Private Use of Ludington's Public Credit Cards, 2019 Edition, pt. 1

[XLFD]

The City of Ludington allows many of its officials and employees the use of a credit card in order to purchase necessary goods and services for the performance of their duties. This is fairly convenient and practical, but it can also lead to abuse when the purchases fail to be used for their intended public purposes. Every credit card used today by city staff will need to be paid off a month or two later with public funds, so those purchases need to support the job they're doing, and not used for their own private purposes.

This is codified at least a couple of places in Michigan law. MCL 15.342(3) in the standards of conduct for public officers section says: "A public officer or employee shall use personnel resources, property, and funds under the officer or employee's official care and control judiciously and solely in accordance with prescribed constitutional, statutory, and regulatory procedures and not for personal gain or benefit." As may be expected, officials who suspect that fellow officials are violating this law have a duty to the public and their oath of office to report such behavior; they cannot be punished for their whistleblowing.

It can actually be a criminal offense to misuse public funds. MCL 750.490a states that "An officer or employee of any governmental agency shall not purchase... any goods, wares, or merchandise of any description in the name of or on the credit of the governmental agency for any other purpose than for use... in the regular course of the official business of the governmental agency." Violation of this statute is a misdemeanor.

In a prominent Michigan law firm's webpage entitled Ethical Considerations for Township Officials, they point to statutes closely related to ethical conduct and duties of local officials. The overarching message is clear and serious: public funds cannot be used for the private purposes of officials. I outed one of many instances just 26 months ago while speaking at a council meeting:

"Last November, [then city manager] Shay and Chief Barnett caught a late lunch at Jamesport Brewing Company, enjoyed it enough to leave a 20% tip, and put it all on their city credit card. They charged their lunch and gratuity to us, apparently because they were allegedly discussing contract revisions. They both have offices we maintain, they both are paid more than fair wages and benefits to afford their own meals. Both gentlemen should be aware of the laws regarding the use of public credit, and why this was highly unethical of them, if not illegal."

And this came up because a city contractor, the DDA's Marketing Director Jen Tooman had earlier that year used a city credit card to pay that same restaurant $248 for allegedly supplying a party that had happened several months before the charge was made. The crooked administration of John Shay along with every other city official at the time ignored that misuse of funds. Perhaps we should not be shocked to learn that city officials are still abusing your taxes.

This article will look at some of the City's questionable credit card purchases throughout the first half of 2019. This was a transitional period of administrations with Interim CM Steve Brock finishing off the first month, followed by nearly two months of Asst. CM Jackie Steckel taking the lead position, and then newbie Mitch Foster donning the mantle. Having reviewed other periods, the misuse of the city's credit during this time wasn't significantly different from other periods that I have looked at with periodic FOIA requests for that information.

In January's company card bill, often abused by the DDA, we see a couple of charges that stand out when looked at closely:

And those stand out because they correspond to purchases that seemed questionable at the time as noted in the councilor packets of a 'funeral planter' and 'NYE entertainment lodging:

The FOIA response indicated the receipts used. Sue McAdam's planter included not only a planter, but a nice card and several other funerary items. McAdam had never been a city official so it's difficult figuring out why the public monies were tapped for this non-public gesture. The lodging bill turned out to be 3 rooms at Nader's Motel for beer tent entertainers on the night of New Years Eve. Paying them to play at a DDA event is one thing, but using public funds to house those musicians at Councilor Lenius' daughter's inn seems a tad unethical.

We should all be thankful for the selfless volunteers serving on the Ludington Board of Review, but even more thankful that they don't meet too often. This is because they racked up over $200 in charges in two days of meeting with pizza joints outside of the city limits:

 

You can see from the Mancino's receipt and Pizza Hut receipt, that they were very generous to these providers, including a 19% and 22% tip respectively. Why not, it's only taxpayer money. Can we expect an honest review from this board when their snack/dinner for five is being provided to them courtesy of the taxing side (with your money)?

The next month showed a sizable expense at Jamesport Brewing, the City's preferred dining depository for public funds:

The Jamesport receipt shows the event was a volunteer appreciation dinner held by the recreation department. Perhaps they should take a hint from the Lakeshore Food Club who had their own volunteer appreciation dinner in 2019 and catered it with donated food from area restaurants, none of which had Jamesport in their name. The city spent over $600 of taxpayer money for this volunteer appreciation dinner, and yet the general public was never apprised of it or of the volunteers that inspired it.  We can't appreciate their volunteerism, but we can negatively appreciate this abuse of the public dime by non-volunteers.

The last two charges deal with first responders and their love for anything pizza. The date of a giant Mancino's bill coincides with the new $2 million Ludington Fire Department's open house and rather than subject the public to the usual firefighter-prepared cuisine they themselves were accustomed to, they ordered $326 worth of grinders, just in case paying off the loan and interest to build this new station wasn't enough for you to handle:

See the Mancino's mega receipt. Second in command (since-retired) Captain Mike Harrie saved the taxpayers some money by using a coupon to make his Pizza Hut bill down to $30, but it hasn't been divulged as to what public purpose these three pizzas and sodas were used for:

Maybe Capt. Harrie's pizza and pop were used to coax someone from jumping off Longfellow Towers, but more than likely it was for placating the hunger of him and his fellow officers, a non-public use which many police departments would find impermissible under their ethical codes.

