NORTH CHARLESTON — Decades after failed runs for local elected office, Jerome Heyward finally got his shot in 2019, grabbing a council seat in the state's third-largest city.
Heyward, who had recently moved to North Charleston, billed himself during his campaign as "a self-motivated professional with a record of results." But the long-awaited victory for the sole newcomer on the 10-member City Council has been clouded by a troubled financial history that has only grown worse, records show.
After three bankruptcies and two unsuccessful business ventures, the former police officer and Statehouse lobbyist finds himself more than $1 million in debt and facing years of unpaid taxes.
What’s more, federal authorities are investigating a mortgage official and company that were involved in loans Heyward and others received from a Charleston credit union, court records show. Federal prosecutors say the mortgage official’s company generated or underwrote an “alarming number of highly questionable loans” while partnering with the credit union, according to subpoena documents.
That credit union is now under federal control and battling for its survival as it fends off a lawsuit Heyward filed against it last year. He alleges the credit union's board of directors improperly refused to provide him a loan on top of three others he had already received. In court records, former board members counter that Heyward failed to fully disclose his problematic finances.
In interviews, the councilman answered few questions about his debts, asking why his finances were even a story.
"The whole country’s upside down, I'm not the only one," he said. "But y'all seem to think I'm the only one."
Heyward, like all other members of council, serves on the Finance Committee and helps oversee the city's $127 million annual budget. When asked if his debts affected his ability to serve on City Council, Heyward said he has "no problem making sound decisions."
Still, some political observers expressed concern over how his precarious financial state might weigh on Heyward in the nearly three years left in his term.
"Anything that makes an elected official vulnerable can be problematic," said Kendra Stewart, a political science professor at the College of Charleston.
For his part, Mayor Keith Summey said he had heard rumors of Heyward's financial difficulties but had no direct knowledge of them. Heyward worked as a community liaison for city officials, including Summey, before winning his seat on council.
"He's working for the district," said Summey, the city's mayor for nearly 30 years. "Everything that I’ve seen has been kosher."
Ups and downs
Heyward's road to City Council was bumpy, and not just when it came to money.
He worked as a Charleston police officer before he was fired in 1992 for allegedly associating with a suspected drug dealer, The Post and Courier reported at the time. He denied the accusation. During that decade, he also ran unsuccessfully for seats on Charleston City Council and Charleston County Council. He later became a lobbyist in Columbia.
In 2007, with his own political consulting business up and running, Heyward created a limousine bus service, court records show. Three years later, he opened a nonprofit cafe along U.S. Highway 17 in Charleston's West Ashley community.
7 Cafe featured a bar and food options that included fried pork chops, chicken and turkey wings, ox tail and ribs, The Post and Courier reported in 2010. The establishment celebrated Saturday mornings with a shrimp-and-grits breakfast, along with live jazz.
But both the limo business and the cafe "suffered substantial losses" and stopped operating, leaving Heyward unable to pay his taxes and other debts, according to a 2016 bankruptcy filing.
Heyward listed nearly $950,000 in liabilities, more than double his assets. It was his third bankruptcy since 1997, records show.
In 2017, Heyward started working as a community liaison, assisting Summey and other city officials "in establishing and maintaining a positive rapport with the citizens of North Charleston,” according to a job description provided by city spokesman Ryan Johnson. The part-time job involved responding to complaints and attending community meetings and events, the description said.
In 2019, Heyward's final year on the job, he made nearly $42,000, Johnson said.
Two of Heyward's long-running consulting agreements are publicly known. One, which began in December 2016, was with the Charleston County Sheriff's Office. Then-Sheriff Al Cannon paid Heyward $5,000 a month to advise him on community issues, particularly related to Black residents, and on pending legislation because of Heyward's connections with influential state lawmakers.
In early 2019, Heyward signed another deal: to work as a consultant for Charleston County government for "services related to the procurement of state funding" to help address the county’s transportation needs, according to the agreement.
The county's current and former administrators have declined to discuss the deal or say what the consultant accomplished. Heyward was eventually paid $7,000 per month.
With his flow of income steady, Heyward bought a condominium in a gated North Charleston community near the Ashley River, records show.
