Skip to comments.Ex-Mayor Rout , aides 'off-limits,' auditor tells commissioners
Posted on 11/16/2002 5:18:03 AM PST by GailA
Rout, aides 'off-limits,' auditor tells commissioners Ex-mayor says no such order: 'I'm not so dumb'
By Michael Erskine email@example.com November 16, 2002
Shelby County government's internal auditors were told to steer clear of the financial records of former mayor Jim Rout and his top aides, an external auditor claimed Friday.
"They were just told not to look at certain people. . . . Certain persons were considered to be off-limits," alleged David Palmer, who spoke at a hearing before a new County Commission audit committee.
Palmer, of the firm Watkins Uiberall, said internal auditor Tommy Cates recently told him that Cates was not allowed to audit the credit card or travel records of Rout and aides Tom Jones and Bobby Lanier.
He said he didn't know who made such an order to Cates or how long that might have been in effect.
Cates declined comment Friday, but referred questions to John Fowlkes, the county's chief administrative officer.
Fowlkes, speaking later on Cates's behalf, said there had been a miscommunication between Cates and Palmer.
"At least to my knowledge, no one told Mr. Cates not to look at this account or not to look at that account," said Fowlkes, a recent appointee of Mayor A C Wharton.
Cates, who during Rout's tenure reported to former CAO Jim Kelly, felt his authority only stretched to the CAO's office, Fowlkes said.
"He didn't have the authority to look at elected officials' accounts or credit cards," Fowlkes said.
The revelations "baffled" Rout, who said the records of his office were always open for review.
In fact Rout said he requested Cates be involved in an audit of the mayor's office credit cards, which looked at Jones's spending.
"No one, to my knowledge, was off-limits. And they certainly weren't from any directive from me or anyone I was aware of in my office," Rout said. "I'm not so dumb as to ask for an audit of other people and expect that I wouldn't be audited in a public office."
Friday's meeting was just the latest twist in an increasingly volatile credit card and travel controversy.
Jones, Rout's senior adviser, is the subject of an investigation by the FBI and Tennessee Bureau of Investigation for allegations of credit card abuse. And revelations about spending and costly travel by the mayor and other high-ranking officials have sparked further interest in the county's finances.
Palmer appeared at the hearing Friday at the commission's request to explain his role in the auditing process.
Palmer, and partner Ben Watkins, said they have been responsible for the annual audit, which examines the county's financial statement. That audit had been done together with the firm Banks, Finley, White & Co., though the contract recently expired.
"We don't go in specifically to find fraud," Palmer said, adding it is the internal auditors who should be testing the county's controls.
Palmer's statements about the mayor's office drew vocal questioning by commissioners, who said they plan to question Cates on Thursday.
"I'm just sitting here shocked," said chairman Walter Bailey, who formed the audit committee to provide oversight for audits.
"It's almost like having a guard on duty and somebody tells him to go to sleep so the other troops can come on."
Commissioner John Willing ham called the news "scary."
"I can assure the commission that if there was a wink-of-the-eye type business dealing before, that is no longer occurring," Fowlkes replied.
SEE LINK FOR MORE ON THIS SCANDAL tax payer abuse
Jones used card to buy wedding trip
By Michael Erskine firstname.lastname@example.org November 13, 2002
Former Shelby County mayoral aide Tom Jones used a government credit card last year to pay for a $5,000 Virgin Islands honeymoon for his daughter.
Jones used a county fund set aside for a Memphis Regional Chamber project to pay down the balance of the card, including the charges for the trip. He eventually paid the credit card company directly for the full amount of the trip, nine months later.
Records show that Jones, senior adviser to former mayor Jim Rout, charged $1,501.20 in airfare on Sept. 24, 2001, for his daughter and new son-in-law to fly to the island of Virgin Gorda, via Dallas and San Juan. Then, on Oct. 15, the card paid the $3,492.84 bill for the newlyweds' stay at Little Dix Bay, a resort featuring a secluded, crescent-shaped beach lined with coconut palms.
Jones's attorney, Robert Spence, said his client never intended to pay for the honeymoon with chamber funds, but said his bookkeeping had become "haphazard." Said Spence: "He was just trying to pay bills."
The charges are among new details found in financial statements released Tuesday to The Commercial Appeal. Jones is under investigation by the FBI and Tennessee Bureau of Investigation for his personal use of county credit cards.
A county audit completed last month claimed Jones "misdirected" more than $125,000 in county funds for his personal benefit. Auditors determined that Jones, who has reimbursed the county for some of that debt, still owes about $87,500 in personal charges. Spence has vehemently questioned the audit's findings, saying auditors were biased and created new rules that applied only to his client.
The honeymoon charges, which were apparently not included in the audit report, were placed on Jones's MBNA MasterCard.
In the past two years, expenses charged to that card were typically paid by a county-funded contingency account set aside for Memphis 2005, an economic development initiative. As the county's representative to the public-private project, Jones in part directed how the contingency funds were used.
A $1,850 check requested by Jones from chamber finance officials on Sept. 19 paid the balance on the October credit card statement, which included the honeymoon airfare. Jones explained in a memo that the check was for "payment of travel expenses for the mayor's office."
"It didn't say 'mayor's office travel and my daughter's honeymoon,' " Spence said. "To only sort of give half the story was wrong. And he wishes that he hadn't done it that way."
Then, on Oct. 30, 2001, Jones requested a check from the chamber for $2,776, which paid off some of the resort charges, though not all, which appeared on the November statement. Jones did not specify what items the check would pay for.
In the eight months following the honeymoon, the MBNA card incurred $581.39 in finance charges. The December 2001 statement was the first that year to show finance charges.
Jones sent a $5,226.57 check, dated July 15, directly to the credit card company to cover the honeymoon and other expenses. The check was sent as Jones neared completion of a reconciliation, started in April, of personal expenses on his county cards.
The trip payment is in addition to $13,471.28 that Jones has reimbursed directly to the chamber fund for other personal expenses.