Scathing Mandeville audit released

Storms are brewing in Mandeville.

Mandeville Mayor Eddie Price and Police Chief Tom Buell are back in the public spotlight thanks to the 30-page Louisiana Legislative Auditor’s report released Monday.

The report, released after 10 months of investigations, alleges Price, Buell and other city officials took part in activities that may have violated state laws.

Allegations in the audit:

• Citizen Service Fund

The auditor’s office first received information last October from the Metropolitan Crime Commission, a watchdog group aimed at ridding the area of political corruption. Auditors were asked to look into the questionable activities involving the Mandeville Police Department’s benevolent Citizen’s Service Fund.

The fund began as a local toys for tots program in 1980, not associated with the U.S. Marine Forces Reserve Toys for Tots Program, but was converted to the CSF in 1994 after a former city police officer stole from the fund.

Buell requested the city’s accounting department maintain the program’s bank account, where it became the Citizen Service Fund, to avoid future thefts.

According to the report, purchases made using CSF funds are initiated through the MPD using the city’s check voucher system.

Vouchers that are handed over to the city are first approved by the accounting department and then a check is written for the amount requested, and then signed by two of the three signatories including Price, his executive assistant Marlaine Peachey and Finance Director Milton Stiebing.

From January 2002 through December 2007, according to the audit, the CSF solicited and received donations from area residents and businesses totaling $217,938, which was to be used for benevolent purposes like the children’s gift giveaway program. Over the five-year period, the auditors found expenditures totaling $203,464 were made.

However, only 28 percent or $56,773 was used for charitable activities while 72 percent or $146,329 of the funds were spent on gifts, food, parties and sponsorships, the report alleges.

Of the misused monies, the report states $15,775 were used to purchase Wal-Mart gift cards for residents and city employees including Price who, over the five-year period, received $1,300 in gift cards. The report also states Price was given additional gifts, including a gun cabinet and a crossbow, that totaled $1,607.

When Price first discovered earlier this year the gifts he received were paid for with donations, he reimbursed the CSF with a personal check for $2,300 and vowed not to accept any more gifts.

Buell admitted earlier this year he used the donated money to buy Price the Christmas gifts because he didn’t want to ask his officers for money for the yearly collection taken to purchase Price a gift.

Apart from the money misuse, the report states the CSF may also be subject to federal income taxes because it was not established as a 501 (c) organization, which are tax exempt.

When auditor’s first uncovered the mishaps with the CSF, they decided to expand their investigation into the inner workings of the entire city government, where they found several additional instances that may also violate state laws.

• City Credit Card Misuse

According to the report, the city department heads and other employees including Price and Stiebing, carry their own city-issued credit cards.

From September 2003 through March 2008, Price made 620 credit card transactions totaling $56,733 and Stiebing made 119 transactions totaling $17,210, the report states.

Of the charges Price made, 65 charges totaling $8,845 were personal, 512 charges totaling $42,549 were for meals and 15 charges totaling $6,143 were spent on parties and celebratory functions for employees. The report also states Stiebing made 92 charges totaling $12,986 on meals.

Included in Price’s personal transactions, the report states from Feb. 3, 2007 to Feb. 10, a total of $2,972 was charged while Price was on a cruise to Mexico.

It also reports other incidents where Price spent a total of $1,449 on lodging, meals, parking, gas and food while in other states.

The report also notes the lack of documentation for thousands of dollars in credit card charges including $34,703 made by Price on meals. Price did pay back the money for the Mexico trip two years later, the audit noted.

• City Vehicle and fuelman cards

In addition to city-issued credit cards, the city also provides vehicles coupled with Fuelman cards to all department heads and certain employees including Price.

According to the report, Mandeville currently has no documented policy on vehicle or Fuelman card use which reported by the auditors, has led to employees routinely using city vehicles and their gas cards for personal outings.

From April 2005 to December 2007, according to the report, Fuelman records indicate city employees along with department heads made 39 out-of-state fuel purchases totaling $1,768. It also states several department heads including Planning Director Louisette Kidd admitting to using the vehicles for personal use.

“Ms. Kidd explained that because her work overlaps with her personal life, it would be difficult to use separate vehicles,” the report states.

Along with the alleged misuse of city-owned vehicles, auditors also report several of the vehicles are not properly marked with city insignia in accordance with state law.

• Improper Gifts

The audit also found several email messages during a review of Price’s emails that indicate people or vendors doing business with the city provided “things of value” to Price,

Councilman Jerry Coogan and Stiebing including hunting trips and golf outings. According to the report, under state law, “no public servant shall solicit or accept, directly or indirectly, anything of economic value as a gift or gratuity from any person or employee of any person who has or is seeking to obtain contractual or other business or financial relationships with the public servant’s agency.”

Several of the trips listed in the report involve the city’s engineering firm Meyer Engineers taking Price on trips in their private plane.

It also lists an a 2005 fishing trip which Coca-Cola Sales Representative Tony Cash paid for Coogan’s and Stiebing’s expenses.

The trip happened a year before the city signed an agreement with Cash for Coca-Cola to become the official soft drink of Mandeville.

Rebuttal/Revisions

To rectify the situation involving the CSF, Buell converted the organization to a nonprofit 501 (c)(3) program that is now run by a board of directors.

Buell also said he would like to publicly refute several of the auditor’s allegations but his attorney has advised him otherwise.

“We may just make our own release by Wednesday in addition to what we answered in back of the audit,” he said. “I’ve already been interviewed by the FBI. It’s not a comfortable spot for me.”

Price has also made resolutions to certain issues including reimbursing the CSF for the gifts he received and reimbursing the city for the transactions he made while on his cruise.

“Mayor Price indicated that he used his city credit card for the cruise because he did not have his personal credit card with him at the time,” the report states.

But as for the other charges incurred on the card by Price, the audit said, “he [Price] indicated that he is on duty twenty-four hours per day, seven days per week and takes note of the architecture and other things that provide a benefit to the city while he is on vacation,” the report states.

Price also said the city has accepted most of the recommendations provided by the auditors and revisions to policies will be completed in the coming months.

“We responded to just about every issue in the audit with solutions,” Price said. “We’re making sure we get back on the right page but the only documentation we got from the auditors was a disk of all the records they looked at.” He continued and said he and his attorney are in the process of reviewing the allegations concerning the credit card misuse but the auditor’s reluctance to provide sufficient paperwork is making it difficult.

Price also said the reaction from his constituents have been mostly positive with several telling him to “hang in there.”

“We’ll see what happens now that law enforcement has it,” Price said, adding the Attorney General, District Attorney, and the Louisiana Department of Justice have copies of the report but none have contacted him yet, even though he expects them to.

The full report can be found at www.lla.state.la.us under audit reports.