The loan for the condominium came from Community Owned Federal Credit Union, which was co-founded in 1966 by civil rights icon Esau Jenkins to give Black residents in the Lowcountry better access to capital denied to them by other financial institutions.
A half-century later, Community Owned Federal Credit Union had grown but remained small, despite a long-running desire, and attempts, to expand its reach. Its limitations, at times, frustrated members, who saw modern services more widely available at other banks and credit unions.
In March 2019, then-credit union CEO Perrin Middleton signed a deal with a company called Westminster Mortgage of America to join with the credit union to provide residential and commercial loans, The Charleston Chronicle reported at the time.
Vincent Terry, who would go on to run the company, told credit union officials that he would underwrite loans that another company had agreed to buy. Terry maintained the plan posed little risk to the credit union, as it would be fully reimbursed for the loans, prosecutors stated in court records.
It was an arrangement that Robert Smalls, a former chairman of the credit union's board, would come to regret.
"I believe if we really knew the history of (Westminster Mortgage of America), we wouldn’t have touched them," said Smalls, who noted he resigned from the board last year. "Getting involved with Westminster was a bad move."
Federal prosecutors, in a court filing, say Terry did not tell credit union officials that he was about to surrender his mortgage loan originator license in Georgia. He was accused of purposefully withholding documents and for "failing to demonstrate character and general fitness such as to command the confidence of the community," according to a consent order from Georgia banking and finance regulators. Nor did Terry tell credit union leaders he had filed for bankruptcy nine times in Georgia, including most recently in January 2019, according to court records.
With the credit union's new mortgage division up and running, Heyward came to the institution in 2019 to buy the North Charleston condominium in the Reverie on the Ashley community, records show. Despite his previous financial problems, Heyward received a $459,000 mortgage in August of that year to make the purchase.
"The loan was approved, and I couldn’t approve a loan by myself, so you figure that out," Heyward said in an interview, when questioned about the loan.
Former members of the credit union's board, in court records, accuse Heyward of not disclosing his 2016 bankruptcy case when applying for the loan. When reached by a reporter, they declined to comment, citing the ongoing lawsuit and the federal takeover of the credit union.
Debts add up
With his new home secured, Heyward tried his luck at elected office once again, running for a seat on North Charleston City Council.
Nearly three dozen donors pitched in to support his campaign, raising a little over $12,500. Among the largest was a Vincent Terry, listed as a business owner in Georgia, who gave Heyward $1,000 less than a month before the election, according to a campaign filing. The Post and Courier could not confirm if it was the same Vincent Terry that ran Westminster Mortgage of America.
Heyward, in an initial interview, said he and Terry were "not associates." He declined to discuss Terry in a subsequent interview, which he ended early, telling a reporter not to call him again.
In November 2019, Heyward defeated incumbent Todd Olds by 75 votes for council's District 5 seat. The district covers a southern stretch of the city that borders the Ashley River and includes most of the area adjoining Leeds Avenue, near Interstate 526.
Soon after winning, he lost several consulting clients between the election and when he took office in January 2020, leading to a reduction of roughly $16,000 per month in income, according to a recent bankruptcy filing. His part-time job with North Charleston also ended during that period.
His consulting agreements with the Sheriff's Office and Charleston County were both terminated within his first six months of taking office. Then, the State Law Enforcement Division investigated Heyward for comments he made in response to a column, written by freelance columnist Steve Bailey, in The Post and Courier.
Bailey raised concerns about the councilman’s county consulting contract and Heyward’s vote, as a member of the county aviation board, that helped then-County Council Chairman Elliott Summey land a job as the Charleston airport’s new CEO.
Heyward felt the column targeted him as a Black elected official and called it unfair and inaccurate. In a social media video, he said he might use an “AR” and go “hunting” in response. SLED determined that Heyward had no plan or intent to harm anyone.
In the meantime, his financial distress continued.
Heyward has not paid federal taxes for at least four years and has been unable to make all payments agreed to as part of his 2016 bankruptcy, which has resulted in a tax liability of $486,000, according to court documents filed last month. He also has at least two unpaid federal tax liens, records show.
