Parton and pals targets of lawsuit

Raleigh group represents Jim Garrett's concerns in court

Herald staff report

June 19, 2008

HALIFAX - Country musician Randy Parton, several of his close business associates and various enterprises are accused in a lawsuit of perpetrating a fraud scheme that allegedly bilked city taxpayers out of hundreds of thousands of dollars and left the community with a $21.5 million bond debt.

The legal action is expected to be filed in Halifax County Superior Court today by the Raleigh-based North Carolina Institute for Constitutional Law, representing Roanoke Rapids businessman Jim Garrett.

This morning Garrett told the Daily Herald he isn't seeking any money for himself, but wants the community repaid for its losses.

He said his motivation was simple. “I run a business that rents to homes to people who have little and are on the brink of poverty; this theater has had a harsh impact on them and on my business.”

Garrett explained that the property tax increases necessary to pay for the theater will be passed on to people who can ill-afford to pay more rent.

He added that the theater was supposed to be a godsend to the region - considered a Tier I or impoverished area. Instead, Garrett said it has become a drain on the people.

In a press statement released this morning by the Institute, the lawsuit was described as alleging “Parton, former economic development official Rick Watson, attorney Ernest Pearson, and various businesses they worked through began scheming in 2004 to fraudulently lure a city into an agreement to build The Randy Parton Theater so that they could personally profit at the expense of taxpayers.” (The city is not named as a defendant in the lawsuit, according to Institute officials.)

“In carrying out their plan, these individuals, all named as defendants in today's lawsuit, made false statements, withheld material facts, breached their fiduciary duties to taxpayers and ignored substantial conflicts of interest.”

The Institute's lawyers claim the scheme went undetected initially because of an amendment to the North Carolina constitution in 2004, “The same year the defendant's scheme began.”

The change in the law “did away with the right of the people to approve or disapprove the type of bonds used in this case to the detriment of the taxpayers, who did not have an opportunity to vote on the bonds issued to finance The Randy Parton Theatre,” the statement asserts.

Jeanette Doran, senior staff attorney for the Institute, said, “The city of Roanoke Rapids was sold on the concept of the theater as a way to bring new jobs and revitalization to their struggling town, but all the people got was a $21.5 million debt that they are going to have to repay.”

Parton and the city joined forces to create the theater. It opened last July amid a great deal of fanfare. By November, the city had soured on Parton's management of the venue and was concerned with the expenditure of thousands of dollars in money meant to get the theater off the ground.

Parton was removed from his management role and his performance schedule was drastically reduced. Then in December, city officials said they believed he was under the influence of alcohol and unable to perform. They asked him to leave the theater shortly before show time.

Parton denied he was inebriated but has not performed in the Valley since then. In February, he and Watson defended their roles at a news conference in Raleigh. After that news conference, it was reported that Parton was served with a federal grand jury subpoena. There is no information available on the status of that investigation.

A few weeks later, the city paid Parton a total of $750,000 to sever all ties and claims with the performer.