DeKalb County leaves door open to abuse

So DeKalb taxpayers were stuck with a $1,880 bill for Commissioner Stan Watson’s “website development” — although the website listed on the first page of each invoice he turned in was called PoliticalStan.com and he was running for re-election at the time.

Taxpayers shelled out tens of thousands of dollars for then-Commissioner Elaine Boyer’s fake legislative consultant — even though she already was having the public pay another man $1,500 a month to consult for her on legislative issues. She admitted guilt Tuesday and may face federal prison time for fraud.

The county paid for six printers, two shredders and two scanners for Commissioner Sharon Barnes Sutton’s office — within little over three years’ time.

With a few rudimentary steps, DeKalb County might have protected taxpayers from the waste, fraud and abuse that came to light from an Atlanta Journal-Constitution investigation. Had commissioners hired a watchdog over government spending — something they frequently talked about but never acted on — they might have been spared the scrutiny of the FBI and federal prosecutors.

They might not have lost the public’s trust.

Now, under public pressure, county leaders have revived the dormant ethics board, authorized an audit of purchase card expenses and strengthened rules on contracting. But that’s not enough to create the kinds of financial accountability that can protect taxpayers, the AJC found. And some top officials seem to still be focused on the hits to the county’s reputation.

They’ve talked so much about getting past the perception that DeKalb has a culture of corruption that it’s hard to tell at times what concerns them more: A politician pilfering public money, or all the outside scrutiny now aimed their way.

“I’m just frustrated right now,” Interim CEO Lee May said Tuesday. “The headlines, the accusations, the ethics claims and the criminal charges, as well, (are) more of an obstacle for us here, and we have to get beyond it.”

County spokesman Burke Brennan bristled at the number of records requests from the AJC. Look anywhere with the level of scrutiny DeKalb has seen and you’d find the same problems, he and other officials said.

“Don’t you know you’ve caused me enough grief?” an agitated Watson said, when asked about his campaign website. “Why you keep digging at me all the time? I’m not doing anything but trying to serve the community.”

Watson said he wasn’t aware the website solicited donations and he would consider paying the county back. “If I’ve done something that’s wrong, I’ll take care of it,” he continued.

Meanwhile, federal prosecutors say they're probing the remaining commissioners' use of taxpayer funds. The ethics board is investigating four of the five commissioners. And the county's suspended CEO, Burrell Ellis, goes on trial Sept. 8.

It could have been stopped

Had someone plugged in the address for Watson’s website, they’d have seen his smiling visage over such messages as “Donate to the Friends of Stan Watson” and “Help support Super District 7’s Commissioner Stan Watson’s re-election. Your contributions are greatly appreciated!”

It would have been apparent that the website was for political purposes. That’s a misuse of public funds, a clear violation of the state’s ethics law, experts said. Incumbents may not use their office budgets to boost their campaigns.

And if DeKalb had been enforcing its own policies and using basic fraud detection techniques, it would have uncovered Boyer’s kickback scheme on its own as early as November 2010, the AJC found.

That was the month Boyer issued a $2,500 payment to evangelist Rooks Boynton, edging his grand total of county payments up to $52,250 for his supposed advice on legislative issues, transportation and Grady hospital.

By county policy, services costing more than $50,000 should be put out for competitive bid. That never happened.

The only question the Finance Department raised was about the taxpayer identification number Boynton provided.

Then-Finance Director Joel Gottlieb told the commissioner in a December 2009 email that he might have to freeze her consultant’s payments — not because she’d paid too much, but because the ID number he provided didn’t match IRS records.

“I need an updated W-9 form…Thanks for your assistance,” Gottlieb told Boyer.

An aide passed the message along to Boynton, who complied. The checks kept rolling in until they reached $83,250 in October 2011.

“I don’t pass judgment on the validity,” Gottlieb, who is now retired, said recently, “because I wouldn’t know what she received, and she signed off on it … If I had to follow all the commissioners at the time, it would be a full-time job.”

There’s no indication that the county’s purchasing department, which also handles transactions, raised any objection.

Isaac Blythers, the former chairman of the DeKalb Board of Ethics, faults finance officials for not bringing scrutiny.

