COUNTY ATIORNEV Jeny Vander Sanden

FIRST ASSISTANT Nicholas G. Maybanks

DIVISION ATTORNEYS

Felony Jason D. Besler Jason A, Bums Nicholas L Scott

Misdemeanor HeidI A. Carmer Brian D. Claney Laurie Craig Lisa M. Epp Matrhew Kishin;J!TIi Rena NIOd1US Jordan N. Schier Elena Wolford

Juvenile Rebecca Belcher WHllam C. Croghan Lance J. Heeren Kelly Kaufman

Civil Jeffrey L Clark Robert A. Hruska Gary p, J<!lyis Chrjstln~ Curley-

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PROFESSIONAL SUPPORT

Investigator James Noonan

Victim/Witness Chris Adcock Anastasia Wilson

Office Manager Diane Albers

www.linncounty.org

LINN COUNTY ATTORNEY'S OFFICE

Civil Division - 935 - 2nd Street SW, Cedar Rapids, IA 52404-2100 Criminal Division - 51 Third Avenue Bridge, Cedar Rapids, Iowa 52401

Juvenile Division - 211 8 th Avenue SW, Cedar Rapids, Iowa 52404

REPORT OF THE LINN COUNTY ATTORNEY TO THE LINN COUNTY BOARD OF SUPERVISORS REGARDING REVIEW OF FRAUD REPORT

OCTOBER 15,2012

On September 18, 2012, the Linn County Board of Supervisors referred for my review a fraud report investigated and compiled by the Compliance Officer for Linn County government who is charged with the

. responsibility of investigating possible incidents of financial misconduct in the operation of county government. .

The fraud report focused on whether a temporary employee hired by Linn County Auditor Joel Miller had submitted fraudulent or falsified time records in order to receive compensation for hours that were not worked. The act of submitting fraudulent or falsified time records to receive compensation not earned could be considered a theft under the Iowa Code. Theft is defined several ways in the Iowa Code. One such version is theft by deception which is committed when a person obtains something of value from another by means of deception. The degree of the theft depends on the value of the property taken. Any such criminal charge would have to be proved beyond a reasonable doubt in a court of law.

I have examined the report of the Compliance Officer in detail and have noted numerous facts and circumstances which would lead a reasonable person of prudence to suspect financial impropriety or, at the very least, fiscal mismanagement. The following facts and circumstances detailed in the report of the Compliance Officer supports the following conclusions:

1. The Linn County Auditor willfully and purposefully selected for temporary employment a close friend to act as a "project man<;lger" to implement an expensive software project for his department and, in doing so, intentionally disregarded and ignored standard county hiring practices. The retention of Joe Clara han by Auditor Miller under the circumstances set forth in the compliance report raises the specter of blatant cronyism by steering a professional employment position to a close friend contrary to acceptable and well-established principles of responsible governance.

Criminal Division: 319/892-6350 fax: 319/892-6389 Civil Division: 319/892-3940 fax: 319/892-6346 Juvenile Division: 319/892-6330 fax: 319/892-6339

2. Auditor Miller negotiated an employment contract for Clarahan through Kelly Services in which he arbitrarily set an hourly rate of compensation with no reference to a regular hourly work schedule. Employees of the Linn County Auditor who work at an hourly rate are typically required to work regular hours and document their time worked by clocking in and out through their computers using Novatime software. However, Joe Clarahan never worked a regular work schedule and was given discretion to choose his own work hours. He was placed on the "honor system" under which he was free to report his own hours to Kelly Services who, in turn, submitted an invoice to Linn County for payment of the hours Clarahan claimed he served. Auditor Miller indicated in his statement to the Compliance Officer in an unsworn statement dated August 22, 2012, (Miller refused to be placed under oath) that he believed in "flex time" and that he really didn't care about the hours being worked by Clarahan but was more concerned about the results obtained.

