Dewey commissioner calls for new investigation

Bauer: Town was active in military surplus program
January 28, 2019

For months, Dewey Beach Mayor TJ Redefer has urged town officials to move forward. But now a Dewey commissioner has called for a new investigation into the town’s involvement in the police department’s military surplus equipment program.

At the Jan. 12 town council meeting, Commissioner Paul Bauer called for investigations into the Seasons Pizza demolition, a $35,000 transfer from the town’s general fund and two undisclosed bank accounts.

“The public has been very critical of us all of not being transparent, sweeping things under the rug,” Bauer said. “We’ve just investigated so far the police inventory. What we haven’t investigated, and I want to bring up for the next agenda, is the town had some activity in this program as well.”

The issue was not on the agenda at the Jan. 21 council meeting; Bauer called for it to be included on the Friday, Feb. 1 meeting agenda.

A.J. Schall, state coordinator of the military surplus equipment program, said the last piece of equipment received by the police department was a freight container on Jan. 24, 2018. This freight container is not on the military surplus inventory worksheet on the Town of Dewey website; an acquisition value for it is unknown.

Seasons Pizza

Bauer said he wanted details on the Seasons Pizza demolition.

“The building didn’t fall down on its own,” Bauer said. “There’s military equipment on this list that is now in the possession of the contractor. We know that for a fact. What we don’t know is how it happened, who authorized it, was it done in the public? If if it wasn’t, then shame on the administration of the past.”

Emails provided to the Cape Gazette in August 2018 by Mayor TJ Redefer show Town Clerk Ashleigh Hudson emailed Police Chief Sam Mackert and then-Town Manager Marc Appelbaum April 2, 2016, to ask Mackert to contact Dirt Works for a demolition estimate.

Mackert responded he would; Appelbaum asked Mackert to explain what was going on.

Later emails show Hudson received the quote, forwarded it to Mackert and Appelbaum and said Dirt Works agreed to lower the cost in trade for equipment. Appelbaum responded with question marks.

In an estimate, Dirt Works said a 12 percent discount would be given if Seasons Pizza and another town-owned property at 1505 Coastal Highway were demolished at the same time. The estimate for Seasons Pizza was $18,500; 1505 Coastal Highway was $12,500. The estimate stated Dirt Works would consider trading the cost for all demolition work for military equipment from the police department.

The military surplus inventory worksheet shows a truck and forklift, with an original acquisition value of over $72,000, were exchanged for Dirt Works services. Only Seasons Pizza was demolished.

Nancy McCloskey, of Dewey Finance Department at that time, said in a Jan. 15 email that she had not seen the Dirt Works invoices or emails regarding them, but remembers a check for $5,000.  

“I have never seen anything in writing from a contractor that contained bartering for their service as a practice,” McCloskey said. “I do remember asking Marc about the payment of the $5,000 check to verify what expense code to give it. Marc said it's $5,000 for the demolition of the Seasons property.”

Then-Mayor Diane Hanson said in a Jan. 15 email that Appelbaum had told her about the exchange, which he called strange.

“The police were the ones who approached Marc [Appelbaum] with the idea of bartering and said someone who does demolition owed them a big favor,” Hanson said.

“In a way, I hope they do investigate,” Hanson added. “However, my concerns are that it will be a total waste of money, bring more negative news coverage to the town, and they will find nothing of consequence. And to what purpose? They keep saying they want to move forward, but are now taking a major step backwards for purely political reasons.”

$35,000 deposit in general fund

During the meeting, Bauer also said Commissioner Dale Cooke found a 2016 deposit for $35,000 in the town’s general fund.

In a Feb. 9, 2018 letter to the Gazette, McCloskey said the police department gave a temporary employee a check for $35,000 to deposit into the police department restricted account.

McCloskey said the check was placed in the town's expense-revenue line, used to report the sale of equipment or assets belonging to the town that required the police chief's submittal of program details and activities.

After the meeting, Cooke said $35,000 from the sale of military equipment had been placed in the general fund and that he had the amount moved to the police restricted fund when he served as interim town manager.

Surplus coordinator Schall said sale proceeds are not required to be placed in a police department restricted fund.

“Once the items are sold the town may place the funds in their general account or as their guidelines specify,” Schall said.

Secret accounts

Bauer said the internal audit conducted by TGM Group found four police bank accounts under town control. He said members of the public allege two secret accounts also exist, and called for the town’s contracted human resources company to find them.

Commissioner David Moskowitz said an auditor would be more suitable to conduct such investigations. He called upon the town’s audit committee to issue an RFP for a new auditor.

“We need to move forward on replacing the auditor because I feel [TGM Group] did a bad job,” Moskowitz said.

An estimated budget for an investigation has not yet been made public.

Updated to indicate that Diane Hanson was mayor, not commissioner, in April 2016.

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