The state Department of Revenue also has liens on Heyward, his consulting business and his former cafe, which total more than $177,000, records show.
And a separate credit union in January filed to foreclose on a Charleston home the councilman has owned for over a decade, according to court documents.
Heyward, in an interview, said he is on a payment plan for his federal taxes and that his payments are current. He also said he has contracts to sell both the Charleston home and his North Charleston condominium.
Robert Pohl, Heyward's attorney for his 2016 bankruptcy, did not respond to emails and a voicemail seeking comment.
But in a Feb. 16 filing, Pohl said that attempts to modify the payment plan Heyward agreed to "would be futile" due to his dramatic loss in income in 2019 and his federal tax bill. He asked a judge to dismiss Heyward's bankruptcy case so the councilman could "negotiate individual settlements" with those he owes money.
A new home rises
After his 2019 election win, Heyward approached Community Owned Federal Credit Union and Westminster Mortgage of America's Vincent Terry for an $80,000 loan to cover the purchase of a vacant North Charleston lot near the Ashley River where he decided to build a house. He returned to the credit union in April 2020 for an additional $90,400 to cover construction costs, court and mortgage records show.
After he received the money in May 2020, he went back to the credit union again and asked for nearly $118,500 more for the project, according to court documents.
What happened next is disputed.
Heyward, in his lawsuit, said the credit union's then-board of directors conspired to refuse the loan, despite previously agreeing to honor it. Former board members, in court records, said they had not approved the loan and were not obligated to pay the money.
Whatever the case, Heyward's latest home turned into another financial burden.
Before work on the new property finished, contractor Gerald Neal filed a lien against Heyward, saying he was owed $234,000, records show.
Neal, in an interview, said he "quit and left the home" unfinished when he filed the lien, which was recorded in September.
But work on the property continued at some point after Neal left. North Charleston issued a certificate of occupancy for the home on Jan. 7, records show.
Heyward declined to comment on the lawsuit, as did his attorney in that matter, Zachary Closser. Heyward, in court records, said the credit union caused him "irreparable harm" by not honoring the additional loan request.
Drew Butler, an attorney for nearly all of the credit union's former board members, did not respond to phone and email messages requesting comment. Neither did Daryl Hawkins, who is representing Community Owned Federal Credit Union.
But it's clear from court records that loans like Heyward's have caused problems for the credit union, as well.
Eventually, Terry would admit to board members that he, and Westminster Mortgage of America, largely underwrote or generated unsecured, or virtually unsecured, loans from the credit union for himself, his relatives, associates and friends, federal prosecutors said in a court filing. Almost all of the loans are in default and none was ever purchased by a legitimate mortgage company, as Terry had promised, the prosecutors said in the court filing.
The prosecutors did not say in court records if those loans include the three that Heyward received from the credit union in recent years. But federal officials have subpoenaed Terry for documents related to roughly two dozen entities and individuals, including Heyward. The individuals listed are ones who Terry "may have associated and/or interacted with" regarding loans underwritten by Westminster Mortgage of America or those submitted to the credit union for funding, according to court records.
Terry did not respond to phone, email and LinkedIn messages requesting comment. Perrin Middleton, the credit union's former CEO, did not respond to phone messages seeking comment.
In January, the National Credit Union Administration placed the credit union into conservatorship for "unsafe and unsound practices." A spokesman for the federal agency declined to provide more details.
Community Owned Federal Credit Union, which had a little over $4 million in assets as of December, continues to operate. Links to Westminster Mortgage of America no longer appear on its website. The credit union's current manager declined to comment.
As for Heyward, it is unclear how the councilman will address his own financial woes as he continues in his second year in office.
His salary for serving on council is set at $20,657 and his seat on the Charleston County Aviation Authority board nets him a $35 per diem every meeting. How much money he makes from his consulting business is unknown, as he did not disclose an amount on a filing with the State Ethics Commission last year.
And now his mountain of debts includes money owed to the credit union. Two loans, worth more than $170,000, are supposed to be paid off by May 1, mortgage records show. The third, for $459,000, is due in 2029.
John McDermott contributed from Charleston.