Md. looking for missing $1.2 million State environment official suspended

November 05, 1993|By Timothy B. Wheeler | Timothy B. Wheeler,Staff Writer

A criminal investigation has begun into the disappearance of $1.2 million from the Maryland Department of the Environment over the past two years, and the agency has suspended one of its top fiscal officers.

The possible theft of the money has forced the agency to cancel the sale of $90 million in bonds that would have helped Baltimore, Baltimore County and eight other localities clean up pollution and ensure safe drinking water.

In a statement issued yesterday, the state attorney general's office and Environment Secretary David A. C. Carroll said that they are looking into "suspected unauthorized withdrawals" from accounts of the department's water quality financing administration.

The administration helps pay for upgrading municipal sewage treatment and drinking water systems throughout the state.

Investigators are still tracing the exact dates and amounts of the withdrawals, but some apparently go back to early 1992. Ralph Tyler, deputy attorney general, would not discuss the investigation or say who might have authorized the withdrawals or where the money went.

No charges have been filed.

However, Rufus Ukaegbu, chief fiscal officer for the water quality financing administration, has been suspended with pay pending the outcome of the investigation, said Michael Sullivan, spokesman for the environment department.

Mr. Ukaegbu could not be reached for comment.

The investigation began shortly after an agency employee in late August "noticed what they thought to be a discrepancy" in the accounting of loan payments to local governments and their contractors for water quality projects, Mr. Sullivan said.

The water quality financing administration has issued $207 million in low-interest loans to Maryland cities, counties and towns for sewer and water projects since 1988. The office has sold nearly $130 million worth of revenue bonds and has pooled the proceeds with federal grants to make the loans.

The department has tightened internal controls, requiring that a greater number of top agency officials review and approve loan payments before they are made, Mr. Sullivan said.

Until an internal audit is finished, the department has deferred plans to issue $90 million in bonds, including $45 million intended to finance new projects.

The new projects were planned in 10 localities this fall. Baltimore was scheduled to receive $13.5 million, most of it for improvements to the Back River and Patapsco sewage treatment plants. Baltimore County was slated to get $10.7 million to help pay the county's share of improvements to city sewage and water facilities.

State officials still hope to get those projects started on time, using state and federal grants. Mr. Sullivan said that the state is seeking approval from the U.S. Environmental Protection Agency shift federal money that had been earmarked for other purposes.

Financial scandal has troubled the Environment Department in recent years. An employee in the department's public affairs office was convicted in 1989 of embezzling more than $130,000 worth of checks paid to the department. During the past three years, audits have revealed problems with management of computer contracts and federal grants.

Mr. Carroll took over the Environment Department Aug. 23 after the previous secretary, Robert Perciasepe, resigned to accept a job in the Clinton administration as the EPA's assistant administrator of water. Mr. Perciasepe had headed the department for 2 1/2 years.

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