The ‘golden goose’ fund

Spokane police spent $5.3 million on cars, travel, gasoline, weapons, training, clothing, electronics and office equipment over two decades, using a private account operated by the department’s Special Investigations Unit – outside of public scrutiny and in violation of city and state laws.

The account was funded by seized cars, guns, cash and other valuables in drug cases and was to be used for drug-related investigations. Accounting statements obtained by The Spokesman-Review through a public records request show that the department applied such a broad definition of that purpose that the funds could be used for nearly anything: remodeling parts of the police academy, buying new radios for patrol cars or sponsoring a C.O.P.S. basketball team.

“People would come to SIU and ask for money, and if there was a drug connection … we could do it,” said Spokane police Capt. Steve Braun, who ran the unit from 1991 to 1997. “Everybody saw us as the golden goose of the department.”

In a few instances, though rare, Braun said, “The chief asked us to write a check, so we did.”

By state law, such funds can’t be used for general city purposes; they’re considered extra money for police departments to combat drug crimes. But the law, RCW 69.50.505, is broad, and in practice the money can be used for a wide range of activities that help with drug-related investigations.

Police maintain they have always been good stewards of the money. Every purchase request was vetted by a police commander in addition to the unit’s lieutenant, and Braun said some requests were denied. Even so, in the wake of a critical report from the state auditor’s office earlier this year, officials say purchases have become more restricted, and management of the fund has been transferred to the city treasurer’s office.

“It just had a life of its own until we discovered it,” police Chief Anne Kirkpatrick said of the funds. “But there was no willful knowledge of misuse of the account.”

Former chief opened accounts

Items used in drug crimes or thought to be purchased with profits from drug crimes can legally be seized by law enforcement officers. Guns, cars and cash are the most commonly confiscated items.

Owners have a chance to prove the property has no connection to illegal acts; for example, cash that may have been legitimately earned by working or jewelry received as a gift.

Failing that kind of proof, the possessions are sold at Reinland Auction in Post Falls, and the Police Department gets a check.

Revenue from the drug seizures and forfeitures went into checking and savings accounts opened at Old National Bank in the late 1980s. Former police Chief Roger Bragdon, who oversaw the Special Investigations Unit at the time, set up the accounts a few years after state law directed how the money could be spent.

However, those funds were handled outside the city treasurer’s office until the current chief discovered the problem last year.

Money collected by a public officer or employee must be deposited with the city treasurer’s office within 24 hours of receiving it, according to a state law on the books since at least 1909.

The police chief and the city’s chief financial officer, Gavin Cooley, requested an audit, which found no evidence of fraudulent use of the funds.

Cody Zimbelman, an audit manager for the Washington state auditor’s office, said, “The city brought this to us, so we know they are completely on board with making the changes, and they did.”

But the auditor’s office said that between 1998 and 2008, about $600,000 of expenditures lacked receipts, and nearly $2 million worth of goods were bought without competitive bids, a violation of city law.

Spokane City Councilwoman Nancy McLaughlin said she was proud of how Kirkpatrick handled the discovery of the SIU accounts. “The minute it was stumbled upon, the chief’s kept a light on it and they said, ‘We need to fix this.’ ”

But Councilman Bob Apple said he was disappointed it hadn’t been resolved before Kirkpatrick raised her concerns in spring 2008. “It means for more than 20 years they were doing it illegally,” Apple said. “I hope it’s on the up and up now.”

He added, “One of the problems with the city, the first thing we do is figure out how to cover it up, then promise to never do it again.”

At least 76 vehicles purchased

Records obtained by The Spokesman-Review show that the Special Investigations Unit used the fund to purchase at least 76 new, used or seized cars, trucks and technical vehicles during a 15-year period, including an Isuzu Rodeo, a Jeep Cherokee, a GMC Envoy, a BMW and a Pontiac Grand Prix. Vehicle purchases accounted for about $1.1 million of the $5.3 million spent from the account during that time.

A bomb truck that cost about $84,000 was purchased in 2006, records show.

