by Jessee Perry
Office of Inspector General Investigation Report
A still-to-be-released report obtained from an inside source that was prepared by the City Auditor Louis Lassiter in his capacity of Inspector General, details the results of a recent investigation into an abuse of time complaint within the Department of Public Utilities. The report concludes that the allegations were substantiated and recommends appropriate disciplinary actions for the employees involved. There is no further information provided in the report regarding specifics of possible disciplinary actions or indication of if criminal charges will be filed.
The original complaint alleged that two DPU employees had been parking their City vehicles at a Wawa in Henrico County during their contract hours several days a week. Through the course of the investigation, the employees were identified as Construction Service Technicians assigned to DPU Richmond Gas Works whose job is to locate, mark, and map gas lines. As part of the investigation, an investigator conducted surveillance at the Wawa for a total of 7 days across the span of three weeks in June. Identified only as Subject 1 and Subject 2, the employees were observed at the location for a collective 6 hours and 28 minutes and 6 hours and 19 minutes respectively during the surveillance period. Subject 1 was at the location all seven days for times ranging from 35 minutes to 70 minutes and Subject 2 was observed on six days for times between 52 minutes and 72 minutes.
In addition to surveillance, investigators conducted interviews with both subjects. Subject 1 admitted to going to the Wawa for approximately an hour a day to talk about work and drink coffee since starting to work for their supervisor approximately one to two years ago. Initially, Subject 2 told investigators they would only go to Wawa for coffee for 10-15 minutes but they later admitted to being there for closer to an hour. Subject 2 stated they had been going to this Wawa since March or April 2018. Both employees cited being entitled to 15 minute breaks despite their time at Wawa exceeding that amount of time. Subject 1 also told investigators that they have gone to multiple Wawas in the areas where they work.
Not included in the report is exactly which Wawa on West Broad St in Henrico County the employees were going to; however, per Google maps there are only three. The closest Wawa to Richmond City is at the intersection of West Broad and Parham Road which is approximately 4 miles past the Richmond City line.
Dated June 28th, this report comes two days before the Office of Inspector General is separated from the City Auditor’s office in an effort to create a better working relationship between the auditor and city departments. In addition, just shy of one year ago, former city auditor Umesh Dalal resigned after allegations of him bullying his employees. What does the split of job duties mean for the city? Until the new law is implemented, we may not know; however, we do know the City Auditor’s Office did not always have the role of Inspector General within their office. It was actually a role expansion that took place in 2007 a little over 1 year into Dalal’s tenure. To begin trying to understand the potential impact to the city as this change takes place, let’s look back at some of the highlights and lowlights of Dalal’s time as City Auditor.
Looking to the Future on Throwback Thursday
Dalal was appointed to the post of City Auditor effective March 20, 2006. It was not long after his appointment to the post that Dalal was identifying savings for the city. In June 2006, it was reported that the auditor’s office experienced substantial success from following up on tips placed through city’s fraud hot line. One tip helped the office recover $107,557 in excess payments made the a Department of Public Utilities contractor. As a result of that audit, it was discovered that DPU’s procedures for inspecting and billing gas pipeline and meter work were faulty and the department changed their procedures. The fraud hotline still exists today under the name “Fraud Squad” and information can be submitted by citizens and employees online or via phone call. A reward equal to 10% of the money recovered or saved up to $5,000 is available for anyone providing misconduct tips that results in at least $5,000 in recovery or savings during 1 year.
Throughout the course of his tenure, Dalal’s audit findings were centerpieces that stemmed from various public debates and controversies. For example, early in his tenure, Dalal was involved in a 2007 audit of Richmond Public Schools that identified $19 million in cuts. In a 2007 Richmond Times-Dispatch opinion piece written by then-Mayor L. Douglas Wilder, he alleges that Dalal indicated there was a “significant lack of candor” from different departments in the school district during the audit. Following Dalal’s audit, Wilder threatened to withhold funds from the school district if they did not comply with a second audit. Wilder’s relationship with Richmond Public Schools and the School Board continued to be contentious and escalated to the point of Wilder attempting to evict the School Board from their offices and the School Board suing the city.
