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Report finds Treasurer’s allegations unfounded

 

By Michael Howell

Retired judge Nels Swandal submitted an eight-page final report on March 28 summarizing the results of his investigation into the allegations made by County Treasurer Valerie Stamey against various county officials. The report was made public the following day by County Attorney Bill Fulbright. Fulbright hired Swandal to conduct an independent investigation of Stamey’s allegations and those made by her attorney Robert Myers.

Stamey is on paid administrative leave pending the resolution of this investigation and the independent audit of the treasurer’s office that is still underway. Stamey has made allegations against the County Attorney as well concerning his role as County Auditor. She claims that he has not carried out his statutory duties to audit the Treasurer’s office himself. Fulbright initiated the independent investigation by Swandal and an independent audit investigation by Anderson ZurMuehlen to avoid any possible conflict of interest.

Swandal notes that his investigation is solely into Stamey’s allegations and does not consider any of the financial issues that are being investigated separately by an auditing firm and other agencies. He broke his report into sections involving the initial hiring of Stamey and then focused on the allegations that she has made.

The report was based on interviews with 18 individuals including all five county commissioners and several county employees, past and present. Stamey was not interviewed.

“I asked to interview Valerie Stamey and made that request through her attorney,” wrote Swandal in his report. “Mrs. Stamey agreed to an interview initially, but subsequently changed her mind and declined to be interviewed.”

Stamey has stated in at least two television interviews following the release of the report that she believes it is prejudiced because it was paid for by the very County Commissioners that she was making allegations against. She also said that Swandal had refused to talk with the FBI about the allegations.

Swandal told the Bitterroot Star in a telephone conversation that he did not expect Stamey to be pleased with the results of his report. He said that he had not seen or heard of her response to the report but would probably not comment on it even if he had.

“I generally don’t comment on people’s responses to investigative reports such as this,” he said.

When asked if he would confirm or deny that he had refused to talk with the FBI, Swandal said, “What happened is, first they agreed to an interview. Then, all of a sudden, they wanted me to meet with them and an agent from the FBI or IRS, I can’t remember which, but I told them that I was not investigating any financial issues and wanted only to meet with them to discuss the specific issues of her allegations against the county commissioners and county employees.”

He said when he declined to meet with the agent, Stamey declined to be interviewed about her allegations.

Swandal reviewed the appointment of Stamey as Treasurer, calling it a decision that “has been roundly criticized (hindsight is always 100%), and I find unfairly so.” He noted that the commissioners each rated Stamey from 1 to 5 based on her answer to each of 23 questions. Commissioners Burrows, Stoltz and Foss voted in favor of Stamey and each had rated her higher in total based on the interview. Commissioners Iman and Chilcott voted for the opposing candidate, Linda Isaacs, who rated higher in their calculations.

Swandal states that, based on his interviews of the commissioners, Stamey performed well in the interviews, presenting herself in a positive manner and giving a superior interview while Isaacs “was certainly qualified, but to some of the commissioners, came off as one who thought she was entitled to the job in an otherwise lackluster interview.”

He also noted that the commissioners were looking for stability in the office and that Isaacs had already stated that, if appointed, she would not be running for the position in the 2014 election. He also noted that Human Resource Director Robert Jenni also rated Stamey higher on the interview.

“My conclusion is that all the commissioners fulfilled their duties and voted in an effort to best serve the citizens of Ravalli County with the information they were given. The one criticism in the process I would levy is that while the commission was understandably anxious to appoint a new Treasurer they should have taken more time to conduct a thorough background check of the candidates,” wrote Swandal. “While it is my understanding that a criminal background check was completed, since the Treasurer is in a bonded position and obviously deals with large amounts of public money, a thorough check of any prior financial issues should have been done, as well as interviews with all prior employers.”

He notes that such a background check would have revealed Stamey’s financial problems in South Carolina and in Ravalli County.

“If information about an apparent inability to handle personal finances would have been provided to the commissioners the vote would undoubtedly have been different,” states the report.

He recommends implementing policies to ensure a proper and thorough background check of Treasurer candidates in the future as well as requiring an applicant to state all names and/or aliases that they have used, where they have lived since the age of 18 and specifically, whether they have been involved in any civil litigation.

Turning to address issues in the Treasurer’s office, Swandal notes, “It is now obvious that the appointment of Mrs. Stamey was not successful. The reasons for the failure, based on my interviews and review of certain documents, are mixed.”

While there was some assertion that Stamey may have instigated a hostile work place once she took office, Swandal found that not one employee interviewed thought it was a problem.

“To the contrary, those I interviewed did not find Mrs. Stamey very engaging and stated she generally stayed in her office and had little interaction with employees,” wrote Swandal. He said in one instance she did not introduce herself to an employee until she had been on the job for two weeks. He notes that to his knowledge no office-wide meetings were held.

