Idaho State Treasurer Ron Crane, battered in recent years by charges of padding expenses, excessive state-funded travel and mismanagement of state investments, now faces a wrongful-termination claim that alleges a former deputy was fired for trying to stop some of the office’s excesses, writes Bill Dentzer of the Idaho Statesman; the claim includes explosive allegations that Crane cost Idaho taxpayers large sums of money for his own political gain.

In an article published over the weekend, Dentzer reported that Christopher Priest’s notice of claim, filed Thursday with the Secretary of State’s office, says Priest’s termination from the Investment Division last November violated the state’s whistleblower law, and that he “was terminated in direct retaliation for communicating in good faith the existence of extensive waste of public funds/manpower and illegality” in the office, where politics and avoiding bad publicity drove decision-making.

A 10-year employee of the office’s investment division, Priest and another division employee, Travis Schaat, were fired last November, two weeks after all five members of the division were put on notice for insubordination, on charges of not sufficiently supporting Crane’s decisions. You can read the notice letter here; it’s “Exhibit A” with Priest’s claim.

Priest is seeking at least $207,460 in damages. Among his allegations, and this is a partial list:

• That Crane personally selected Idaho Trust Bank to invest tax anticipation note proceeds, a function the office could have handled in-house, at a fee of $75,000 a year since 2005; the claim says “several investors and highly-ranked executives at Idaho Trust Bank are personal friends and campaign donors of Treasurer Crane.” When staffers pushed to put the service out to bid in the spring of 2014, Crane agreed, but said it’d have to wait until after his re-election campaign in the fall. “He was counting on TAN service providers to support his campaign, and he could not risk offending them prior to his campaign,” the claim charges. Finally, after receiving numerous lower bids, Crane again awarded the service to Idaho Trust Bank.

• That Crane refused to put out for bid another contract, for the tax anticipation notes financial advisor, instead awarding it again to the longtime advisor, Cheryl Cook, without bids, because “he could not offend Cheryl Cook” because “Ms. Cook’s political support was essential.”

• That Crane continued to pay Mike Tracy $4,000 per month for public relations services, including $2,000 for the unclaimed property division, although the division was dissatisfied with his work, and Crane rejected recommendations to put the service out for bids.
• That Crane employs an executive assistant who is the director and registered agent for Crane’s “Smart Women, Smart Money” conference, for which state lawmakers have authorized the office to donate $10,000 a year, but the executive assistant “works exclusively” on matters involving the conference.
•  That Crane paid exorbitant premiums to a single broker for many years to handle Local Government Investment Pool securities transactions, and brushed off employee complaints about the issue.

• That Crane signed a settlement agreement with a securities lending agent firm, Victory Capital, in 2012, while refusing to consult outside securities counsel, that later prevented the state from pursuing a claim for compensation for losses that Idaho taxpayers incurred over distressed assets.

• That Crane refused to sign off in a timely manner on an outside audit conducted by Eide Bailey in 2014 because “he did not want the information contained in the audit to be made public until after the forthcoming election.”

• That Crane accepted meals from private companies while on trips related to issuance of tax anticipation notes, but “routinely” exceeded the allowable charges the companies set for the meals. “Treasurer Crane would either use taxpayer funds to pay the excess, or he would beseech the private companies to characterize the excess as a campaign donation,” the claim charges.

Priest says in the claim that he was fired for raising concerns about all those items and others, and for answering questions “truthfully and honestly” during a fiscal year 2016 audit of the treasurer’s office conducted by the state Audits Division. He says he and others in the office’s Investment Division were told their job was “to support and protect Treasurer Crane and make him look as good as possible.”

You can read the full complaint here. Dentzer’s full story, from Saturday’s Idaho Statesman, is online here. Crane told the Statesman he hadn't had a chance to review the claim in depth, and couldn't comment on personnel matters, tort claims or pending litigation.

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