Mayor opts for audit of account

Outside firm will examine Norris' use of $178,000 from off-the-books fund

Commissioner welcomes review

O'Malley reverses course after criticism, will follow finance director's advice

August 16, 2002|By Tom Pelton and Del Quentin Wilber | Tom Pelton and Del Quentin Wilber,SUN STAFF

Mayor Martin O'Malley reversed course yesterday and said he would hire an independent auditor to investigate the spending of Police Commissioner Edward T. Norris and past police chiefs from a little-known, off-the-books private expense account.

The probe by the accounting firm of Ernst & Young will examine whether $178,000 that Norris spent from the police "supplemental account" over the past two years was used for business or personal reasons, city officials said.

"On the advice of our finance director, we are asking Ernst & Young to do an audit of the police account going back to 1983," O'Malley said. "Hopefully, this will allow our Police Department and police commissioner to get back to the issue of fighting crime and saving lives."

FOR THE RECORD - An article in Aug. 16 editions of The Sun reported that police supplemental funds were consolidated during the tenure of Bishop L. Robinson as police commissioner. In fact, Frank J. Battaglia was commissioner when the funds were combined. The Sun regrets the errors.

Questions about the account - which Norris controlled without any oversight - arose this week when The Sun reported that the commissioner had spent about $20,000 in travel expenses, including $2,500 on several meals at a trendy Manhattan steakhouse. He also spent $550 for 55 pairs of gold-plated cuff links and $433 for Orioles sweat shirts and jackets for police officials attending a game.

Yesterday, Norris said that he agreed with the mayor's decision and welcomed the audit.

"I have been open and frank about this issue since the first inquiry," Norris said. "A Baltimore Sun reporter was given several days of complete access to the books on this account. As police commissioner I am responsible for all that occurs within my agency, including taking sole responsibility for the account's poor record keeping. I look forward to the auditor's findings and recommendations for improving our accounting practices and controls."

O'Malley said Wednesday that he would not call for an independent investigation of the account because he felt that a recent internal audit by a police official who reports to Norris was sufficient.

But after being criticized by auditing experts and others for failing to conduct an independent probe, O'Malley said yesterday that he will follow the advice of his financial director, Peggy Watson. She urged him to turn the matter over to the New York-based private accounting firm that audits most other city accounts.

Norris was not the first police commissioner to use the more than 70-year-old fund for travel and other expenses. The account evolved from three charities for which police officers in the 1920s and 1930s started raising private funds to assist officers in need and buy athletic equipment for police leagues.

Over the decades, the funds were converted to stock and grew substantially. In 1983, then-police chief Bishop L. Robinson consolidated the three charity funds into one "supplemental account." The fund remained a secret to many in city government and its use shifted from providing emergency help for those in need to being an expense account for travel, meals and other purposes.

"The fund was used with no oversight ... and I don't think the money was used in a way that the original donors intended," said City Comptroller Joan M. Pratt, who said yesterday that her office will be helping Ernst & Young in conducting the audit of the fund.

On Wednesday, Pratt said she did not think her office had the authority to investigate the fund because it is not taxpayer money. But she said she changed her opinion yesterday after reviewing the city charter and concluding that she could audit the records because they are held by a government agency.

O'Malley said that he did not know about the existence of the fund - now worth about $214,000 in cash and stock - until The Sun began inquiring about it a few weeks ago. The mayor criticized Norris' oversight of the fund because some receipts were missing and about $8,400 remains unaccounted for, according to an internal Police Department audit.

But O'Malley said it is not fair to blame Norris, who took office 2 1/2 years ago, for using an off-budget expense account that commissioners had apparently been dipping into for decades for a variety of purposes.

Former Mayor Kurt L. Schmoke said yesterday that he held office for 12 years, from 1987 to 1999, without hearing about the fund, which was apparently secret to almost everyone outside the Police Department.

"It's one of those things that from one police commissioner to another, they apparently told each other about - and said, `Don't tell the mayor! Because he'll take it away from us,'" said Schmoke, whose police commissioner, Thomas C. Frazier, spent about $300,000 from the fund.

"The people who were protecting this fund understood City Hall," Schmoke said. "I would have taken it away if I knew about it."

O'Malley turned over control of the fund this week to the city Finance Department, which has yet to decide what to do with the remaining money.

Former mayor and governor William Donald Schaefer said yesterday that O'Malley had taken the right steps to assure public confidence. Schaefer praised O'Malley's move to hire an outside auditing firm.

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