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OUR OPINION: Make ‘missing loan’ EGF’s No. 1 concern

“When asked by a board member if the missed payments were simply a matter of negligence, Murphy said they will discuss that at another meeting.”

— The Herald, Page A1, April 30

Now, here’s a suggestion for City Administrator David Murphy and other East Grand Forks officials, in the wake of news that a $510,000 loan from a city agency to a business somehow was not serviced for more than 10 years:

Plan on doing a lot more than simply discussing it at another meeting.

Indeed, East Grand Forks City Hall should be at Defcon 2 right about now, as city leaders mobilize staffers to find out exactly what happened, when it happened and who was responsible, without fear or favor.

The measure of an organization is how it responds in a crisis — especially a crisis that likely was caused by a misstep or oversight in the organization’s own ranks.

And forgetting, ignoring or otherwise failing to collect on a half-million-dollar loan of taxpayer money certainly qualifies.

Right now, the rumors are swirling in East Grand Forks, in part because Dan Stauss — the brother of Mayor Lynn Stauss — may be an owner of the building and/or business that got the Economic Development and Housing Authority loan.

But East Grand Forks city leaders should put rumors and speculation aside and simply resolve to find out exactly what happened.

Why didn’t the business pay the loan back, as the business had promised to do in the loan agreement? More important to taxpayers, why didn’t the Economic Development and Housing Authority demand that the money be paid back?

And why were neither of those inactions caught by auditors?

Answering those questions — again, without fear or favor — has overnight become Job 1 in East Grand Forks. It’s the new top priority — for if city officials listen, they’ll hear virtually every taxpayer in town urging them to act.

An ethics case involving The Wall Street Journal that’s still taught in journalism schools is useful here.

On March 1, 1984, the Journal was told that one of its reporters was under investigation for leaking potentially market-moving news in advance of publication.

“At stake was the Journal’s most precious possession — its reputation for integrity and impartiality,” recounts an online review.

“It had to make a difficult choice — to chase after the story and reveal all of the facts, or to hide behind the screen of legal precedents that provide journalists with a certain degree of immunity from public scrutiny.

“The Journal made its decision immediately. The next morning it came out with a feature article on market leaks, in which it disclosed the SEC investigation. … A few weeks later, after the first round of investigations was over, it published a front-page article headlined ‘Stock Scandal’ in which it revealed all available information.”

Meanwhile, the reporter — R. Foster Winans, who later went to jail — had been fired.

The Journal even took extraordinary steps such as turning over Winans’ notebooks to the SEC.

Again, “at stake was the Journal’s most precious possession — its reputation for integrity and impartiality.”

Today, it’s East Grand Forks’ reputation for integrity and impartiality that is on the line. The city should respond as The Wall Street Journal did: By making an extraordinary effort to find out — and reveal — exactly what happened and why.