Pittsburgh Controller Michael Lamb quietly launched a broad audit of the Pittsburgh Bureau of Police last week, according to communications obtained by the Pittsburgh Post-Gazette under the state right-to-know law.
The controller's office launched the performance audit -- which, as opposed to a fiscal audit, can go beyond dollars -- through an email of March 21 to acting police Chief Regina McDonald. The email said preliminary objectives include "secondary employment and staffing." The first meeting with Chief McDonald occurred Wednesday.
Other communications between top controller's office officials and top police brass show that auditors launched a review of the police Premium Pay Account on Feb. 8 by emailing bureau personnel and finance manager Sandra J. Ganster. On Feb. 9, Ms. Ganster brought her concerns about the alleged diversion of funds meant for that account to public safety director Michael Huss, her attorney has said. The alleged misapplication of funds meant for the account last week became the centerpiece of the criminal case against former police Chief Nate Harper.
"It does appear that our [inquiry] is what prompted a whistle-blower to step forward," Controller Michael Lamb said. "I think that the work that we've done has helped to unveil this scandal."
Mr. Lamb, a Democratic mayoral candidate, has come under some criticism because police bureau accounting went awry on his watch. He said his office did what it could to keep a handle on bureau finances, asking for details on spending, but added that his auditors "can't control when that information is a misrepresentation or a lie."
The indictment against Mr. Harper alleges that he directed the diversion of some $70,000 in private payments for police secondary employment work -- this typically includes security details at bars, sports venues and construction sites -- which should have gone to the police premium pay account but instead ended up at an unauthorized account at the Greater Pittsburgh Police Federal Credit Union. Mr. Harper is accused of using $31,986 of the money for personal expenses, and his attorneys have said he will plead guilty to conspiracy and tax charges.
The Post-Gazette also demanded any "emails, letters, memos and any other correspondence, that reference the Greater Pittsburgh Police Federal Credit Union" that would have reached the controller's office. Deputy controller Doug Anderson wrote in answer that there were no such documents.
"Given the controversy, given the interest on council, the issue of the role the bureau is playing with respect to assigning secondary employment -- and also the billing and invoicing of secondary employment -- has raised a lot of red flags," Mr. Lamb said.
Mr. Lamb said police union sources encouraged him late last year to look at how the bureau handled payments for secondary employment.
His office began to take a first stab at the police premium pay account in the Feb. 8 email from fiscal audit manager Hadiza Buhari to Ms. Ganster. "I need some information regarding the Premium Pay Account," she wrote. "Who should I talk to?"
There is no reply email, nor is there an answer to a Feb. 11 request from Ms. Buhari to Ms. Ganster asking for a report on all Premium Pay Account transactions in 2010.
Ms. Ganster has become a key witness for prosecutors in the case against Mr. Harper, appearing before a grand jury just hours before his indictment.
Her attorney, Bill Difenderfer, told the Post-Gazette on March 7 that she became concerned with the diversions to the credit union because she concluded that the unauthorized account was used to pay for a freshly minted commander's promotion party. Mr. Difenderfer has said she went to Mr. Huss. Within a week, the FBI took boxes of documents from the bureau's personnel and finance and special events offices, and from the credit union.
Mr. Lamb said he had no direct knowledge of Ms. Ganster's motivations. Mr. Difenderfer could not be reached Thursday.
Mr. Lamb has pointed fingers at the mayor's administration -- and the finance office in particular -- because, he said, they should have been performing account reconciliations that might have turned up the fact that checks were missing. In turn, the mayor's administration has repeatedly criticized Mr. Lamb for failing to detect the alleged theft of checks sent for secondary detail work, which total millions each year.
Deputy finance director Tony Pokora said last week that account reconciliation is Mr. Lamb's job. "The controller is trying to shed blame for this," he said. "Anything with that much cash you would have to audit to make sure that there's internal controls.
"Michael reconciles all the accounts."
Mr. Lamb has said his office does not get data on revenue, like the checks paid by private businesses that were diverted to the credit union, so there is no way it could detect the leakage. He said his staff fully audits one public safety bureau per year, and this is the year for the Bureau of Police.
"We're fully cooperating with the controller's office," police spokeswoman Diane Richard said.
Mr. Lamb's office audited police use of money gleaned from joint federal-local narcotics busts in 2010 and again early this year. The city gets a share of the assets the Department of Justice seizes from drug investigations in which the bureau participates.
The money flows in $30,000 chunks to the bureau's Confiscated Narcotics Proceeds Imprest Fund, where it is converted to cash, kept in a safe and used to support various police operations. While federal rules allow use of the money for any law enforcement purpose, city legislation passed in 1987 earmarks the money solely for drug investigations. A Post-Gazette review of its usage found that money restricted by the city code to drug investigations went for general bureau travel, training and other miscellaneous expenses, including Gatorade, though the sports drink spending was later reimbursed.
The emails show tension between the controller's office and the bureau over the confiscated narcotics fund.
In December, a controller's office manager emailed Ms. Ganster urging her to request replenishment of the fund before it is spent down to near zero, "as to not make the check such a dire necessity for same day processing."
On Jan. 7, then-Chief Harper wrote to Mr. Lamb asking that the "narcotics [imprest] fund be increased to $50,000."
Mr. Anderson relayed the request to city council, indicating Mr. Lamb had no objection. Council has not acted on the request.
Ms. Richard didn't know whether the bureau is still pursuing an increase.
"It's not out of the ordinary for an increase to be requested," she said, "but the spending must still be within the guidelines."