Benjamin Wachs: Audit doesn’t prove guilt, but raises questions

I’d say I’ve been following Monroe County’s latest ethics scandal, but that wouldn’t be specific enough. These days Monroe County can’t tie its shoelaces without trying to shake down money from its socks.

Yet after reviewing the state’s audit I honestly don’t know if the Local Development Corporation the county set up to handle its technology needs failed to deliver on its promise to save taxpayers money. It says: “County taxpayers are likely overpaying … (T)he county is at high risk of paying for goods and services that were not provided or did not confirm to contract terms.”

“High risk?” “Likely?” The state can’t positively say wrongdoing occurred — their argument is that the county never provided adequate oversight, so something bad might have happened.

That’s classic Monroe County, all right. The county didn’t provide adequate oversight over the airport, the water authority, or Robutrad, to name just three recent examples ... and laws were broken. The idea that the county could handle a child’s piggy bank without giving the Republican Party a cut is suspect.

But the state hasn’t proven anything. It can’t prove the county did something wrong — while the county’s defense isn’t nearly compelling enough to prove it didn’t. Both the audit and the county’s response are ... frankly ... embarrassing. Nobody looks good.

Here are a few items that jumped out at me:

— The audit’s assertion that you needed to be an insider to know that Monroe County wanted to use an LDC is absurd. Back in 2004 it was obvious that Maggie Brooks heavily favored the creation and use of such entities. The county had done it before; she publicly claimed they were cheaper and more efficient. Everybody who was paying attention knew. This doesn’t mean that someone inside didn’t point it out to Siemens, but it was hardly inside baseball.

— The audit doesn’t seem to understand an LDC’s business model when it accuses the LDC of “overcharging.” Here’s an oversimplification using inexact numbers: The county estimates that it will cost $104 million to manage its technology needs over 20 years. It gets a proposal from an LDC to do a better job for $99 million. The county saves an estimated $5 million. Computers unexpectedly got much cheaper over the next seven years, so the LDC saved $8 million more than expected thus far. That money is kept in reserve to cover future expenses over the rest of the life of the contract. The county hasn’t been “overcharged” — and it never pays more than it signed up for.

It is fair to ask what happens to any reserve money after the 20 years are up. The audit says sufficient controls to return it to the taxpayers aren’t in place. If that’s true, it’s a serious issue: but it’s not evidence of wrongdoing thus far.

— But the original $105 million cost estimate wasn’t from an impartial third party: it was developed in-house, and the audit says the county can’t provide work-product to demonstrate its accuracy.  If that’s true, the county could have over-charged itself — accidentally or on purpose.

— Several Republicans who approved giving the LDC $99 million when they were working for the county left government to work for the new LDC, reaping the benefits of the funding they approved.

— The papers incorporating the LDC listed Attorney Michael Townsend, Vincent Dinolfo (the husband of the county clerk) and Bonadio Group partner Kenneth Pink as its directors.  Basically it was stacked with Republican insiders.

According to the Democrat and Chronicle, Dinolfo and Pink were both just “placeholders,” to be replaced later with real board members. This would be like a non-profit with Michelle Obama and Rahm Emanuel’s names on the masthead applying for money from the White House. The fact that these weren’t “real” board members and that Michelle and Rahm didn’t know anything about it doesn’t mean the organization wasn’t trying to get away with something — in fact it strongly suggests it was.

Dinolfo and Pink claim they didn’t know anything about it until after the fact. If that’s true, then apparently a proposal to spend almost $100 million in county funds on a company ostensibly controlled by the county clerk’s husband and two other Republican insiders wasn’t unusual enough to warrant a phone call. No one blinked an eye when three major insiders appeared to have their hands out for millions in county money. Or bothered to ask them “What are you doing?  When did you become a tech entrepreneur?”  Or wondered “could this be inappropriate?”

If it’s not true then people are lying to cover their tracks.

The audit may not be a smoking gun — but the way Monroe County does business keeps putting it in the crosshairs.

Benjamin Wachs writes for Messenger Post Media, and is the editor of Fiction365.com. Email him at Benjamin@Fiction365.com.