In an online article Saturday headlined “Embezzling suspect pleads guilty,” the Coeur d’Alene Press skewspaper reported that former City employee Sheryl Lynn Carroll has pleaded guilty to six counts of wire fraud involving her electronic diversion of funds from the City’s account to her own accounts rather than to the intended recipients. (I believe the skewspaper’s report is technically incorrect. The former employee has offered a guilty plea which has been tentatively accepted by the US Attorney’s Office, but it is my understanding that the plea hearing in front of a Federal District Court judge has not yet occurred.)
Assume that the guilty pleas will be accepted by the Federal District Court as offered in documents filed Friday with the Federal District Court. Clearly Carroll has primary responsibility for her actions, but there are other City officials who need to be held accountable for creating an environment in which she was able to allegedly divert about $365,000 to her own accounts without detection for about ten years. Simply put, they failed to exercise proper supervision as the duties of their employment or office require.
The article identifies her supervisor as City Finance Department Director Troy Tymesen. Tymesen will institute corrections to close the barn door now that the $365,000 horse has gone. According to the article, ” He [Tymesen] said the department will also implement ‘mini-audits’ on wire transfers during the year, in addition to keeping its annual audit.” Well, wait a minute. These alleged diversions occurred regularly (one or more per month) over several years. Why didn’t the annual audit pick up on that and make recommendations that would have made the diversions difficult or impossible? Why didn’t the annual audit recognize the conditions were ripe for wire fraud and recommend safeguards to protect against it? Electronic fund transfers have been commonplace for years. Why hadn’t the City’s Finance Director already put safeguards in place to protect against the wire fraud?
Carroll had been convicted in Oregon of first degree theft of $9000 in 1983. According to the article, “City Administrator Wendy Gabriel said in that article the city did not know about Carroll’s past when they hired her, and that in light of the embezzlement case, all finance department positions will be added to the city’s FBI background checks.” Didn’t City Human Resources Director Pam MacDonald examine all of Carroll’s employment history and call former employers? Even though Carroll was convicted in 1983 under the surname Anderson, a diligent background investigation even by telephone would have at least revealed that conviction. It was City Administrator Wendy Gabriel and Human Resources Director Pam MacDonald’s responsibility to ensure that suitably thorough background investigations were done on all applicants being considered for positions of public trust. It was their responsibility, not the FBI’s, to define the parameters of the background investigations for employment with the City of Coeur d’Alene.
It would be easy to stop with Gabriel, Tymesen, and MacDonald, but Coeur d’Alene Mayor Bloem and City Council members Reid, Hassell, Edinger, Goodlander, McEvers, Kennedy, and Bruning bear some responsibility for their own failures to exercise supervisory direction over City department heads. This failure was demonstrated by Council members Goodlander, Kennedy, and McEvers at the September 4, 2012, Council meeting during discussion of a motion by Council member Gookin to remove some budget items. Goodlander verbally attacked Gookin for daring to question the staff’s budget proposals. Kennedy excoriated Gookin and stated Kennedy believes it is the role of a Council member to act as a board member of a Corporation and trust staff. Trust the staff. Blindly and without public questioning? Apparently, at least according to Kennedy.
Perhaps if the Mayor and Council members back to 2002 had been a little less blindly trusting of staff and instead had verified that adequate safeguards were in place, there wouldn’t have been approximately $365,000 allegedly fraudulently diverted by a former City employee.
It is not the job of our elected officials to stroke staffs’ collective egos by turning a blind eye to conditions that can result in harm to the City. It is the elected officials’ jobs to ensure that department heads are performing their administrative duties diligently, lawfully, and ethically. When, as in this case, some department heads failed to perform the duties of their position adequately, the elected officials need to accept some responsibility themselves, discipline where appropriate, and then take steps to ensure the failures don’t occur.
Trust but verify.