The mayor went to Florida; the town got $6 million – what we know

Published 7:24 pm Monday, June 24, 2024

Four weeks ago, after an invitation relayed by a mutual friend, Smithfield Mayor Steve Bowman flew to Palm Beach, Florida, for a three-day stay at former Smithfield Foods Chairman Joseph Luter III’s residence.

Two weeks after Bowman’s return, $6 million of Luter’s money had been deposited in the town’s bank account.

According to the town’s response to a Freedom of Information Act request, Bowman had no written communication, including text messages or emails, with anyone about the trip before arriving on May 22 at the home of Luter, whom Bowman said he had not spoken to in “a couple of years.” Town Council members learned about the trip a week after the mayor’s return – and after $1 million had already been deposited in the town’s account. 

Subscribe to our free email newsletter

Get the latest news sent to your inbox

The money, according to Bowman, is intended to fund the beautification of town-owned right-of-way at Main Street’s intersection with Route 10, where Luter’s son is developing the 267-home Grange at 10Main subdivision, and is conditioned on the town matching the gift dollar for dollar and moving its farmers market to the Grange. Those conditions have drawn the ire of some residents and raised the eyebrows of an expert on municipal governance. 

The Smithfield Times, based on FOIA requests and multiple email interviews with Bowman and others, has established a timeline for what is known about the mayor’s trip and Luter’s matching gift.


May 12-22

Bowman told the Times he received an invitation roughly 10 days before his departure through a mutual friend, Maynard Gwaltney Sr., who declined to comment for this story.

The invitation must have been in person or by phone. The Times’ FOIA requests produced no emails or text messages from Bowman to Gwaltney, Luter, or council members discussing his itinerary ahead of his departure.

Bowman, in a May 29 email retroactively informing the Town Council of his travels, acknowledged a 35-year friendship with Luter.

“Two weeks ago, I was informed that Mr. Joseph Luter III wished to see me,” he wrote, asserting he’d flown at his own expense and “not a cent of Town money” was spent during the trip.

Gwaltney had approached Luter four years ago with the idea of buying the vacant Little’s Supermarket and dilapidated 18th century Pierceville farmhouse at the western edge of the town’s historic district, according to an advertisement Luter’s son, Joseph Luter IV, ran in the Times in 2022. Both parcels were razed in late 2020, leaving roughly 57 buildable acres the council approved in late 2023 for mixed-use zoning. The Grange, which from its inception has proposed housing the town’s farmers market, “wasn’t on the discussion agenda” for the trip, Bowman’s May 29 email asserts.

“I thought what I was doing was correct. I went down to see a man who wanted to donate money to the town that he loved, and what do we get, we get this kind of reaction,” Bowman said, addressing more than a dozen residents who’d spoken in opposition to the required match at the council’s June 4 meeting.

However,  Bowman, in his May 29 email to council members, had described Luter III’s monetary offer as “spontaneous and a surprise to me,” and told the Times he’d received no indication Luter III planned to offer the donation. Luter made the offer on May 22, according to the email.


May 23-24

Bowman, at the June 4 meeting, acknowledged having worked with Town Manager Michael Stallings and Town Treasurer Laura Ross to facilitate the first installment of Luter’s donation.

Stallings told the Times he received a phone call from Bowman on May 23, while the mayor was still in Florida, requesting the town’s bank account and routing numbers, which Stallings relayed to Ross, also by phone.

Ross texted Stallings the requested information at 12:59 p.m., starting a thread of messages obtained by the Times through its FOIA request.

“Received. Do you have a phone number for whoever you deal with the most?” Stallings replied, also at 12:59, prompting Ross to relay contact information for TowneBank representatives that Stallings then forwarded to Bowman.

“I will watch the account and will let you know when it posts,” Ross texted Stallings.

Three hours later, at 4:15 p.m., Ross texted Stallings back.

“No $$ yet,” she wrote.

“I talked to the mayor again and he said it’s coming from Goldman Sachs and it may be tomorrow,” Stallings replied.

“Sounds like Wednesday is the latest it should show up,” Ross texted Stallings back at 12:33 p.m. on May 24, the final day of Bowman’s stay at Luter’s residence.

Bowman texted Gwaltney on his way home.

“I am leaving Atlanta now. Do you have time for lunch tomorrow?” Bowman asked.

