Carmichael calls state Supreme Court audit findings 'more of the same'

By Chris Dickerson | Apr 18, 2018

CHARLESTON – The president of the West Virginia Senate says he is dismayed by the “constant revelations about inappropriate spending” at the state Supreme Court.

“Couches, lunches, travel … this highlights that our state needs to put the budget of the Supreme Court underneath the control of the state Legislature,” Mitch Carmichael told The West Virginia Record. “We’re the only state that doesn’t have that authority. But, voters will have an opportunity in November to vote for that. I think that will help alleviate this problem.”

Carmichael made his comments after the April 16 release of a Legislative Auditor report that said Justices Allen Loughry and Menis Ketchum used state vehicles for personal use without claiming it as a taxable fringe benefit.

“The Legislative Auditor finds that the instances documented in this report, taken together with media reports, show a complete lack of regard for the principles of fiscal prudence and responsibility,” the report states. It was presented April 16 to the legislative Post Audits Subcommittee, which includes both Carmichael and House Speaker Tim Armstead.

“Frankly, it was just more of the same,” Carmichael said when asked if anything in the report surprised him. “It didn’t surprise me when you’ve read about all of the other spending that has occurred.

“It’s just these constant revelations about inappropriate spending. I was glad to see that Justice Ketchum was contrite, admitted he made a mistake and paid back the money and requested updated W-2s.

“For years, people here in the Legislature have talked about the need for lawmakers to have more control over the court budget. I’ve always supported that idea, but I never had the chance to do much about it. But once I became Senate President, I thought it was time we put it on the ballot.”

This fall, voters will have a state Constitutional amendment on the ballot to give the Legislature more control over the court budget.

Other matters included in the Legislative Auditor report:

* In November, media reports focused on Loughry using an antique desk at his home. The desk is one of the Cass Gilbert desks, linked to the architect who build the state Capitol and the U.S. Capitol.

“In 2013, Justice Loughry had an antique desk brought to his home from the Office of the Supreme Court,” the report states. “The desk, referred to as a ‘Cass Gilbert desk,’ was an original desk used by Supreme Court Justices when the East Wing of the Capitol opened in 1927. The desk is owned by the State of West Virginia and has been appraised at $42,000. Following a media inquiry regarding the propriety of having state property inside a personal residence, Justice Loughry returned the desk to the Court.

“In 2013, the West Virginia Ethics Commission addressed a ‘common misconception’ that public employees may use public equipment for personal purposes so long as it is not for commercial purposes and does not interfere with the government’s use of the property. The commission rejected this proposition and declared that the test for a violation of the statute is not the cost to the state, but the benefit that public official or employee enjoys from the use of the state property.”

The audit says the state Ethics Commission has the jurisdiction to determine whether these uses of state property are a violation of the Ethics Acts, and the Legislative Auditor has reported its concerns to the commission and defers to its determinations as to whether any violations have occurred.”

* At least three cars in the state Supreme Court didn’t have required plates.

“An on-site inspection by the Legislative Auditor of three WV Supreme Court of Appeals’ fleet vehicles found a lack of the required green and white plate on the front of those vehicles,” the audit states. “The 2013 gray Chevy Impala, the 2012 black Buick LaCrosse, and the 2007 Black Dodge Caravan are all lacking front plates as required by W.Va. Code,” which states “The failure to display the required plate increases the risk of improper usage of the vehicle.”

“It inhibits the public’s ability to report instances of what is perceived to be improper usage, possibly creating an issue of transparency,” the audit states. “The Legislative Auditor recommends that the Supreme Court of Appeals comply with W.Va. Code.”

* Justice Robin Jean Davis first brought up the discussion of the use of the court’s state-owned vehicles.

In 2016, Davis requested a memorandum from former Administrative Counsel Kirk Brandfass discussing the use of state-owned vehicles.

“Use of a state vehicle in a manner that contravenes the provisions of an applicable West Virginia legislative rule, or an Internal Revenue Service (IRS) regulation, could result in a determination that untaxed wages were accrued that must be reported to the IRS,” Brandfass wrote in a July 21, 2016, memo to former Court Administrator Steve Canterbury. “Contravention of the relevant provisions of the Code of Judicial Conduct could result in the filing of an ethical violation complaint with the Judicial Investigations Commission.”

The memo was provided to the justices as well, and the issue was discussed during a September 2016 administrative conference. Draft policies were reviewed by the Justices, but no action was taken, according to documents.

“According to notes, agendas, and memos regarding the Justices’ administrative conferences, it appears that the issue of the Justices’ use of vehicles was brought up in June 2016 by Justice Robin Davis, who requested the legal research that was outlined in the aforementioned July 21, 2016, memorandum,” the audit states. “Justice Davis was concerned due to several news stories at that time regarding the Legislative Auditor’s Office surveys concerning travel and the use of state cars. Several memoranda, including a memorandum from Justice Loughry, show that Justice Davis was questioning Justice Loughry’s state vehicle use.”

Loughry took offense to Davis’ request.

“This fishing expedition is also clearly retaliation for inquiries I made regarding the unilateral authorization of payments by our (former) Court administrator Steve Canterbury, to Mark Starcher totaling approximately $1 million and the depletion of the Court’s so-called rainy day fund in the amount of $26 million, which has never been accounted for despite numerous inquiries from more than one justice,” Loughry wrote in a memo.

The item was on the agenda for an Aug. 29, 2016, administrative conference. But, it apparently wasn’t discussed until a Sept. 8, 2016, conference, according to Ketchum’s notes.

“A suggested vehicle policy was discussed, yet no action was taken,” the audit states. “According to Justice Ketchum from a memorandum dated December 7, 2017: I do not remember the issue of a car policy being discussed again.”

Supreme Court spending has been under scrutiny since November, when WCHS-TV reporter Kennie Bass first detailed other state Supreme Court expenditures. Since 2009, court offices have undergone extensive renovations. The original price tag was about $900,000 for the first round of renovations. But it since has grown to more than $3.7 million and include more areas of renovations.

Some of the issues that have drawn the most attention by the media, lawmakers and the public are a $32,000 couch in Loughry’s office, a $7,500 wooden medallion inlay in Loughry’s office floor picturing the state of West Virginia, $28,000 rugs in Davis’s office and $130,000 in renovations to Justice Beth Walker’s office just a few years after it had been renovated when Benjamin was in office.

In a memo attached to the auditor report, current Chief Justice Margaret Workman says the IRS audited the court from April 2017 until earlier this year. She says the court does not believe it needs to issue any revised or amended W-2s from 2014 to present, even though Ketchum sought and received his amended W-2s.

“It was agreed that there would be continued communication and a joint cooperation in continuing to improve fiscal procedures and accountability,” Workman wrote.

Workman’s memo also says the court is taking action, including requiring full documentation — including the specific purpose of the use, the destination, the mileage in and out and the specific vehicle assigned — for any vehicle request for court employees or justices.

Workman also said she, Administrative Director Gary Johnson and Administrative Counsel Lori Paletta-Davis met with Legislative Auditor Aaron Allred and his staff.

“It was agreed that there would be continued communication and a joint cooperation in continuing to improve fiscal procedures and accountability,” she wrote.

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