May 2007 was a turning point for the role of City Auditor, Dalal released an audit report that documented the City’s lax vehicle policies and procedures that allowed someone to charge almost 45 gallons of gasoline for a city vehicle that had a 16-gallon tank. This was one of 645 occurrences where someone charged the city for more gas than the city vehicle’s tank could hold. Following this report, Richmond City Council proposed expanding the city auditor’s budget and responsibilities to establish an inspector general function within the auditor’s office. While the city auditor traditionally has reviewed operations of various city departments to identify financial waste and fraud, expanding the role to include an inspector general extended the office’s reach to investigate potentially criminal activities. Mayor Wilder was quoted by the Richmond Times-Dispatch as saying that an inspector general “would have taken the fuel issue and investigated it more.”
With the scope of his role expanded, Dalal hit the ground running after it became effective in the new budget cycle starting July 1st, 2007. Per Richmond Times-Dispatch archives, some of the outcomes of Dalal’s investigations over the years included:
- August 2007- Former human-resources director of the Richmond Behavioral Health Authority was indicted on charges of embezzlement and larceny by false pretenses after an audit identified “improper or questionable transactions” of approximately $170,000 in total. In November 2007, the accused employee pled guilty to a felony larceny charge and was sentenced to five years in prison.
- December 2007- Dalal seeks an outside legal opinion on Mayor Wilder’s decision to divert $500,000 of money budgeted for the purchase of flood-damaged properties near Battery Park to pay for the forced eviction of the School Board.
- December 2007- Former official in the Department of Public Works was indicted on embezzlement charges for allegedly selling city-bought laptops online. In February 2008, the former official pled guilty to embezzlement and was sentenced to five years in prison with all five years suspended contingent on his repayment of $22,525 and 100 hours of community service.
- April 2011- Following an audit that revealed employees made fraudulent claims for overtime ranging from $293 to $4,238 for a total of $12,776, nine employees in DPW and DPU received criminal charges. Three of the employees were charged with felony counts of obtaining money by false pretenses and six were charged with misdemeanors for obtaining money by false pretenses. In May 2011, four of the employees were found guilty of misdemeanor charges and received one-year suspended jail sentences, community service, and were ordered to pay restitution.
- July 2012- An investigation in the City Assessor’s Office was uncovered a former employee who was in charge of recording and reconciling employee payroll was improperly reporting their own hours worked that resulted in being paid $4,469 for time they did not work.
- January 2014- A former Department of Social Services employee pleaded guilty to felony embezzlement after taking $1,610.13 of Walmart gift cards from a safe that was discovered in an audit. The employee received a two-year suspended sentence and to repay the city.
These cases are not an all-inclusive list of Dalal’s audit hall of fame. During his tenure, he proved a track record of dedication to transparency and efficiency releasing reports that uncovered racism in DPU, misuse of time by a member of Mayor Jones’s church member, and more. The public reports released by the office are available on the city's website. While his no-holds-barred reports earned him clout and respect with many citizens of Richmond, it did not come without scrutiny and challenges. In 2011, Dalal made Style Weekly’s power list citing him as a “force to be reckoned with” and that his presence at a council workshop created “palpable tension and sparked an argument between President Kathy Graziano and Councilman Marty Jewell.” Also in 2011, Style Weekly’s Best of Richmond list named Dalal as the “most feared public servant” stating that “if you work for Richmond, the last person you want appearing at your doorstep is an emissary from the office of City Auditor Umesh Dalal.”