3. However, even though Joe Clarahan's sole responsibility was to work on the I-Maint software program, of the 119 days worked by Mr. Clarahan, activity in the i-Maint system was noted on only 30 days. There should have been activity recorded on the i-Maint system every day Clarahan claimed to have worked since working on that system was his only responsibility. Individual(s) in the same department reported Clarahan was absent from his work station for prolonged periods of time. There certainly is credible evidence to suggest that Joe Clarahan did not work the number of hours he claimed to have worked in order to obtain compensation from Linn County.

4. Even though Auditor Miller indicated he was more concerned with results than hours worked, there is a legitimate question whether Joe Clarahan obtained any discernible results on the i-Maint system for Linn County in exchange for the compensation he received. The following facts and circumstances in this regard support the conclusion that Clarahan achieved no discernible or measureable results with the i-Maint software:

• At the end of his employment, Joe Clarahan was to make an official presentation of his accomplishments with the i-Maint software to other staff members which included Auditor Miller. However, he was unable to launch his presentation and Auditor Miller abruptly disbanded the meeting and then met privately with Clarahan. The presentation was never rescheduled.

• Even though Auditor Miller made public assertions that Clarahan took something that didn't work and made it work, the laptop computer containing the i-Maint software sat idle in Auditor Miller's

office from the time Joe Clarahan left employment on March 16th

through April 30th, 2012, when the Compliance Officer asked for the

computer in connection with his investigation.

• When the Compliance Officer requested the computer in connection with the investigation, Auditor Miller initially refused to relinquish possession and kept the computer under lock and key. After Auditor Miller eventually relinquished the computer, it was discovered that Miller did not possess the administrative password for the i-Maint software which was installed on the laptop computer and efforts to obtain the password from Clarahan were unsuccessful.

• Despite Miller's public proclamations that Joe Clarahan got the i-Maint software working, Miller admitted his dissatisfaction with the system in an e-mail he sent shortly after Clarahan left employment. In a June 11 th e-mail to his assistant manager of the facility services, Miller indicated the following: "To date, I have not received one report or any indication that the County has benefited from the purchase of i-Maint and, to date, we have expended about $82K on i-Mainl." In this same e-mail, he threatened to take disciplinary action against this employee, including a threat of termination of employment, if the employee could not draft a plan for i-Maint to deliver value to Linn County. It is perplexing that the i-Maint software was not "providing value" to Linn County after the "project manager" hired by the Auditor devoted the entirety of his six (6) months of employment exclusively to the operation of the i-Maint system.

• Joe Clarahan refused to make himself available to answer questions about his employment by Auditor Miller when contacted by the Compliance Officer and refused to be interviewed in connection with the investigation.

Having reviewed the matter at length, I have concluded it would be impossible to prove whether a theft was committed or whether Joe Clarahan submitted falsified or fraudulent time records in order to receive compensation from Linn County. There is no definitive way to verify the time spent by Clarahan as "project manager" on the i-Maint system. Under Joel Miller's supervision, he was free to choose his own hours and was placed on the honor system to record his own time on the job. Clarahan was not required to log in his work hours on the Novatime software system as other employees of the Auditor's Office are required to do. Essentially, it would be impossible to prove whether Clarahan worked the hours he claimed because of the lack of supervisory oversight provided by Auditor Miller.

However, the circumstances under which Auditor Miller hired and supervised Clara han as a "project manager" strongly suggests the creation of a "make work project" designed for the financial benefit of another based upon friendship rather than objective or impartial employment criteria. Such a special preferential employment arrangement is clearly contrary to well established Linn County employment policies and procedures which are designed to promote equal opportunity and competitive bidding in the hiring process.

