A confidential investigative report says Franklin County didn't do enough after its chief accountant in the public works department admitted to having a criminal past.
The report concludes that Dennis Huston's superiors were "remiss in not taking any action in response to Mr. Huston's revelation, especially since Mr. Huston worked in a financial capacity."
The opportunity for a "prudent employer" to do a minimal review was missed, said Jim Webber, a private investigator from Kirkland.
A state audit released this week says that Franklin County lost $2.84 million in an embezzlement scheme dating back to 1996 that involved phony invoices from a defunct company.
The audit shows $258,941 of the missing money was taken in the two years after Huston told some of his bosses and co-workers about his criminal theft conviction before he was hired by the county.
Details about who in Franklin County government knew what and when is part of Webber's report ordered earlier this year by Franklin County commissioners.
This week, the Herald anonymously received a copy of a nine-page report believed to be the same document that county commissioners have refused to make public since April, saying they believe it is protected under attorney-client privilege based on advice from county Prosecutor Shawn Sant.
Huston, who was arrested in February and fired from the job he held for more than two decades, is charged with first-degree theft, money laundering and cocaine possession. His trial is set for January.
Webber's report says that after an FBI investigation began in April 2009, Huston himself told several co-workers he had been convicted of theft many years earlier at a previous job.
"He told them that he was concerned the FBI matter might cause his history to become public, and he wanted people to hear the information directly from him," Webber wrote.
"He told most of the individuals (including his boss Tim Fife, and County Administrator Fred Bowen) that he had been convicted of embezzlement," but Huston did not say his criminal conduct happened while working for another public agency. The FBI ended its investigation finding no evidence that Huston was stealing from the county.
Webber concluded after his two-month investigation that no county employees who worked with Huston knew or even suspected him of taking county money.
"(Their) emotions ranged from anger to betrayal," said the report.
The report said it was "undisputed that no one at the county took any action in response to Mr. Huston's revelation of a criminal conviction. This includes Mr. Huston's direct supervisor (Fife) and the county administrator (Bowen)."
Commissioners fired Fife earlier this year for failing to properly supervise Huston.
The report says Huston made the admissions in various ways to Bowen, Fife and others, including Assistant Public Works Director Guy Walters, parts technician Raenette Carle, confidential secretary Laura Stark, roads supervisor Gary Fitch, and accounting assistant Len Langston.
Webber said the county staff said Huston was emotional and very sincere, and they believed he deserved a second chance because he had "paid the price" for his past behavior.
"Although county commissioners did not receive official notification of Mr. Huston's record at that time, Mr. Bowen described having a conversation with Commissioner (Brad) Peck about the embezzlement conviction, and how he had 'paid the price.'"
Peck told Webber he had no recollection of that conversation with Bowen.
"(Peck) stated that Mr. Bowen did not tell him about Mr. Huston's conviction until after Mr. Huston was recently arrested," said the report.
Commissioner Miller was the first to hear the rumors about Huston's past.
Miller told the investigator that an individual called and told him about Huston's criminal history. He told the person to put the tip in writing. He later found an anonymous letter at his door and he gave it to then Prosecutor Steve Lowe, who turned it over to the FBI.
"Commissioner Miller told me that he did not formally notify the other commissioners about the letter, but asserts that he told commissioner Peck about the letter's contents. Commissioner Peck said that he never saw the letter and does not know what was in it."
On Thursday, Peck told the Herald that he told the investigator Bowen spoke to him only about Huston having an interesting past, not a criminal past.
Peck declined to say anything more, saying it would be improper for him to talk about information in a confidential report.
"Given that someone has chosen to send this document to you, irrespective of what I'd like to say, the interests of the county come first and have no comment," he told the Herald.
Bowen also declined Thursday to discuss Webber's report.
Peck and Commissioner Bob Koch previously voted to keep the report confidential, while Miller tried unsuccessfully on Sept. 8 to persuade them to release the document paid for with public money.
Webber's investigation cost $13,467, of which $5,000 was covered by the Washington Counties Risk Pool, Franklin County's insurer. The county paid the balance.
Webber noted that his investigation showed Koch knew nothing about the Huston case and no one claimed to have told Koch anything about the anonymous letter or the FBI investigation until after Huston's arrest this year, said the report.
The FBI report said investigators checked the county vendors list and used the internet to research any that weren't commonly known. The FBI concluded all the vendors on the list existed.
But Webber's report noted that Critzer Equipment had been out of business for eight years by that time.
Webber said parts technician Raenette Carle told him she would have questioned any invoice from Critzer and would not have approved it because she knew it had stopped operating about 11 years ago.
Carle also said she had no idea the county was paying Critzer anything because she never saw any invoices or forms with the company's name.
Webber said Fife didn't question the Critzer name because it was on voucher requests he saw on a regular basis.
"(Fife and Walters) trusted their employees, in large part, because of the length of time they had all worked together," Webber said.
He said the county's system for processing vouchers had several problems, including no reconciliation step, the lack of cross training and failure to use appropriate software to balance accounts. The county also was lax in checking inventories.
County officials say they've since tightened financial controls, bought new software and reorganized some departments.
Webber said most of Huston's co-workers knew he enjoyed gambling at local casinos, but no one considered it excessive.
However, Webber reported several employees told the investigator they thought, "Mr. Huston had a leprechaun up his butt because he was so lucky."
"Everyone thought Mr. Huston was living within his means. In fact, most are wondering exactly what he might have done with so much money because they saw no evidence of spending," Webber said.
The county also has filed a civil suit against Huston and his wife in an effort to recover some of the missing money.