(Editor’s note: This is the second part of a multipart story. The first installment was in Friday’s edition and can be found at http://bit.ly/2rNnb5Z. The next installment will be in Tuesday’s edition.)
After allegations of fraud, waste and abuse came to the attention of the executive leadership of the Texoma Council of Governments, legal depositions show relationships inside the leadership team were fractured and eventually led to the firing of then Finance Director Stacee Sloan Caskey.
On Oct. 13, 2015, David Ryon, a maintenance worker for the Texoma Housing Partners, reported that his supervisor Gary Edwards, the public housing maintenance program manager, perpetrated fraud, waste and abuse inside the organization. While Edwards was fired the next day, more allegations involving Edwards later surfaced.
TCOG Executive Director Susan Thomas, in her Nov. 15, 2016 deposition, said the organization suffered no losses as a result from Edwards’ actions and no taxpayer money was lost.
“We’ve spent a good deal of time talking to employees,” Thomas said. “We hired a third-party investigator to talk with those employees, review invoices, and insure that there was no fraud, waste or abuse that has been left undone, or unmanaged, or unhandled.”
As TCOG’s executive leadership dealt with the fraud, waste and abuse allegations, depositions taken during discovery for a lawsuit filed by former Sloan Caskey, who was terminated in January 2016, document the in-fighting that occurred behind the scenes.
Leading up to the Edwards discovery, the executive leadership team met weekly and was formed by Thomas, Sloan Caskey, current Deputy Executive Director Randy McBroom, Client Services Department Director Allison Reider and Information Technology Director Raj Croager.
Thomas said in her deposition that tension between Sloan Caskey and Reider was present and dated back to January or February of 2015. She noted a heated argument between the two had occurred earlier in the year, and that two or three instances formed a kind of building block next to the Edwards issue.
“It was this sort of knit-picking, back-biting, but at the same time, somewhat passive aggressive,” Thomas said. “You couldn’t really get your head wrapped around it. But there were some specific instances later throughout the year that really created a tremendous amount of tension.”
In Croager’s deposition, which was conducted on Feb. 9, 2017, by Robert Maris — an attorney for the defendants of the suit, the information technology director said the team was functioning at a high level, but that ceased after a retreat held at the end of September 2015. He noted a conversation he had with Sloan Caskey where she indicated she did not trust Thomas as she claimed Thomas covered for Reider.
“She felt that — or she believed that Susan gave Allison favoritism,” Croager said.
The executive leadership went on a retreat known as the “The Great Escape.” The team would go on retreats occasionally to focus on the direction of TCOG without office distractions. A third-party consultant was brought in, as Croager said, “to help everyone feel comfortable, to open up and discuss topics that they may not otherwise feel comfortable discussing.” The September retreat was designed to get the issues in the open, so the team could move on and look toward the future of the organization, he said.
During this retreat, Croager informed Thomas of Sloan Caskey’s feelings of distrust due to a relationship between Thomas and Reider. When Croager told Thomas this, he said Thomas was hurt and felt disappointed.
“I think — I believe she felt that it was a personal attack, that she takes a lot of pride in the staff trusting her,” Croager said.
Musical chairs incident
Thomas became executive director in 2008 after working as a policy advisor and public information officer for the Fayetteville, Arkansas, mayor’s office. During the course of her work at TCOG, Thomas developed a close friendship with Reider, who has worked for the organization since the early 1990s.
“It was a personal relationship. It was a friendship. It was a good friendship,” Thomas said. “And there were — I would describe what happened a number of years ago as mistakes were made and corrected, is — is how I would describe it.”
While Thomas did not described the relationship as romantic, she conceded that there were times when lines were crossed, which she later described in the depositions as intimate moments dating back to 2010 and 2011. In Reider’s deposition, which was held on Nov. 16, 2016, she characterizes the relationship as a friendship. But under questioning, she confirmed that it developed into more than that.
Thomas said the relationship did not negatively impact her work or influence her decision making. She said in the deposition that she takes full responsibility for it, but did not notify the full governing board of the relationship.
“I’m sure that Allison would take her own level of responsibility but as the — again, because — it’s a mistake because it occurred in a relationship that also had a professional component to it,” Thomas said. “And because I am the superior in that relationship, it is my responsibility.”