“Yes,” Gwaltney replied.

“OK I have a 9 0’clock meeting with Town Manager and (Town Attorney) Bill Riddick I will call you in the morning. I have to cut my phone off now,” Bowman texted back.

According to Stallings, the referenced 9 a.m. next-day meeting “dealt with real estate” and was exempt from FOIA.

According to the town’s FOIA response, the text exchange was the only written communication between Bowman and Gwaltney before, during or after the trip. 


May 29

May 29 marked the date of the first installment, and the date Town Council members first learned of Bowman’s trip.

Ross emailed Stallings that day just after 11 a.m., informing him that the first $1 million had come through via a wire transfer from Luter III’s wife, Karin.

Stallings, around that same time, texted Bowman, “Laura just received notice of an incoming money transfer.”

The Times, in a follow-up FOIA request on June 10, obtained additional messages between the mayor and Luter’s daughter, Laura Luter Gurkin.

Bowman’s correspondence with Gurkin was omitted when the town responded to the Times’ first request, which sought “correspondence, including emails and text messages on town and personal accounts, about Mayor Steve Bowman’s trip to Palm Beach, Florida, on May 22-24 to visit Joseph Luter III” and “correspondence and other documents related to the deposit of up to $4 million of Joseph Luter III’s donation into the town’s bank account(s),” but was later provided when the Times expanded its FOIA request to include ​​”communication between Mayor Bowman and members of the Luter family or their representatives between May 1, 2024, and June 10, 2024.”

According to both FOIA responses, Bowman had no text or email correspondence with anyone to plan the trip, and with the exception of coordinating with town staff to have the money wired, didn’t correspond with anyone, including Riddick, about Luter’s gift prior to emailing the entire council.

“Just checking to make sure you got the money OK,” Gurkin texted Bowman on May 29.

“We received one million of the six million a little while ago,” Bowman replied. “I thank you and your family for the generosity. Just wondering, as I will need to brief Town Council if the donation will come in staggered increments.”

Bowman then tells Gurkin he “had some great conversations about Smithfield” with Luter III during his trip.

“He has been so good to this poor country boy from Smithfield. Really Good!” Bowman wrote.

Bowman told the Times that Luter III has over the decades invited him to Aberdeen Farm, a private events venue and weekend retreat the family owns about 3 miles outside the town limits.

“I was allowed to hunt and fish his Aberdeen property growing up when I had nowhere else to hunt,” Bowman said. “He allowed my family to walk his farm and enjoy the outdoors at Aberdeen. That relationship has always been special to me.”

At 4:51 p.m. on May 29, nearly six hours after the transaction and five days after Bowman’s return from Florida, the mayor informed Town Council members by email of the arrangement with Luter III.

“I can assure you I did not ask in any way for a cent,” Bowman wrote, adding “the reason I have not advised you sooner is because I was waiting for the contribution to be deposited in the Town account.”

Bowman, in an email to the Times, said he’d waited “because sometimes people change their minds.”

“Had that occurred, the trip would have been purely personal in nature as it was up and until Mr. Luter offered to make a donation to the Town,” Bowman said.

Councilman Jeff Brooks, who’d asserted, “I don’t see this as a gift,” at the June 4 meeting, citing the conditional town match, took a more enthusiastic tone in a May 29 text-message thread with Bowman.

“Please check your email for an important message,” Bowman had texted Brooks at 4:56 p.m. that day.

“Got it thank you, what a pleasant surprise!” Brooks replied.

Brooks told the Times he’d been “pleasantly surprised that the Town was being presented a donation/gift from an outside party.”

Brooks, who was one of two dissenting votes on the Grange’s rezoning application in December, said he’s undecided on whether he’ll support accepting the proposed $6 million donation and Luter III’s conditions.

“I have not made up my mind on it as much more dialogue and a better understanding of the caveats needs to happen,” Brooks said.

Bowman, on May 29, also wrote a letter to Karin Luter thanking her for his stay in Palm Beach and the donation.

“It truly was a pleasure meeting you, your friends and your wonderful staff,” Bowman wrote. “If you come to Virginia, I would love to have you come by and visit. The door is always open. Thank you again.”


May 30-31

Gurkin texted Bowman again a day after the first wire transfer.

