By The Lane Report
FRANKFORT, Ky. (May 1, 2012) — As agriculture commissioner, former University of Kentucky basketball star Richie Farmer showered himself with gifts, rewarded friends with jobs and used state employees to take him hunting and shopping, mow his yard, build a basketball court in his yard and chauffeur his dog, according to a report from State Auditor Adam Edelen.
Edelen released the results of a special examination of Farmer’s administration Monday, saying his office found “a toxic culture of entitlement and self-dealing at Kentucky taxpayers’ expense.”
The 150-page report has been referred to the Kentucky Attorney General’s office, as well as the Executive Branch Ethics Commission, the Internal Revenue Service, the Kentucky Department of Revenue, the Office of the Inspector General of the United States Fish and Wildlife Services and the state Personnel Board.
The examination details an extravagant conference hosted by the former commissioner that cost Kentucky taxpayers more than $96,000; multiple instances of misuse of department resources and state employees for personal benefit; questionable spending of state and federal dollars, including tobacco settlement money; timesheet and travel reimbursement abuses by employees who had close relationships with the former commissioner; numerous merit system abuses and several management issues.
“The law makes no distinction between icons and the rest of us, and neither do I,” Edelen said. “The report paints a clear picture of an administration that had no qualms about treating taxpayer resources as its own.”
Seven professional auditors reviewed thousands of documents, including emails, invoices, reports, policies, timesheets, travel vouchers and personnel files from 2004 through 2011, with an emphasis on the past four calendar years. They conducted interviews with more than 50 individuals, including current and former KDA staff, Kentucky Proud vendors, Farmer’s former spouse and others.
Auditors attempted to interview the former commissioner, but he declined the opportunity, Edelen said.
The state auditor announced his plans to audit the former KDA administration in January at the request of newly-elected KDA Commissioner James Comer, who said he wanted to restore morale within the department and ensure the integrity of its operations. KDA employees had come forward with troubling allegations involving Farmer’s administration, according to a press release from Edelen.
The department, which has 300 employees and a total annual budget of $38 million, is responsible for regulating and promoting Kentucky’s agriculture industry.
The report details seven findings of Farmer’s the misuse of department resources and staff.
Over a two-year period, the former personnel director was directed to reserve hotel rooms in the names of two employees who she knew would not be staying overnight during the State Fair, Edelen said. Farmer used the rooms for his family members at a cost of $4,257 to taxpayers.
State employees reportedly performed work at the former commissioner’s house on state time, including constructing a basketball court and moving a gun safe from his garage to his basement. Employees also drove Farmer on shopping and hunting trips. In one instance, he allegedly called a merit employee who was attending a training course at a local university and directed him to drive him to an outdoor sportsman’s store in Indiana. In another, he reportedly directed an employee to drive him to hunt. The employee claims Farmer shot a deer from his state-issued vehicle and directed the employee to bag it for him, according to Edelen’s press release.
In 2007 and 2011, the former commissioner allegedly directed a staff member to fill Christmas baskets with items purchased by the department and donated by Kentucky Proud vendors for promotional purposes, then apparently gifted the baskets to family.
Farmer also directed staff to purchase two small refrigerators with department funds. He previously returned one of the $179 refrigerators to the department. His former spouse told auditors that she used the second refrigerator at her workplace and has since turned it over to the auditor’s office.
Farmer also took four laptops that had been intended to replace the computers of four staff members for his personal use. He returned three laptops and related equipment in January. Auditors discovered the laptop hard drives had been wiped “in an uncharacteristically aggressive manner,” Edelen said. One laptop and its accessories, plus another laptop that had been assigned to Farmer, remain unaccounted for.
The examination found several gifts worth more than $200 to the commissioner, including $900 in free concrete from a local vendor to construct a basketball court in his backyard. Gifts worth more than $200 are required to be reported to the Executive Branch Ethics Commission, but Farmer did not report any gifts during his eight-year tenure.
The audit includes six findings related to the 2008 Southern Association of State Departments of Agriculture (SASDA) conference, which Farmer hosted.
“The total cost of the conference to Kentucky taxpayers was approximately $96,000, yet it is unclear what overall benefit to Kentucky resulted from these expenses,” Edelen said.
