The state auditor and inspector's office is preparing an investigation into an Oklahoma City police captain's whistle-blower complaint that a city employee misappropriated funds for personal gain and his superiors sought to keep it quiet, but top city officials flatly deny any corruption or cover-up took place.
At a meeting earlier this month, the Oklahoma City Council voted unanimously with no discussion to request a state audit of “certain city contracts regarding implementation of various public safety systems.” Mayor Mick Cornett formally requested the audit in a letter received Oct. 4 by State Auditor and Inspector Gary Jones.
City Manager Jim Couch and Assistant City Manager M.T. Berry acknowledged that a complaint filed by a city employee was related to the audit request, but said they couldn't comment on the complaint or the investigation because it was a personnel matter. City attorneys cited state laws protecting the release of information “part of a confidential personnel investigation” in refusing to release the complaint.
The Oklahoman later obtained the complaint through a source who provided it on condition of anonymity. In it, Oklahoma City police Capt. Bradd Brown alleges a city employee misappropriated funds related to a project to create a new public safety communications and records system, and efforts to “hide or minimize information given to” the city council about the problems reached as high as Couch's office.
Brown declined to comment when reached by telephone.
Couch had a simple answer, “No,” when asked whether there was any financial impropriety related to the project or whether anyone participated in an effort to hide information from the city council.
“Why would I do that? What purpose would there be for me to do that?” Couch asked rhetorically and with exasperation in his voice. He went on to note instances when his staff had to present an unforeseen problem that required more city spending, and a full report was made to the council for their consideration and approval.
The crux of Brown's whistle-blower complaint is an allegation that Kerry Wagnon, the city employee who manages the Public Safety Capital Projects, “misappropriated and prepaid project funds for personal gain.” Brown goes on to allege that Couch, Information Technology Department Director Schad Meldrum and others “conspired” to hide evidence from the council, and ignored requests from other city employees for an audit of the project “because their office failed to provide the correct oversight of project funds.”
“It is unfortunate that this issue is playing out under these circumstances and I am certain that when the facts are known, no additional response will be required,” Wagnon wrote to The Oklahoman in an email. “However, until the investigation into the validity of those allegations is concluded, I am unable to further discuss them.”
Brown filed the whistle-blower complaint Sept. 14 with the city's ethics hotline. The city auditor, who like Couch reports directly to the city council, recommended to the council that the state auditor's office should investigate.
“There are some personnel matters involved that I think it's just important we get a third party, an entirely disinterested party, to look at it,” City Auditor Jim Williamson said.
Couch said the audit request is an effort to clear the air, and that he knows of no evidence showing of any financial impropriety on the part of Wagnon or anyone else.
“If Kerry had misappropriated some funds, I would have terminated him,” Couch said.
Brown lists more than 20 current and former city employees as people investigators should interview. The list includes himself, Couch, Berry, Wagnon, Meldrum and Police Chief Bill Citty.
City officials declined to make any employee on the list other than Couch or Berry available to The Oklahoman for an interview. Citty, reached by telephone, also declined to comment, saying the investigation had yet to take its course.
Brown's complaint alleges Wagnon was demoted during the project, but city attorneys said there's no record of a demotion or a reduction in pay in Wagnon's personnel file.
No city employee is or has been placed on administrative leave or punished for any reason related to the investigation, city spokeswoman Kristy Yager said.
The complaint's allegations center on a part of the public safety capital project that has proved particularly troublesome. The communications and records system project started in 2004, and is years behind schedule and still not complete.
The original contractor on the project, Affiliated Computer Services (ACS), met many of the project benchmarks required by the city, but few of them were met on time, Wagnon told The Oklahoman in an interview in the spring. ACS was paid only for the benchmarks they met but suffered heavy financial losses because of problems with delays and their contractors, he said.
Wagnon said the city was not on the hook for the cost overruns, a position Couch reiterated Friday. Couch and Berry said they don't know whether the project eventually will go over budget, but it hasn't yet, and council approval for more funding is needed if it does.
ACS, which has been purchased by Xerox, still is embroiled in a lawsuit with one of its subcontractors related to the project. ACS has not filed suit against the city.
Couch said the delays have cost the city only in terms of more time spent by staff on the project, not in additional payments to ACS or anyone else. The city is in negotiations with ACS' subcontractors, with ACS' blessing, to finish the project.
Records provided by the city related to the ACS contract and payments to ACS do not indicate the city has paid more than what it agreed to in the contract.
The original contract was for about $19 million, with an extra $1 million budgeted as a contingency. Couch and Berry said there are still funds available that haven't been paid out because of benchmarks not yet met.
Audit to begin soon
Jones, the state auditor, said his staff is in the preliminary stages of beginning an investigation.
“We're in the process of evaluating what it's going to take in terms of man-hours and who is available to work on it,” Jones said. “This will probably be a combination between three divisions: the performance division, IT and the special investigative division.”
Jones said his staff has started to gather information, but he declined to say what they had so far. It's too early to say how long the audit will take, he added.
Staff Writer Ken Raymond