The Board of Supervisors responded by placing Arpaio’s office under new budget restrictions as Maricopa County Board attorney Tom Irvine called the improper expenditures the “biggest misspending of state funds in the history of Arizona.”
Much of the analysis, by the Office of Management and Budget, centered on the misuse of a tax-based jail-detention fund that was approved by Arizona voters in 1998 for jail expansion, guards’ salaries, and related expenses. Instead, according to the report, Arpaio’s office diverted the funds for such activities as immigration sweeps and public-corruption investigations against the sheriff’s critics.
The report also raised concerns about unexplained travel expenses, questionable transactions on county credit cards, and secret outside bank accounts that prevented county officials from monitoring the department’s transactions.
The budget accusations come as Arpaio’s office is under investigation by the U.S. Department of Justice (DOJ) over allegations of abuse of power. The budget findings will be forwarded to the DOJ, Irvine said.
The nature of the misspending is not considered criminal, according to the county budget manager, David Smith. But the use of taxpayer-supported jail funds for other purposes violates the law.
Related to Abuse-of-Power Probe?
Maricopa County Attorney Rick Romley, a Republican and longstanding Arpaio political foe, said the findings may shed light on the abuse-of-power investigation.
He said the misspending could explain why Arpaio’s office has refused to cooperate with county officials over budget issues and initiated a number of corruption investigations against them instead.
“It seems like that was the catalyst for the start of the criminal investigations—it provides a motive for why this has been going on for a number of years,” he said. “They fight the board, and when the board doesn’t cave in, they start criminal investigations to pressure them to cave in. It all makes total sense.”
When asked for comment by New America Media, Arpaio said only: “We are trying to correct the deficiency.”
But Maricopa County Deputy Manager Sandi Wilson said the improprieties went well beyond a “deficiency.” The sheriff’s office actually kept a separate set of payroll books for its employees showing their assignments, and justifying expenses from the jail fund, different from the records that the office provided to the county, she said.
"A Shadow System"
“They actually kept a shadow system,” Wilson said. The misspending dates back as far as 2006, according to county officials.
Chief Deputy Sheriff Jerry Sheridan said the findings had taken the office by surprise.
“It’s very complicated. I’m very disappointed with what I consider to be a very inflated number,” he said, referring to the $80 million figure. Sheridan said that part of the problem was that the financial system that tracks payroll was very “cumbersome” and sometimes wouldn’t transfer employees properly from one assignment to another.
Smith admitted that the financial system was outdated, but said there was a clear intention on the part of Arpaio’s office to use the jail funds for unauthorized purposes.
“I would think the sheriff knew about this,” Smith said. “How could you not understand you were getting personnel that were otherwise not authorized for field operations?”
Expensive Trips—and Extradictions
The budget analysis also discovered misuse of general funds for expensive trips abroad, including to Honduras and Puerto Rico. In one case, county officials detailed expenses of $2,215 for an unexplained stay at a Disneyworld Yacht Club Resort.
The report found that the sheriff’s department spends three to six times as much as other agencies to extradite a prisoner.
Arpaio’s office and the Board of Supervisors have been at odds for about two years over issues related to budget cuts during the economic downturn.
During that same period, his agency’s anti-corruption task force initiated a racketeering investigation on county employees, judges and politicians, which eventually led to allegations that his office was abusing its power.
The Board of Supervisors holds the purse strings over county agencies and has the ability to conduct audits. But when it came to Arpaio’s office, Smith said that for years, the supervisors operated on a trust basis.
The misuse of jail funds for other purposes comes to light in different ways, according to county spokesperson Cari Gerchik. The sheriff’s office was uncooperative, filing lawsuits to prevent the production of records.
A Series of Red Flags
Another red flag was the failure of Arpaio’s office to deliver jail detainees in time for their scheduled court appearances. By court order, the office was forced to produce a list of employees assigned to inmate security and transportation. There was a large discrepancy between the number of employees on payroll from the jail fund and those actually working.
What’s more, as part of a pending racial-profiling lawsuit against Arpaio’s office, it become apparent that some of the employees working on immigration sweeps were incorrectly listed in county jobs records.
Gerchik said investigators found business cards left by deputies at the homes of county officials under scrutiny by Arpaio and later discovered that these deputies were being paid from the jail-detention fund.
By law, the estimated $80 million in misspent funds need to be replaced, Gerchik said.
In coming weeks, the county will work with the sheriff’s office to figure out how to restore the funds as well as implementing a set of new checks over the use of jail funds.
Supervisor Mary Rose Wilcox said that if the sheriff’s office doesn’t cooperate, she will ask the federal government to take over running of the county’s jail system.
Of the alleged misuse of funds, Wilcox said: “I think there’s many elements in it that are criminal.”
The budget report was issued a week after a memo from one of Arpaio’s deputies became public, calling on the sheriff to initiate an investigation of misconduct, misspending and abuse within his agency.
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