By Jennifer Bowman
ASHEVILLE — Buncombe County officials illegally used taxpayer dollars to enrich themselves, paying for daytime shopping trips, private phone bills, meals, vacations, spa treatments and other personal pleasures, according to federal indictments. Three of them have admitted as much.
Research says they’re not the first to try out government corruption.
A 2018 report by the Association of Certified Fraud Examiners found occupational fraud in government and public administration caused organizations a median loss of more than $125,000, most commonly through corruption schemes. Financial damage was worse when the fraud was committed by a person of authority like a manager or executive, and even greater when multiple perpetrators were involved.
What is the cost to Buncombe County?
In Buncombe, federal prosecutors say corruption has cost much more. Even without quantifying the alleged kickbacks received by former managers Wanda Greene, Mandy Stone and Jon Creighton, the U.S. Attorney’s Office cited more than $200,000 in illegal credit card purchases and more than $2.5 million used for life insurance policies.
That’s not including millions of dollars in other controversial expenses made under Greene’s 20-year tenure as county manager, prosecutors allege.
What would drive Buncombe’s highest-ranking administrators — already paid handsomely with six-figure base salaries, bonuses, retention incentives and some of the best benefits in the state — to behave in such a way?
If they’re like any white-collar criminal, it’s greed, said Michael Clark, a former FBI agent with decades of experience investigating public corruption.
“They go in there usually with pretty good intentions, and they see (money) all around them,” Clark said. “They’re giving out a million-dollar contract to a sewer guy, another million to a road guy. Everyone’s getting rich around them — they have a lot of money, beach houses, ski trips, trips to Florida.
“The county manager — they’re civil servants. They’re making a set salary, which is comfortable but not rich. They kind of feel this sense of entitlement. ‘I’m as smart as these guys. They’re rich. I’m stuck with a civil service job. I deserve the perks.’ The greed part steps in. And we saw that time after time after time.”
No oversight? ‘That just opens the floodgates’
The report by the Association of Certified Fraud Examiners, conducted annually and in its 10th edition, said most employees never commit fraud. But when they do, researchers said, they can cause “enormous damage.”
Of nearly 2,700 cases across more than 100 countries, the study found that most occupational fraud costs a victim organization less than $200,000. Twenty-two percent, however, exceed $1 million in financial damage.
The schemes last an average of 16 months, according to the report. Government and public organizations are among the industries with the highest proportion of corruption cases.
Prosecutors allege fraud in Buncombe County government is wide-ranging, involves multiple longtime officials and dates back to more than a decade ago.
Four officials have been indicted: Greene, Stone, Creighton, and Michael Greene, Wanda Greene’s adult son and the county’s former business intelligence manager.
All but Wanda Greene have reached deals with the U.S. Attorney’s Office, pleading guilty to conspiracy charges. Joe Wiseman, a Georgia-based engineer said to be at the center of the yearslong kickback scheme with the former managers, has not been charged.
The four ex-officials represent a total of nearly 110 years as county employees. Wanda Greene served as county manager for two decades — nearly three times longer than the average tenure of city and county managers in the U.S. Stone and Creighton were Buncombe staffers for even longer.
Fraudsters who had been working with their company longer stole twice as much, according to fraud examiners’ findings: If the perpetrator had worked more than 10 years at the organization, the financial damage increased by over six times more than the median loss caused by the fraudulent scheme of someone who worked there less than one year.
“Some people get in these positions and there’s no oversight,” said Thomas Raftery III, a former FBI agent who investigated construction and contract fraud in the Afghanistan war zone.
“And that just opens up the floodgates. You gotta have some type of system of checks and balances and it doesn’t look like this county had any.”
The FBI investigation: 18 months and counting
Federal officials confirmed Wanda Greene “and others” were under investigation in August 2017, more than a month after county officials flagged financial irregularities during Greene’s last week as manager.
The investigation continues nearly a year and a half later. That’s common, former FBI agents said.
“Some of these types of investigations, they’ve taken several years — as many as five years,” Raftery said. “It depends on what’s involved, what else is going on. The agents typically have other cases, so there’s peaks and valleys in attention.”
Raftery said it’s likely the county investigation has required “a whole host of subpoenas.” The superseding indictment, in which a grand jury indicted Greene for additional charges in August, is evidence that investigators likely are picking up additional information along the way, he said.
Raftery, who has 23 years of federal law enforcement experience and served as the first inspector general for the Delaware River Port Authority, said the FBI also pays special attention to professional services contracts like those granted to Wiseman. In North Carolina and other states, they’re not subject to bidding requirements and “are a great way to shield bribes,” he said.
“They’re just more prone to manipulation,” Raftery said.
Clark said corruption cases can be complicated. A 22-year veteran of the FBI, he supervised the investigation of former Connecticut Gov. John Rowland, a case that ultimately led to the governor’s imprisonment for corruption and fraud.
Clark also oversaw major bribery and kickback investigations of several mayors throughout the state, and his work on high-profile corruption cases made the bureau’s public integrity operation in Connecticut a national model. He now is a senior lecturer in the criminal justice department at the University of New Haven.
Investigators looking into Buncombe County likely have been working through subpoenaed records, from credit card statements to travel documents, Clark said. And corruption cases often work on “moving up the food chain,” he said — finding others, perhaps more significant participants, potentially engaged in corruption.
“Let’s say they get a plea or someone decides to cooperate,” Clark said. “They’re cooperating behind the scenes before they even plead, most of the time. (Investigators) are lifting up the rocks and taking a peek and looking around, and they are sent down a whole new path.”
And the decision to cooperate is a common one, he said.
“For the most part, they’re not hardened criminals who are used to doing jail time,” Clark said. “If you’re a drug dealer or in the mob, that’s a red badge of courage. With a white-collar crime person or a public official, that’s not the case.
“They’ll cut a deal.”
‘There’s got to be checks and balances’
Internal control weaknesses were responsible for nearly half of all fraud cases, according the fraud examiners’ report. In Buncombe, officials quickly became aware of what they lacked, albeit after the fact.
“When they’ve been in that one job for that long, they certainly know how to manipulate the system, there’s no question about that,” Clark said. “They know where they can hide things or grab things from, things along those lines.”
The investigation revealed glaring problems in Buncombe County government.
Commissioners never received line-item budgets under Greene, never gave her annual performance reviews and did not regularly ask for information about her expense reports. Greene, meanwhile, redacted receipts she submitted for reimbursement, was accused of using bullying and intimidation techniques, and never reported back to commissioners on no-bid contracts,.
The county has since overhauled its policies, clamping down on how economic development money is spent, capping performance bonuses and promoting their whistleblower hotline. They’ve also changed auditing firms, strengthened the role of the county’s internal auditor and required more public reporting of contract activity.
Raftery said oversight is key, even if it’s unpopular in the organization. As inspector general, he said he regularly received pushback after issuing negative reports and implementing policies against waste and fraud. He left the job in 2014, penning a scathing resignation letter that accused officials of interfering with his independent watchdog role and preventing him from issuing audits.
Commissioners need to take responsibility for their fiduciary duty, Raftery said, and that includes being aware of contracts that don’t require their approval.
And they should remember that the county manager works for them, not the other way around, he said.
“What little I saw (about the case) just struck me — where is the oversight?” Raftery said. “Nobody’s watching. You’ve got two, three people there it looks like just doing whatever they wanted to do.
“And they got caught. Because, eventually, you’re going to get caught.”