Formal Complaint re: Transfer of $5 Million of District Funds to Banner Bank
Description of Complaint
According to public record, in July of 2023 the superintendent directed a very large sum of Bandon School District public funds - reportedly five million dollars (approximately one quarter of the entire budget) - to be transferred into a local Banner Bank money market account. At the time of the transfer, Board Chair David Hisel was serving as Vice President and branch manager of that same Banner Bank location. This presents an incontrovertible conflict of interest. Oregon Government Ethics law states that “a public official is met with a conflict of interest when participating in a financial action which would or could result in a financial benefit…to the public official.”
Even if direct financial gain cannot be proven in this specific complaint (that would require additional financial investigation and disclosures), Mr. Hisel very likely could have benefited from this significant transaction in the following ways:
Boosted performance metrics: A multi-million-dollar deposit significantly increases branch total deposits, a key metric used to evaluate branch managers and vice presidents. According to the Banner Corporation 2023 Annual Report, Banner Bank’s deposit portfolio consisted of a total of $13.03 billion in deposits among 250 branches. It is reasonable to assume that branches located in larger towns and cities would have higher deposits than in a small town like Bandon, but even if you averaged total deposits across all branch locations, each Banner Bank branch would hypothetically hold $52,120,000 in deposits ($13.03 billion divided by 250 branches). The $5 million dollar transaction directed by the superintendent and accepted by the board chair in 2023 would at minimum represent a staggering 10.42% of total branch deposits in Bandon. One can reasonably assume that the $5 million dollar deposit represented an even higher percentage, given that Bandon is a small, rural town with fewer depositors.
Enhanced compensation: Higher deposit totals can influence bonuses, raises, and other performance-based compensation.
Career advancement and job security: Strong branch performance can positively impact performance reviews, strengthen job security, and improve opportunities for promotions.
Branch profitability: Large public deposits improve the branch’s lending capacity and overall profitability, reflecting well on leadership.
Reputation and influence: Securing a major public account enhances the branch manager’s standing within the bank and strengthens their professional reputation.
Material benefit without direct payment: Even without receiving personal funds, managing or retaining a major public account can materially benefit the VP/manager through these indirect financial and career advantages.
Additionally, it appears that there was inadequate public disclosure of conflict of interest by the board chair at that time. According to the Oregon Government Ethics Commission Guide for Public Officials, “Elected officials (other than legislators) and those appointed to Boards and Commissions must publicly announce the nature of the conflict of interest before participating in any allowable official action on the issue giving rise to the conflict of interest. [ORS 244.120(2)(a) and ORS 244.120(2)(b)] The announcement must be made in a public meeting, or if no public meeting is available, by other means reasonably determined to notify members of the public of the public official’s disclosure.” Meeting minutes from the August 2023 board meeting (Action Item 5.12) pertaining to “Resolution No.11 Designating the Depository of School Funds” state that, “AJ Kimball made a motion to pass Resolution No. 11. Angela Cardas seconded and the motion passed with votes from Greg Looney, Stan Avery and Martha Lane. David Hisel abstained due to conflict of interest.” The nature of the conflict of interest is not described in the meeting minutes and the recording of that particular board meeting has been deleted from the district’s YouTube channel.
An ethical, appropriate board process concerning transfer of public funds to a new financial institution would proceed as follows:
There should be a district finance committee, in which a district board member leads/participates. The entire finance committee should be educated on the Oregon Department of Treasury laws regarding public funds deposits: https://www.oregonlegislature.gov/bills_laws/ors/ors295.html
The finance committee should recommend to the full board all and any policies regarding the management of public finances.
In the event of a need to transfer a large sum of money to a private institution, the following should be done:
a determination of a need to transfer money because of necessary school district workflows;
an evaluation of laws governing the transfer of money to private institutions and legal/audit risk;
solicit proposals from at least three private institutions to evaluate (in this order): safety of principle, liquidity, and yield. Note that yield is the last consideration, not first.
The most common compliant option is the Local Government Investment Pool (LGIP), which is specifically designed for Oregon public entities, has daily liquidity, is professionally managed, and is a very low audit risk. The school district should have an audit-defensible reason for transferring large sums of money out of the LGIP and in to a private bank.
If all above are satisfied, then the finance committee should review the proposals and select the most prudent option. If a board or staff member can profit from the decision OR if there is an appearance that the board or staff member can profit, then the particular individual(s) should submit in writing a conflict of interest statement and should not participate in any voting or selection related to the specific finance decision.
The decision to move such a significant amount of taxpayer money into a financial institution directly tied to the sitting board chair raises serious questions about judgment, ethics, and motive. Why would the superintendent engage in a financial decision that demonstrates direct and substantial favoritism? Why would the board chair deem it appropriate to establish this significant financial relationship with the school district, given the obvious potential for personal benefit and gain and the blatant violation of conflict of interest laws therein? Why would the school board approve an action that so plainly violates government ethics laws and erodes public trust?
This action is additionally concerning given the relevant context at the time and subsequent events:
The transfer of funds occurred during the same general timeframe in which the superintendent was negotiating her 2023-26 employment contract with the board, making it reasonable to question whether appropriate boundaries and safeguards were in place throughout that process to ensure that no undue influence was exerted on board members regarding the superintendent’s compensation package.
Bandon School District funds have historically been held in a Local Government Investment Pool (LGIP). The LGIP is a cash management program for local governments in Oregon that allows them to deposit and earn interest on their funds. Banner Bank purportedly promised to meet or beat the LGIP interest rate when the $5 million in funds was transferred from the LGIP into a Banner money market account, but that proved not to be the case. For one to two months the account earned nominally more than the LGIP (approximately 0.10%), but it then reverted to an interest rate that was equal to or less than the LGIP.
In May of 2025, Mr. Hisel lost the public election for Bandon School Board yet has now reportedly submitted an application for board appointment to fill one of two vacancies – potentially placing him back into a position of public power despite voters having recently removed him.
Taken together, this paints a deeply troubling picture of governance that appears self-serving, financially irresponsible, and dismissive of public accountability. Oregon law is clear, offering that public officials must not use public resources to curry favor, place personal or political considerations over fiduciary duty, or ignore conflicts of interest. This conduct by the superintendent, the former board chair, and the board as a whole appears to constitute a serious ethics violation, official misconduct, a breach of fiduciary duty, and a failure of governance.
Who Should the Board Talk to and What Evidence Should it Consider:
The board should interview current and former BSD business managers to ascertain further details pertaining to the Banner Bank account and to solicit their insight on the ethical concerns posed therein.
The board should talk to current and former BSD school financial auditors for perspective on the superintendent’s directive to transfer such large sum to Banner Bank.
The board should determine if a conflict of interest disclosure is on file with the district regarding this action.
Suggested Solution/Relief Sought
This formal complaint should be forwarded immediately to the independent investigator, Keith Ussery, who is currently investigating multiple other formal complaints pertaining to the superintendent re: mismanagement and misconduct in her role since 2021.
This formal complaint should be presented and discussed publicly at the February 9th board meeting, during which two new members will be selected by the current board. If Dave Hisel is one of the applicants, the details of this formal complaint should be taken into full and serious consideration by all board members before a vote is taken to fill board vacancies. The evidence of ethical wrongdoing presented here is ample and sufficient to justify his disqualification from further school board service.
The board should undergo comprehensive conflicts of interest training to prevent the reoccurrence of a similar breach of ethics in the future.