Citizen journalism | Arkansas Blog

Monday, June 1, 2009

Citizen journalism

Posted By on Mon, Jun 1, 2009 at 9:36 AM

You need not be a paid newspaper employee to dig up information on public officials.

Case in point is some information I received today from a citizen reader. (It was augmented by a little reporting of my own.)

It pertains to Prosecutor Marcus Vaden of Conway, who earned newspaper attention recently because it's his duty to review some of the unusual fund transferring turned up in a state audit of the University of Central Arkansas. In one episode, money was paid to a marketing firm which in turn sent some of the money to boost pay in the athletic department. Because of state limits, the school could not send more money directly to the athletic department, so it used a pass-through.

It turns out state auditors turned up something of a similar situation regarding a long-time arrangement in which Prosecutor Vaden leased office space from an LLC in which Vaden held 25 percent ownership. The prosecutor and the county have since taken steps to satisfy auditors' questions.

UPDATE: House Speaker Robbie Wills is also a part-owner in this partnership. Vaden reported his transaction as a government sale on his statement of financial interest. Wills did not, but the statement requires reporting of "sales to the governmental body for which you serve."

Here's the deal:

First, the fruit of a citizen FOI inquiry that provides many of the details.

Since Vaden became a deputy prosecutor to Prosecutor H.G. Foster in the early 1990s, he's been part-owner of an LLC that rented office space to the prosecutor for the hot check division Vaden ran. The rent is now $2,000 a month. Vaden is a 25 percent owner of the LLC.

Vaden was elected prosecutor in 2006 and took office Jan. 1, 2007. The office rental continued though a significant change in legal circumstance had occurred. It meant Foster was no longer  renting the LLC space, Prosecutor Vaden was leasing his LLC's space. He told me in a phone interview today, "When we took over, maybe I should have been aware of this [a problem later cited by auditors]. ... Of all the other things I had on my plate at that point in time, that wasn't the first thing that came to mind." 

The matter was brought to Vaden's attention subsequently by state auditors during the routine audit of the prosecutor's office. They saw a problem with his direct lease to his company and suggested action to correct it. First would be to seek a waiver of the conflict of interest  law from Richard Weiss, director of state Finance and Administration. Vaden sought that, but it was denied in mid-2008, as the letter in the link shows. Weiss rejected Vaden's argument about the lack of convenient ready space and found his investment was significant enough to trigger the conflict provision. To cure that problem, Vaden asked the Faulkner County Quorum Court to approve an ordinance for the county to lease the space, in return for a $24,000 payment from the hot check division.

The letters between Vaden and Weiss, in the first link, and the ordinance were supplied by my tipster. On the surface, they look a bit like a money laundering arrangement. That's not the end of the story, however. 

Vaden told me today that state auditors had the same adverse opinion about the corrective ordinance, with its swap of money for county responsibility.

As a result, he said, another ordinance was passed this year in which the county simply agreed to rent the office space, whether it got a direct offsetting payment from the hot check division or not. (The county, of course, receives a substantial amount of money from fines collected by the prosecutor.)

Vaden's public office still uses space he partially owns. This has never been a secret in the county, he said, and he said space in reach of the courthouse is still in short supply in Conway, where the prosecutor's offices are scattered in four locations.

He thinks the 2009 ordinance corrects any problem. (The state audit is still in progress and its final opinion isn't known.)

"I think it fixes the problem that caused the concern," Vaden said. "As far as legality and ethics, I’m comfortable with it since it’s a lease between the county and the business. And if they [the Quorum Court] don’t like it and want to move that’s fine."

 

The arrangement is both old and hardly secret. State auditors took note of the office lease as a "related party" transaction (though not an improper one) as early as both a 1999 and a 2000 state audit (along with payments to Vaden's wife, who once worked as a contract employee but now works in the hot check division as a Faulkner County employee).

Citizen reports. You decide. Maybe it's just a Conway thing. Sort of like the state lottery.

 

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