JimmyCsays: At the juncture of journalism and daily life in KC

A week ago today Mayor Sly James stood on the stage at the Gem Theatre and, before a crowd of more than 200, signed a “Pledge for a Moral Economy” — a document that denounces usurious rates charged by payday lenders.

The pledge, fashioned by the public advocacy organization Communities Creating Opportunity, states: “It is wrong to take advantage of vulnerable families by charging triple-digit interest rates. I support reform measures that will stop the debt trap.”

To cheers and applause, James said that taking out payday loans is going down a road that often leads to “long-term prison.”

Of payday lenders, he said, “They’re like roaches — they never do go away.”

This week, however, thanks to some outstanding investigative reporting by the Pitch newspaper, it turns out that the mayor has appointed to the city’s most important economic development agency a man who has been deeply involved in the payday loan industry.

Here’s the backdrop…

The subject of the Pitch story is a man named Herb Sih, who has founded, owned or managed at least three companies with deep roots in the payday loan business. The Pitch story says one or more of Sih’s companies have specialized in generating “leads” for the operators of online payday-loan operations.

While Sih (pronounced SEE) may not have sullied his hands by directly making loans and charging interest rates of several hundred percent, which is typical, he has provided lenders with technology that enables the lenders to gain access to vital information about prospective borrowers. In addition, according to the Pitch, Sih’s brother-in-law owned an online, payday-lending company before selling it in 2012.

Sih told The Pitch that he hasn’t been involved in the lead-generation business in more than six years, but Hudnall noted that Sih’s Linkedin bio says that he left the last lead-generation company he was associated with two and a half years ago.

Apparently Sih has distanced himself from the payday-loan business in recent years. He now owns and operates a technology-based business called Think Big Partners, which has a piece of a $15 million, public-private project to rewire downtown into a so-called “smart city” (whatever that means).

Sih is mentioned in only five articles in The Kansas City Star’s electronic library, which tends to indicate that he is not well established in civic and economic development circles.

The best information I could find about him came from a 2014 story in The Wichita Eagle, which says Sih “has started more than 20 companies, including some of Kansas City’s fastest growing companies, and sold seven of them.”

Previously, the story says, he was a senior vice president for Wachovia Securities and before that a helicopter pilot and officer in the military. He graduated from the University of Kansas and is married (or at least was then, according to The Eagle) and has three children.

He is 49 years old and, from what I could find, he appears to have come to the Kansas City area from the St. Louis area.

In January of last year, Mayor James appointed Sih and four other people to the board of the newly revamped Economic Development Corp. This was after James had successfully pushed to consolidate several city-funded economic development agencies into the EDC. So, these appointments were critical to the city’s economic development efforts.

Now, giving the mayor the benefit of the doubt, maybe he didn’t know about Sih’s background when he appointed him to a two-year term — the same length as all the other newsly appointed board members. Or maybe he had inklings but didn’t know the depth of Sih’s involvement in a business that the Communities Creating Opportunities organization calls “sinful.”

Yesterday, I spoke with David Hudnall, the Pitch reporter who wrote the expose on Sih. Hudnall has “owned” the payday loan story and is more responsible than anyone else for calling attention to how it has mushroomed here and cost low-income people thousands and thousands of dollars and immeasurable anguish after taking out relatively small loans.

Regarding the mayor’s appointment of Sih to the EDC board, Hudnall said, “My impression is that the mayor didn’t fully vet him.”

Hudnall said he wrote the story because he saw “several strong indicators that he (Sih) was not really what he looks like on paper.”

**

This morning I called the mayor’s office and spoke with James’ press secretary, Mike Grimaldi, who, among other things, is a former business editor at The Star. I asked Grimaldi if, in light of Hudnall’s story, James would reconsider Sih’s appointment to the EDC.

Early this afternoon, Grimaldi sent me this statement from the mayor:

It is important to have entrepreneurial, high-tech representation on Kansas City’s EDC Board of Directors, and that is why I appointed Herb Sih. I expect EDC board members, and all appointees to boards and commissions, to be persons of integrity who act in the best interest of our city. I regularly evaluate the needs of our boards and commissions as well as the impact appointees have on them. I am currently very pleased with the fabric of the EDC board of directors and the forward momentum of the organization.

(By the way, this is the very same statement the mayor’s office gave to Hudnall, so James obviously hasn’t changed his position since The Pitch published its story.)  

I also spoke with Andrew Kling, communications manager for Communities Creating Opportunity (CCO), which has been around for nearly 40 years, advocating for better neighborhoods and better opportunities and public services for the working poor.

Kling said CCO officials were “paying attention” to Hudnall’s revelations about Sih, and he said CCO officials would “meet and talk it through” before issuing a formal statement, perhaps next week.

“I don’t want to pre-judge it,” Kling said. “We’re going to take this at an appropriate and deliberate pace.”

James, Kling said, has been “a great ally” in calling attention to the abuses of the payday lending industry and advocating reform…CCO’s goal is to convince the Missouri General Assembly to pass a bill that would limit interest rates in Missouri to 36 percent, the maximum that credit-card companies can charge.

**

Here’s what I think…

Mayor James needs to have his staff re-examine Sih’s background. Thoroughly. And in my opinion, even if he has washed his hands of the payday-loan industry, he should not be on the EDC board. The damage he has already inflicted on this community should disqualify him from any publicly appointed position.