EXTERNAL AUDIT INTO CITY’S FINANCIAL ADVISORY SERVICES NEEDED!

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by Elliott Stonecipher

 

It is axiomatic that in any political scandal, it’s the cover-up – not the facts of the scandal – that claims most political lives.  Though that outcome is not yet certain for Mayor Cedric Glover, one thing is:  his actions in this case suggest anything but innocence.

Last October and November, I wrote about the Shreveport City Council’s effort to formally examine the relationship between Cedric Glover and the city’s “financial consultant.”  That company was hand-picked by Glover, without a bid process, in 2007.  The relationship between the two, and the way the company is used by Glover to “justify” his tax-and-spend-and-tax-and-spend-and-tax-and-spend record, has raised many a warning flag.

Glover’s hand-picked guru on all-things-financial has been the subject of more than one scrape with legal authorities around the country, and various city council members have been privately informed by big-league Wall Street players that their companies will not participate in Shreveport municipal bond sales with this company in the mix.  For Glover’s part, he praises this group as if they, not Moses, parted the Red Sea.  (Website Here, and a related article can be read here.)

To hear Glover tell it, this company deserves the praise – and a boatload of money – for its Wall Street wizardry in reducing city debt service costs.  What Glover doesn’t say is that when The Fed lowered interest rates to zero, and told the world officially that it will keep rates there for years, any one of us who knows the difference between borrowing at 0% versus 4% or 5% could do just as well.  In fact, I’ll do it for the city for free, as compared to the million taxpayer dollars this firm has so sucked up so far.  (Given the absence of internal controls in these charges and payments, it is now clear that the payments could be considerably higher.)

When Glover waited about a second-and-a-half after last year’s $175,000,000 bond issue before he put up another one for $94,000,000, some on our City Council got wise.  As the city charter specifically authorized them to do, council members privately asked for an internal audit to investigate payments to this “consulting” firm.  Within another instant, Glover and his closest aides hijacked the process.  While a City Council-directed internal audit is meant – even under Glover – to be exactly that, the auditor somehow found it appropriate to immediately cut the mayor’s office in on the conduct of the “audit,” which proved to be no such thing.  Almost immediately, this waste of time ground to a complete halt as the mayor’s finance department conveniently “disappeared” some important records of checks written to pay these bills.

Given the direct involvement of Glover and his staff in the internal “audit,” and given the convenient “loss” of checks in the mayor’s finance department, it was logical to wonder if some city official or two, or ten, had something to hide.  The next logical step in that reasoning led to the need for an independent external audit.

The City Council’s Audit & Finance Committee should have played a major role in moving directly and appropriately to the hiring of the beyond-reproach professionals required to conduct such a real and actual audit.  Again, though, Glover hijacked the committee.  First, Councilman Jeff Everson was used – and that’s a carefully selected and highly appropriate word for Everson’s role at that point, u s e d – by Glover to postpone that effort until after the election between Glover’s political soul mate Lydia Jackson, and State Senator-Elect Greg Tarver.  Second, when Everson realized that Glover had used him (again), he and Councilman Michael Corbin were the only two Committee votes necessary on the three-councilperson body to move forward.  (New committee chair and Gloverite Sam Jenkins is the third member.)  The next step is all we needed to know that Glover has something to hide:  knowing that a tie vote meant the move for the external audit could be said to have “died in committee,” Glover / Sam Jenkins simply added a member to the committee, Glover’s other city council Gloverite, Rose McCulloch.  The 2-2 tie vote, thus engineered by an increasing guilty-looking Glover, was official.

Fortunately, the absence of an affirmative vote for an external audit is not the end of the road for the Council, which is to say, for the people of Shreveport.  If a majority of the full Council votes for an independent external audit, it will go forward.  In that effort, Councilman Corbin has proposed this Resolution for the Council’s vote next Tuesday.  It is notable that highly respected – and devoutly apolitical – Shreveport CPA Jeff Cole of Cole, Evans & Peterson (website here) has agreed to work with the City Council, pro bono, in design of the scope of the hoped-for independent audit.

Having carefully monitored this controversy along the way, it is my personal opinion and analysis that Glover and his supporters – whether Council members, his staff, his political handlers or lawyers he has hired on the taxpayers’ nickel – are not through with their full-court press to kill this independent external audit.  In fact, while there are presently enough council votes committed, I am told, to see what is and is not the case in this matter, we can rest assured that council members are just beginning to take the many hits Glover has already decided to deliver.

What I can say with certainty is this:  any Council member or other person who gets / stays on the mayor’s side on this one knows very well – as the old saying goes – that this dog had fleas when they picked it up.

By the way, does anyone else remember when an innocent elected official wouldn’t so openly, boldly and loudly run this cover-up?

Elliott Stonecipher
Evets Management Services, Inc.
6658 Youree Drive
Suite 180, #367
Shreveport, LA  71105
Phone:  318-424-1695

 

http://shreveportla.gov/Council/Resolution%20-%20Council%20Investigation%20-%20Finan_1.htm#TopOfPage
http://www.grigsbyinc.com/
http://www.conservativedrink.com/wp-content/uploads/2010/10/Grigsby_Breaks_Silence.pdf
http://bhamweekly.com/birmingham/article-47-politics-bond-dealer-has-shady-past.html

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