"Federal authorities arrested the comptroller of a small city in Illinois on Tuesday, saying she used more than $30 million in municipal funds to live a lifestyle that included a horse farm, a convertible and a $2.1 million motor home.
Rita Crundwell was charged with one count of wire fraud. The 58-year-old has been the comptroller of Dixon, Ill., since the early 1980s. In the role, she oversaw all finances for the city, which is best known as the boyhood home of Ronald Reagan. . . .
Ms. Crundwell, over a nearly six-year period, paid out more than $30 million from a city account for her personal and business expenses, according to the U.S. Attorney for the Northern District of Illinois.
A federal court filing describes Ms. Crundwell as living a "luxurious lifestyle" that included a horse farm with stables for 150 horses. Federal officials said she used city funds to purchase the 2009 Liberty Coach motor home, several trucks and trailers, and a Ford Thunderbird convertible. Ms. Crundwell has an annual salary as comptroller of $80,000. . . .
Federal authorities said they were contacted by Dixon Mayor James Burke last fall after a city employee who was filling in for Ms. Crundwell during an unpaid vacation found an account that city money was being deposited into and withdrawn from.
Investigators said they traced the account and withdrawals back to Ms. Crundwell. A further review of city bank records found the misappropriation of city funds dated back to 2006, according to the U.S. attorney."
Discussion and Analysis
Good people do bad things. We'll begin there.
People entrusted with OPM will often waste much of it if not monitored carefully and in a transparent manner.
Accordingly, it's always best not to tempt people, good or bad. As President Reagan put it, "Trust but verify."
MOM like rules should always apply to OPM, especially when the public trust is involved. And that trust is always involved when taxpayer monies are expended by government officials.
Accountants follow a basic principle known as segregation of duties. Simply stated, it means that an employee that approves the writing of checks isn't to be the same person as the one writing the checks. Or that a different employee reconciles the checkbook than the one who wrote the checks and so forth.
In other words, while we can't always prevent a bad thing from happening, we can at least make it hard for the wrongdoer. And frequently we can nip bad behavior in the bud when it does occur.
As a result, we can at least make it hard for an employee to steal. And we do this by making the presence of a two or more person conspiracy a fundamental prerequisite to steal. Thus, one person acting alone should never be able to engage in financial theft for any extended period of time without being detected.
This more than one person to steal safeguard obviously wasn't in place in Dixon, Illinois during the past several years. The principle of segregation of duties may have been written in the city's accounting manual, and it certainly would have been in the city's outside auditor's manual. In any event, it wasn't adhered to by anyone, even if documented.
To me this behavior by all concerned is symptomatic of a much bigger issue when it comes to the public trust and taxpayer money. The presence of OPM mandates that special care be taken in safeguarding the expenditure of public funds.
Ms. Crundwell was undoubtedly a thoroughly trusted employee. That's probably why she was able to steal so many millions of dollars and go undetected for so long. And the taxpayers' money wasn't treated as MOM by the Dixon leaders either.
To say the least, Dixon officials did not serve their thieving and trusted employee well when they made it so easy for her to steal. Of course, Ms. Crundwell didn't serve Dixon city officials well either when she stole all that money.
Here's the real point. Although the employee clearly deserves whatever punishment is ultimately meted out, the Dixon city officials didn't even try to act as stewards of taxpayer funds.
In assessing blame, my view is that the most culpable people were the Dixon city officials and their auditors.
While Ms. Crundwell will undoubtedly go to jail, the rest of the bad guys will get off with not even a serious reprimand by the taxpayers.
They may even be praised for discovering the crime. That's wrong.
Sadly, We the People have grown far too accustomed to being cheated out of our money by government officials at all levels, whether the direct cause be simple waste or straightforward theft. That's also wrong.
The underlying cause is almost always the OPM factor. MOM behavior is absent. That's wrong, too.
Transparency, scrutiny and accountability are essential to the protection of MOM. That's what's right.