Lack of supervision contributed to Tiregate |

Lack of supervision contributed to Tiregate

by Jim Hartman

A thorough 99-page report completed on Sept. 4, 2018, by the Nevada Division of Investigations found “undeniable” evidence that former Douglas County Public Works Superintendant of Maintenance and Operations Chris Oakden used his position to defraud at least $1 million from Douglas County over six years. That finding was the result of information developed by NDI investigators interviewing nearly 60 subjects as well as work done by independent auditors.

The report documents that Oakden as a county employee purchased tires from county vendors and then sold them to family, friends, co-workers and the general public — personally pocketing the proceeds. The investigation disclosed a lavish spending lifestyle, involving gambling casino “buy ins” of $1.5 million from 2004 to 2017 and annual cruises beginning in 2013, for amounts far in excess of his known legitimate income. Records disclose significant gambling activity by his wife as well.

Prosecution of Oakden was found moot, as a result of his death in a head-on collision with a truck while en route to an NDI interview.

It was the detectives’ conviction, based on their investigation, that Oakden’s wife and five adult children knew that Oakden was stealing from Douglas County and that they actively aided, abetted and assisted in his illegal activities. As a result, the report concludes that these family members were criminally chargeable for crimes of theft, grand larceny and embezzlement.

In addition, the detectives found that two of Oakden’s co-workers knew he was stealing from Douglas County. Their aiding, abetting, and assisting him made them criminally liable.

The investigation disclosed that a Newcastle, Calif., man purchased tires in bulk from Oakden between 100-150 times over several years. The sheer volume, frequency, price and quasi-clandestine nature of their meetings led investigators to conclude that this alleged criminal “fence” knew the tires were stolen. His actions constituted provable criminal conduct as well.

The investigation revealed that Oakden’s activities were enabled by the lack of any effective checks for many years. Managers and supervisors with oversight responsibility of personnel and budgets failed in their duties. Specifically identified were the most recent chief financial officer and past public works director. While internal audits were ordered annually beginning in 2013, no audit was ever conducted prior to the initiation of the NDI investigation. Investigators found these individual failures as clearly negligent, but not rising to the level of a chargeable criminal offense.

With respect to Douglas County employees, the investigation established that a number of employees purchased tires from Oakden. The involved employees worked for multiple departments within the county. Seven county employees were identified as purchasing tires from Oakden. The purchases generally involved a single transaction and detectives concluded that proving criminal intent would be unlikely.

Investigators concluded “for some time there has existed in Douglas County a persistent attitude of entitlement among significant numbers of employees.”

The county manager retired on Aug. 31, 2018, having served 1.5 years during “Tiregate.” He was responsible for the annual county budget, along with county commissioners. County expenditures on tires ballooned from $46,371 in 2008-09 to $396,163 in 2015-16. More than 400 commercial truck tires purchased in 2015-16 didn’t fit any county vehicles. Most egregiously, they failed to have internal audits conducted or have adequate fiscal controls in place. It was an invitation for theft.

The 2018 Douglas County Grand Jury noted the $1 million-plus embezzlement “should never have occurred and the failure to detect it was inexcusable.” Their report cited “poor management.”

A 1989 grand jury report, after a prior 10-year long embezzlement, concluded Douglas County had a “lackadaisical method of inventory control, poor purchasing system … exacerbated by a lax and tolerant attitude by county commissioners and management.” A culture of self-dealing has been able to take root over at least 30 years.

The Sept. 4, 2018 NDI investigative report was submitted to the Nevada Attorney General. No action was taken until Dec. 21, 2018 when a “Declination Letter” was quietly issued by the chief deputy attorney general. That letter asserts the reporting detective “did not believe there was sufficient evidence to prove that anyone other than Oakden committed any crimes in relation to these events.” That assertion is glaringly at odds with the actual conclusions in the NDI investigators’ report.

There was no activity in 3.5 months between the completion date of the NDI report and the Attorney General’s “Declination Letter.” That letter declined any prosecution despite the NDI report identifying nine individuals as criminally culpable, without qualification. Apparently, no one will be criminally or civilly charged. Why not?

In the 1989 near-identical Douglas County embezzlement case, three individuals were indicted, the principal actor was imprisoned and civil restitution was paid by two other individuals in exchange for dropping criminal charges.

Why should a similar outcome not be demanded in “Tiregate?”

Jim Hartman is an attorney residing in Genoa.