Swandal notes, in Stamey’s defence, that one of her reasons for lack of engagement may have been because her initial attempts to pacify hard feelings about the selection were rudely and disrespectfully rebuffed.

“This may have set the tone for the office from that day forward,” he states.

He notes that conflicts and problems in the Treasurer’s office did not start with Stamey’s appointment.

“However, Mrs, Stamey’s appointment may have escalated the problems,” wrote Swandal.

He states that if the personnel in the tax office had “acted as a team” the county would not have faced the problems it did. Instead, he writes, the personnel “left Mrs. Stamey to figure out all the duties and responsibilities of the office on her own.”

But “on the other hand,” he states, “Mrs. Stamey sought the position and should have made more effort to learn her duties and responsibilities.” He said she could have sought more help from other county treasurers.

In the end, Swandal concludes that fault lies with many parties over the dysfunction of the office.

He notes that, “After problems surfaced regarding Mrs. Stamey’s performance and her past legal issues became known, Mrs. Stamey made various allegations against County Commissioner J.R. Iman and several employees in the Treasurer’s office.” He goes on to address each allegation.

As to the allegation that Iman prevented her from having access to the Treasurer’s bank accounts and the Treasurer’s safe for three weeks after she was appointed, hampering her from doing her work, he found the allegation had no merit. He notes that it is the Commission Chair that signs on the bank account and that Iman was Chair three years before Stamey’s appointment. He said it was an apparent oversight that the signature cards were not updated but that the error had been corrected. He noted that two subsequent Treasurers managed to use the account during this period of lapse without any problem. He also notes that Iman never had access to the combination of the safe. In fact, no commissioners have access. Swandal also notes that an office employee gave Stamey the combination to the safe when she was asked, but that was weeks after Stamey was on the job.

Swandal states that although Stamey alleges that Commissioner Chilcott, following her talk with him about Iman’s activities, went into Iman’s office and said,”…..G** Dammit, you son of a B****, what the F*** have you done now.” He simply notes that both Commissioner Iman and Commissioner Chilcott denied the incident.

Stamey also accused former Treasurer Joanne Johnson of illegally taking files out of the office after losing her re-election bid.

Johnson told Swandal that she did in fact take some files out of the office in 2010 to protect her employees form possible retaliation. She copied each of the personnel files and had all the employees sign that they were true copies of the original. She kept these signed copies in the office and took all the originals to the Human Resources Director to be filed in his office. Human Resources director Robert Jenni confirmed Johnson’s account.

Swandal notes that the “missing” files referred to by Stamey “are not specifically identified making it difficult to determine when or where they were taken.” He states that there is no evidence to support the claim that files are missing to “hide the illegal selling of tax liens.”

Stamey also alleged that County CFO Klarysse Murphy had taken files from the Treasurer’s office containing missing receipts and deposits.

“Again the exact nature and importance of all these documents is not clear,” states Swandal. He notes that there is mention of missing files involving federal expenditures and supporting documentation. He notes that the Treasurer’s office does not retain expenditure documents, either state or federal. Those are retained in the Finance Department. He notes that regular audits are done on the office and that if Stamey has any legitimate allegations she should have addressed those concerns with the auditor.

“I could find nothing to substantiate an allegation that Mrs. Murphy ever removed any files from the Treasurer’s office,” concludes Swandal.

Concerning the allegations about the illegal sale of tax liens, Swandal states, “If Mrs. Stamey is implying that problems existed in the issuance of some tax deeds because the County Treasurer failed to take all the necessary statutory steps, she is correct. If she is implying that something criminal has taken place, she is incorrect.”

Swandal goes to great length describing the rules, regulations and processes involved in the issuance of tax liens and the procedure in obtaining a tax deed. He notes that between 2010 and 2013 hundreds of tax liens were issued but only 20 tax deeds were issued. It is the tax deeds that may be voided due to the failure by the Treasurer to file the documents in the Clerk and Recorder’s office.

“It is important to note that Ravalli County did not lose any money because of the failure to publish the required notice in a timely manner,” wrote Swandal.

He also debunks Stamey’s claim that the Treasurer’s office was “funneling tax deeds to certain purchasers.” He notes, “there were several tax lien purchasers in 2012, so the tax liens were not being funneled to one specific purchaser.”

He concludes that there is no evidence that any crime occurred or any cover-up existed, or any files were taken in relation to the tax liens. It will affect some tax deeds by voiding them, but the protracted failure in the process has been discovered and corrected.

Stamey remains on paid administrative leave at this time and an audit of the Treasurer’s office is still underway, as is an investigation by the FBI.

The County Commissioners have scheduled a meeting with the County Attorney on Thursday, April 17 at 10:30 a.m. for a status and update report and possible decisions concerning issues at the Treasurer’s office.

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