“The funds will come in increments with more coming in today,” she told him. “I am not on their account and not privy to the info. Good talking to you and thanks for the leadership and all you do for Smithfield. Dad and I are both grateful.”

The second payment arrived a few minutes after 2:20 p.m. on May 31. Robin Landrus, a financial analyst under Ross, emailed Stallings within a minute of receiving Luter III’s second $1 million payment, prompting Stallings to text Bowman at 2:35 p.m. that day.

“2nd deposit has arrived,” Stallings told Bowman.

“Great,” Bowman replied.


June 1-7

According to a June 4 email from Ross to Stallings, an additional $2 million was deposited on June 3 for a total of $4 million as of the council meeting that day.

On June 1, Ross emailed Landrus asking her to move Luter III’s donations to date to a “sweep” account. According to TowneBank’s website, the bank is affiliated with IntraFi network to make insurance of multimillion-dollar deposits possible through insured “cash sweeps.”

“Your deposit is divided into amounts under the standard FDIC insurance maximum of $250,000 and then placed into deposit accounts at multiple FDIC-insured banks in the network,” TowneBank’s website states, referring to the Federal Deposit Insurance Corporation that regulates banks.

On June 3, Karin Luter texted Bowman stating she was “holding off on the last” $2 million installment payment and “waiting to see what the tax ramifications are.”

“Plan on five for now and we will see what ends up happening with the accountants and paying capital gains,” she told Bowman.

Despite her revised lower estimate, the final $2 million payment came through in full on June 7, according to the town’s records, bringing the total up to the $6 million originally proposed.


‘A particularly odd method’

Richard Meagher, an expert on municipal governance who chairs the political science department at Randolph Macon College, described the sequence of events as “a particularly odd method” of donating money to the town.

“For most gifts of this kind, there’s an offer, a written agreement, and then a vote to accept the funding,” Meagher said. “Only then would you actually transfer funds. Otherwise you leave your locality open to litigation. Now that this money is sitting in the town’s account, what if the town spent it, against Luter’s wishes?”

According to Bowman’s letter to council, it was Luter III who “insisted that the money be transferred forthwith.”

“The letter I sent outlines that I am fully aware (and so is he) that the Council will have the final say on any arrangement,” Bowman wrote to the council members on May 29.

Town Attorney William Riddick cited Virginia Code 15.2-1108 – which states “a municipal corporation may accept or refuse gifts, donations, bequests or grants from any source, which are related to the powers, duties and functions of the municipal corporation” – when the Times asked him what gave Bowman statutory authority to arrange the transfer of funds ahead of a vote by the Town Council.

Meagher, who isn’t a lawyer, agreed that Bowman “probably has the authority to accept funds” ahead of a council vote, but opined it would be “irresponsible – maybe wildly irresponsible – to accept it without a written legal agreement or grant that has been approved by the appropriate governing bodies.”

Riddick countered: “The mayor may not act alone nor has he done so. Town Council will have to act to accept a gift.”

Meagher also raised concerns over “the political implications of accepting a very large sum of money that requires a government body to pursue certain policies,” such as moving the farmers market to the Luter-owned Grange.

It would not be the first time Smithfield has done so. In October 2022, following a closed-door meeting, the council voted to accept Luter III’s offer of land and $1 million, conditioned on its committing up to $1.4 million toward a proposed indoor/outdoor brick structure to house the farmers market at the Grange, and at that same meeting voted to accept an additional $3 million from Luter conditioned on its committing $1 million in taxpayer funds toward the expansion of the Luter Sports Complex, an athletic park built in 2018 with partial funding from Luter III that’s named for his father, Joseph Luter Jr.

Luter, in 2007, offered $3.5 million to buy what is now the Windsor Castle Park from developer Lewis McMurran and another $1.5 million in an escrow account under his control to develop it into a public facility. The town now owns and maintains the 208-acre park, including the 18th century Windsor Castle homestead of Smithfield founder Arthur Smith IV.

“If he’s going to give money, he expects someone else to have skin in the game,” Bowman said at the June 4 meeting.

According to Riddick, “there is no time limitation for council to act” now that the money is in the town bank account, “but I would expect the council to act within a reasonably short time once they have had an opportunity to get the information they deem to be important in making their decisions and to thoroughly discuss the matter.”