By JAY CONLEY
THE ROANOKE TIMES

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Less than two months before Bedford was thrust into the national spotlight by the dedication of the National D-Day Memorial, the former president of the memorial's foundation and the city's mayor sought to keep information that the foundation was not paying its bills secret from the foundation's board of directors and the news media.

The disclosure came Wednesday during the third day of former foundation president Richard Burrow's federal trial on charges of wire, mail, bank and loan application fraud. It adds to a growing body of evidence presented by prosecutors regarding what they say are Burrow's deceptions in acquiring millions of dollars in bank loans and state taxpayer-funded grants to build the $25 million memorial.

Burrow, 55, of Roanoke, has pleaded not guilty to the charges, and his defense attorneys have established in some regard that board members knew of the financial transactions he was making.

Bedford Mayor Mike Shelton, the former vice chairman of the foundation's board of directors, testified that he was upset to learn early in April 2001 that Coleman-Adams Construction Co. wasn't getting paid for its work in building the memorial and had threatened to walk off the job. After confronting Burrow, Shelton learned the foundation was $1.2 million in debt at the time.

Shelton said he planned to address the debt a few days later at the board's quarterly meeting April 12.

But he was infuriated to learn Burrow had allowed a reporter from The Roanoke Times to attend the meeting.

"I was upset," Shelton said, and he decided not to bring up the debt. "I didn't feel we could discuss it openly at that time in front of the news media."

A few weeks later, on April 27, a handful of board members who made up the board's executive committee called Burrow into a private meeting to discuss the foundation's growing cash-flow problems.

Cathy Benson, the former secretary of the foundation's board, testified that Burrow told those present not to inform the rest of the board members because news of the financial problems might leak out.

Benson said she insisted the entire board be notified, which was done May 11.

Defense attorney John Lichtenstein said in his opening statement Monday that Burrow realizes now he should have told the board sooner of the cost overruns from construction and extra expenses related to the memorial's dedication ceremony that centered on President Bush's attendance.

Shortly after the dedication, Burrow resigned abruptly.

The foundation ultimately spiraled into $5 million of debt and filed for Chapter 11 bankruptcy protection in October.

Much of the case regarding the foundation's borrowing practices seems to hinge on a $2 million pledge from a Richmond millionaire that prosecutors contend never existed.

At a fund-raising dinner in March 2001, E.C. Robins said he would match up to that amount if other people at the dinner donated funds to the memorial by the end of May 2001.

Robins testified Monday that he never made a formal pledge to the foundation, though he wrote a check for $611,000 in late 2001 on the request of the foundation's current president, William McIntosh.

Lichtenstein has tried to establish that that amount is part of Robins' pledge.

Board member Skip Tharp said he was at the dinner and testified Wednesday that he did not consider the challenge match to be a formal pledge.

Tharp said Burrow told the board May 11, 2001, that the Robins pledge was legitimate.

"If I recall what I said at that meeting, it was 'I believe Mr. Burrow is deliberately giving us incorrect information.' "

Shelton testified that it was his understanding that the Robins offer was shaky.

"I think to a degree we knew that wasn't coming forth," he told the court.

What Tharp, Shelton and Benson didn't know was that at Burrow's direction, the pledge was kept on the books, even though there was no documentation for it.

Prosecutors have introduced financial statements that show Burrow later used the nonexistent pledge to secure a $1.2 million loan from the Bank of the James and in failed attempts to collect other loans and grants.

Board members acknowledged that they approved all of the loans Burrow acquired but were not shown the list of pledges he used as collateral.

To obtain $3.3 million in grants from the Virginia General Assembly in 2000, Burrow secured a 30-day loan from the National Cooperative Bank in California to be used as matching funds. But prosecutors contend that Burrow also used the state grant as security for the NCB loan. In effect, he was using the two sources of funds as collateral for each other.

Shelton said he understood that the NCB loan would be used as a match, but he never knew that the foundation offered the state grant as collateral for the loan.

Under cross-examination, Lichtenstein got Shelton to acknowledge that board members thought Burrow had done a good job leading the foundation.

Shelton agreed that the board gave Burrow good annual performance reviews for each of the years he worked for the foundation.

The trial is expected to continue through Friday.

Jay Conley can be reached

at 981-3114 or jay.conley@roanoke.com.

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