Are trusted workers stealing from Vt. taxpayers? - WCAX.COM Local Vermont News, Weather and Sports-

Are trusted workers stealing from Vt. taxpayers?

Montpelier, Vermont - March 15, 2011

"We have to close the loop," Vermont auditor Tom Salmon said. Salmon went to the Statehouse Tuesday, asking the House Government Operations Committee to give his office more power.

"It's a proactive educational step," said Salmon, R-Vermont.

He wants lawmakers to let him send detailed questionnaires to select boards, town managers, heads of nonprofits, and more-- asking them who's watching over the state money they receive. Right now the state auditor has no authority to track how these organizations operate.

His checklist could raise red flags, helping leaders see if single employees have too much power over funds. One person shouldn't be in charge of writing checks, balancing the books, and getting the mail, Salmon says, without regular oversight.

"If people know they're going to be discovered or they know they're being watched, or think they're going to be discovered or watched, then they're going to behave differently," said Tom Hughes, a convicted thief.

Hughes served more than a year in federal and state prison for stealing $900,000 over 20 years. He'd funnel his clients' money into his own accounts as a business manager for performing artists. The Milton man also admits to insurance fraud. He's now paying the money back, and helped Salmon learn how crooks game the system.

"Everyone has financial pressures. Everyone has some need. Everyone wants more. We can't eliminate that. What we can eliminate is the chance they'll do something about it unethical," Hughes said.

Vermont has seen several high-profile embezzlement cases in recent years. Suzanne LaBombard's family repaid $150,000 to Isle La Motte after the former town clerk admitted to stealing money, and Kathy Lantagne just admitted to taking nearly $500,000 from the Department of Children and Families, where she was a manager.

Salmon, accountants and municipal employees he worked with think fraud is more common than we know.

"It's very possible and there's no way to know. That's just a fact," Rutland City Treasurer Wendy Wilton said. "But educating and preparing communities to strengthen their controls is certainly a way to prevent it."

Reporter Jack Thurston: Do you worry that this might be putting undue suspicion on municipal workers? Because Vermonters want to trust the people in power positions in small towns.

Tom Salmon: Trust has gotten us into trouble in the state.

But Salmon points out stronger internal controls will help cash handlers, too, and may actually instill better public trust. A House committee has to first move the proposals to the full Legislature before a bill can come of this idea.

"It is addressing a serious issue for state, local, and county governments as well as nonprofits that use state dollars," said Karen Horn, of the Vermont League of Cities and Towns. "We think the idea of a checklist has merit and look forward to working on a system that would reduce the opportunities for embezzlement or fraud."

Vermont crime records show embezzlement is pricey. In 2009 alone, more than 70 convicted embezzlers took $2 million from businesses and town offices, and that doesn't count federal charges.

Jack Thurston - WCAX News

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