Confidential report on $2.8M embezzlement in Franklin County unsealed a decade later

Franklin County finally unsealed a report that said officials didn’t do enough to stop an employee from stealing $2.8 million.

At the time is was called the largest public embezzlement case in Washington state history.

The decision to release it came nearly a decade after Dennis Huston was sentenced to 16 years in prison for his embezzlement over the course of 22 years.

The county’s public works accounting and administrative director used the money to fuel his $100-a-day cocaine addiction and gambling habits.

The theft rocked the county and left people wondering whether the managers at the time knew or should have known that money was missing.

The same day Huston was jailed, the county hired Seattle law firm Michael & Alexander for legal advice on issues not related to the criminal investigation.

And the firm hired investigator Jim Webber to see if “Huston’s managers and/or co-workers knew or should have known about the embezzlement before the news became public.”

At the time it was sealed, Prosecutor Shawn Sant told the Herald he wanted the report in the file because it was part of a pending civil case against Huston. The suit was never filed.

While two of the three county commissioners at the time voted to keep the document under seal, the Tri-City Herald received a leaked copy and reported on its contents in 2012.

Then this month, Commissioner Clint Didier and fellow Franklin County Republican Party member Steve Bauman brought up the report during a May 24 commission meeting.

The push to unseal the report comes just weeks after former county Commissioner Rick Miller filed to run against Didier. Miller was a commissioner when Huston’s theft was uncovered.

Prosecutors asked a judge to unseal the report and it was opened on Tuesday. It was also posted on the county’s website.

Huston, 75, remains in prison at the Coyote Ridge Corrections Center in Connell. According to the Department of Corrections, he was transferred to graduated re-entry on May 25, and is expected to be released in November 2023.

Huston’s criminal history

Webber’s findings in the report are mixed. He said Huston’s managers and co-workers didn’t have any clue about the the theft, but that some clues were readily available.

“Employees credibly exhibited emotions toward Mr. Huston ranging from anger to betrayal,” he wrote. “Although there was no actual knowledge or suspicion of wrongdoing, I conclude that information was readily available that should have alerted manager to the possibility of or opportunity for wrong doing.”

That information included Huston’s previous criminal records, accounting forms from a defunct vendor and failure to implement cross-training, use accounting software or implement inventory controls.

Before Huston was hired as an accountant in 1989, he served a prison sentence tied to his work for a public employer in Montana. According to news accounts, he finished that sentence a year before coming to Franklin County.

Huston told them directly about the convictions during a FBI investigation of possible fraud. He didn’t share that he was working for a government agency at the time.

While Webber’s confidential report didn’t contain details of the FBI investigation, it was spurred by a letter to Miller in April 2009, which was written by his wife Brigitte, according to a Herald article.

When Huston’s co-workers learned about his history and the FBI investigation, they didn’t believe he had done anything wrong.

“Without exceptions, the employees state that they believed that the FBI had ‘cleared’ Mr. Huston and the incident did not cause them to doubt Mr. Huston’s trustworthiness,” Webber said.

Commissioner Brad Peck told Webber, he had heard Huston had a shady past, but hadn’t heard any specifics.

Former Commissioner Bob Koch said he didn’t know about either the anonymous letter or the FBI investigation until after Huston’s arrest.

Webber wrote that he understood why Huston’s co-workers didn’t take any action, but he believes that the managers should have taken some action once they learned about his past. Webber did not specifically name what manager should have stepped in.

“At a minimum, I believe a reasonably prudent employer would have obtained specific information about Mr. Huston’s past conviction and any current status related to the conviction,” Webber wrote.

Lack of oversight

Huston was eventually caught after a routine audit of the 2,000 companies working with the county uncovered one company — Critzer Equipment — had been out of business for more than a decade.

Huston used the defunct company as a way to funnel payments to himself.

Then Public Works Director Tim Fife and Deputy Director Guy Walters didn’t know the company had stopped operating until after the news of the embezzlement came to light.

While they required multiple estimates for larger purchases, they didn’t conduct an independent review of all the companies the county paid. They relied on their memory and that of the employees in the accounting process.

While one of the employees knew the company had stopped operating, she didn’t realize that it was still receiving money from the county.

Webber said the process relied too much on the initials of subordinate employees. He suggested having a step to make sure the county received the items they were paying for.

Huston also handled much of the accounting process himself and didn’t delegate work.

In particular, Webber noted that he handled much of the motor vehicle fund and other employees were in the dark about it.

After Huston’s theft was discovered, Franklin County worked to upgrade financial management and tracking, including several anti-fraud systems, including ONESolution, a financial management system, and WinCAMS, a cost accounting system designed for public works departments.

This story was originally published June 1, 2022 at 10:28 AM.