As you can see, there are several questionable purchases being made with tax-supported credit even after the corrupt John Shay years. Our current leaders must humbly observe that the people of our community struggle to see why our leaders are divesting public funds away from their core purposes and using them for restaurant tabs, hotel bills for musicians, and other non-public purposes.

There is a simple and cost-saving solution to address that struggle. Quit spending public money when it is illegal and/or unethical to do so. Repeat.

[shinblind]

''All citizens of Ludington are equal.''  has become,  ''All citizens of Ludington are equal but some are more equal than others.''

Vote the Old Guard bastards to the curb this November.

Drain the Ludington swamp.

[XLFD]

The Finance Committee sees these charges each meeting and passes them along as fair uses of the public's nickel, we need somebody to run against Les Johnson in Third Ward who is on that committee and has chaired it in the past when it was at its worst.  We need anybody in the City to run for the at-large council seat occupied by Brandy Henderson who is a staunch defender of the old guard and their corrupt policies and now chairs the committee.  

These incumbents will be hard to beat, you know they will be supported by the newspaper and Brandy's organizations (the Chamber, the CVB, and the DDA) and it will be hard to contrast yourself from them or prevent them from exploiting your weaknesses.  If you can't run, actively support the good candidates for good change.  There will be plenty from the old guard backing the bad candidates.

[shinblind]

''These incumbents will be hard to beat...'' 

''Difficult but not impossible.'' from the Godfather.

 

[XLFD]

Not impossible, I believe that Miller and especially Johnson both have vulnerability against one-issue 'marijuana candidates' who can frame the election as a referendum as to how the people of the city and the 3rd Ward voted in 2018.  If they can otherwise hold their own as a responsible alternative they could conceivably win. 

The same tact would not work against Councilor Lenius, whose affluent 1st Ward rejected rec marijuana.  He also has the strength of being an incumbent for decades if we look back at his county commissioner experience.  Another tough obstacle.  Councilor Serna is probably the most vulnerable, but shouldn't be by dint of her actual record.

[AQUAMAN]

Any idea of what the Cops Plus and Amazon charges that repeat over and over are for too?  Yes and that Jamesport Brewing bill for over $628 is really something too. I'd like to see the actual Jamesport bill broken down for individual purchases, bet that would be interesting. Thanks for the heads-up again X on the back-door expenditures of questionable nature for sure.

[XLFD]

I will supply .pdf files of the bills and receipts on request, but I didn't necessarily want to quibble over every single purchase made over the internet when it appeared that it could be something used for that department.

Hence, most anything the LPD could purchase from Cops Plus could conceivably be used by the LPD in their normal course of business.  The Amazon purchases were reviewed, and those purchases also looked like they were purchased for public functions, and I am willing to give the City the benefit of the doubt that they were put to public use. 

Where I didn't give much leeway was with restaurant purchases and motel bills for musicians.  I was almost willing to excuse the 'planter' as a cemetery expense of the sexton's, but the purchase of water baubles and a (sympathy) card showed it was a purchase made outside of the general public interest.  My mom (along with many other Ludington residents) died last year, she was laid to rest in a city cemetery, and nobody from the City paid for these items for her.  To her credit, Councilor Winczewski sent me a sympathy card after my mother's death, brought and mailed on her own dime, that's what the person who made this purchase should have done-- used their own money-- to show true respect for the departed.

I posed a seemingly hypothetical question of why the City might have spent money on various funerary items for Sue McAdam, while being pretty sure I know the motive.  Would anybody want to guess why?

[XLFD]

Be advised, I had used the wrong files for the 'planter' link and 'lodging bill' link towards the beginning of the article, they have been corrected to show the proper bills.

[Willy]

Thanks X. The City should pay you for keeping track of what's going on. I'm glad the City uses credit cards for these types of expenditures because there is "usually" a record of what is spent, how much and where it is spent. Much better than borrowing from the petty cash box.

[XLFD]

Maybe they'll pay me with a credit card one of these days.  Using credit cards for expenditures isn't a bad idea, as you notice there is a good paper trail left behind, but the second part of accountability is to recognize when a charge is not appropriate, which is something the city has been lax on, and their newest rules and codes are not very clear on misuse of entrusted funds-- nor do they seem to be doing a good job of self-oversight by the credit card user and those who later authorize the charges.  Hopefully, that will come in the very near future.

[stump]

  Accountability is what is needed in any transactions. When I was working, one of my jobs  required purchasing items with a credit card, my limit was $250,000. per month. There were months I spent over that snd had to use my assistants card. There was only one time I recall that accounting questioned what I purchased. I had purchased what was listed as a trash truck. In reality it was a plastic hopper for custodians to put trash in .   At least someone looking over the charges.   On the City Lunch meetings are questionable in my eyes and paying for alcohol drinks during  city paid meals is definitely a no no. Back when I was working and went  out of town for company related trips,  the meals were paid for but no alcohol . Milk , soda or water . If you wanted a a alcohol drink you paid for it yourself and you couldn't of coarse drink and be the driver.  

[Willy]

stump. Is that $250,000 a misprint in your post? I didn't know credit cards went that high. Imagine a credit card thief getting hold of that.

[stump]

 No mistake on the $250,000 . The guy that replaced me got it bumped up more.