Fledgling Pacific Liberty Bank has found itself caught in the middle of a community flap over a proposed Wal-Mart retail project in Huntington Beach.
It seems that developer George Argyros, who wants to build a Wal-Mart store in Huntington Beach, invested about $100,000 in Pacific Liberty earlier this year, when the tiny bank was just starting. The investment came shortly after the city of Huntington Beach gave his Wal-Mart project the green light.
One of the bank's founding members is City Councilman Dave Garofalo, the incoming mayor, who invested about $50,000 in the bank. Two other City Council members, Pam Julien and Shirley S. Dettloff, also made smaller investments.
Critics of the proposed Wal-Mart--who are seeking to overturn the City Council's approval with a March ballot measure--say the three council members should have abstained from voting on the Wal-Mart project. (They supported it.) Opponents also are questioning whether the city officials properly disclosed their investments in the bank.
Pacific Liberty Chief Executive Rick Ganulin said there were no conflicts involving the bank's investors. He said it is common for co-investors in a small community bank, such as Pacific Liberty, to be prominent local officials, including a mix of government and business leaders. There was no connection between the Wal-Mart project and the bank, he said.
Tom Love, vice president at Argyros' Arnel Retail Co., also said the developer's investment in Pacific Liberty was unrelated to the Wal-Mart project. Argyros has invested in several Orange County community banks over the years, including Eldorado Bank and Pacific Mercantile Bank, Love noted.
"[Argyros] has always supported Orange County business," Love said.
Ganulin stressed that the bank has no financial ties or interests in the Wal-Mart project, and has taken no position in the debate over whether it should be built.
Garofalo noted that Pacific Liberty raised nearly $5.7 million from more than 360 local investors when it opened this spring. Argyros' investment, though sizable, represented only about 2% of the minimum $5 million needed to open the bank.
"His investment wasn't pivotal," Garofalo said.