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Commentary Still not at the bottom of Parking Dept problems

August 4, 2018

Republican First Selectman Peter Tesei should immediately pressure the finance board to release the 2017 forensic audit of the Parking Services Department, and order an independent criminal investigation into possible corruption suggested by the department’s lax handling of cash receipts and pre-paid parking cards.

This paper revealed last week that the Parking Department had granted more than $2 million in unauthorized parking fine discounts over a more than six-year period ending in June 2016, according to an audit conducted by RSM US LLP, an international tax, audit and consulting firm.

The Board of Estimate and Taxation hired outside auditors shortly after the arrest on larceny charges of Michael Gordon, an accounting clerk in the Parking Department who allegedly stole more than $11,000 through a scheme enabled by the department’s longstanding and cavalier approach to even basic best practices of cash accounting.

But $11,000 is a drop in the proverbial bucket compared to the $2 million identified as “possibly misappropriated” by the audit firm. That speaks to the possibility that either there was a larger, organized larceny scheme afoot, or individual parking services personnel were helping themselves to free-flowing cash. There may be very good reasons that the town applied discounts to 24 percent of all parking fines assessed between January 1, 2010 and June 30, 2016. But without further investigation and more transparent management, we will never know.

If nothing else, the forensic analysts present an indictment of yet another town department’s inability to keep secure records or engage in common sense cash handling procedures.

Smart cards are pre-paid cards that can be replenished when they run low of funds, much like the Metro Cards used on New York subways. The electronic log of the town’s smart card system was disabled in 2012 “for unknown reasons,” the audit said. That prevented the audit from analyzing about $1.7 million in smart card transactions over an almost five-year period.

In a section titled “Noteworthy Observations,” the auditors wrote that “a key element in the inability to effectively audit historical SmartCard transactions stems from a lack of IT (Information Technology) controls within the” smart card system provided by a town vendor, J.J. MacKay. “Therefore,” the audit continued, “if technical issues arose with the local accounts of Parking Services Clerks, years of data could be corrupted or lost without the ability to recover that data.”

The forensic audit makes many references to the town’s own internal auditor’s 2016 report that identified some of these same problems. That audit remains secret as well. But a copy that was posted to the town website, and then quickly removed, said changes to department procedures recommended in a 2014 audit had not been made, even though the Parking Department’s business operation supervisor, Rod Dioquino, had told the auditor the changes had been implemented.

Former Town Parking Services Director Rita Azrelyant, who took over the job in July 2014, started this chain of investigations when she discovered that the 2014 audit had been largely ignored. She encouraged and cooperated with the town auditors and the outside forensic analysts as well. Tesei eliminated her job immediately after the November 2017 elections, and she has filed a whistleblower suit against the town.

If you are lost in the weeds of this by now, my apologies. But all you need to remember is the Parking Department has been audited three times since 2014, and the most recent work identified more than $2 million in unauthorized discounts that may have been the result of corruption.

Two of those audits remain secret, all apparently in the interest of preserving a criminal case involving a little more than $11,000. Since the decisions to hide the audits, there have been no additional charges filed. I emailed Police Chief James Heavey to find out how many detectives he had working the case, but I did not get a response.

Meanwhile, Gordon, according to his attorney, Philip Russell, paid back the missing monies this spring. “I can tell you that the money was returned 75 to 90 days ago, without prejudice and without incrimination,” Russell said Friday. “Among the various serious crimes, larceny is unique in that it can be repaired by restitution,” he added. Gordon was also charged with crimes relating to the misuse of the town’s computer system. The criminal case against Gordon is still working its way through the state court system.

It is hard to escape the conclusion that the audits were kept secret to shield Tesei from the potential political consequences. Tesei won re-election last year by a narrow margin, and the GOP lost control of the BET for the first time ever. Tesei’s opponent, now Democratic Selectman Sandy Litvack, tried to pin the Parking Department debacle on Tesei, but he did not have the information to make it stick. Friday, in response to a question, Litvack called for the immediate release of the forensic audit.

“I have never seen the report. But transparency suggests that it should be released,” Litvack said. The former corporate attorney who said he has been involved in “his share” of audits, added, “The state’s attorney has had it for the better part of a year. I see no reason to keep it from the public. I don’t understand how it could affect the prosecution.”

Tesei points out that the state’s attorney requested that the forensic audit be kept secret, but the state’s attorney did not make that — specious — request until a few weeks after the report had been issued. The taxpayers should have seen it. And they should now.

Jill Oberlander, now Democratic chairman of the BET, was a member of the Audit Committee last fall, prior to the election, and she expressed skepticism about then about the state’s attorney’s request to keep the forensic report secret.

She noted at a public session of the BET in September that neither the BET nor the Audit Committee had heard directly from the State’s Attorney Office. Instead, his “concerns” were relayed in a private session with the BET by Tesei, Town Attorney John Wayne Fox and Heavey. Oberlander said she would give the state’s attorney “two weeks” to make clear his concerns or she would demand the public release of the full audit report.

Michael Mason, Republican BET chairman at the time, noted in response to Oberlander’s remarks, that he was “obligated” to follow the advice of Fox, Heavey and the state’s attorney to keep the report private. When asked Friday about what he meant by obligated, since the BET, not the State Attorney’s Office, commissioned the audit, Mason said: “My political mentors told me long ago that, even if you want to, you better not go against the town attorney or the state attorney recommendations, because if you do, you have no recourse.”

“But I think it might have been an October meeting where we finally had the town attorney, the police chief and the state attorney on a conference call, and we were being asked by the state attorney to keep the report private because of his criminal case. It was not political at all.”

Mason added, “But here it is August. So, it’s been almost a full year. I think it’s time to ask, ‘What’s going on?’”

It is well past time. The election is over. The money involved in the criminal proceeding has been returned. The report should be released, and Tesei should call for a credible, independent criminal investigation. But, I expect he will eventually say that the town cannot run the Parking Services Department and he will look to hire an outside consultant who will recommend, after mulling it over for weeks, that SP Plus or some other outside firm will take over parking management in Greenwich. A second round of proposals for just that has been received by Town Hall. It is just a matter of time.

Bob Horton can be reached at bobhorton@yahoo.com.

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