SDC has plans to reopen, but says its bank and IT firm are standing in the way
After abruptly closing its doors and laying off its entire staff nearly five months ago, the Social Development Commission is talking about making a comeback.
But according to SDC attorney William Sulton, the anti-poverty agency's plans for reopening are being slowed by its bank and IT firm.
According to Sulton, SDC has been unable to access its bank account or its computer systems since spring, shortly after the agency shuttered its doors. BMO Harris Bank froze the agency's bank account in April, and Caspian Technologies revoked SDC's access to its computer systems in May, including emails, website and transactional information, Sulton said.
As a result, the agency has been unable to pay its former employees, its debt to Caspian Technologies and other operating expenses, Sulton said. It also can't accept deposits from organizations that owe SDC money. Sulton said those deposits could have amounted to a million dollars and set SDC on track for reopening.
"I think it's fair to say that SDC's doors would be open today if BMO Harris had simply allowed SDC the ability to have deposits made into the account and the ability to have access to its money," Sulton said.
Scott Doll, BMO Harris Bank spokesperson, said the company "cannot comment on customer matters."
However, "we always strive to work with our customers when they face difficult times," Doll said via email on Thursday.
Sulton said SDC also owes Caspian Technologies, an IT service and consulting company based in Waukesha, more than $100,000. In May, Caspian Technologies revoked SDC's access, he said.
As a result, Sulton said SDC has not been able to fulfill the IRS' July subpoena for financial records and other records requests.
"While we appreciate that Caspian is owed money, the data information belongs to SDC," Sulton said. "It also belongs to third parties like state and federal agencies, and Caspian does not have legal right to withhold that information or to destroy it."
Caspian Technologies did not respond to the Journal Sentinel's calls for comment.
SDC finding work-around for banking issues
According to a May 10 email Sulton shared from a BMO senior manager, BMO placed a "hold" on SDC's account following the news of the agency's closure at the end of April.
In the email, the manager explained that SDC would still have access to its funds to pay its employees. The manager also asked about SDC's plan to reopen and how it could impact the agency's ability to repay its loans.
The SDC board didn't realize the hold would prevent other organizations from depositing funds into its account, Sulton said.
It wasn't until after the volunteer board spent hours of time tracking down organizations that owe SDC money — without access to SDC's computer system — that SDC discovered BMO Harris Bank had denied the organizations' deposits, Sulton said.
According to Sulton, the bank froze SDC's account out of concern the agency would default on its two loans, but SDC has yet to miss a payment. Combined, the two loans are under a million dollars, Sulton said.
The last thing the SDC board wanted to do was create a new bank account, Sulton said.
"We're talking about dozens and dozens of contracts that we have to go back, rewrite, reauthorize, to change over to another account," Sulton said. "It's a huge lift."
However, the SDC board is managing to pay some project-based employees, Sulton said.
The SDC Foundation, the nonprofit arm of SDC, has accounts with BMO Harris Bank that are also frozen, but it has accounts with other banks that aren't, Sulton said. He said the foundation has contributed some funds to paying employees.
When the Journal Sentinel asked if it is possible for the foundation to use its funds to pay Caspian so that the board can regain access to SDC's computer system, Sulton said he would have to ask the foundation board.
Foundation chairwoman Alicia Smith did not respond to requests for comment Thursday.
On Wednesday, the SDC board met briefly before heading into closed session for more than two hours. Barbara Toles, board chair, said the focus of the closed session was to plan SDC's reopening.
Gina Lee Castro is a Public Investigator reporter for the Journal Sentinel. She can be reached at .
