Dewey to investigate police slush fund

Dewey Beach town council will investigate police department accounting practices associated with the unreported acquisition of surplus military equipment valued at $2 million.

During its Nov. 11 meeting, town council voted unanimously to conduct the investigation, with agreed-upon procedures, with the understanding that the scope of the investigation will be expanded if needed. The move comes on the heels of an Oct. 27 recommendation by the Dewey Beach Audit Committee.

The discrepancies around accounting procedures by the police department were called into question by Wilmington-base attorney Max Walton, who was hired by the town this past summer to investigate employee complaints against former Town Manager Marc Appelbaum. The employees included police Chief Sam Mackert, the majority of the chief’s officers, beach patrol Capt. Todd Fritchman and building inspector Bill Mears. Walton strongly urged town council look into the matter.

Commissioner Gary Persinger said 2015 and 2017 inventory lists from the Law Enforcement Support Office of the Department of Defense show the police department has received at least 235 line items, worth roughly $2 million in military acquisition value, as a participant in the program.

LESO runs the federal military surplus program, which has been around since the late 1990s.

Persinger said the intent of the program is to provide a means for local law enforcement agencies to obtain equipment and supplies they may not otherwise be able to afford. It’s not, however, intended to be a supplemental source of funds, he said, and it’s pretty clear the Dewey police department has been a pretty big participant in this program – at a level that’s far beyond other beach front communities in Delaware.

Mayor TJ Redefer said it was important to recognize the police department’s involvement in the program goes back two police chiefs.

“It is now our responsibility to make sure we do what we should do, so moving forward not be in this position ever again,” said Redefer.

Commissioners Dale Cooke and Paul Bauer said they knew the police department was participating in the program, but they were not aware the revenue wasn’t being accounted for.

Cooke said he doesn’t believe the police department has participated in any malfeasance, but he also said he doesn’t know for sure.

“It’s not a point that it was morally improper; it was technically improper and we have to get everything on the books,” Cooke said.

Bauer said he was surprised there has been no accounting for the program after more than 15 years of participation. It’s crazy, he said, adding it was something that could be fixed.

At this point, Bauer said, he was in favor of auditing everything.

Following the meeting, Wilmington-based attorney Rick Cross, the complainants’ attorney in the suit against Appelbaum, said council’s decision appears to be a textbook retaliation against his clients.

“The comments made during the meeting made it clear they wanted to target the departments that were involved in complaining about the former town manager,” said Cross in a Nov. 13 email.

Cross said in October he intended to file a claim on behalf of his clients with the Equal Employment Opportunity Commission as the first step in filing a suit based on harassment. The claim was filed with the commission Nov. 16.

Federal, state audits taking place

Despite his surprise at the lack of proper accounting procedures, Bauer said, during the council meeting, the program, and the surplus material attained, are audited at the state and federal level.

“It’s not like nothing was looked at. I just want to reinforce that with everybody,” Bauer said. “This was not totally done in the dark, but we do want to make it right.”

The Delaware Emergency Management Agency is the state-level liaison between local law enforcement agencies and federal defense agencies that run the federal surplus equipment program.

As part of that role, DEMA Director AJ Schall said, DEMA is required to perform a physical audit of all the pieces of equipment the state’s law enforcement agencies have received from the program. For this year’s audit, he said, a little more than 6,200 pieces of equipment were inventoried throughout the state, and there’s 100 percent accountability.

Schall said the number of pieces audited statewide fluctuates year-to-year because law enforcement agencies are allowed to sell or dispose of equipment after a certain period of time.

Across the state, at various levels, law enforcement agencies participate in the program. Dewey Beach Police Department is one of those agencies, and it has recently found itself in hot water after it was revealed the department was not reporting to town accountants the revenue it has received from selling the surplus equipment.

Schall declined to comment specifically on the relationship between Dewey’s police department and its accounting practices, but he said, if the program is being used as a slush fund for the department, it probably is not being used properly. He said he would hope there are policies and procedures in place to account for all revenue and expenses.

Using DEMA as an example, Schall said DEMA has a paper trail for anything over $50.

In the past, Redefer said the police department didn’t trust Appelbaum to keep funds from the program separate from the town’s general fund.

In an email prior to the council meeting, Dewey Police Sgt. Cliff Dempsey said, “Mayor Redefer’s comment regarding the trust issues are correct,” he wrote Nov. 9. “The complaint filed this year outlines the long history regarding the town manager.”

Dempsey said the Dewey Police Department is audited every two years by the federal government, most recently, he said, on Aug. 23.

“Since the onset of our participation in the program, we have passed all audits or [program compliance reviews],” he said.

Cape Region municipalities say they’re in compliance

Dewey’s participation in the program is not unique. According to the logistics agency, nearly 30 police agencies in Delaware have participated, including most of the agencies in the Cape Gazette’s coverage area.

Lewes Town Manager Ann Marie Townshend said she was spurred to ask police Chief Thomas Spell after reading about Dewey’s issues. She said Lewes hasn’t participated extensively in the program. According to the 2017 audit, the department received a utility truck and a couple of truck seats in 2013 and 2014.

Townshend said Spell, who came to Lewes from the Wilmington Police Department a little over a year ago, is well-versed in procedures and protocol associated with the program.

Spell said Lewes Police Department hasn’t used the program since he took over, but he thinks there’s value in the program. There are things used by the military that translate well to policing, which allows police departments to do a better job, he said.

Milton Town Manager Kristy Rogers said she and police Chief Robert Longo work closely together to track and monitor what the town’s police department receives from the program, and the town auditors are told about it. According to the 2017 audit, the department received a number of pieces of firefighting equipment, a printer, first aid kits, a couple of generators and a pickup truck in 2017.

“We’re thankful for the program,” Rogers said.

Longo said his police department doesn’t look for anything outrageous. It’s stuff that will benefit the community and the town’s police officers.

“We definitely comply with everything the state requires,” Longo said. “We just had an inspection and were in 100 percent compliance.”

Among Cape Region towns, only Rehoboth Beach has not participated in the program. Rehoboth Police Chief Keith Banks said the town’s police department is eligible to participate in the program, but simply hasn’t. In the past, he said, if there was a storm and something was needed, the town has always been able to procure a specific piece of equipment.

“I’ll never say we won’t use it,” said Banks, recognizing that town budgets are getting tighter. “But financially, the town has been able to provide us with what we need, and we’ve been able to have things in place. We’ll just have to weigh our options.”