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He told
County Council's executive committee that Mullaney, who heads
the county law department, threatened him with a lawsuit and
with not
approving his being indemnified by county government if he were
sued. Venezky, Hicks said, told him she had the necessary four
votes lined up to have Council order him to change "the manner
in which one aspect of this audit was being performed."
"This is
an extremely serious and dangerous threat to the county
auditor's ability to conduct internal audits," Hicks, reading a
prepared statement, said.
Mullaney,
who attended the committee meeting on Apr. 6, denied that he
said the county would sue Hicks, but said that he told the
auditor that unidentified persons referred to in the report
would likely sue if the report, which Mullaney said contained
"libelous content," were released.
Venezky
said she "did not say I had four votes," but did say that "I
would vote [to require] an exit interview face-to-face" before
publishing the report. Hicks replied that he stands behind his
charge.
Council
president Christopher Coons told Hicks, "The issues you raise
are serious and troubling." Councilman Penrose Hollins said that
the alleged "threats, intimidation and harassment [of Hicks] is
equivalent to suing [me as] a member of Council if I disagree
with [the administration]."
Referring
to Hicks's entire statement, Mullaney said, "You have to know
the whole thing in proper context."
Hicks
later told Delaforum that a four-hour meeting with Gordon "and
numerous other people" after his appearance before the executive
committee resulted in his being shown some additional documents
and given some further explanations.
There was
"nothing that causes us to change our findings," he said.
"However," he added, "we did agree that the characterization of
one of the findings probably should be changed so as not to
mislead the public." He said the audit report will be made
public, but did not provide a date when that will be done.
Gordon
told Delaforum that the subsequent meeting generally resolved
the conflict. "It's calmed down now," he said.
Initially, the audit report "was dropped on us without an
interview," he said. All he was doing, he added, was seeking the
opportunity for a meeting "where protocol calls for information
to be exchanged back and forth." That, Gordon added, is standard
practice and one with which he is personally familiar, having
experienced it in connection with annual general audits of
county finances during his seven years as executive.
Hicks's
leveling his charges brought into public view what observers
have recognized as growing tension with the Gordon
administration over his role. That is especially pointed in
light of recognized outstanding management of county finances by
the Gordon administration, which has resulted not only in clean
bills-of-health from outside firms which conducted annual
overall audits during the past several years but also top scores
from all three major Wall Street bond-rating firms.
There is
state legislation pending in the General Assembly designed to
bolster the county auditor's independence. Council also
professed to move in that direction with recently enacted
legislation to establish an auditing committee composed of
outside professionals. By law, Hicks is an employee of Council
and there has been some squabbling over whether he is 'County
Council's auditor' or 'the county auditor'.
Somewhat
ironically, the previously prepared agenda for the executive
committee's meeting included a discussion of the process for
establishing the oversight committee and interviews with the
first two candidates for potential membership.
That part
of the meeting occurred after Hicks had left to keep his
appointment with Gordon and other officials.
Although
he did not directly refer to Hicks's charge concerning
indemnification in the event of a lawsuit, one of the
candidates, Araya Debessay, said that providing indemnification
to all members of the committee would be a prerequisite to
participation for most, if not all, of them. "Corporations are
finding it difficult recruiting for audit committees. ...
Conflicts often arise and you can still face litigation," he
said. Indemnification involves the government or a company
paying for legal representation and assuming responsibility for
any judgment arising from the suit. That generally applies only
to civil lawsuits, not criminal actions.
Debassay,
a University of Delaware professor who is on sabbatical leave
and working as a consultant for W.L. Gore & Associates, and the
other candidate, John Baxter, an auditor in private practice who
held the county position on an interim basis before Hicks was
hired, were present when Hicks's charges were made and
discussed. Coons, a lawyer who works for Gore, said he is not
involved with nor was he, until recently, aware of Debessay's
association with that company.
Hicks's
statement and subsequent discussion at the committee meeting
provided a general, but incomplete, account of the dispute.
Coons cautioned his colleagues, and presumably Hicks, against
'leaking' any of the substance of the report to the news media
before it is officially published.
From what
was said, it could be determined that the audit had to do with
county procurement practices. 'Fieldwork', Hicks said, was
"outsourced" to an auditing firm, which he did not identify,
"due to the lack of an internal staff to complete this
engagement [sic] within a reasonable time frame."
As is
customary with an audit, its subjects have a right to include
comments on the results as the report is being drafted. What
Hicks intimated was the last of three 'exit interviews' was held
on Apr. 2, with Hicks attending in person and someone from the
unidentified outside firm participating by telephone. That
person's not being physically present at the session evidently
was the 'technical point' in dispute.
Mullaney
and Venezky said that having the auditor who actually performed
the work present at a final interview is standard auditing
procedure. "My intention [in that regard] was that a proper
'exit interview' be held," Venezky said. Hicks said the
procedure was proper because "I am the auditor of record; I am
the auditor ultimately responsible for this audit."
Gordon
later said that the outside auditor should also have been at the
meeting in order "to get the facts right." That auditor was at
the meeting which followed the Council committee meeting, he
said.
Hicks's
statement identified Gordon, Venezky and Councilman William
Tansey as being present at the Apr. 2 meeting, but others presumably
attended as well. Tansey said at the executive committee meeting
that he was there "because you (Hicks) asked me to come." Tansey
made no other comments regarding Hicks's allegations.
Hicks
said that, if Council, at the administration's behest, were to
order that the report changed, that would be tantamount to
interfering with an audit, which he described as "a probable
violation of state law."
He said
that if Gordon or members of his staff had lobbied Council
members to secure the four votes that Hicks alleged Venezky and
Gordon claimed during the session, it would amount to "an
attempt to interfere with an audit." Four votes constitute both
a quorum and a majority of Council members.
Hicks
also said Gordon refused to provide documents which the
executive reputedly said would "prove that one of the more
significant audit findings has errors" unless the outside
auditor who performed the audit were present. Those documents
evidently were the ones to which Hicks referred after
the subsequent meeting.
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