Tensions in City Hall rose to a breaking point with Dalal in a series of events that took place in early 2017. First, in early March, Dalal released an audit of the Finance Department finding an employee was spending work time tending to their church’s business. On March 14th, Dalal stated the city’s finance director, John B. Wack, denied him access to relevant tax records as part of his review of the city’s tax enforcement and collection efforts based on a state law that only allows access to identifying tax records if required by the finance director. Then, on March 20th, Wack pointed to an employee in the auditor’s office allegedly misusing taxpayer data as the reason for his refusal to share information. While Dalal and the finance department reached an agreement on terms for the audit on March 21st, Dalal reviewed the allegations made by Wack. On March 22nd Dalal attributed the allegations to the finance department misunderstanding around his employee’s use of a late property tax bill they received to investigate why the bills are not always received on time.
In July 2017, there were two audit reports released. The first released by Dalal was a report following up on a $1.8 million four-year consulting contract between DPU and TMI consulting that followed a racial discrimination settlement. In the report he stated the program failed to produce change in DPU’s work environment. A couple of days later, an investigation by an independent human resources contractor that was requested by City Council earlier in the year to review Dalal’s performance released a 100+ page report. Council made the request after some of his staff members approached council members with complaints. While the report was not released publicly, the document has been said to detail bullying and attacking behavior by Dalal toward his staff. A glimmer of insight into the possible details of the report came from a statement provided to media by 8th District Councilperson Reva Trammell on July 17th, 3 days after the report was received. In the statement, Trammell defends Dalal and calls the information in the report “sour grapes on the part of disgruntled employees who were and are being encouraged by the administration to sabotage the City Auditor at every opportunity.” Trammel does not provide a name but goes on to question if the person who investigated the allegations had a conflict of interest related to Dalal’s criticism of the DPU contract with TMI Consulting.
Later that day, Council voted to accept Dalal’s resignation which passed on a 6-3 vote with 4th District Councilperson Kristen Larson, 2nd District Councilperson Kim Gray, and 5th District Councilperson Parker Agelasto voting in opposition. Richmond Times-Dispatch quoted Trammell as stating she did not originally want to accept the resignation but supports what Dalal wanted.
A week later, prior to a Council meeting, Trammell held a press conference where she alleged “ugly and dishonest things” were happening in City Hall. Trammell alleged that city attorney Allen Jackson urged a 7:30AM meeting the previous Monday prior to Council’s closed meeting discussion which she felt was city administration wanting to get rid of Dalal. Trammell’s statement went on to call the actions of the administration a conspiracy.
Mayor Levar Stoney quote tweeted Trammell’s statement with the statement “Trump level #alternativefacts.”
Then, at the City Council meeting, it was disclosed that Dalal was given an almost $400,000 severance package as part of his resignation. Council President Chris Hilbert and Councilman Michael Jones regretted the package amount while Agelasto expressed disappointment not only in the decision but also that information from closed session was being publicly discussed.
Soon after Dalal’s resignation Council began to discuss separating the roles of auditor and inspector general through a charter change. In December 2017, Council formally asked the General Assembly to allow for the necessary changes to the charter. Passing through the General Assembly, this change becomes effective July 1, 2018. Council members have cited the tension with various departments and the administration when the auditor’s office holds the dual role as reason for the change. Gray was quoted by Richmond Times-Dispatch as saying “The Office of the Inspector General is an investigative arm, and that can create a lot of tension within the administration when they’re coming in after a complaint of fraud, waste or abuse has been made. The audit function is more about process, more about finding inefficiencies. It requires a good working relationship with management and staff in order to gain the information needed to complete those reviews.” In a council panel meeting regarding the change, Agelasto stated he believed separating the offices would "allow the auditor to operate with less fear from staff of what he is seeking." When asked his opinion in late 2017, Dalal stated his indifference toward the change and the challenges he encountered were not a flaw in the dual role but more the individuals not wanting to comply with his requests.
As the City Auditor's office winds down their function as Office of Inspector General, only time will tell if the city's departments and administration begin to cooperate more openly during audits with the threat of potential criminal issues being incidentally uncovered.