“They should be bulldogs on this kind of stuff,” he said. “The rules were in place, but they weren’t being enforced.”

Auditors on the county’s payroll didn’t catch the misdeeds. They make sure the county’s books add up but rarely go further.

DeKalb also might have recognized Boyer’s fraudulent use of her county purchasing card years ago by the mere fact that she repeatedly reimbursed the county for some of her personal expenses. They even had a 2011 email from Boyer’s office acknowledging that the card shouldn’t have been used for family travel expenses. “Her daughter mistakenly used the wrong credit card for her flights,” a Boyer aide wrote in an email.

The county’s stance has been that commissioners have total autonomy over their budgets — upwards of $250,000 a year each, with up to $60,000 available after paying salaries — and that rank-and-file employees under the CEO just cut the checks.

“I don’t have the authority to impose any corrective action or policy mandates on elected officials,” May said in April, after the first wave of stories about P-card abuses. “We have separate branches of government in DeKalb County.”

A fraud examiner said finance officials may not be able to stop money from going out the door, but they could chase after it.

Money managers ought to make spot checks of payments, especially in a system where elected officials can unilaterally deal in such large amounts, said Allan Bachman, education manager for the Association of Certified Fraud Examiners.

“The simple fact that I can sign something up to $49,999.99 without scrutiny doesn’t mean I don’t have to answer questions about it,” Bachman said.

Invoices can be faked, as Boynton’s were. But simply having a conversation with the person getting paid can root out fraud.

“And while I was doing that, possibly make it clear in some way that submitting phony invoices to a municipality — there are state laws it against it, there’s also federal laws against it,” Bachman said. “Sometimes, all it takes is just a phone call to scare people half to death.”

Inviting corruption

Lacking such safeguards, DeKalb spiraled into a spending free-for-all.

Watson charged the county nearly $5,000 over three years for his personal cellphone, even though he also carried a county-issued phone. After being called out for the spending, he is now paying the county back.

During her first two years in office, records show Sutton paid her then-boyfriend Warren Mosby’s companies more than $34,000. Invoices show it was mostly for his advice to her on how to be a commissioner. She could produce no reports or research materials documenting that advice.

In more recent years, Sutton and her top aide used their P-cards for about $75,000 in purchases, by far the most out of all seven commission offices, without keeping receipts for more than half of what they bought. Sutton — or rather, taxpayers — also paid for her speeding ticket.

Boyer and her top aide, Bob Lundsten, spent more than $11,000 in 2012 and 2013 for restaurant meals, despite having already been cited by a county auditor for excessive meal purchases. Lundsten also paid for a car to be towed.

Boyer paid for rental cars, a ski resort booking and family airfare.

Worse may have happened because of the county’s lack of fraud control.

A special grand jury report found rampant questionable spending on contracts for a $1.7 billion sewer upgrade project. The yearlong investigation also led to criminal charges against Ellis, the suspended CEO, who is going on trial to fight charges that he shook down county vendors for campaign contributions.

Missing oversight

With elected officials left to police their own behavior, power goes unchecked, said Gale Walldorff, a DeKalb commissioner from 1992 to 2006.

“It’s the fox watching the henhouse,” she said. “There were red flags in the past and yet it was allowed to continue.”

The only outside checks on officials’ behavior comes from prosecutors and from the county Board of Ethics, which wasn’t operational for a year and a half before this March.

For at least five years, various community groups have pushed for an independent investigator or internal auditor, also called a performance auditor.

About half of the counties in the nation with populations comparable to DeKalb, which has more than 700,000 residents, have internal auditors, according to the Association of Local Government Auditors.

“In an organization the size of your county, an independent office would add an accountability check that doesn’t currently exist,” said Larry Dyckman, manager of the Office of Internal Audit in Montgomery County, Md. “You want to find a problem and nip it in the bud.”

Among other areas, Dyckman examines government employees’ use of purchasing cards.

A group put together by Ellis in 2009, soon after he took office, recommended an inspector general position, but the county’s elected leaders couldn’t agree on creating it. The Commission voted in this year’s budget to put three auditing positions under its authority, but no one has been hired.

