Official investigation attempts to shift blame
Report on alleged credit card misuse appears to condone personal purchases while shifting suspicion to whistle blowerNews Editor
July 16, 2003 — A report authored by a contract investigator with the Culver Police Department apparently clears Culver City Recorder Jeri Jones of credit card misuse while shifting the appearance of impropriety to the whistle blower.
The report, dated June 27, concludes that 11 purchases by three city employees were made on Jones' city credit card, totaling $1,289 -- and that all the purchases were paid back with either cash or through payroll deductions.
Further, the report by Jim Smith of Smith Investigations, Inc. suggests that Eugenia Alire, the former city employee who originally accused her former supervisor in April of credit card fraud, could possibly be charged with criminal mischief, a class C misdemeanor.
The 11-page report cites interviews supporting that the use of the city credit card for personal purchases was an "acknowledged practice" that was not prohibited by "any rule or regulation regarding credit cards" until a revision was made in Culver's employee handbook on May 19.
The Culver City Council accepted Smith's report on July 1. But at least one councilor, Anzie Adams, is saying that she's not convinced it accurately tells the whole story.
"I'm not satisfied with the report," Adams said. "And who gave city employees permission to make purchases with the city credit card? And who gave them authority to make payroll deductions?"
The Pioneer was unable to reach Culver Mayor Dan Harnden and the city's other three councilors for comment.
Culver Chief of Police Lee Farrester removed himself from the investigation after the initial allegations were made in April. He turned it over to Smith because he has had a long-term friendship with Jones and her husband, Jefferson County Sheriff Jack Jones, through law enforcement.
"I'm satisfied with the investigation and I think Jim did a good job," Farrester said.
Farrester said the investigation took about 65 hours. He said Smith usually charges around $70 per hour, but agreed to charge the city $750 for the entire investigation.
Farrester said he would not be surprised if there's "more to come" in terms of additional investigations, but he said it's out of his hands.
"I'm done with it," Farrester said. Now it's up to the powers that be."
Smith's investigation does not specify the dates of the records he inspected, or note the contents of the 11 personal purchases made by three city employees.
Smith's report makes two references to confirming that "no outstanding debts" were found on Jones' card after reviewing statements from May and June of 2003. Citing an interview with Kelly Lucas of U.S. Bank, Smith also wrote: "The account has always been kept current with no late or unpaid charges."
A review of 20 credit card statements obtained by The Pioneer found an "over limit" fee and four late fees totaling $157 -- the most recent late charge issued to the city last November.
The independent analysis of the records by The Pioneer also suggests that up to $3,162.80 of personal items, spread between 40 purchases, were charged to the card. (See related story).
Smith could not be reached for comment. His secretary said all calls were being directed to Culver City Attorney Paul Sumner.
"Jim's not talking to any reporters because there is still action on this with the tort claim," his secretary said.
Alire, a former Culver city clerk, was laid off on May 27.
Her attorney, Paul Speck, has sent Culver a notice that his client intends to sue for being "discharged in retaliation for reporting financial irregularities within the City of Culver."
Reached by phone, Speck declined to discuss the city's findings in-depth, but he did offer one comment.
"It would behoove them to be forthright," Speck said. "The investigation does not appear to be adequate."
According to an interview cited in the report, Jeri Jones said she did not have outstanding personal debts on the card. Jones said during the interview that Alire was a reliable employee until one year ago, when she began making complaints to city officials regarding comp time she felt she was entitled to.
The report also notes that Alire also used Jones' credit card. "Some of her purchases included clothes, gifts and personal items," the report states.
"Jeri indicated that although Eugenia did a good job of paying the City back, she needed to spread out the payments on occasion," the report went on to say.
The report also cites interviews with three individuals -- Farrester, Public Works Director E.V. Smith and private auditor Candy Frank -- who spoke highly of Jones' character.
According to an interview with Frank, the report states that auditors found no outstanding credit card balance, and that "all items checked were approved by the City and fit into the budget."
"When asked whether Jeri could prolong or hide payments to the credit card, Candy stated that the auditors would have immediately found this and a deficit would have been indicated," the report said.
Jefferson County District Attorney Peter Deuel said he has not ruled out asking the Department of Justice to do an independent investigation. He said he had not yet seen a copy of Smith's report from the city of Culver.
"If I receive that report I'm going to review it and I intend to ask the Department of Justice to review it, and together with the Department of Justice a decision will be made whether an additional investigation will be conducted," Deuel said.
The state Government Practices and Standards Commission, an agency akin to an ethics commission, also is doing an initial investigation into Alire's allegations of misuse. She filed a complaint with the agency on May 27.
Adams said Smith's investigation does not satisfy her questions because it does not address a $762.87 reimbursement made by Jones in mid-May, plus it relies too heavily on an assumption that auditors would catch irregularities.
"An auditor won't find it out unless it's pointed out," Adams said.
Adams also said that city councilors had no prior knowledge of their employees making personal purchases on credit cards.
"The council was totally unaware," Adams said. "They were surprised and astonished."
The entire text of Smith's investigation report can be viewed at www.madraspioneer.com/MAPNews3.html.