Government Waste Watch Report

Taxpayer Association of Oregon PO Box 23573 Portland OR 97281 (503) 603-9009

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The Taxpayer Association has assembled examples of over $215 million of government waste and misappropriated taxpayer dollars that surfaced in local newspapers in the past 150 days from March 15th to July 2000. Read for yourself the endless examples of blatant abuse of taxpayer dollars brought to light between March and July of this year.

Our report begins with the massive abuse of taxpayer dollars lost to numerous public employees. The range of fraud cases found are in some of the most respected professions such as fire chief, parks official, 911 director and deputy school superintendent. In May, a Monroe former fire chief was charged with stealing $30,000 from the department to help pay for a diamond ring for his girlfriend. In June, a former parks employee was caught and charged with 50 employee violations which included writing checks to herself and her son. In May, a Salem-area Deputy School Superintendent was found to have been making personal charges on the school credit card. Fortunately, it turned out to be an innocent mistake, but produced an unnecessary investigation. The case reminds us how easy it is to misuse public funds.

The most entrusted public figures are our policemen. When a police officer is accused of corruption it is tragic. When 30 officers are accused of corruption it becomes a heart breaking travesty. That is exactly what happened last March when 30 Portland Police officers were caught falsifying their time slips to take advantage of $160,000 in overtime pay.

This scandal gave rise to more controversy when one of the chief instigators of the overtime scheme filed a disability claim, one day before he was to be fired. Sergeant Richard Barton claimed he suffered from Post Traumatic Stress Syndrome surfacing from repressed feelings after a police shoot-out case which took place eight years before. The claim made Barton eligible for $25,458 in disability benefits and $3,400 a month until a doctor decides he is eligible to go back to work. The disability claim now prevents him from being convicted for the overtime fraud and the expense to taxpayers doubles.

Barton's abuse was easily overshadowed by another police officer in the department, Lloyd Grundmeyer. Grundmeyer was caught doing strenuous work at a tavern while on paid disability leave from the police department. A surprise arrest for sexual assault landed Grundmeyer in prison, which stopped the fraud case. Grundmeyer's disability checks, based on a dubious claim, kept feeding his bank account for 16 years, costing taxpayers $458,000 paid to this two-time sex offender.

A local 911 office has also come under fire from rampant abuse of worktime and taxpayer money. One of the financial officers ran a vacation cruise business out of the 911 office. Dozens of vacation related faxes came in over the fax lines, some as large as 30 pages. One would think that he would have more loyalty to his office after the department spent $1200 for a popcorn maker and $500 on free food for the employees.

Taxpayers expect that such drawn out abuses would have been caught and disciplined by the 911 department's director. The problem with the 911 office arose from the fact that the director was never showing up to work. Time records show that during some periods she was at home more days than she was at work. Sherill Whittemore was criticized by city auditors for changing what had previously been marked as 24 "vacation" and "sick days" and re-labeling them as "working from home" or "flex" time. City officials were shocked to find out they couldn't fire him for this blatant abuse of the taxpayers.

The most widespread and expensive misuse of taxpayers money that surfaced this summer was the state public employee overtime fiasco that may cost taxpayers as much as $200 million. State employee overtime was supposed to be changed with reforms passed by the 1995 legislature. The reforms accidentally left open a few loopholes, such as managers who became exempt from the new law. The loophole was closed two years later, but not before a staggering $200 million in overtime was generated. This either represents the near total disregard some public employees have for the taxpayers they serve or a gross disconnect between state employees and our elected representatives who make employment policy.

A state audit of the Oregon Health Sciences University found over-billings in one of every five bills charged to the federal government. Through creative re-labeling, a "Tummy Tuck" was categorized as an essential "Tissue Transfer", therefore qualifying for federal grant money. Such deceptive maneuvers helped cost taxpayers $230,000. It might be said that OHSU's violations were minor compared to the audits of five East Coast medical schools that had to repay five to thirty million dollars each to the federal government.

A program audit of Metro uncovered a possible million or more dollars lost due to over-payment on purchases of greenspace properties from private landowners. Metro Auditor Alexis Dow found that 33% of purchases were questionable in her small sample. One example included paying $750,000 for property appraised at $450,000, while another example showed exaggerations on the number of buildable lots a property could sustain.

"Fool me once, shame on you - fool me twice, shame on me," goes the old saying. Public agencies seem unable to learn this lesson when it comes to bad vendors. The Portland Development Commission had one such experience when they contracted to pay $70,000 to Creative Data Corp., a computer consulting company, to install a new computer software. The vital financial software system never worked and caused rampant problems in the office. Despite a failed software system and an expired contract, Creative Data Corp saw their compensation grow to $500,000. In the end, PDC decided to hire a new consulting firm and pay $1.2 million to install a fully functional software system. Even with the new consultants, PDC still is attached to Creative Data Corp and is paying them $140,000 for on-going work.

Marion County and Salem faced similar computer problems when last June it was reported that their financial information management system went over budget by $2.2 million. In July, Portlanders learned that their Water Bureau recently spent $8 million on a computer system that doesn't work, which also cost $500,000 in uncollected fees.

Contrary to popular belief, some state agencies have too much money and they are unconcerned about doing anything with it. Five million dollars of unused job-training funds have been piling up in the Jobs Plus program since 1994, almost $1 million per year. It appears that Oregon’s economy has been performing so well that over 9,000 qualified recipients haven’t taken advantage of the free funds. Unable to adjust to changing times, millions of taxpayer dollars sit until a five year limitation expires and the excess is routed into a scholarship fund. The Taxpayer Association feels that five million dollars resting in a bank is a waste of taxpayer’s resources.

The town of Canby opened Oregon’s first "telecommuting center" last April. Thanks to a $68,000 DEQ grant and $20,000 expected from the city, the center now has plenty of new cubicles and state-of-the-art equipment. The center hoped to lure workers away from long drives by renting commuters one of their personal stations closer to home. Well, one month after its opening, the center has attracted only one regular client who comes in twice a week. Planners failed to heed the warnings coming out of California that saw the closing of most of their 30 taxpayer-funded telecommuting centers due to abysmal participation.

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