Buried in a recent Courier Journal story about the Metropolitan Sewer District's dismissal of its attorney were two interesting notes which raised a question what, if any, legal action is going to be taken. See, MSD severs ties with longtime board attorney Larry Zielke after critical audit
First, the small and buried paragraph about the MSD's financial advisor who had been dismissed for a "conflict of interest" in reaping profits on various investment transactions makes no mention of what action is being taken against the advisor who financially profited from those transactions other than his termination.
A conflict of interest costs a public agency millions of dollars.
Any chance of recouping the profit the advisor made by benefitting from those "recommendations" presumably made under the appearance of objectivity?
And, if the disclosure of the conflict was made, then what action should be taken against those in authority for permitting it? Just wonderin'. Here's the paragraph. You decide for yourself.
Heitzman announced that staff was also developing a request for proposals for a new financial adviser for the agency, which has an operating budget of $110 million and a capital budget this year of more than $200 million. The current adviser, Warren White, was found by the auditor’s office to have a conflict of interest by making recommendations on where to invest hundreds of millions of dollars, then collecting millions of dollars on fees on the profits of those investments.
Second, what about that sweetheart trust set up to continue keeping the Executive Director's interest and employment as MSD but which allowed these transactions and money leaks to continue during his watch. And now, he is retained at full salary as an adviser. Some trust.
Heitzman also said he has decided that former Executive Director Bud Schardein will retain his full salary of $181,000 as an adviser until he retires this spring. He said he has not decided when that retirement would occur, but that it would likely be by April 1.
He said Schardein is working every day and has been helping with the transition.
Heitzman said he has withheld the final $40,000 payment in what was to be a $200,000 trust fund established for Schardein. Heitzman said he’s reviewing that decision with Purifoy.
Am I the only one just a little dismayed that those placed in a public trust are allowed to profit from abuses of that trust without any steps to dislodge those ill-gotten gains?
Folks are out of work, the state is scrutinizing the unemployeds' claims for unemployment benefits, and millions of dollars are left to leak out with nary an attempt to say "wait a minute buddy".
