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Audit reveals LCBPU fiscal ‘abuse’; neutral prosecutor asked to consider criminal charges

Posted on Saturday, March 9, 2013 at 8:00 am

FAYETTEVILLE — More than a year after the resignation of former Lincoln County Board of Public Utilities’ Superintendent Billy Wiley, Tennessee’s state comptroller has returned the findings of his investigation, a report riddled with allegations that could lead to criminal charges.

“Ratepayer money is public money, just as taxpayer money is,” Comptroller Justin P. Wilson said in his report released Monday. “It is inexcusable for public officials to distribute or spend public money for unauthorized bonuses, water bill discounts or travel and purchases that do not serve work-related purposes. I hope the Lincoln County Board of Public Utilities will take appropriate steps to ensure that these types of abuses don’t occur in the future.”

Among those steps is an investigation by a neutral prosecutor, said District Attorney General Robert Carter earlier this week. The state comptroller met with Carter as well as LCBPU officials and Lincoln County Mayor Peggy Bevels shortly before releasing his findings.

“The results of the comptroller’s special report are certainly troubling as a citizen, a taxpayer and a prosecutor,” said the district attorney general. “I appreciate the hard work, diligence and focus of the auditors who worked on this matter.

“As a result of the facts and allegations contained in the report, my office has determined that further investigation, with an eye to potential criminal charges, should be considered.

“Consequently, my office has requested that a neutral prosecutor be selected by the District Attorney’s Conference to handle the investigation and potential prosecution thereof,” Carter continued, adding that the prosecutor will likely be out of the 14th Judicial District.

In making the request for a neutral prosecutor, the district attorney general said he has what could be viewed as a conflict, noting that the father of his niece has worked as an employee of LCBPU since 2000.

“This situation is not unusual for my office,” he said, citing similar situations prior to his appointment and adding that his office handles investigations for counties and cities outside his jurisdiction. “Once an investigation such as this begins by an independent prosecutor, our office is limited in the information that we may provide and in the input we may have; however, we will certainly assist in any manner possible when able to do so and asked to do so.”

Allegations cited in the comptroller’s report occur during Billy Wiley’s tenure as superintendent of the Lincoln County Board of Public Utilities. Wiley resigned in December of 2011, after a long controversy over allegations of paying excessive wages and bonuses to employees, losing inventory and shredding financial documents.

During the period reviewed by the comptroller, he noted that around Easter of 2008, some employees at LCBPU received Easter eggs with notes inside, informing them that they would be receiving special bonuses. “Bonuses were also routinely doled out around other holidays such as Thanksgiving, Christmas and the Fourth of July — or, for some of the more favored employees — almost weekly,” stated the report.

The problem with that, continues the findings, is that Wiley didn’t have board approval to distribute nearly $300,000 in ratepayer money for bonuses from 2008 through 2011.

And that was just one of many issues investigators from the comptroller’s office found during a recent review of the utility’s practices.

Employees sometimes received bonuses for doing routine parts of their jobs, such as reporting water theft or scouting possible water intake sites along the river. Some employees received overtime pay even when they didn’t work extra hours. Employees also received bonuses through random drawings and marble handouts. One employee, according to the findings, received a bonus for “adultery watch,” which apparently involved monitoring another employee during work hours.

Findings of the investigation also document that the former superintendent gave more than $13,000 in water adjustments — essentially, discounts on water bills and new water taps — to utility board members, employees and some customers. Nearly $4,000 of those adjustments were granted to volunteer firefighters who attended annual dinners held to foster good will between the utility and local fire departments. The rest of the adjustments were given at the former superintendent’s discretion.

The investigation also revealed that board members were overpaid more than $12,000 for attending board meetings, work sessions and “road trips.” And the former superintendent and former office manager made more than $10,000 worth of questionable credit card charges to the district, including more than $5,000 for meals for employees who were not traveling or conducting official business.

“We received multiple allegations regarding bonuses, excessive salaries, travel expenses, credit card charges, inventory issues and other payments at the Lincoln County Board of Public Utilities,” said Jim Arnett, director of the state Division of Local Government Audit with comptroller’s office. “While we were reviewing these matters, several thefts occurred at the utility.

“It should be noted that certain records of LCBPU had been shredded by a private company,” Arnett continued. “During routine document shredding, the former management of LCBPU did not properly supervise the shredding of the records, and certain records necessary for our examination were shredded, thereby limiting what we could examine.”


—From Elk Valley Times reports