Editor's note:On Monday, the Herald looks at how public agencies in the Tri-Cities try to prevent embezzlement of funds.
PASCO -- Less than eight months after Dennis Huston was released from federal custody for stealing taxpayer money, he was hired as an accountant for Franklin County.
Almost 23 years later, he is suspected of using a similar scheme of embezzling money through a fake company to support a cocaine habit. Investigators say he might have stolen more than $1 million in the past decade.
For now, Huston is not charged with a crime and was released from jail this week, while Pasco police and the state Attorney General's Office scrutinize thousands of documents and computer files. They say the investigation could take months.
County officials still can't say how a convicted felon who served 21 months in prison for stealing government money in the '80s was hired for a position that eventually allowed him to manage the annual spending of a $10.5 million Public Works department.
Current county officials weren't in office when Huston, 65, of Pasco, was hired as the county road department accountant in 1989, and investigators have seized his personnel files.
But court and county documents obtained by the Herald have pieced together some of the story.
When Huston was hired, the county did not have a human resources department or a county administrator. It is unlikely they required potential new Public Works employees to pass a physical and a drug test like they do now.
Bruce Gilkeson was the county engineer at the time and headed the Public Works Department.
Minutes taken at a county commission meeting in April 1989 show that Gilkeson asked commissioners Neva Corkrum, Harold Mathews and Ken Miller if he could offer the candidate for the accounting position a higher starting salary.
"The gentleman has indicated that he would not take less than he was presently making, $2,000 a month," according to the meeting minutes.
Commissioners denied the request but told Gilkeson to offer a salary increase after the six-month probation period.
On May 1, 1989, Gilkeson told commissioners that the new accountant had been hired, and a week later he brought Huston in to meet the commissioners.
What is not clear is what Gilkeson, who could not be reached this week, or the commissioners knew of Huston's background.
Three years earlier, Huston was accused of using his job as a finance officer with the federal Bureau of Reclamation in Billings, Mont., to funnel almost $142,000 to himself through a company that didn't exist.
The federal worker for 15 years blamed a drug problem and went through a 28-day inpatient rehabilitation program in Utah through the Veteran's Administration.
Huston pleaded guilty, and before sentencing, his attorney submitted 16 letters requesting leniency. They were from auditors, finance officers, an attorney, accountants, supervisors and subordinates with various federal offices, including the Office of Inspector General, Department of Interior and Bureau of Reclamation.
Many characterized him as an honest, sincere and good person who "made a once in a lifetime mistake" that was "completely out of line with his normal character."
"Mr. Huston has earned our support, respect and trust," one writer said.
Still, Huston, who since had moved to Spokane, was sentenced in December 1986 to four years in prison.
He was sent to a federal camp in Boron, Calif., where he voluntarily participated in classes, such as drug awareness and Bible study, according to court documents. He also helped tutor fellow inmates who were studying for their high school equivalency.
In April 1987, his attorney asked a federal judge to reduce his prison term because of his remorse, cooperation with authorities and repayment of some of the money.
The attorney also cited the "crushing impact on him and his family." His wife and two daughters had to sell many of their possessions, lost their home when they couldn't pay the mortgage and had to go on public assistance, said court documents.
Also, a Spokane company, The Insurance Office Inc., was offering to hire Huston if he was released.
A letter submitted to the court by the firm's president said, "We are fully aware of his present situation, but my personal knowledge of Dennis and his character convince me that he will be a valuable asset to our company."
However, Huston's sentence was not reduced and he remained in prison until August 1987, when he was transferred to a half-way house, according to the Federal Bureau of Prisons. He was paroled Sept. 12, 1988.
Seven months later, he was a candidate for the accounting position in Franklin County.
Bruce Whitemarsh, a Franklin County commissioner from 1970-88, said the general practice at the time was for the commissioners to hire the county engineer, who then was responsible for hiring employees within the road department.
At the time Huston was hired, Critzer Equipment of Spokane already was doing business with the county, according to commissioner meeting minutes.
Huston is suspected of creating a fake bank account for Critzer Equipment after the firm went out of business in 2001.
Court documents say Huston told investigators he was using money from invoices for county payments to Critzer Equipment to buy drugs. When he was arrested, he had a blank check from the company and a small leather bag reportedly containing cocaine.
Huston, who was fired Wednesday from his $76,164-a-year position, could not be reached at his home this week about the new allegations.
His arrest Feb. 2 on investigation of money laundering, theft and cocaine possession, shocked many in county government.
County Commissioner Bob Koch said Huston's arrest and criminal background came as a complete surprise.
State Public Disclosure Commission's online records, which date to 2000, show Huston gave $800 to Koch's 2008 re-election campaign and $200 to the campaign of former county auditor Zona Lenhart in 2001.
Huston also was the treasurer for the re-election campaign of former county commissioner Neva Corkrum in 2000 and 2008, when she lost to current County Commissioner Brad Peck.
Corkrum declined this week to talk about the allegations against Huston. Lenhart could not be reached.
While many questions remain about the current allegations, Franklin County officials said they already are looking to prevent fraud from happening again.
County Auditor Matt Beaton said his office is continuing to look at how spending is monitored.
The alleged embezzlement was discovered during a routine audit as his staff was verifying the legitimacy of its 2,000 vendors.
Beaton said the county needs to invest in upgrading its 28-year-old financial software. He said they are currently negotiating with a software company for an estimate for the commissioners to consider.
Franklin County has budgeted money for new financial software twice in recent years, but both times the money was used for something else.
Financial software with its built-in safeguards can help catch and prevent fraud, Beaton said.
He said they are examining how vendors are added and who has the authority to do that. And they are continuing to review vendors on the county's master list, including verifying names, addresses and tax ID numbers on company W-9 tax forms, Beaton said.
"Fraud occurs when need meets opportunity," he said. "The auditor is tasked with diminishing the opportunity as much as possible."
Another possible change is moving Public Works accounting under the control of the auditor's office.
Public Works is the only county department that has a separate accounting division.
Payment vouchers were prepared by Huston and reviewed by the Public Works director, Tim Fife, before being forwarded to the county administrator, Fred Bowen, for review and then to county commissioners for approval.
The Auditor's Office was not involved in the day-to-day creation and review of Public Works vouchers, but did cut the checks after commissioners approved the vouchers.
Until city and state investigators sort out how the system failed, eight other county employees remain on paid leave.
Peck said he believes the allegations against Huston came out because commissioners and the Auditor's Office have pushed for increased accountability during the past three years.
"We found it and we are fixing it," Peck said.
Commission Chairman Peck said all county processes and procedures are on the table for review but the county doesn't have the money and staffing to do everything overnight.
"It takes time," he said.