Let us be blunt. “Uncle Billy,” as Mr. Bailey is known, exhibits clear symptoms of early stage dementia. And while we are sympathetic, his involvement in key operational activities amounts to a threat to survival of this institution. Indeed, it came to our attention that on Dec. 24 of last year Mr. Bailey failed to make a crucial deposit of $8,000 after misplacing the funds. The shortfall nearly resulted in the collapse of the Building & Loan, which was only averted after the wife of Building & Loan President George Bailey, Mary Bailey, undertook an unauthorized, inappropriate and potentially unlawful effort to raise additional capital from shareholders and others, via a frantic Christmas Eve solicitation that apparently consisted of going door-to-door with a large basket.Awesome.
The missing $8,000 was never accounted for.
During our investigations, we also determined that the episode on Dec. 24 was not the first time the Building & Loan tottered on the brink. Soon after George Bailey assumed control, a run nearly brought down the firm, as the financial panic engulfed the country during the early 1930s.
Mr. Bailey (George) was able to keep the firm afloat but only thanks to the irresponsible and unsound financial practices that have unfortunately became a hallmark of the Building & Loan during his tenure. Our audit unearthed widespread examples of such practices including, but not limited to, co-mingling of personal and institution funds, lax financial record management, sexual harassment, more consumption of alcohol — incredibly — in the course of investment decision making, and the forced involvement of subordinates in spontaneous, silly, mini-parades.
Mr. Bailey’s personal life also raises significant questions about his fitness to continue on as president of the firm. He has been known to consort not only with town floozies but, perhaps even more troublingly, Italians.
Thursday, December 20, 2012
Auditor's Report on Bailey Bros. Building and Loan