Only nine of the 7,238 whistleblower communications received by the California State Auditor over a 15-month period of time ended in substantiated allegations of improper governmental activities, but it would be hard to call it a failed enterprise.
As the report’s subtitle reflected, the auditor found “instances of bribery, conspiracy to commit mail fraud, improper overtime payments, improper use of lease proceeds, improper travel expenses, and other violations of state law.”
The report is a compendium of investigations, spurred by tips from the public and state employees, that were conducted by the auditor between April 2011 and June of this year. The California Whistleblower Protection Act empowers the auditor to investigate allegations of improper governmental activities for investigation by others. Some of the 7,238 calls and inquiries were shipped to more appropriate local, state or federal agencies and eventually the auditor opened investigations of 1,453 cases, including some held over from previous years.
The highlight of the report is an “elaborate scheme” by Franchise Tax Board employees, Secretary of State employees and a courier service owner to steal a quarter of a million dollars. The courier service bribed employees to avoid processing fees that are commonly paid to obtain information for clients. Three people were convicted of bribery and ordered to pay restitution of $227,430.
A second scheme involved employees at the Employment Development Department (EDD), who ripped off the state for $92,826. An EDD accounting technician created in the state’s computer system fictitious employees at a bankrupt company, allowing two fellow conspirators to collect undeserved unemployment checks between August 2008 and October 2010. The fraud was discovered after the technician was fired for unrelated reasons. The technician and one conspirator were convicted of mail fraud, and got jail time. The second conspirator received probation and all three were collectively required to make full restitution.
A third case was actually a follow-up to an auditor’s investigation from a few years before in which an unnamed “high-level official” at California State University allegedly received “wasteful reimbursements” of $152,441 from July 2005 to July 2008. The official left the university before the investigation was reported to take a position in the chancellor’s office at the University of California. The auditor said that made pursuit of a resolution to the case difficult and no mention is made of any. But the auditor continued to birddog the official and claimed in its new report that he had incurred $6,074 in new, improper reimbursements between July 2008 and July 2011.
Other successful investigations included that of a California State Athletic Commission official who gave 18 athletic inspectors $118,650 in inappropriate overtime, and a California Correctional Health Care Services manager who authorized 23 employees to receive $55,053 in travel expense reimbursements they did not merit.
The state auditor has identified improper governmental activities totaling $31.2 million since it turned on a hotline in 1993. The auditor is particularly proud of catching the California Highway Patrol five years ago wasting $881,565 by purchasing 51 vans that remained unused for more than two years.
–Ken Broder
To Learn More:
California Auditor Releases Report on State Workers Behaving Badly (by Juliet Williams, Associated Press)
California State Workers Committed Bribery, Mail Fraud, Auditor Says (by Patrick McGreevy, Los Angeles Times)
Investigations of Improper Activities by State Agencies and Employees (State Auditor) (pdf)