While Sloan Caskey would claim in her suit that the relationship played a role in her firing and how the fraud, waste and abuse allegations were handled, a component of it led to trouble inside the executive leadership. Croager and Sloan Caskey exchanged texts venting frustrations about the friendship between Thomas and Reider and issues of incompetency. Croager noted that Reider would always sit to the right of Thomas at executive leadership meetings. Croager said he came up with the idea for Sloan to sit in that spot instead.
When Croager was questioned by Sanders, Sloan Caskey’s attorney, he said the incident did cause anger from Thomas and Reider. Thomas characterized this incident, “the musical chairs incident,” as one of the disruptions Sloan Caskey caused, and she said it was “childish and ridiculous.”
“Stacee determined that it was her position as the finance director to be the right hand of the executive director, and felt that psychologically sitting next to me at my right hand would help, I guess, make that true,” Thomas said. “So her and Raj plotted to have her come to a meeting early and sit at the right hand.”
Sloan Caskey terminated
As Sloan Caskey began her investigation into the issues of fraud, waste and abuse perpetrated by Edwards, Croager said that she told him she didn’t want Reider involved in her interviews for the investigation as they involved personnel under Reider’s supervision.
“I concurred with Stacee that if Allison was potentially implicated in any fraud, waste and abuse, it would be inappropriate for her to be involved in the interviews,” Croager said.
Croager noted the executive leadership had a meeting on Oct. 20, 2015, where the intent was to hash out issues between Sloan Caskey and Reider. He said there was frustration and discord between them. He said Reider felt cut out of the investigation and there was a lack of trust. These issues made the team “relatively dysfunctional,” he said. He noted that days later Reider shared with him superstitions of vendor abuse perpetrated by Edwards involving tree trimming. Sloan Caskey noted in her report that Croager told her of these suspicions.
Reider in her deposition said she didn’t report these suspicions to Sloan Caskey as required by policy. On Nov. 4, 2015, she said Susan Ensley, the public housing program manager, called her after Sloan Caskey was questioning her about invoices and reports. Reider called Sloan Caskey, and Reider was asked about invoices being paid for work not completed and not reported.
“She went on and on about how it was her responsibility. She had a — a responsibility to the board, a fiduciary responsibility,” Reider said. “And this is just like TAPS, and just went on, and on, and on. At which point I said, ‘Stacee, if ever this happens again where someone is terminated and discussions are had about things they could or could not have done, I will be sure to report those directly to you.’”
Thomas said Sloan Caskey became aggressive and insubordinate in early November 2015. As the additional allegations involving Edwards surfaced, and Reider didn’t report those allegations to Sloan Caskey, the finance director wanted Reider terminated. Thomas said Sloan Caskey was basing her recommendation for termination on supposition and unsubstantiated allegations. Ultimately, Sloan Caskey wanted Reider disciplined as she did not report the information to her.
“Allison didn’t report it to Stacee. She spoke to Raj about it, she spoke to me about it,” Thomas said. “The fact that she didn’t report it to Stacee and didn’t follow to the letter of the law reporting it, not only talking to her supervisor and talking to Raj about it, and we had an open conversation about it, that was not a huge problem to me.”
Thomas noted that Reider was later written up for not following the policy, but she was not suspended or terminated. Thomas said Sloan Caskey became incapable of being an effective member of the executive team during this time.
“I think what shifted on Nov. 5 is when Stacee became insubordinate to me, insolent to me,” Thomas said. “That’s when I learned that this is a much bigger problem that I understood. Here I am trying to mediate between two members of the team and make things better working with them individually, and it — and it shifted to be against me. And that’s when I knew things — that the landscape had changed.”
Thomas said she lost confidence with Sloan Caskey, and she was sent home on Dec. 9. Thomas said her objective initially was to work through a performance improvement plan or an evaluation, though termination was an option. Sloan Caskey was terminated in early January 2016, and Thomas noted at that point she removed herself from the situation and McBroom moved in.
Croager said terminating Sloan Caskey was justified as she had become combative and caused the team to be unproductive. After Sloan Caskey was gone, he said the discord settled and the team began working toward rebuilding trust.
“I believe Stacee was a cancer on the team and that she was negative and disruptive,” Croager said.
Sloan Caskey filed grievances and claimed the process for how grievances were handled were not followed correctly. She later filed suit against Thomas, the former TCOG board president, and TCOG itself. In April, the TCOG board approved the settlement of the suit, which agreed to pay Sloan Caskey $555,000 plus 18 months of COBRA insurance coverage for her and her family.
