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CRW showing warning signs

Community Soapbox by Patricia Holloway

Clackamas River Water is flashing big red danger warnings to ratepayers.

· A federal grand jury has the FBI investigating CRW financial and management practices.

· CRW's current auditor's senior manager and certified fraud examiner labels the CRW board 'dysfunctional.'

· Since June 2008, legal bills topped $1,100,000-nearly $250,000 last year alone to sole practitioner Dean Phillips-all hidden from public view.

· Payrolls often bulge between 13 percent and 19 percent in a single month-undisclosed raises and bonuses?

· CRW's insurance carrier is reducing coverage and increasing liability deductibles to $50,000 from zero-more money straight from ratepayer wallets.

· There is a rate increase on the CRW agenda!

The CRW Board majority, currently President Kami Kehoe, Secretary Barbara Kemper and Treasurer Michael Cardwell, conspired with General Manager Lee Moore and CRW's Legal Counsel Dean Phillips to hide the federal grand jury subpoena from me-they lied about it for a month. Cyndi Lewis-Wolfram was a part of the conspiracy until ratepayers elected Grafton Sterling. His election blew their subpoena coverup.

The board majority uses its controlling three votes, backed by the ratepayer piggy bank, to fund character assassination, litigation and intimidation against any opposition. Kehoe took the outrageous step, of demanding that the Clackamas County Sheriff's Office remove me from the Dec. 8 CRW closed-door executive session meeting as a criminal trespasser because the board majority voted to lock me out of the meeting-the same Kehoe who faced Measure 11 arrest after she wielded a beer bottle in a bar brawl.

That expulsion attempt failed, as did the board majority's unsuccessful litigation against Former Commissioner Warren Mitchell (a whistleblower who ferreted out the embezzlement) and me, and their unsuccessful Oregon Government Ethics Commission complaint against me. Both ratepayer-funded litigations were thrown out because they had no case. The board majority and Moore spew allegations and insinuations that don't hold up under the proof test.

Since Commissioner Sterling and I told ratepayers about the federal grand jury investigation, the board majority and Manager Lee Moore have put out a series of misleading 'red herrings' to divert attention from their stonewalling about questionable financial and management practices.

One 'red herring' is boasting about 'three clean audits.' CRW has always had clean audits, including in FY2008 when a multi-year $70,000 plus embezzlement sent an employee to jail. A clean audit means nothing more than that the auditor makes an unqualified acceptance of a company's financial statements-not that the organization is fraud free or operating legally.

CRW's former auditor, Van Beek and Company, notified the CRW board in September 2010 about expressed concerns relating to suspected financial mismanagement, disdain of internal controls, and fraud by a sitting commissioner. The board majority summarily replaced Van Beek-but board majority votes can't fire a federal grand jury.

Moore's comments ignore the 'significant deficiencies' documented in the 'clean' FY2010 audit-including problems in 80 percent of the contracts reviewed. One telling example: 'Due to the long-term prior working relationship between the general manager and these two contractors, these contracts appear to have circumvented fair and competitive contracting practices.' Those two contracts cost ratepayers over $250,000-and the meter is still running!

The FY2010 audit cost ratepayers $80,000 more than the FY2009 audit. The board majority voted to use ratepayer funds to reimburse the new auditor for its costs to answer a federal grand jury subpoena.

I will keep my commitment to the ratepayers to shine a bright light on CRW, no matter how many tons of rotting 'red herrings' the board majority tries to sell ratepayers.

Patricia Holloway is a Clackamas River Water commissioner.