Respectfully submitted,

JERRY VANDER SANDEN Linn County Attorney

#1 ‐ Vander Sanden claims a "reasonable person of prudence" would suspect financial impropriety, but later admits he, as the duly sworn Linn County Attorney, could not “prove whether a theft was committed or whether Joe Clarahan submitted falsified or fraudulent time records in order to receive compensation from Linn County”.  #2 ‐ What defines expensive?  In my report to the Board on 5‐23‐2012 (http://www.scribd.com/doc/94563797/Auditor‐s‐Report‐Under‐Oath‐to‐the‐Board‐5‐23‐2012  ‐ see page 16 of 26), the Board of Supervisors paid MS Govern $430,894 for software that was never delivered.  In contrast, the iMaint software cost $38,050 and it's in our possession and operational.  #3 ‐ Vander Sanden admits "project manager" is a "professional employment position".  Board of Supervisor Purchasing Policy OP‐002 (http://www.scribd.com/doc/46278561/Purchasing‐Policy  ‐ see page 1 of 7) specifically exempts "professional services" from the Purchasing Policy.  I followed the Board's purchasing policy even though I had no legal obligation to do so in this circumstance.  #4 ‐ All county employees, contractors, and vendors are on the "honor system"; especially, elected officials, deputies, management, and assistant county attorneys.  Hourly employees use the County's Novatime system to clock‐in/out, Kelly temporary services employees use Kelly's online timecard system, and vendors/contractors use their internal clock‐in/out systems.  Management employees including assistant county attorneys are not required to clock‐in/out.  #5 ‐ Why would I consent to giving a political appointee reporting to the Board a statement under oath.  Tucker does not have the power to administer oaths and he took no sworn statements from any others.  He had no power to compel me to an interview; yet, I consented to being interviewed.  Is Vander Sanden is implying something negative about me when he writes, “Miller refused to be placed under oath”.  I am not giving up my rights for a sham investigation – not now – not ever.  #6 ‐ Vander Sanden is not an expert on purchasing, maintaining, or operating software.  He is so “low tech” he does not even carry a cell phone.  He has no idea if/when activity should be logged by a person working on software.  To my knowledge, he has no experience as a project manager.  Further, why would someone log into a system that was not working properly when he knew the system was going to kick him out in five minutes (which was one of the problems that Clarahan encountered and fixed)?  I have yet to see the log files for all 119 days.  Where are they?  #7 ‐ Where is the credible evidence?  If Vander Sanden had credible evidence, he would have arrived at a different conclusion.  His evidence is tainted by a couple of disgruntled employees – one who thought Clarahan was a spy and the other who thought Clarahan was after his job.  

#8 – Vander Sanden and Tucker based their findings on Cassell, who totally mischaracterized this meeting.  During his presentation, Clarahan demonstrated that iMaint was operational to Amanda Hoy, Becky Shoop, Cassell, and me.  Hoy and Shoop were never interviewed by Tucker or Vander Sanden.  I was never interviewed by Vander Sanden.  Why?  Because neither Tucker nor Vander Sanden wanted to interview anyone who might contradict the disgruntled employees who I believe initiated the investigation.  The meeting was ended because of the friction I observed between Cassell and Clarahan as Clarahan was doing his presentation.  #9 ‐ The laptop computer was used by Clarahan as his pc workstation to access iMaint; however, the iMaint software system runs on an iMaint server and the server is accessed by the end users using their pc workstations ‐ not the laptop.  The laptop sat idle because all of the end users have access to their assigned pc workstations.  #10 ‐ According to Cassell, IT had the administrative password for iMaint for several weeks and likely had the password at the same time Tucker was complaining about me not having the password.  On the other hand, if Tucker and/or IT did NOT have the password, then how did they conclude that Clarahan logged into iMaint on 30 occasions?  You should not complain about not having access to a computer system, then offer conclusive evidence that someone did something on the same computer system you supposedly cannot access, i.e., if you want to be credible.  Further, as County Auditor, I typically do not possess the administrative passwords for any software application.  I had my iMaint password and I was not really concerned about any other passwords when Clarahan terminated his employment.  #11 ‐ At the time I wrote this email to Cassell, the software was operational; however, Cassell was not making any effort to use it, which is why I wrote, "To date, I have not received one report...."  Vander Sanden knowingly took my communication to Cassell out of context.    #12 ‐ Now, Vander Sanden ‐ three pages later ‐ concludes he does not have a case, but continues his efforts to discredit Clarahan and me.