In mid-January 2016, Thomas selected Elizabeth Miles, a certified public accountant, to follow up as a third-party investigator on the fraud, waste and abuse allegations involving Edwards at THP. Miles’ report, which was dated Feb. 12, 2016, and was submitted to the governing board the same month, examined Sloan Caskey’s report and for the most part concurred with her findings.
In Thomas’s deposition, she said the accounting consultant for TCOG suggested Miles conduct the investigation as Miles had experience in public housing accounting. Thomas said she initially contacted Miles through text, and from there McBroom was Miles’ point of contact with TCOG. The third-party investigation also served to address Sloan Caskey’s grievances. Miles was ultimately paid $7,875 for the February 2016 report.
“My position is that I didn’t want to put the board — I didn’t think it was fair for me to ask the board to believe me or believe Stacee,” Thomas said. “… I thought it was important to get a third-party objective opinion about it.”
Miles notes in her report that she was not associated with TCOG, and has numerous years of experience in public housing authorities as an independent auditor. Miles listed her objectives of her engagement as: to review the finding of Sloan Caskey’s report and either concur or refute those findings; identify if management or staff had knowledge of ongoing illegal activities of Edwards; identify if fraud, waste and abuse was ongoing at THP; and make recommendations for management so fraud, waste and abuse can be better detected and prevented.
In the summary section of the report, Miles concluded that she “did not identify any ongoing fraud, waste and abuse” and she “did not identify any ongoing circumstances which caused me to believe that management at THP or TCOG had any knowledge of the FWA being perpetrated by Gary Edwards.”
The report retraces the first steps executive leadership took after the maintenance worker made the initial report that alleged Edwards was responsible for fraud. The report states Sloan Caskey’s findings on the tractor were adequately documented.
On the time sheets incident, where a maintenance worker repaired Edwards’ home air conditioner and was instructed by Edwards to record the time on his time sheet, Miles notes that she personally interviewed the employee. She states in the report that the incident occurred at about 11:45 p.m. and Edwards allegedly told the employee to go to Edwards’ residence immediately as he had company. The worker did not record the time on the time sheet, and Miles noted he was never compensated by Edwards.
Miles confirmed that the parts used in the repair were from THP inventory, and Edwards did have rock chips delivered to his home. The incidents of vendor relations abuse involving tree trimming and foundations repair as documented in Sloan Caskey’s report were confirmed as well.
On Edwards’ alleged purchase of underwear from the Duluth Trading Company, Miles reported “no fraudulent purchase was identified.” For the software purchase identified as possibly fraudulent, Miles concurred with Sloan Caskey’s findings in the addendum to her report.
On the claims that Edwards may have pilfered items from the maintenance shop in Bonham, Miles echoed the conclusion from Sloan Caskey that “it is not practical, nor likely possible, to determine the quantity or dollar value of supplies that were likely stolen from THP by Mr. Edwards.”
For the 13 invoices for make-ready units that totaled $5,585, which Sloan Caskey in her report identified as fraudulent, Miles found that manually kept logs provided by THP staff showed the invoices to be valid. Miles was also able to corroborate the manual logs with an outside reporting system that kept track of the tenant movements for HUD.
The report goes on to document the investigative process Miles took for her second and third objectives, to which she concludes that “I concur with the findings of the FWA Report with the exceptions of the fraudulent invoices.”
As far as who had knowledge about the fraud, waste and abuse tied to Edwards, Miles states “I believe it is plausible that neither his direct supervisor nor the Executive Director had any reason to suspect what was happening.” Miles also states that fraud, waste and abuse was not found to be ongoing, and she provided recommendations on what the organization can do to better detect and prevent fraud, waste and abuse.
“My concern was to determine if there was fraud, waste and abuse that had not been discovered, that was ongoing, or if there was a management relationship that was perpetuating the likelihood of fraud, waste and abuse, that was my objective,” Thomas said in her deposition. “If there had of been, we would have dealt with it. There wasn’t.”
After the Miles investigation, the legal proceedings involving the Sloan Caskey suit continued. As the suit was eventually settled in April, other issues persisted and outside questions continued on of whether TCOG leadership fully investigated all fraud, waste and abuse.