile on Ballotpedia.
As the state’s second-in-command, Husted oversees Ohio’s Common Sense Initiative and serves as the director of Gov. Mike DeWine’s Office of Workforce Transformation and InnovateOhio, Carducci said.
The Common Sense Initiative, which was created to “propel job and economic growth” in the state, “reviews business-impacting rules, helps businesses navigate regulatory obstacles and leads initiatives to improve Ohio’s regulatory climate,” according to the governor’s website.
Husted, who does not oversee Ohio’s Department of Commerce or the state’s banking regulators, “doesn’t expect any conflicts” between his day job and his board seat, Carducci said.
“But [he] would certainly recuse himself and act in any way that the law requires should any conflicts arise,” Carducci said.
Husted’s term is one year, and he is filling a recently vacated seat on the board, according to Carducci.
After his election to the board, Husted said in prepared remarks that “Heartland is a great community bank and I look forward to adding value to the way they serve the small businesses and families that count on them for their financial services needs.”
In a statement Tuesday, Heartland stood by its election of Husted to the board. The company cited Husted’s “work in economic development” as well as “his robust policymaking and financial expertise gained through years as a state elected official.”
“He has guided initiatives to promote Ohio’s economic vitality, led the state’s innovation efforts and shaped the transformation of Ohio’s workforce,” the company said. “It is his acumen in these areas that we believe will be most impactful on Heartland Bank’s mission to grow relationships in the communities that we serve.”
Heartland, which is based in Whitehall, Ohio, operates 18 branches in the greater Columbus and northern Kentucky markets. It has been named to American Banker’s
Heartland’s marketing director deferred questions about potential conflicts of interest or the perception of such conflicts to Chairman and CEO G. Scott McComb. But McComb was out of the country and unable to answer questions on Tuesday, the marketing director said.
Common Cause Ohio plans to watch for transparency, Turcer said.
“You don’t want the lieutenant governor to be wearing two different hats,” she said. “You want him to focus on being the lieutenant governor.”
