Jim Hartman: County must rebuild trust after Tiregate
The 2017-18 Douglas County Grand Jury Final Report concluded that a decade long embezzlement of more than $1 million by Vehicle Maintenance Manager Chris Oakden “should never have occurred and the failure to detect it was inexcusable.” The report notes the amount “only represents the tires; it does not include any other supplies, equipment, or liquids.”
“Tiregate” marks a management failure by past and current county commissioners and county managers. They failed both Douglas County taxpayers and honest county employees. The embezzlement began in 2008 but was not identified until March, 2017. Commissioner Nancy McDermid was a board member for the entire 10-year duration of the thefts; Commissioner Barry Penzel four years; and Commissioner Steve Thaler two years. County Manager Larry Werner has served two stints totaling 1½ years during “Tiregate.” (Commissioners Larry Walsh and Dave Nelson are not culpable in “Tiregate,” having taken office in January 2017)
These county officials were responsible for annual county budgets. No one noted that county expenditures on tires ballooned annually, going from $46,371 in 2008-09 to $395,163 in 2015-16. No one questioned “augmentations” for additional tires. No one noted that more than 400 commercial truck tires purchased in 2015-16 didn’t fit any county vehicles.
In 2012 nothing was done, even after a whistleblower complaint, a reprimand of Oakden, an initial inquiry commenced by Human Resources and a direction to conduct an internal audit. Told to conduct an audit, Vicki Moore, then a county accountant, failed to do so in 2013, 2014, 2015 and 2016. As a result, hundreds of thousands of dollars were lost.
The Oakden embezzlement scam isn’t new to Douglas County. Over a 10-year period in the 1980s, former Parks Superintendent Marty Strube sold county turf and trees. He and three others were convicted. This “Sodgate” theft was estimated at $300,000. A Grand Jury Report in 1989 concluded Douglas County had a “lackadaisical method of inventory control, poor purchasing system … exacerbated by a lax and tolerant attitude by the county commissioners and management.”
Tiregate is a reprise of “Sodgate.” A culture of self-dealing was permitted to take root. How many other “-gates” are there going undetected? Embezzlement is a noteworthy financial crime, but how much commonplace waste exists in county government with no internal audits or sufficient fiscal controls established?
County officials have treated Tiregate as a public relations problem rather than a public policy failure. According to the Grand Jury, at least one person was reprimanded for calling for an investigation.
There was a failure of transparency. Commissioners and the county manager were made aware of Tiregate on March 21, 2017, but the embezzlement was not publicly acknowledged until Sept. 28, 2017, six months later. In the interim, with the public unaware of Tiregate,”County Manager Larry Werner actually promoted Moore on April 24, 2017, to be chief financial officer. Moore resigned on March 20, the day before the report — highly critical of her failure to conduct audits — was issued. On Sept. 18, Werner appointed his expected successor, Brad Hurley, as assistant county manager. Hurley resigned 44 days later as “not a good fit”. In a vote of confidence, with the public unaware of Tiregate, Commissioners by a 3-2 vote on Sept. 7, 2017, extended Werner’s contract for two additional years to Dec. 31, 2019, despite a pending Nevada Tiregate criminal investigation not yet complete.
The composition of a new Douglas County commission will be revealed at the June 12 primary election. Commissioners should immediately seek to rebuild trust with Douglas County citizens. A new county manager with fresh eyes should be recruited and hired by Dec. 31 to provide new leadership and to “drain the local swamp” in Douglas County.
Jim Hartman is an attorney living in Genoa.