The Canton Papertown Association voted to drop the embezzlement charges against Steve Banks but fire him from the position of executive director, the board of directors announced following a two-hour meeting Tuesday night.

“It was a unanimous decision of the board to drop the charges,” said Jim Weatherman, chairman of the Papertown board. “We don’t feel there is criminal intent there. It was an error in very poor judgment.”

However, law enforcement officials said Papertown board members do not have the authority to drop the charges. Once someone has been formally charged by law enforcement, only the district attorney has the authority to drop charges in a hearing before a judge.

Banks is now saying he will file a civil suit against Papertown for slander.

“I’m encouraged that the board of directors at Papertown has begun to come to their sense and drop the ridiculous charges put forth against me, yet I’m afraid the damage against my credibility and work ethics has already been done,” Banks stated in an email to media outlets Wednesday morning.

In the meeting Tuesday night, Papertown board members also discussed whether the organization should continue in light of its credibility problems in the business community. The board members announced they will try to rebuild the organization and its reputation.

“We are still a viable organization,” Weatherman said. “It has been around for a lot of years. We’ve had a lot of blows, but I think we’ll come through.”

Weatherman read a prepared statement and then took questions from the media who waited outside the meeting for two hours while the board met. The board is meeting again Thursday evening to further discuss the possibility of hiring a new executive director. However, with less than $600 in the bank, it’s hard to say who will take the job.

Banks was receiving minimal compensation, around $500 a month plus commission on new memberships. Banks says he will demand proper compensation for his 6 month term of employment in his suit against Papertown.

It is still unclear whether Papertown as an organization could be culpable for more than $5,000 allegedly misappropriated during the tenure of Gail Guy, the former executive director. Skeeter Curtis, a Papertown board member, said the organization may hold fundraisers or tap into town tax dollars to pay back the money that went missing under Guy’s direction.

The $5,000 that is the subject of a criminal investigation was from tourism tax dollars given to Papertown by the Haywood County Tourism Development Authority. Guy had generated fake invoices in order to get the money from TDA, but was eventually caught, in part due to media probes at the time.

The town was giving Guy about $50,000 a year. The town required no documentation or accounting from Guy of how she spent the funds, so it is unknown how it was spent or whether any of it is missing as well.