Each of the 13 officers in the unit is issued an undercover car, typically a seized vehicle. Department policy allows SIU officers to commute in the vehicles and drive them during work. Braun said mileage on those cars was not tracked during his years. Nor are they today, said Lt. Dave Richards, the current commander of the Special Investigations Unit.

Records also show that on 46 occasions, Lt. Darrell Toombs, the unit’s commander from late 1997 to 2007, was given $100 checks for gas, with no receipts.

Twenty checks for the same amount and the same purpose were written to Braun.

Police officials said the two lieutenants used premium gas for the undercover car they drove – a 1991 Cadillac Eldorado Touring Coupe, which was passed in 1997 from Braun to Toombs. That type of fuel wasn’t offered at city-operated gas pumps.

Braun said he “probably kept cash in the car to get gas,” and when he ran out, he would get another check.

The checks stopped when Toombs started driving a seized BMW as his undercover car, according to a review of the public records. Toombs declined a request for an interview.

New radios for patrol cars

Among the other expenses in the SIU account records:

•Clothing and windbreakers for bike patrol, $721.64.

•Tasers, $45,447.

•Pistols, $2,027.

•Jackets and pants with DEA logos, $4,487.25.

•Police uniforms, $1,507.

•Computer with memory card, $7,819.

Money from the accounts can be spent as long as a connection can be made to drug investigations.

Upgrades to the firearms training system at the Spokane Police Academy – a $9,000 expense – were justified because the SIU used it to train officers, Braun said. The same applies to a partial remodel at the academy that cost $8,000, and maintenance of the academy’s shooting range, for $2,050.

When patrol officers needed new radios for their cars, they went to the Special Investigations Unit. Braun said they used $17,000 from the fund because patrol officers sometimes encounter drugs during traffic stops or receive information during a call that results in a seizure.

When the SWAT team found better protective gear, more than $19,000 was spent from the SIU accounts outfitting that team. Braun’s justification: The SWAT team often breaks down doors for the SIU, helping with drug investigations.

As recently as last year, money from the fund was used to buy special flashlights for police dogs – at a cost of $1,123 – because K-9s are sometimes utilized by the drug unit.

At least two expenditures appear to have no connection to drug investigations.

In 1997, an $800 check was written from the SIU accounts for a C.O.P.S. station basketball team. In 1993, $1,300 was spent to sponsor Copy Kids, an organization that covered up graffiti.

Braun said he was directed by his superiors to write those checks.

No purchases put out for bid before 2008

None of the purchases made using the seizures and forfeitures fund was put out for bid before 2008.

Braun said that when he took over the unit from Bragdon, using oral, written and public bidding was never mentioned. “No one ever said a word,” he said. “I just kept on doing business the way it had been done.”

When news of the audit was reported in February, former Spokane police Capt. Bob Allen, upset about oversight, sent Braun an e-mail, which was obtained through a public records request.

Braun responded to Allen, “The nice thing about it was we were able to purchase equipment without the City Hall process which normally took time.”

Allen wrote back, “I think the Chief did the right thing because obviously any type of ‘slush fund’ on a police department is a major problem. Bypassing the City bid process – that alone is a major issue.”

City law requires informal quotes for goods between $750 and $19,999, three written quotes for goods costing from $20,000 to $44,600, and a public bid process for goods costing more than $44,600. The threshold is different for personal services: Three written quotes are necessary for services between $10,000 and $60,000, with public bid required beyond $60,000.

Account use also violated state law RCW 35.39.032, enacted in 1969, that no investment should be made without the approval of the city in which it exists, according to the audit.

Braun and Richards said they or officers in the unit often did their own price comparisons before making purchases.

The auditors concluded that by not following state and city guidelines, the unit increased “the risk that public funds could be misappropriated, lost or misused and not be detected in a timely manner,” the report said. “The city also cannot be sure all expenditures from this account were for a legal, city-related purpose.”

The seizure and forfeiture funds were deposited with the city treasurer’s office in July 2008, and the city now has control over the use of those funds.