(This article was originally published on the Freedom Foundation blog on October 1, 2013, written by Glen Morgan, while he was the Property Rights Director at the Freedom Foundation. The original article posting was deleted by the Freedom Foundation in 2017. It has been reposted here exactly as it was originally written. Some links no longer work and some original images are no longer included in the article)
It’s not always easy to catch a thief. Just ask Dwight Pelz, Chairman of the Washington State Democrat Party. Although Chairman Pelz was not directly supervising Michael W. King, Campaign Director for the Senate Democratic Campaign Committee, he does have to deal with the fallout from Mr. King’s recent run-in with the law. Mr. King was in King County Court charged with embezzling over $250,000 of campaign funds from this Democrat Party Committee. During the course of Mr. King’s embezzlement spree, his supervisors included Democrat Party Senators Sharon Nelson (D-Seattle), Ed Murray (D-Seattle), Lisa Brown (D-Spokane), and former Senator Derek Kilmer (D-Gig Harbor, now Democrat Congressman 6th District), among others.
A recent Tacoma News Tribune article (since vanished – related articles linked here and here) indicated that this theft may have contributed to less than optimal election results for Washington State Democrats. Combined with the unfolding of the 2012 Ramtha-gate debacle, Mr. King’s crime certainly was a distraction for the party attempting to retain control in the Washington State Senate.
The Democrat Party is not the only entity in Washington State that has suffered due to inadequate oversight and criminal behavior by unethical employees. Unfortunately, local governments are experiencing similar problems on an all-too-frequent basis. Here are a few recent highlights of how government employees have stolen taxpayer funds in our state:
- Former office manager of the Lake Forest Park Water District Jackee Bormann-Sweekhorst pled guilty on September 11th to embezzling more than $350,000 from the local water district (located in North King County) between 2004 and 2011.
- Former Clallum County Treasurer Catherine Betts was convicted in 2011 for embezzling more than $600,000 of real estate excise tax proceeds between 2003 and 2009. This story was news earlier this year because her case was heard at the Court of Appeals last March. Catherine Betts is currently serving time in Purdy, WA, and will be eligible for release in 2019.
- Seattle Public Utility engineer Joseph Phan pled guilty on September 26 to embezzling $1.1 million of public funds, the largest embezzlement of public funds in King County’s history so far. Read this excellent Seattle Weekly article to see how he was able to land another government job at the City of Bothell, even after this scandal broke. Six other employees were caught doing the same thing, only in smaller amounts.
- Former Franklin County Public Works Accounting and Administrative Director Dennis Huston was sentenced to 16 years in prison this March for embezzling over $2.8 million from Franklin County over 22 years.
Pictured (left to right) Dennis Huston, Catherine Betts, Joseph Phan (missing photo). All government employees convicted of embezzlement in Washington State in different local jurisdictions.
These are just the cases that have received some level of local media and legal attention over the last few years. It is not unreasonable to assume that a substantial amount of fraud goes undetected, and Joseph Phan’s current position as the record embezzler of taxpayer funds in King County is unlikely to stand long. Fraud, including embezzlement, is a fact of life because humans are flawed, and a certain percentage of people, under the right circumstances, will take advantage of opportunities to steal. This is particularly true if the criminal believes they will not be caught.
The likelihood of embezzlement also increases in the public sector where transparency is not always upheld, proper accounting controls are not strictly enforced, and large sums of tax dollars are handled. Catching these thieves is one benefit of having an assertive auditor in office for state and local jurisdictions.
The Freedom Foundation has always recognized that humans are flawed – in and out of government -and this reality has motivated our support of improved transparency laws, a robust auditing process to improve oversight, and performance audits. We were strong supporters of Brian Sonntag’s efforts to improve government efficiency and openness when he was Washington State Auditor. Our recognition of the critical importance of open government and robust auditing efforts is also why Brian Sonntag is working with the Freedom Foundation, continuing to help educate government and community leaders on the importance of these issues even when he is no longer in elected office.
Government employees are not the only people who steal money, as the Democrat Party has recently learned with Michael King’s guilty plea last week. Perhaps, recognizing that everyone can benefit from good financial oversight, controls, and robust auditing efforts, Dwight Pelz will reconsider his recent ex-communication of Brian Sonntag and bring him back into the Democrat Party to help restore more effective financial controls and improved auditing efforts. It would be difficult to find anyone more qualified for this task.
Human nature will not change, so it certainly helps to have a good auditor on your side if you are trying to catch a thief.
Update 10/1/2013 – Since I wrote this, Washington State Democrat Party Chair Dwight Pelz announced his resignation. Amazingly, he took the time in his resignation letter to Praise Michael King – the embezzler! I guess I was wrong in assuming that embezzling $250,000+ dollars in campaign funds was not approved. You can’t make this stuff up. See article here. Read the letter for yourself.
The following were the original links I could find linked in the original article:
Seattle Met – Feb 22, 2013 – “Breaking: State SDCC Director Under Investigation for Stealing Party Money”
DailyMail – Sept 25, 2013 – “Democratic campaign worker stole more than $250,000 in donations to fund his gambling and alcohol addictions”
Puget Sound Business Journal – Sept 12, 2013 – “Ex-Lake Forest Park Water District clerk pleads guilty to fraud”
Peninsula Daily News – March 31, 2013 – “State Court of Appeals to hear of missing Clallam County money”
Puget Sound Business Journal – September 27, 2013 – “Ex-city of Seattle employee pleads guilty in $1.1M theft”
Wayback Machine – Seattle Weekly – April 10, 2012 – “Chau Phan: Joe Millionaire – How an SPU employee allegedly pulled off the largest government embezzlement in modern Seattle history”
Seattle PI – March 6, 2012 – “Ex-SPU worker charged with 70 thefts in $1M embezzlement”
Washington State Wire – August 29, 2013 – “Former Auditor Brian Sonntag No Longer a Democrat, Declares State Party Chair Dwight Pelz”
Wayback Machine – The Stranger – Sept 30, 2013 – “Dem Party Hack Dwight Pelz to finally resign”
