Oklahoma City, Oklahoma based Avondale Investments LLC President Don Dillingham (photo left) and Senior Adviser J.D. Colbert were kind enough to answer a few questions about Avondale Investments LLC. They also discussed how the firm was selected to manage the wind down of the Capital Purchase Program and the Emergency Economic Stabilization Act and the special challenges and opportunities presented with the contract.
Thanks to Don Dillingham, and special thanks to J.D. Colbert who sent these interesting and informative answers.
Your firm was selected as one of six companies to manage the wind down of the Capital Purchase Program and the Emergency Economic Stabilization Act. What were those programs designed to do?
J.D. Colbert: The EESA was an unprecedented effort on behalf of the federal government to intervene into the nation's economy with the intention of preventing an overall "economic meltdown". The EESA bill, passed in September, 2008 was a response by the Bush Administration to severe and worsening economic dislocation in the nation's economy and an attempt to avoid still worse conditions. The EESA authorized $700 billion for this overall economic stabilization effort.
The Capital Purchase Program (CPP) was one of several programs created under the EESA. Initially, under the EESA, there was the intention to use a large portion of the $700 billion to purchase "toxic assets" from the balance sheets of financial institutions. These toxic assets were generally defaulted home loan mortgages and financial assets that had gone sour. The Bush administration quickly realized that this approach would take too much time.
In the interests of expediency, the CPP was created to where Treasury could invest monies directly into the bank by purchasing stock in banks so that the bank would then have additional liquidity with the intention of the bank making additional loans using the monies.
What size and type of financial institutions and what types of assets are included in the stabilization effort?
J.D. Colbert: All sizes and types of Financial Institutions are participating in the stabilization effort through the various programs Treasury is administering under the EESA. These include commercial banks, both large and small, and other firms such as AIG, GMAC, Chrysler Holding, and General Motors Corporation.
What are your firm's role and responsibilities in that process?
J.D. Colbert: Avondale's role will include a significant role in the ongoing evaluation and monitoring of the financial condition and financial performance of the financial institutions assigned to Avondale.
J.D. Colbert (photo left)
Will you be working closely with the Treasury department regarding the valuation of the assets involved?
J.D. Colbert: Yes. Under the contract signed between Avondale and the U.S. Treasury, known as the Financial Agency Agreement (FAA), Avondale will be responsible for periodically valuing Treasury's investments in Financial Institutions.
How important is it to you and your organization to maintain transparency and accountability as your perform your new duties?
J.D. Colbert: It is VERY important to both Avondale and the U.S. Treasury to maintain the highest standards of transparency and accountability in Avondale's fulfilling the duties and responsibilities to Treasury as outlined in the FAA. The FAA itself outlines mechanisms, procedures and policies that call for the highest standards of transparency and accountability.
How was your firm selected for this role and are there other Native American firms involved in the process?
J.D. Colbert: Avondale's selection as a Financial Agent in December, 2009 represented the culmination of a 13 month evaluation and selection process conducted by Treasury.
In early November, 2008 Treasury promulgated a Request for Proposals (RFP) in which Treasury was seeking the assistance of private sector asset management firms to help managed the assets created under the EESA. Over 200 asset management firms responded to the RFP. In the end, only 9 firms were selected and Avondale is the only Native American firm.
The evaluation and selection process included responding to the RFP, transmitting to Treasury numerous documents attesting to Avondale's capabilities, face-to-face meetings, teleconferences with Treasury and Treasury's evaluation of Avondale's internal control standards and audit processes.
Do you see yourselves and your firm as positive role models for aspiring Native American entrepreneurs?
J.D. Colbert: From the very positive response of our many contacts across Indian Country, it is fair to say that Indian Country shares our joy and honor at being selected as one of only nine firms out of over 200 firms to be awarded this important contract with Treasury.
We feel that aspiring Native American entrepreneurs will be encouraged by this unprecedented selection of a Native firm by Treasury. We also recognize the great responsibility upon Avondale to deliver excellence in our performance of the duties of the contract such that we might be able to pave the way for future Treasury contracts with other Native-owned firms.
What advice would you give to a Native American person considering a career in entrepreneurship?
J.D. Colbert: We as a general matter encourage entrepreneurship in Indian Country. At an individual level we would advise a Native American person considering entrepreneurship to remember that the most "successful" businesspeople aren't necessarily the ones who have made the most money. Success lies in doing those things that make you the most happy and those things that you are passionate about. Thus, identify that which you are most passionate about and considering building a self-perpetuating business around that passion.
What is next for Don Dillingham and JD Colbert and for Avondale Investments?
J.D. Colbert: In addition to dutifully and faithfully discharging all of the responsibilities and duties under the FAA with Treasury, we believe that this contract will facilitate additional contracts with federal agencies and Indian tribal government in the asset management area as well as facilitating Avondale's involvement in community development finance opportunities.
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