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Commissioners to file suit against Treasurer

 

By Michael Howell

Last Friday, June 20, the Ravalli County Commissioners took the long-anticipated step toward filing a lawsuit against the County’s interim Treasurer Valerie Stamey, alleging official misconduct. The commissioners also scheduled a meeting for Tuesday, June 24, to consider suspending Stamey without pay pending the outcome of the lawsuit. Stamey has been on paid administrative leave since the end of January pending the outcome of an investigation into her allegations of corruption against county officials by Judge Nels Swandal and an examination of the Treasurer’s Office by the accounting firm Anderson-Zurmuehlen.

Swandal’s report, issued months ago, found no evidence substantiating Stamey’s allegations of corruption. The accounting firm’s final report was made public last week. The Commissioners officially accepted the report on Friday and used it, for the most part, to establish a long list of “findings” to support the charge of official misconduct.

Ravalli County Clerk and Recorder Regina Plettenberg described to the Commissioners the state of the office when she and other officials first entered it after Stamey was placed on leave. She said they found a total of  $951,587.72 in cash and checks piled around the office in boxes and envelopes that had not yet been deposited. She also described the long and arduous process undertaken to bring the office current after having fallen behind from the time Stamey took office in September.

James Woy, Business Unit Director of the accounting firm Anderson-Zurmuehlen, along with certified fraud examiner Angela Mudroe, summarized the company’s final report to the commissioners. Woy told the commissioners that he had done a lot of examinations over the years but had never seen an office in such disarray as the Treasurer’s Office.

“There is absolutely no doubt,” said Woy, “that the duties of the Treasurer’s Office were not being fulfilled.”

Woy said the regular monthly reports to various agencies and departments were not done for at least three months including November, December and January, and close to a million dollars was found stashed about the office. He said money was not being remitted to the state from October through December, which almost cost the County a substantial fine. No remittances were being made to the Department of Revenue or the Department of Justice. Monthly reconciliation was not being done and subsequently no interest was being collected on investment accounts.

With the help of former Beaverhead County Treasurer Kathy Allard, working under contract along with Clerk and Recorder Regina Plettenberg, the staff was trained and the reconciliations were finally brought up to date. Woy said out of 78 different agencies and departments that finally got preliminary reports on their funds, over 74 responded. About 80 specific transactions required correction in about 20 of the departments and agencies.

Woy had a long list of recommendations for improving the performance of the office including the need for dual control when cash is being counted. He also recommended ceasing the practice of using generic log-ins to gain access to the Black Mountain software that keeps track of county funds. He recommended removing the read/write capability for the software for the Commissioners and the Finance Office. But he did note that no evidence was found that any commissioner ever used the function to change anything. Only one incident was found in which the Finance Office had made changes to the Treasurer’s books and that reasons for that change were appropriately documented. Woy also noted that after the final reconciliation of the office that brought it up to date there was only $5,404 left un-reconciled. He said this was “not bad” considering that about $31.6 million had been reconciled. He noted that a small amount of cash was missing from three different agencies, totaling only a few hundred dollars. Some mill levies were also miscalculated on the tax bills sent out and those had to be corrected.

The Commissioners unanimously adopted both Swandal’s report and the accounting firm’s report before tediously approving 26 “findings of fact” based on those reports and public testimony. All of the findings except three received unanimous consensus (Commissioner Ron Stoltz was absent). Commissioner Suzy Foss did not agree with the finding that numerous coding errors on tax bills and some duplicate deposits were Stamey’s fault. She said that the Commissioners should have done more to help her out. Foss also disagreed with the finding that there was substantial lack of engagement and communication with office staff. She said this was the fault of the office staff who refused to cooperate with her. Foss also disagreed with the finding that no evidence was ever presented by Stamey concerning her allegations of corruption against county officials.

Based on those 26 findings of fact, public testimony and reports, the Commissioners voted unanimously that the statutory duties of the Treasurer’s Office were not being followed by Stamey. The Commissioners then decided unanimously to send a letter to Stamey giving her the chance to resign before they take action to suspend her. The Commissioners then unanimously approved a motion based on the findings of fact that Stamey’s failure to carry out her duties amounted to official misconduct under the law. The Commissioners then directed County Attorney Bill Fulbright to file suit in District Court alleging official misconduct and a meeting was scheduled for Tuesday, June 24 to consider suspending Stamey without pay pending the outcome of the case.

Stamey’s attorney Robert Myers submitted a letter to the Commissioners explaining her decision not to attend the meeting.

“Valerie will only answer questions in a setting which complies with her right to due process and the public meeting today does not comply with the law of Montana and her recognized rights to procedural due process,” wrote Myers. He argues that if the charges of misconduct are under the criminal statutes then there is no reason for the commissioners to meet since it is the County Attorney’s duty to investigate and file those charges. He also claims that Fulbright has a personal conflict of interest in the matter that would preclude him from doing the investigation. Myers argues that if the charges are being filed under the civil codes governing official misconduct, his client was being deprived of the chance to defend herself because she was not given the opportunity to prepare her defense since no evidence was presented to her in time to prepare for the meeting. He also states that the commissioners are not a neutral decision making body and should not sit in judgment of Stamey. Myers also spent a good part of his letter criticizing both County Attorney Bill Fulbright and Chief Finance Officer Klarysse Murphy for not carrying out their own statutory obligations.

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