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ETHICS: President-Elect of Real EstateTrade Association Declares Bankruptcy: Should He Step Aside?
If everything goes as planned, Thomas, 68, of Mission Viejo (Orange County) California, NAR president-elect, will be sworn in as president of one of the nation's largest trade associations at the NAR convention in Orlando, FL. Nov. 9-12.
According to the Orange County Register, Thomas formed his first RE/MAX franchise in 1985 and eventually ran 14 RE/MAX offices in Orange County. But financial problems forced Thomas to quit RE/MAX and form his own chain, Altera Real Estate, in 2008. The only problem to some NAR members is that veteran Realtor Thomas has filed for personal and corporate bankruptcy, with combined debts of $13.2 million and assets of $1.7 million.
In January 2011, Thomas’ corporation filed for bankruptcy. He filed for personal bankruptcy this past June.
On Friday, Oct. 5, Stephanie Singer of NAR's Washington DC office confirmed to me that Thomas will be the 2013 president of NAR. She said there will be no change in the succession to the top spot in the Chicago-based Realtors.
Former Los Angeles Times reporter Mark Lacter, writing for the LA Observed site said on Oct. 4:
"Next month a fellow named Gary Thomas becomes president of the National Association of Realtors, which is a big deal because it makes him a spokesman for the nation's real estate industry. But as reported by the OC Register, Thomas had to file for personal and corporate bankruptcy because of the housing crash. His debt totals $13 million. Is this the sort of guy who should be leading NAR?
"'The real truth is hundreds of thousands of Realtors didn't file bankruptcy and managed their businesses - and honored their commitments,' said RE/MAX President Vinnie Tracey. NAR President Moe Veissi said a long and arduous vetting process took place over years before Thomas was picked for president and that an additional inquiry was launched in response to Tracey's concerns. Thomas answered questions to the board's satisfaction. 'It's at least a five- to seven-year process to get into a position to be considered as president,' Veissi said. 'He's been vetted and is qualified to lead the National Association of Realtors.'"
OK, so what he's doing is perfectly legal, but what about the ethics in the matter?
I sent the story to a friend who has spent decades covering real estate, as I did at The Milwaukee Sentinel and the Los Angeles Times. Here is his response:
"The solution seems like Thomas should withdraw gracefully, saying he needs to focus on pressing business and cannot serve at this time. I woul like to know if this is Ch 7 (meltdown/closedown) or Chaper 11 (reorganization) on these two filings. Not an easy issue though. The PR person at NAR is earning her keep on this one."