“It’s a matter of control. I don’t think they want to release the power they have,” said Gil Turman, a south DeKalb resident and a member of a group of citizens working on a new auditing proposal. “Everybody that’s got oversight is connected in the county.”

Government leaders need to recognize that scandals aren’t a problem just because they give the county a bad reputation, said Agnes Scott College President Elizabeth Kiss. Elected officials should look to make fundamental reforms that create a more transparent and honest culture, she said.

“It’s a very depressing sign when leaders say, ‘This makes us look bad,’” said Kiss, who previously was the director of The Kenan Institute for Ethics at Duke University. “If we are bad, we need to own up to it and figure out how to change things.”

May said he can’t clamp down on commissioners’ free reign over their budgets without changes to the county’s charter at the state Legislature, but he can intensify scrutiny on what they buy.

For example, Acting Chief Procurement Officer Scott Callan says his staff is now looking for any payments to vendors that cross the $50,000 threshold.

Such payments would be halted until the work is put out for bid, he said, and commissioners could be asked to reimburse unauthorized expenses. That doesn’t involve a policy change, just employees being more vigilant, he said.

Albert Trujillo, who served as foreman of the special grand jury, is looking to prosecutors to bring about real change because the county has become so steeped in corruption.

“It permeates,” Trujillo said. “Once the corruption is unchallenged, it reaches out in every direction. And rare is the person who says, ‘You know, I’m not going to be a part of that.’”

IN THEIR OWN WORDS

Here are some statements DeKalb County officials have made as the Atlanta Journal-Constitution reported about commissioners’ misuse of county purchasing cards and other discretionary spending.

Former Commissioner Elaine Boyer, accused of paying for personal expenses with her P-card and paying an "adviser" who federal officials say was part of her kickback scheme:

March: "I will take on the fact that there was sloppy accounting. And I'm not going to be the poster child for this. I'm just not."

April: "I deeply regret that any of my actions have led to the misperception that I was abusing the trust the voters have placed in me."

August: "I've betrayed the people and I've abused my position of power."

Commissioner Sharon Barnes Sutton, on why she made more retail purchases than any other commissioner and on why she paid her boyfriend, Warren Mosby, for advice:

May: "Because I do five times the work."

June: "An ethics complaint is just a complaint. There are people who have done nothing wrong. We need a way to distinguish between real problems and propaganda."

August: "It does not matter. Mr. Mosby is not a member of my family."

Commissioner Stan Watson, on billing the county for nearly $5,000 in personal cellphone bills when he also carries a county-issued cellphone, and why taxpayers paid about $1,900 to create a campaign website:

June: "If the county thought it was wrong, why would they pay for it for three years? I don't see the big deal about the cellphone."

August: "Don't you know you've caused me enough grief? Why you keep digging at me all the time? I'm not doing anything but trying to serve the community."

Interim CEO Lee May, reacting to unfolding revelations about abuses:

April: "Early on, I was quiet as I tried to figure out who was responsible and what power I had. It is clear I think, though, that there has not been as good of oversight as we should have had."

June: "Each individual person just has to take account and be ultimately held accountable by the general public…"

August: "My main focus is really changing the negative perception that DeKalb County has, and really changing to a more positive view of the work that we do."

How we got the story

Today’s story is the culmination of eight months investigating questionable spending by DeKalb County commissioners. The Atlanta Journal-Constitution used the Open Records Act to obtain financial records and other public documents, at a cost of nearly $1,800 in retrieval and copying fees. Reporters also interviewed dozens of people.

In March and April, the AJC reported that Commissioner Elaine Boyer had made thousands of dollars in personal purchases with her county purchasing card. Following reports by the AJC and Channel 2 Action News, the FBI began an investigation, and the county agreed to audit 10 years of spending.

In May, reporter Johnny Edwards turned his attention to purchases that county commissioners can authorize on their own, drawing on taxpayer funding for their offices. He found commissioners had paid large sums for work they can’t document. Some bought services that benefited their reelection campaigns rather than the communities they serve. One commissioner paid tens of thousands of dollars to companies owned by her then-boyfriend.

But Boyer stood out. Edwards found more than $90,000 in expenses she authorized for which no work product can be located. Last week, she resigned from office and said she will plead guilty to federal charges of mail fraud conspiracy and wire fraud.