PASCO — A former Franklin County public works official accused of embezzling more than $2.8 million repeatedly denied during interviews with the FBI three years ago that he ever defrauded the county.
Dennis M. Huston told FBI agents that someone was out to smear his name when they left an anonymous letter on a county commissioner's doorstep.
But even as the FBI investigated Huston, he allegedly continued to submit fake invoices to the county.
Investigators now claim Huston embezzled about $152,000 the year the FBI began asking questions and about $259,000 more since the case was closed in 2010. The FBI found no evidence of fraud.
Huston told FBI agents that he worked hard to re-establish his reputation after being convicted of stealing money from the federal government in 1986, according to the FBI report obtained by the Herald.
Huston said because of his prior federal conviction he'd even built a series of controls into the county's public works financial system.
During an FBI-administered polygraph test in October 2009, agents asked Huston what his reaction would be if he found out investigators gathered evidence that showed he was involved in efforts to defraud the county.
Huston told investigators "it is not possible that any such evidence exists, insofar as he has not been involved in any such efforts," the documents said.
He reportedly told Pasco police and investigators with the state Attorney General's Office that he started submitting false invoices to Franklin County in 1990 -- less than a year after he was hired -- and used the money to support his cocaine habit and gambling problem, according to Franklin County Superior Court documents.
Three years earlier, he told FBI investigators he "doesn't drink and hasn't done drugs in 24 years."
He also described himself as a "betting man, but under control" and said he "doesn't feel he has a gambling problem." Huston said he had a personal gambling limit of $100 if he wasn't winning.
Information about Huston's failed polygraph and interviews with FBI agents were included in documents received by the Herald from the U.S. Department of Justice through the Freedom of Information Act.
Huston blamed drugs for causing him to embezzle money when he was a financial officer for the federal Bureau of Reclamation in Montana, saying he "needed the money to pay for the habit."
But, he completed a 28-day inpatient substance abuse program in 1986 through the VA Medical Center in Salt Lake City, and many co-workers wrote letters to the federal court in support of him.
Huston received a four-year prison sentence. He spent about three years in a federal prison camp in California and a halfway house, before being paroled Sept. 12, 1988. He was hired by Franklin County 10 months later.
Before the FBI started investigating, he said the road crew had heard rumors about his conviction and asked him about it. He said he talked it out with them and everyone was supportive.
He told investigators though, "that he was just numb now due to everything that has happened," documents said. Huston also "asked lamentingly about how many times he was going to have to pay for his past mistake."
Huston said he "focuses on family, church, mentoring kids and other charity work, something he has done for years to re-establish his reputation."
On Oct. 1, 2009, Huston voluntarily took an FBI polygraph test.
He again denied being involved in any plan or action to defraud the county, saying "he would never do such a thing."
However, he recalled that a few months after he was hired, someone asked him to buy a coffee maker and refrigerator for the road crew, but he told them it would be an improper use of county funds.
Huston said a short time later, requests came through for a "color-coded percolator tester" and a "parts cooler," which he let go through even though he knew they were actually the coffee maker and refrigerator.
He "denied ever having been involved in any other improper or illegal actions during his period of employment with Franklin County," documents said.
Huston also said he was "very angry and upset" that any allegation had been made against him, and that he was "still ashamed and embarrassed that he was involved in illegal activity" in Montana and "still sorry for the problems he caused his family."
Huston failed the polygraph test "with strong indications he was attempting countermeasures during the test," documents said.
Four days later, Huston called the FBI because he was "bothered" he had failed. He said he "told the truth" and wanted to hire a private polygrapher to prove it, documents said.
The FBI told him not to spend his money on a private tester because it wouldn't affect the investigation. Huston said he would be willing to take another test administered by the agency.
On Oct. 23, 2009, Huston was interviewed about the failed polygraph and asked if he had done any research about polygraphs before taking the test. He reportedly denied researching how to beat the test, but admitted he looked on the internet to read about their reliability.
"During his denial, he said he was not so blindly stupid as to even try countermeasures," documents said.
He admitted he was consciously trying to calm himself down during the test because he was "so anxious and roiled up inside," but denied trying to beat the exam.
Court documents filed last month, however, indicate that when officers searched Huston's car after his February arrest, they found "a number of documents that appeared to have been printed from the internet, including 'How to Cheat a Polygraph Test ...' and 'Can I Beat a Lie Detector?' "
The papers also included subsections on topics about "polygraph countermeasures" and "contained margin notes apparently made by Huston when reviewing the printouts," documents said.
The FBI never had Huston take a second polygraph. It closed the investigation in February 2010 after finding no evidence that Huston embezzled funds. Agents also found no evidence that he lied on his employment application.
The "only disturbing item" uncovered during the investigation is that Huston failed the polygraph, documents said. But, investigators noted, there is a reason why polygraph results are not admissible in court.
"Polygraphs are not 'lie' detectors, they are 'response' detectors," the FBI said.