Government Waste Watch Report

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


Fall 2000

How To Sexually Harass Your Way To Riches

How our government employee system helps to reward criminals!

The word is out that sex offenses and other crimes can net you huge financial rewards in the public employee system.

- Recently, the Tigard-Tualatin School Superintendent who was accused of sexually harassing his secretary ended up with a full year's salary, since he moved out of state to another education job.

- A Portland policeman under investigation for disability fraud was able to keep his payments because he was sent to jail as a two-time sex offender. The imprisonment halted the fraud charges and allowed him to receive disability payments that continued for 12 years, totaling $450,000.2

- In April, a Florence band teacher came under fire for sexual misconduct with several of his students. The episode so far has resulted in six months of paid leave with no resolution on the alleged conduct.3

- This summer, the Public Works director of Gold Hill was imprisoned for his third parole violation, and the city decided to continue to pay him full salary behind bars.4

The Tigard-Tualatin Superintendent case is a perfect example on how being charged with a sexual crime can create a financial windfall and incredible opportunities. In a secret deal with the School Board, the Superintendent, Russell Joki, resigned under duress and was immediately rehired as a consultant for the school district at the same $102,000 annual salary. He quickly left the state to take up another job in Idaho while still drawing consulting pay back home. This continued for most of a year. His consulting "job" extended from January to November. November was chosen because Joki turns 55 that month and becomes eligible for early retirement, thus collecting a whole new set of benefits as an early retiree.

William E. Sizemore (no relation to the tax activist) is the city administrator for Madras who turned contention into cash and into permanent job security. Sizemore came under scrutiny for a controversy erupting from the local chamber of commerce. To shield himself from being fired, William, along with several council members, renegotiated a new "fail-safe" contract that guarantees him a free 12-month salary if he is ever to be fired by the council. The contract also gave him a $13,000 raise and had new provisions, making it next to impossible to fire him. The outrageous contract was executed without the knowledge of some council members who were understandably furious. 5

The reward for Gold Hill's Public Works director, Royal Gasso, for being imprisoned for a heroin parole violation was to continue his salary while he was behind bars. The City is paying him while they are "looking into the case." Apparently neither Mr. Grasso's 1984 conviction for dealing heroin, his six years in federal prison, or his 1992 and 1998 parole violations which returned him to prison, were convincing evidence of a problem with this employee. The City made this decision on the heels of a previous scandal involving drug use by another employee in 1997.

Clearing offender's records

When criminal acts are committed the victims get interrogated, humiliated and dragged through the system while the offender gets immunity. With Superintendent Joki, his file has no mention of sexual harassment, instead labeling his departure as a "life issues" classification.

When you clear the record of an offender, they often go on to repeat the same crime in another town. It turns out that the contract fiasco with the Madras city administrator was part of a long trail of financial improprieties stretching back several years and through many states: Wisconsin, Kansas and Arizona. The administrator served two years in a federal prison for bank larceny and theft. Two other mayors were recalled in other towns because of financial problems stemming from prior scandals.

Few had any idea of what type of character their city administrator was because the Mayor and some city council members kept William's criminal record hidden from other council members and the public. The whole affair has been a full-blown embarrassment for the city while the city administrator came away with a $13,000 raise and guaranteed employment.

These examples are indicative of a system that rewards the offender and punishes the victim. Our public employees deserve a system where their rights are fully protected, even in difficult criminal situations. Our public employees deserve an expedient process which does not allow alleged offenders to go months or years on paid leave while the overseers fumble on what action to take. Finally, our elected officials need to stop hiding the past of criminal employees from the public.

1. The Oregonian 8/8/00. 2. The Oregonian 3/28/00 3. Eugene Register Guard 9/20/00. 4. Medford Mail Tribune 7/29/00 5. Bend Bulletin10/3/00.


Over A Billion Dollars Of Waste Reported This Fall!


$1.4 Billion in disappearing funds

An Oregonian survey helped to unveil $1.4 billion in uncollected debts to the state. It appeared that most state agencies have a collection problem and the actual cost may be even higher than $1.4 billion. These debts ranged from felons who never paid their criminal fines, to deadbeat dads owing child support. Another example was a business that bought $50,000 of supplies made by blind workers under the State Commission for the Blind, for which they never paid. The uncollected amount is about twice the state's supposed deficit for 2001-03 "current service level" spending. 1

Self rewarding bonuses help make up millions misused by the state

A state audit of the Department of Human Services uncovered millions of dollars where safeguards and reporting requirements were violated. The agencies under the audit were Department of Human Services (DHS), Vocational Rehabilitation Division (VRD) and Oregon Health Division (OHD).

The audit found a former OHD administrator was able to draw a full four months salary, plus benefits, after she resigned and was replaced. The result was paying two high-salary administrators to do the same job. The department further helped her by paying a contractor $6,000 to assist her in finding a new job. The cost to taxpayers was $42,000.

OHD managers were found to be rewarding themselves bonuses for outstanding service, without involving their supervisors who grant the award. Of the nine managers reviewed, five of them had special discretionary leave without required approval from their supervisors. Cost to taxpayers was $11,600.

Many departments showed little control over how money was spent. The audit found that VRD was pre-signing checks with no amount or payee listed. A DHS employee bought $675 from the Home Shopping Network on the state travel card for personal items. The employee later repaid the state.

VRD hired many expensive employees without filling out the paperwork describing why they were hired and what they would be doing. Of the department's ten largest contracts, the audit found eight (or 80%) failed to submit the required forms. This amounted to eight employees at a cost of $4,543,200 with no documentation on why they were hired or what work they accomplished.

DHS was found to have a host of errors in vacation leave. Of 191 cases reviewed the audit found 181 (or 95%) to be in violation of policy. One leading problem was in allowing employees to cash 100% of their vacation time so they can receive double salary payments while continuing to work. 2

Booking frequent flyer miles, rather than felons

While the State Police Department is making serious cutbacks, they are preserving two aircraft that are primarily used to fly police executives to public relations gatherings. For nine months one of the aircraft was used for only one defined "emergency". As the State Police have paid $2.1 million to keep these aircraft flying every budget cycle, they are cutting funds to detective and crime labs and not staffing 20 state troopers positions.3

A summer audit of the state police noted that 84% of their full-time employees reported overtime every month. Either unmet staff shortages or terrible time management is beginning to put our public safety at risk. 4

Runaway Money in Lane County

Lane County Planning Division is missing $40,000 in land-use fees. One of the chief suspects is the former county clerk, Katherine Kline, who has since disappeared and is wanted by the police 5. Also in Lane County, Eugene's new library has cost overruns of $3-6 million which has the city scrambling to cut costs and find who is accountable. 6

Lottery's Fuzzy Math

Fuzzy math became the target of a state audit that criticized how the lottery calculates administrative expenses. By law, the lottery can only spend 16% of its profits on administrative costs with the rest going to its customers and the state. The Lottery counted credits won on a video poker machine as official state lottery profit, even if the player gambled away all the credits and didn't come away with a dime. The audit recalculated the administrative costs and discovered the Lottery's claim of 3% was actually 17%, which, not surprisingly, is over the state limit.7

The state lottery showed disregard for taxpayer funds this summer when it grossly undersold state property. The Lottery paid $12,300 for a collection of new ladders and then sold them all a year and half later for only $3,075 (a 75% drop in depreciation).

1.The Oregonian 10/2/00. 2.State Audit 10/23/00 3. The Oregonian 10/22/00 4. State Audit 6/16/00 5. Register Guard 9/15/00 6.Register Guard 11/11/00 7. State Audit 10/5/00

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