AshevilleCity - County Gov.Leslee KulbaLocal News: Asheville and HendersonvilleLocal Opinion

Everyone from the ‘Big Table’ is leaving

These were all actions that would make more sense to the public as information protected by the federal investigation became public. The investigation remains ongoing, so Commission Chair Brownie Newman continues to tell press outlets he cannot speak about many things – like the June 8 announcement that County Manager Mandy Stone would be retiring.

Stone had been overseeing the reconstruction of county systems to make sure nobody else would pocket hundreds of thousands of misappropriated tax dollars. She was generally viewed as honest and competent, revising policies as oddities and abuses were discovered; but some activists deemed her a tainted vestige of the former administration. The reasons for her sudden announcement are unclear, but news sources are linking her departure to an anonymous press release that surfaced June 8.

Stone took credit for a list of “clarifications” released only to certain local media outlets. It pertained to the second round of charges the former manager had just faced in court. The first round pertained to Greene and her son, Michael, using $200,000 in public funds for personal expenditures, including home furnishings and DVDs. The transactions were carried out using the details of purchasing cards issued to other county employees and gift cards. The second round pertained to life insurance policies.

The indictment and a public statement from the commissioners tell of a scheme so cleverly devised it took investigators 10 months to unravel. In short, Greene, herself a CPA and trained internal auditor, funded whole life insurance policies for herself and select others with an inflated budget amendment.

August 4, 2015, Greene came before the commissioners saying it “really saddened” her to have to ask them for $8.59 million to settle the wrongful conviction cases of two, and maybe five, people who had been sitting in prison 3.5 to 11 years for pleading guilty to the murder of Walter Bowman in 2011. The North Carolina Innocence Inquiry Commission determined all five were innocent and that former Sheriff Bobby Medford had used coercive interrogation techniques. Medford is currently serving a 15-year sentence for accepting more than $300,000 in bribes from illegal gambling machine operators.

At the August 4 meeting, Greene said the settlements totaled $7,142,250 and legal fees were $767,000 and climbing. The county, however, was eligible to collect “2-point million” from its insurance carriers, she said. She and the commissioners then applauded Curt Euler, an attorney who continues to work for the county in various capacities, for his negotiating skills. Greene said the settlement could have been as high as $44 million, the initial ask had been $17 million, and the amount was lower than a jury would award. It was urgent the county issue the checks the very next day.

For the rest of the year, the county struggled to close a budget gap equivalent to 2 cents on the tax rate, and no opportunity was lost to take a pot-shot at the former sheriff for the county’s financial woes. Greene’s indictment, however, says the amount the commissioners appropriated was double what was used, and during the August 4 meeting, Greene emailed the company she’d been working with on life insurance policies, “Just waiting for a signal we are a go.”

Greene used half the surplus to purchase ten whole life insurance policies and an annuity. County funds would be paid annually into these accounts, which the recipients could cash out if they wished. Greene had asked those receiving the policies not to discuss the matter with anybody, gave the impression that nothing was being done that wasn’t properly being done elsewhere in the state, misrepresented the amount the county had spent on the policies as less than $15,000 total, and kept no master list of recipients. The act was well-hidden from investigators, but upon her retirement, Greene cashed out $458,437.59 from her two policies and quickly sent $155,000 to a Nashville law firm for real estate closing costs.

For the duration of her tenure, Greene would use the commissioners’ approval of “the Bobby Medford settlement,” written up for consent-agenda approval, as authorization for the life insurance policies when the commissioners never wittingly approved the policies and only recently learned their values. To date, everybody who was issued a policy, except for the Greenes, has reassigned their policies to the county, taking no benefits. In addition to working with attorney Ron Payne to recover taxpayer losses, the county has the cooperation of the insurance company, which the indictment does not treat as a knowing accomplice.

The anonymous press release repeated much of this and added, “At least one employee asked the former chair and was advised that the board supported the county manager’s action specific to these policies.” The chair would have been David Gantt, and he issued a counterstatement, strongly denying the claim and noting it contradicts the text of the bill of indictment. Gantt also folds back into the story as it appears his signature was forged on at least three documents approving retention benefits for Greene.

Reports that Stone left following an FBI raid of her office have not been substantiated. Commissioner Mike Fryar told WLOS, “As far as I know, some people came and talked to some people. That’s it.”

Stone’s retirement came quickly after Finance Director Tim Flora’s resignation. The appointment of an interim finance director was added to the agenda of the commissioners’ last regularly-scheduled meeting. Already on the agenda was the appointment of an attorney to represent the county commission and fill the vacancy left by the resignation of Bob Deutsch in October. Flora’s letter of resignation, tendered after a two-hour closed session in which the commissioners reviewed his performance, merely celebrated accomplishments and said, “the time is right,”

Flora, it is true, did sign off on some of Greene’s illegal activities; but he was among the few to challenge and confront her. As CFO, he would have been involved in detecting and documenting the “breaches” and “irregularities” and preserving evidence, informing the appropriate authorities, and implementing corrective actions. He also helped the county’s effort to create a user-friendly, online dashboard for members of the public to access county budget and finance information.

Among other procedural reforms made after Greene’s departure, the county strengthened its internal auditing system and restored standard checks and balances where the county manager had assumed unilateral powers. The new county manager, for example, will not be able to do as Greene and instruct staff to wire funds to an insurance company without proper documentation.

Explaining the problem among staff, Flora explained the county had a good system, but, “We let someone in power and position take advantage of those systems. We also operated in an environment where discovering these exploits was made difficult and making changes to any of the weaknesses incredibly hard… We trusted when we should have questioned. And when we did question, we let ourselves be convinced.” The county’s auditors and other members of staff went further to describe a culture of fear under Greene.

Greene’s administration was characterized by commissions that unanimously rubber-stamped her agendas, which were backed by practically unsearchable staff reports. Government watchdogs couldn’t get answers to their questions, and there were times media outlets didn’t bother to cover the foregone conclusions.

Other high-ranking staff members to leave the county in recent months have been former Assistant County Manager and Planning and Development Director Jon Creighton and County Clerk Kathy Hughes. Flora’s predecessor in IT and finance, Donna Clark, was laid off in 2015 and paid through 2018.

When times were tight, the county had offered early retirement incentives, and after 131 people representing a powerhouse of institutional knowledge accepted, the county responded with a retention incentive. While bopping from one extreme to the other may not have represented the soundest of management calculations, the offers do not appear to have been illegal as some news sources are claiming – yet. Greene did, however, collect $123,555 in early retirement, plus $241,790 in retention incentives, plus $67,763 in annual leave, plus a $7,413 longevity bonus on top of her half-year’s salary of $123,555 when she retired. Greene is also alleged to have falsely represented the amount of personal time off cashed-out.

Greene pleaded not-guilty to 12 counts of wire fraud, eight counts of federal program fraud, and three counts of money laundering. Her jury trial is set for August 6.

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