The department sent $5,000 to the SASDA treasurer in 2007 to be used for the 2008 conference. It also gave a commodity group a $15,000 grant with the stipulation that $10,000 be given to SASDA for the conference. Based on interviews with department staff and documentation, it appears the department attempted to conceal or disguise much of its financial support used to offset the 2008 conference costs.
The department spent $15,635 to register 53 employees to attend the conference. In addition, many of those same employees were used as staff for the conference, resulting in $53,310 in costs to the state for more than 2,000 regular hours and overtime.
Farmer allegedly directed staff members to order excessive numbers of gifts, including rifles, rifle cases, knives, cigar boxes, shopping mall gift cards and watches. The majority of the excess items were taken to his home after the conference.
“For example, although there are only 16 other states in the organization, the department ordered 25 rifles, each worth $449. Only 13 commissioners, including the former Kentucky commissioner, attended the event,” Edelen said. “The former commissioner personally picked up and signed for 13 rifles, seven of which he has since returned to the department. Six rifles remain unaccounted for.”
The extravagance of the conference, which had less than 200 attendees, “shows a stunning disregard for the difficulties faced by Kentuckians who work for a living,” the state auditor said.
The examination found that a former employee, “who was commonly known as a hometown friend” of Farmer, was paid more than $70,000 for work hours and travel for which, “apparently no work was produced,” Edelen said.
An amusement safety inspector who us a cousin of Farmer’s former spouse, appears to have been paid and allowed use of a state vehicle when no department-related work was performed, according to the report.
“On one occasion, he (the inspector) drove 269 miles over 10.5 hours for an assignment that should’ve spanned 146 miles and lasted just three hours. In addition, a GPS device that had been installed to monitor his usage of the vehicle may have been tampered with to stop it from functioning,” the auditor said.
No significant work can be confirmed for a non-merit employee who had a documented personal relationship with Farmer, who signed her timesheets after the former chief of staff refused because of his inability to personally attest to the work being performed by her, the exam found.
• “The U.S. Fish and Wildlife Service gave the department ginseng it confiscated during an illegal harvest. USFWS directed the department to sell the ginseng and use the proceeds to benefit the ginseng industry in Kentucky,” Edelen said. “The exam found the department spent $43,000 of the $241,000 proceeds toward the purchase of vehicles for its animal enforcement officers, who do not perform duties associated with the ginseng program.”
• The department paid a grant recipient the full amount of a $15,000 grant derived from tobacco settlement funds, despite concerns raised by one employee that the grant recipient was not meeting the requirements for reimbursement.
“Tobacco settlement money is intended to help Kentucky farmers and diversify the state’s agriculture economy,” Edelen said. “Misuse of these funds should not be tolerated.”
• Two 60-inch televisions and wall mounting brackets were purchased for $4,192 during Farmer’s administration. One was mounted in an executive conference room and the other is mounted in the commissioner’s office. The department paid roughly $60 to expedite the shipping of the brackets, Edelen said. Staff reported that the expedited shipping was to ensure the televisions would be available in time for Farmer to watch the NCAA basketball tournament.
• Auditors found that Farmer pre-selected candidates for merit positions, rewarded bonuses without justification and retaliated against an employee, Edelen said.
Timesheets for four non-merit special assistants were not signed by a supervisor with direct oversight of their work and the employees were given limited or no specific job duties. In one instance, a supervisor refused to sign timesheets because of lack of work product. These four special assistants were paid for 683 hours in compensatory time approved by the former personnel director, who had no knowledge of their work.
• A former executive director and former director told staff to delay action against a grain dealer because it was during an election year and could cause a negative political outcome for Farmer, Edelen said.
• A $1.65 million fuel-testing lab that was projected to test 20,000 samples a year has not met its goal and lost the state more than $744,000 in fiscal year 2011.
Roughly half the department’s employees had permanently assigned take-home vehicles. Many of the employees were not justified in having state vehicles.
• Issues were found with the reporting of taxable benefits to the IRS and Kentucky Department of Revenue, ProCard administration, home Internet costs and more.